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

                                   FORM 10-KSB
(Mark One)
[x]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
     1934
     For the fiscal year ended December 31, 2004.

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934
     For the transition period from           to
                                   ----------   --------------

                         Commission file number: 0-50993

                           HEARTSTAT TECHNOLOGY, INC.
                 (Name of small business issuer in its charter)

              DELAWARE                            20-1680252
   (State or other jurisdiction                (I.R.S. Employer
 of incorporation or organization)            Identification No.)

                 530 WILSHIRE BLVD. #304 SANTA MONICA, CA 90401
               (Address of principal executive offices) (Zip Code)

                    Issuer's telephone number: (310) 451-7400

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

         Securities registered under Section 12(g) of the Exchange Act:
                         COMMON STOCK, $0.001 PAR VALUE
                                (Title of class)

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

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

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). [ ] Yes [X] No

State issuer's revenues for its most recent fiscal year:  NIL

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was sold,  or the average bid and asked  price of such  common  equity,  as of a
specified date within the past 60 days: $690,144.50 AS OF SEPTEMBER 30, 2005

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 48,402,887 AS OF SEPTEMBER 30, 2005

Transitional Small Business Disclosure Format (Check one):    Yes    ; No  X
                                                                 ----     ----


                                       1
<PAGE>

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

INTRODUCTION

         HEARTSTAT  TECHNOLOGY,  Inc.,  ("HEARTSTAT"  or  the  "Company")  is  a
Delaware corporation originally incorporated on October 12, 1995, under the name
of "Hospital  Software of America,  Inc." The Company has undergone name changes
that are described in the history of the company below. Most recently  HEARTSTAT
was  renamed  from Tec  Factory,  Inc.  pursuant  to a  February,  6, 2004 Asset
Acquisition  Agreement by which the technology assets  "HEARTSTAT  CNBP/BF" were
acquired by Tec Factory,  Inc.  Unless  otherwise  specified,  the "Company",  "
HEARTSTAT  ", "we",  "our" and "us"  refers to  HEARTSTAT  Technology  Inc.  and
"HEARTSTAT  CNBP/BF"  refers to the  Technology  assets that we have acquired on
March 18,  2004 as per the Asset  Acquisition  agreement  signed on  February 6,
2004. Our principal  executive  offices are located at 530 Wilshire Blvd,  Suite
304, Santa Monica,  CA 90401 and our telephone number is  310-451-7400.  Company
information      can     be     found     on     our     corporate      website:
www.FutureVest.com/HeartstatTechnology.

HISTORY OF THE COMPANY

         HEARTSTAT Technology,  Inc. was originally  incorporated on October 12,
1995, as Hospital  Software of America,  Inc. On November 29, 1995,  the Company
changed  its  name to "New  Health  Technologies,  Inc.,  and at the  same  time
effected at 10,000 to 1 reverse  stock split,  reducing the  outstanding  shares
from 300,000,000 to 30,000.

         On August 28, 1996, the Company  changed its name to "Pubbs  Worldwide,
Inc. and at the same time, effected a 35 to 1 reverse stock split,  reducing the
number of issued and outstanding shares from 14,000,000 to 400,000.  The Company
changed  its name to Pubbs  Worldwide,  Inc.  in order  to  better  reflect  its
acquisition of Hubbs  Development,  Inc., which was in the business of operating
restaurants and retail sales of food,  beer, wine and beverages.  In XYZ of 1998
Pubbs Worldwide,  Inc. disposed of all ownership of Hubbs  Development,  Inc. in
which  the  company   thereafter  had  no  current   operating   restaurants  or
subsidiaries.

         On  April  5,  1999,   the  Company   changed  its  name  to  "Chasen's
International  Corporation".  The name change was affected in  anticipation of a
share exchange agreement between the Company and a group of shareholders,  which
owned a controlling  interest in Chasen's  Restaurant and Jockey Club in Beverly
Hills, California.  Management of the Company believed that changing the name of
the  Company to Chasen's  International  Corporation  would  provide the Company
instant name recognition. The Company effected a stock split of 100 to 1 at this
time.  The  acquisition  was never  completed  due some  discouraging  financial
findings  discovered  after further due diligence on the  operations of Chasen's
Restaurant  and Jockey Club.  There was also some  question as to the ability of
the Company to use the  Chasen's  name as it may have  interfered  with  certain
trademarks.

         On  July  6,  1999,   the  Company   changed  it   corporate   name  to
"Tril-MediaNet.com"   after  the  anticipated   share  exchange   agreement  and
acquisition of Chasen's did not  materialize.  It was believed that the new name
would allow the Company to better continue its software business development and
technology  operations  and avoid any conflict with the trademarks and ownership
of the name Chasen's.

         On November 21, 2000, the Company changed its name to Tec Factory, Inc.
and was planning to purchase Tec Factory  Fort  Lauderdale,  LLC and Tec Factory
Los  Angeles,  LLC from Web Capital  Ventures,  Inc.  This  transaction  was not
concluded.  The Company had  negligible  operations  between  November  2000 and
February 6, 2004.

           On  February  6, 2004,  the  Company  entered  into an  agreement  to
purchase the HEARTSTAT  CNBP/BF  technology assets from several Interest Holders
and on February  17, 2004 the Company


                                       2
<PAGE>


amended its corporate name to HEARTSTAT Technology,  Inc. in anticipation of the
final closing of the agreement.

         On March 18, 2004, the Company concluded the February 6, 2004 agreement
to purchase the technology  referred to herein as the "HEARTSTAT  CNBP/BF".  The
HEARTSTAT  CNBP/BF  Technology  (the  "Technology")   consists  of  patents  and
technology  for a  non-invasive  monitoring  of blood flow,  perfusion and other
cardiovascular  and heart measures.  There were no stock splits or other changes
to the Company securities effected at the time of this name change.

         The  Agreement  for the  Purchase  of Assets,  dated  February 6, 2004,
provided for the issuance of 38,000,000  shares of common stock plus two royalty
agreements,  as  consideration  for the  purchase  for a 100%  ownership  of the
HeartSTAT CNBP/BF  Technology from a number or Interest Holders,  which included
the Inventor and a number of investors that have been instrumental and partially
responsible  for  advancing  the  HEARTSTAT  CNBP/BF  technology  to its current
status. In addition,  the Company assumed $20,000 of notes payable.  At February
6, 2004, the Company's former board of directors and  shareholders  approved the
terms of the Agreement for the Purchase of HEARTSTAT CNBP/BF  Technology Assets.
This  agreement was accounted for as an arms length  transaction  as none of the
Interest  Holders that received stock in this  transaction in exchange for their
ownership of the HEARTSTAT CNBP/BF Technology assets were previous shareholders,
directors or officers HEARTSTAT Technology,  Inc. prior to the completion of the
transaction.

         As part of the  Agreement,  the Company  agreed to a  Commercialization
Partnership  Agreement  (Exhibit B to the Agreement)  with the Interest  Holders
whereby the  Interest  Holders  agreed  that Ted  Russell,  the  inventor of the
technology,  could  exclusively  license in  perpetuity  the  HEARTSTAT  CNBP/BF
Technology for the purpose of financing and concluding product commercialization
activities  if the  Company  were to fail to raise at  least  $2,500,000  of net
proceeds for product  development  by September 6, 2005. The Company was given a
90-day period to cure the financing inadequacy to prevent the license from being
effected.  The terms of the license would include a provision that Mr.  Russell,
or an  independent  entity  would repay the  Company  for any actual  investment
capital  received  at  the  rate  of  20% of any  net  income  of Mr.  Russell's
independent  commercial  operations of producing  derivative  products using the
HeartSTAT CNBP/BF Technology.  In addition,  the Company would receive a royalty
on net revenues of such derivative products as follows:

         1.   A  royalty equal  to 3% of net revenues if at lest $1.3 million of
              investment capital was received
         2.   A royalty  equal to 2% of net revenues  if at least  $650,000  but
              less than $1.3 million of investment capital was received, or
         3.   A royalty equal to 1% of  net revenues if  less  than  $650,000 of
              investment capital was received.

         On  August  15,  2005,  due to the  Company's  inability  to raise  the
required  $2,500,000,  Mr. Ted Russell  and  HeartSTAT,  Inc.  executed an Asset
Transfer Agreement with the Company for the sale of the Technology to HeartSTAT,
Inc., a private company controlled by Mr. Ted Russell,  to permit Mr. Russell to
continue the private  funding of and  commercialization  of the  Technology as a
private  entity.  The Company  will  receive the  following  in exchange for the
assets:

              o   Mr. Russell and the Hull Family will return  20,000,000 shares
                  of the Company's common stock to treasury,  which accounts for
                  41.3% of the issued and outstanding stock in the company.

              o   HeartSTAT,  Inc.   will   issue   98,207   shares   of   stock
                  (representing  8.7% equity  interest in  HeartSTAT,  Inc.) and
                  a $70,000 promissory note.

              o   Mr. Russell and HeartSTAT, Inc. will fully release the Company
                  from payment of all amounts owed to them.

         Mr. Russell and Mr. Pat Maley resigned  immediately prior to the filing
of this report as officers and directors of the Company.


                                       3
<PAGE>


         Upon  completion  of this  transaction,  the Company will  continue its
technology  business  development  focus with its equity  position in HeartSTAT,
Inc. and with future operations.

EMPLOYEES

         The company currently has only one full time employee and one part time
executive employee.


ITEM 2.  DESCRIPTION OF PROPERTY

         The Company  currently has its principal  executive  offices located at
530 Wilshire Blvd, Suite 304, Santa Monica,  CA 90401. This space  represents  a
portion  of  the  670  square  feet  of  office  space  and  is  subleased  from
FutureVest, Inc. (Formerly Diamond WorldWide)


ITEM 3.  LEGAL PROCEEDINGS.

         The Company is not a party to, and its  property is not the subject of,
any pending legal proceedings.


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

         None.


                                     PART II

ITEM 5.  MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         Our common  stock has been trading on the  over-the-counter  pink sheet
("Pink  Sheets")  under the symbol "HSTA"  effective  March 1, 2004.  The common
stock was first listed on June 9, 1998 under the symbol  "PUBS" and traded under
that symbol until April 5, 1999. From April 6, 1999 to August 9, 1999, the stock
traded  under the symbol  "CIIT".  From August 10, 1999 to November 27, 2000 the
stock traded under the symbol  "TMDN" and from November 28, 2000 to February 29,
2004 the stock traded under the symbol of "TECF". The following table sets forth
the range of high and low bid  quotations  for each fiscal  quarter for the last
two fiscal years.  These quotations reflect  inter-dealer  prices without retail
mark-up,  mark-down,  or commissions  and may not necessarily  represent  actual
transactions.

         FISCAL QUARTER ENDING                       HIGH BID          LOW BID

         June 30, 2003.............................  $   0.01         $   0.01
         September 30, 2003........................  $   0.01         $   0.01
         December 31, 2003.........................  $   0.01         $   0.01
         March 31, 2004............................  $   0.60         $   0.60
         June 30, 2004.............................  $   0.70         $   0.70
         September 30, 2004........................  $   0.65         $   0.65
         December 31, 2004.........................  $   0.50         $   0.50
         March 31, 2005............................  $   0.11         $   0.11
         June 30, 2005.............................  $   0.06         $   0.06

         On September 30, 2005, the closing price for the common stock was $0.05


                                       4
<PAGE>


         As of  September 2, 2005,  there were 944 record  holders of our common
stock.  Since our inception,  no cash dividends have been declared on our common
stock.


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

OVERVIEW

         The  acquisition  of  the  HEARTSTAT  CNBP/BF   Technology  assets  was
accounted for as an  acquisition of assets as opposed to a reverse merger due to
the fact that there was organized  operating  company that owned or operated the
HEARTSTAT CNBP/BF system in the past 2 years while the technology was in its R&D
phases. (FOR MORE INFORMATION ON THE ACCOUNTING POLICIES USED PLEASE CONSULT THE
NOTES TO THE FINANCIAL  STATEMENTS).  A  predecessor  sensing part of the system
used for the HEARTSTAT CNBP/BF technology assets had a number of investors, that
invested in this predecessor part of the system over the past 10 years.

         During the fiscal year ended December 31, 2004,  the Company  conducted
only limited  operations,  which were focused on obtaining  financing to develop
the  acquired  Technology.  Such efforts  included the filing of a  registration
statement under the Securities Exchange Act of 1934, as management believed that
being a reporting company would enhance financing opportunities.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         Our discussion  and analysis of our financial  condition and results of
operations are based upon our condensed consolidated financial statements, which
have been prepared in accordance with accounting  principles  generally accepted
in the United States. The preparation of these financial  statements requires us
to make  estimates  and  judgments  that affect the reported  amounts of assets,
liabilities, revenues and expenses, and related disclosures of contingent assets
and liabilities. On an ongoing basis, we evaluate our estimates, including those
related to impairment of long-lived  assets. We base our estimates on historical
experience  and on various  other  assumptions  that we believe to be reasonable
under  the  circumstances,  the  results  of which  form the  basis  for  making
judgments  about the  carrying  value of  assets  and  liabilities  that are not
readily  apparent  from other  sources.  Actual  results  may differ  from these
estimates under different  assumptions or conditions;  however,  we believe that
our estimates, including those for the above-described items, are reasonable.

IMPAIRMENT OF LONG-LIVED ASSETS.

         Our long-lived  assets  include  property,  equipment and goodwill.  We
assess  impairment of long-lived assets whenever changes or events indicate that
the carrying value may not be recoverable.  In performing our assessment we must
make  assumptions  regarding  estimated  future cash flows and other  factors to
determine the fair value of the respective  assets. If these estimates change in
the  future  we may be  required  to record  impairment  charges  against  these
respective assets.

RESULTS OF OPERATIONS

FISCAL YEARS ENDED DECEMBER 31, 2004 AND 2003.

         We operated as Tec Factory for the fiscal year ended December 31, 2003.
During that year,  the Company  had  negligible  operations.  We  completed  the
acquisition  of the  Technology  in the first  quarter of 2004.  We had  debited
goodwill  in the  amount  of  $58,000  to  account  for the  acquisition  of the
Technology,  which amount  consisted  of $38,000 for the issuance of  38,000,000
shares at $0.001 per share and the assumption of $20,000 of notes payable.

         We have not yet generated  revenues.  Operating  expenses  consisted of
payroll  and  related  expenses  for  executive,   finance  and   administrative
personnel, recruiting, professional fees and other general corporate expenses as
well as payroll and related expenses for development  personnel and


                                       5
<PAGE>


consultants.  Operating  expenses  were $222,003 for fiscal 2004, as compared to
$21,000  for  fiscal  2003 due to a  $58,000  impairment  charge in 2004 and the
increased level of activity in 2004. The Company performed its annual impairment
test of its  existing  goodwill  and  concluded  that an  impairment  existed at
December 31, 2004.  Factors considered led to a substantial doubt by the Company
to  recover  its  investment  due to a lack of  certainty  in future  cash flows
calculated on an undiscounted  basis.  In addition,  based on the Company's fair
market  value  estimate,  the  related  write-down  was  required  to record the
intangible asset to its fair market value.

         Accordingly,  the net loss was $230,818 for fiscal 2004, as compared to
$21,000 for fiscal 2003.

LIQUIDITY AND CAPITAL RESOURCES

         At December  31,  2004,  the Company had a working  capital  deficit of
$25,752,  as compared to a working  capital  deficit of $42,000 at December  31,
2003.  The Company had no cash at December 31, 2004,  but maintains an agreement
with  FutureVest,  Inc.  (formerly  Diamond  WorldWide)  a related  company,  to
continue to finance operations.

         The Company has been funded and  continues to be funded by  FutureVest,
Inc. (formerly Diamond WorldWide), which will continue to fund the operating and
development  expenses  of the  Company.  All monies  advanced  to the Company by
Diamond  WorldWide  accrue  interest  at 8% per annum.  At  December  31,  2004,
$184,566 of long-term debt and $7,493 of interest was owed to FutureVest, Inc.

PLAN OF OPERATION

         The Company will be changing its name and pursuing other  opportunities
in the area of technology  development.  For the near term,  the Company will be
dependent upon financing  provided by its  shareholders  and related  parties to
sustain operations.


ITEM 7.  FINANCIAL STATEMENTS

         See the pages beginning with page F-1.


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

         Bongiovanni & Associates was appointed as our principal  accountants as
of March 15, 2004.  On August 15, 2005 our CEO and Board of  Directors  approved
Bongiovanni and Associates to complete the audit for year end December 31, 2004.
Bongiovanni & Associates also completed the audited financial statements for the
fiscal year ended December 31, 2002 and December 31, 2003. During the three most
recent fiscal years and the subsequent interim period,  neither we nor anyone on
our behalf  consulted  Bongiovanni  & Associates  regarding the  application  of
accounting  principles to a specific completed or contemplated  transaction,  or
the type of audit opinion that might be rendered on our financial statements.

         Prior to the engagement of  Bongiovanni  and Associates the company did
not have an independent auditor of record.

ITEM 8A. CONTROLS AND PROCEDURES

         As required by Rule 13a-15 under the  Securities  Exchange Act of 1934,
as of the end of the period covered by this annual report, the Company evaluated
the  effectiveness  of the design and operation of its  disclosure  controls and
procedures.  This  evaluation was carried out under the supervision and with the
participation  of the  Company's  management.  Based upon that  evaluation,  the


                                       6
<PAGE>

Company's Chief Executive Officer and Chief Financial Officer concluded that the
Company's  disclosure controls and procedures are effective.  There have been no
changes in the  Company's  internal  controls or in other  factors,  which could
significantly affect internal controls subsequent to the date it carried out its
evaluation.  It was management's assessment that the delay in filing this report
was due primarily to the Company's  change in plans with respect to its business
operations.

         Disclosure controls and procedures and other procedures are designed to
ensure that information  required to be disclosed in the Company's reports filed
or  submitted  under the Exchange Act is  recorded,  processed,  summarized  and
reported,  within the time  period  specified  in the  Securities  and  Exchange
Commission's  rules and  forms.  Disclosure  controls  and  procedures  include,
without limitation,  controls and procedures designed to ensure that information
required  to be  disclosed  in our  reports  filed  under  the  Exchange  Act is
accumulated  and  communicated  to  management,  including the  Company's  Chief
Executive  Officer and Chief Financial  Officer as appropriate,  to allow timely
decisions regarding required disclosure.


ITEM 8B. OTHER INFORMATION

         None.


                                    PART III

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

         Our executive officers and directors are:

         NAME                      AGE     POSITION
         Garrett K. Krause          38     Chief Executive Officer and Director

         Our directors are elected annually by our shareholders and our officers
are appointed annually by our board of directors.  Any vacancies in our board to
be are filled by the board itself. Set forth below is a brief description of the
recent  employment  and business  experience of our sole  executive  officer and
director.

GARRETT K. KRAUSE, CHIEF EXECUTIVE OFFICER& DIRECTOR

         As of August 15,  2005,  Garrett K.  Krause  became a director  and was
elected as our Chairman and Chief Executive Officer.  Since 1992, Mr. Krause has
been the Managing  Director of eAngels Equity,  LLC, an angel investor  network,
based in Miami,  Florida.  eAngels Equity, LLC participates in the investment in
the real  estate,  financial  services,  media,  entertainment,  and  technology
industries.  Mr. Krause studied finance at University of Calgary before starting
his private investment and entrepreneurial ventures.

CONFLICTS OF INTEREST

         Members of our management are associated with other firms involved in a
range  of  business  activities.  Consequently,  there  are  potential  inherent
conflicts of interest in their acting as officers and  directors of our company.
Insofar as the officers and directors are engaged in other business  activities,
we anticipate they will devote only a minor amount of time to our affairs.

         Our  officers  and  directors  are  now and  may in the  future  become
shareholders,  officers or directors of other companies, which may be formed for
the  purpose of  engaging in  business  activities  similar to us.  Accordingly,
additional  direct conflicts of interest may arise in the future with respect to
such individuals acting on behalf of us or other entities. Moreover,  additional
conflicts of interest may arise with


                                       7
<PAGE>

respect to opportunities  which come to the attention of such individuals in the
performance of their duties or otherwise.  Currently,  we do not have a right of
first refusal  pertaining to opportunities  that come to their attention and may
relate to our business operations.

         Our  officers  and  directors  are, so long as they are our officers or
directors, subject to the restriction that all opportunities contemplated by our
plan of operation  which come to their  attention,  either in the performance of
their duties or in any other manner, will be considered opportunities of, and be
made available to us and the companies that they are affiliated with on an equal
basis. A breach of this  requirement will be a breach of the fiduciary duties of
the officer or  director.  If we or the  companies  with which the  officers and
directors are affiliated both desire to take advantage of an  opportunity,  then
said officers and directors  would abstain from  negotiating and voting upon the
opportunity.  However,  all directors may still  individually  take advantage of
opportunities  if we should decline to do so. Except as set forth above, we have
not  adopted  any  other  conflict  of  interest  policy  with  respect  to such
transactions.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Officers  and  directors,  and  persons  who  own  more  than  10% of a
registered  class of the  Company's  equity  securities,  are  required  to file
reports of ownership and changes in ownership  with the  Securities and Exchange
Commission pursuant to Section 16(a) of the Securities Exchange Act of 1934. The
following  table sets forth reports that were not filed on a timely basis during
the most recently completed fiscal year:

--------------------------------------------------------------------------------
REPORTING PERSON              DATE REPORT DUE                DATE REPORT FILED
--------------------------------------------------------------------------------
Ted W. Russell              Form 3 due 12/29/04                   01/07/05
--------------------------------------------------------------------------------
Garrett K. Krause           Form 3 due 12/29/04                   01/07/05
--------------------------------------------------------------------------------
James Hudson                Form 3 due 12/29/04                   01/07/05
--------------------------------------------------------------------------------


ITEM 10. EXECUTIVE COMPENSATION.

         The following  table sets forth  information  the  remuneration  of our
chief executive officers for the last three completed fiscal years.

<TABLE>
                           SUMMARY COMPENSATION TABLE
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------

                                                                                   LONG TERM COMPENSATION
                                                                           --------------------------------------
                                                                                     AWARDS            PAYOUTS
                                         ANNUAL COMPENSATION               --------------------------------------
                           ------------------------------------------------
                                                                 OTHER      RESTRICTED   SECURITIES
   NAME AND PRINCIPAL                                            ANNUAL       STOCK      UNDERLYING      LTIP       ALL OTHER
       POSITION                                                 COMPENSA-    AWARD(S)     OPTIONS/      PAYOUTS     COMPENSA-
                             YEAR    SALARY ($)    BONUS ($)     TION ($)      ($)        SARS (#)        ($)        TION ($)
------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>         <C>          <C>        <C>            <C>          <C>          <C>          <C>
 James R. Hudson (1)<F1>     2004        -0-          -0-          -0-          -0-          -0-          -0-          -0-
 Ted Russell (2)<F2>         2004        -0-          -0-        -60,000-       -0-          -0-          -0-          -0-
 Robert G. Taylor (3)<F3>    2003        -0-          -0-          -0-          -0-          -0-          -0-          -0-
                             2002        -0-          -0-          -0-          -0-          -0-          -0-          -0-
------------------------------------------------------------------------------------------------------------------------------
------------------
<FN>
(1)<F1>  Mr. Hudson  served as President from  April 1, 2004 to February 5, 2005
         and  as  Chief  Executive  Officer  from October 8, 2004 to February 5,
         2005.
(2)<F2>  Mr.  Russell  served as Chief  Executive  Officer from April 1, 2004 to
         October  8, 2004. He was the President  from November 1, 2004 to August
         15, 2005.  Mr. Russell was not an officer or director of the Company at
         the time we filed our registration statement on Form 10-SB (October 20,
         2004).
(3)<F3>  Mr. Taylor  was  the  President  from January 2001 through February 27,
         2004.  He had no compensation from the company.
</FN>
</TABLE>



                                       8

<PAGE>


<TABLE>
                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
----------------------------------------------------------------------------------------------------------------------

                                                  INDIVIDUAL GRANTS
----------------------------------------------------------------------------------------------------------------------
                             NUMBER OF SECURITIES      PERCENT OF TOTAL
                                  UNDERLYING         OPTIONS/SARS GRANTED   EXERCISE OR BASE PRICE
          NAME               OPTIONS/SARS GRANTED      TO EMPLOYEES IN               ($/SH)           EXPIRATION DATE
                                     (#)                 FISCAL YEAR
----------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                      <C>                     <C>                  <C>
       James Hudson                  -0-                      --                      --                   --
       Ted Russell                   -0-                      --                      --                   --
     Robert G. Taylor                -0-                      --                      --                   --
----------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
                 AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                                        NUMBER OF SECURITIES
                                                                             UNDERLYING         VALUE OF UNEXERCISED
                                                                            UNEXERCISED             IN-THE-MONEY
                                                                          OPTIONS/SARS AT         OPTIONS/SARS AT
                                                                        FISCAL YEAR END (#)     FISCAL YEAR END ($)
                          SHARES ACQUIRED ON                           -----------------------------------------------
        NAME                 EXERCISE (#)        VALUE REALIZED ($)         EXERCISABLE/            EXERCISABLE/
                                                                           UNEXERCISABLE           UNEXERCISABLE
----------------------------------------------------------------------------------------------------------------------
<S>                               <C>                    <C>                  <C>                     <C>
     James Hudson                 -0-                    -0-                  -0-/-0-                  -0/-0-
      Ted Russell                 -0-                    -0-                  -0-/-0-                 -0-/-0-
   Robert G. Taylor               -0-                    -0-                  -0-/-0-                 -0-/-0-
----------------------------------------------------------------------------------------------------------------------
</TABLE>

         We will  reimburse our officers and directors for  reasonable  expenses
incurred during the course of their performance.

         Effective  April 1, 2004,  Mr.  Russell  signed a five-year  employment
agreement  which  was to start  upon  commencement  of full R&D  operations.  He
received monthly compensation of $5,000 from April 1, 2004 to September 1, 2004,
which increased to $7,500 monthly beginning October 1, 2004.


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

         The following table provides certain information as to the officers and
directors  individually  and as a group,  and the holders of more than 5% of the
Common Stock of the Company, as of September 30, 2005:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                               AMOUNT AND NATURE OF           PERCENT OF CLASS
  NAME AND ADDRESS OF BENEFICIAL OWNER (1)<F1>                 BENEFICIAL OWNERSHIP                (2)<F2>
-----------------------------------------------------------------------------------------------------------------
<S>                                                        <C>                                      <C>
Ted W Russell
44 Middle Beach Rd West
Madison, CT 06443                                                 19,599,997 (3)<F3>                40.5%
-----------------------------------------------------------------------------------------------------------------
Garrett K. Krause
23852 PCH, #736
Malibu, CA 90265                                           15,000,000 (3)<F3> (4)<F4> (5)<F5>       31.0%
-----------------------------------------------------------------------------------------------------------------
SolutionMed Ventures
C/O G.K. Krause
1521 Alton Road, #352                                       4,000,000 (3)<F3> (4)<F4> (5)<F5>        8.3%
Miami Beach, FL  33139
-----------------------------------------------------------------------------------------------------------------


                                       9
<PAGE>

<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                               AMOUNT AND NATURE OF           PERCENT OF CLASS
  NAME AND ADDRESS OF BENEFICIAL OWNER (1)<F1>                 BENEFICIAL OWNERSHIP                (2)<F2>
-----------------------------------------------------------------------------------------------------------------
<S>                                                        <C>                                      <C>
FutureVest MicroCap Fund
C/O G.K. Krause
1521 Alton Road, #352                                       4,000,000 (3)<F3> (4)<F4> (5)<F5>        8.3%
Miami Beach, FL  33139
-----------------------------------------------------------------------------------------------------------------
eAngels Technology Fund
C/O G.K. Krause
1521 Alton Road, #352                                       3,000,000 (3)<F3> (4)<F4> (5)<F5>        6.2%
Miami Beach, FL  33139
-----------------------------------------------------------------------------------------------------------------
Diamond Ventures
C/O G.K. Krause
1521 Alton Road, #352                                       4,000,000 (3)<F3> (4)<F4> (5)<F5>        8.3%
Miami Beach, FL  33139
-----------------------------------------------------------------------------------------------------------------
All officers and directors as a group (1 person)                    34,599,997                      71.5%
-----------------------------------------------------------------------------------------------------------------
-------------------
<FN>
(1)<F1>  To our  knowledge,  except as set forth in the  footnotes to this table
         and subject to applicable community property laws, each person named in
         the table has sole  voting and  investment  power  with  respect to the
         shares set forth opposite such person's name.

(2)<F2>  This table is based on 48,402,887 shares of Common Stock outstanding as
         of September  30, 2005.  If a person listed on this table has the right
         to obtain additional shares of Common Stock within sixty (60) days from
         September 30, 2005, the additional  shares are deemed to be outstanding
         for the  purpose of  computing  the  percentage  of class owned by such
         person,  but are not  deemed  to be  outstanding  for  the  purpose  of
         computing the percentage of any other person.

(3)<F3>  Mr. Ted W. Russell and Mr. G.K Krause through the eAngels Syndicate may
         be deemed to be the "parents" of our company  within the meaning of the
         rules and regulations of the Securities and Exchange Commission.

(4)<F4>  Includes 4,000,000 shares owned of record by FutureVest MicroCap  Fund;
         3,000,000  shares owned by eAngels  Technology  Fund;  4,000,000 shares
         owned by  SolutionMed  Ventures and  4,000,000  shares owned by Diamond
         Ventures.

(5)<F5>  Garrett  K.  Krause  is  an  investment  manager  that  manages  equity
         investments and  partnerships  for the eAngels  Syndicate of investors.
         Mr.  Garrett  K.  Krause is deemed the  beneficial  owner a total of 15
         million shares or 31.0% of the total outstanding  common stock pursuant
         to note (4)
</FN>
</TABLE>

CHANGES IN CONTROL

         On August 15, 2005 the Company entered into a Asset Transfer Agreement.
Immediately prior to the filing of this report,  Mr. Ted Russell and Mr. Patrick
Maley resigned their positions and upon closing of the Asset Transfer Agreement,
Mr. Russell will return his stock back to the Company,  resulting in a change in
control of the Company.

         The following table provides certain information as to the officers and
directors  individually  and as a group,  and the holders of more than 5% of the
Common  Stock of the  Company,  as of the  completion  and  closing of the Asset
Transfer  Agreement  which is scheduled to close  immediately  subsequent to the
filing of this 10KSB.


                                       10
<PAGE>


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                               AMOUNT AND NATURE OF            PERCENT OF CLASS
 NAME AND ADDRESS OF BENEFICIAL OWNER (1)<F1>                  BENEFICIAL OWNERSHIP                 (2)<F2>
-------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                                         <C>
Garrett K. Krause
23852 PCH, #736
Malibu, CA 90265                                          15,000,000 (3)<F3> (4)<F4> (5)<F5>          52.8%
-------------------------------------------------------------------------------------------------------------------
SolutionMed Ventures
C/O G.K. Krause
1521 Alton Road, #352                                      4,000,000 (3)<F3> (4)<F4> (5)<F5>          14.1%
Miami Beach, FL  33139
-------------------------------------------------------------------------------------------------------------------
FutureVest MicroCap Fund
C/O G.K. Krause
1521 Alton Road, #352                                      4,000,000 (3)<F3> (4)<F4> (5)<F5>          14.1%
Miami Beach, FL  33139
-------------------------------------------------------------------------------------------------------------------
eAngels Technology Fund
C/O G.K. Krause
1521 Alton Road, #352                                      3,000,000 (3)<F3> (4)<F4> (5)<F5>          10.6%
Miami Beach, FL  33139
-------------------------------------------------------------------------------------------------------------------
Diamond Ventures
C/O G.K. Krause
1521 Alton Road, #352                                      4,000,000 (3)<F3> (4)<F4> (5)<F5>          14.1%
Miami Beach, FL  33139
-------------------------------------------------------------------------------------------------------------------
All officers and directors as a group  (1 person)                     15,000,000                      52.8%
-------------------------------------------------------------------------------------------------------------------
------------------
<FN>
(1)<F1>  To our  knowledge,  except as set forth in the  footnotes to this table
         and subject to applicable community property laws, each person named in
         the table has sole  voting and  investment  power  with  respect to the
         shares set forth opposite such person's name.

(2)<F2>  This table is based on 28,402,887 shares of Common Stock outstanding as
         of the  closing  of the Asset  Transfer  Agreement  subsequent  to this
         filing.  If a person  listed  on this  table  has the  right to  obtain
         additional shares of Common Stock within sixty (60) days from September
         30, 2005,  the additional  shares are deemed to be outstanding  for the
         purpose of computing the percentage of class owned by such person,  but
         are not  deemed to be  outstanding  for the  purpose of  computing  the
         percentage of any other person.

(3)<F3>  Mr. Garrett K. Krause through the eAngels Syndicate may be deemed to be
         the  "parent"  of our  company  within  the  meaning  of the  rules and
         regulations of the Securities and Exchange Commission.

(4)<F4>  Includes 4,000,000 shares owned of record by FutureVest  MicroCap Fund;
         3,000,000  shares owned by eAngels  Technology  Fund;  4,000,000 shares
         owned by  SolutionMed  Ventures and  4,000,000  shares owned by Diamond
         Ventures.

(5)<F5>  Garrett  K.  Krause  is  an  investment  manager  that  manages  equity
         investments and  partnerships  for the eAngels  Syndicate of investors.
         Mr.  Garrett  K.  Krause is deemed the  beneficial  owner a total of 15
         million shares or 52.8% of the total outstanding  common stock pursuant
         to note (4)
</FN>
</TABLE>


                                       11
<PAGE>


STOCK OPTION PLANS

         On September 30, 2004,  our  shareholders  adopted a stock option plan,
under which an aggregate  of  5,000,000  shares of common stock are reserved for
issuance pursuant to the exercise of stock options. These options may be granted
to our employees,  officers, directors, and consultants. We may also make awards
of  restricted  stock  under  this  plan.  Shares  issued  under  this  plan are
"restricted"  in the sense  that they are  subject to  repurchase  by us at cost
during the vesting period.

         The  plan  is  designed  to (i)  induce  qualified  persons  to  become
employees,  officers,  or  directors  of us; (ii)  reward such  persons for past
services  to us;  (iii)  encourage  such  persons  to  remain  in our  employ or
associated  with us; and (iv) provide  additional  incentive for such persons to
put forth maximum  efforts for the success of our business.  Transactions  under
the plan are  intended  to  comply  with all  applicable  provisions  under  the
Securities Exchange Act of 1934. This plan will remain in effect until September
30, 2014, unless soon terminated by the Board of Directors.

         Our board of directors administers the plan and determines:

    o    who will be granted options or awards;
    o    when options or awards will be granted;
    o    the number of options or shares to be granted;
    o    which  options may be intended to qualify as  incentive  stock  options
         under the Internal Revenue Code of 1986, versus  non-qualified  options
         which are not intended to so qualify;
    o    the time or times when each option becomes exercisable;
    o    the duration of the exercise period for options;
    o    the  form  or forms of the  instruments  evidencing  options  or awards
         granted under the plan;
    o    the purchase price of the shares issued under the plan;
    o    the  period or  periods  of time  during  which we will have a right to
         repurchase the shares; and
    o    the terms and conditions of such repurchase.

         The board may adopt,  amend,  and rescind such rules and regulations as
in its opinion may be advisable for the administration of the plan. It may amend
the plan without  shareholder  approval  where such  approval is not required to
satisfy any  statutory or regulatory  requirements.  The board also may construe
the plan and the provisions in the instruments  evidencing options granted under
the plan to employee and officer  participants.  The board has the power to make
all other determinations deemed necessary or advisable for the administration of
the plan.  The board may not  adversely  affect  the  rights of any  participant
without the consent of such participant.

         The plan contains provisions for proportionate adjustment of the number
of shares for outstanding options and the option price per share in the event of
stock dividends,  recapitalizations resulting in stock splits or combinations or
exchanges of shares.

         The board  may  select  participants  in the plan  from  employees  and
officers of us and our subsidiaries and consultants to us and our  subsidiaries.
In  determining  the persons to whom  options and awards will be granted and the
number of shares to be covered by each option,  the board will take into account
the duties of the respective persons, their present and potential  contributions
to our success, and such other factors as the board deems relevant to accomplish
the purposes of the plan.

         STOCK OPTIONS.  Only employees of us and our subsidiaries,  as the term
"employee"  is defined for the  purposes of the  Internal  Revenue  Code will be
entitled to receive  incentive stock options.  The option price of any incentive
stock option may be not less than 100% of the fair market value per share on the
date of grant of the option; provided,  however, that any incentive stock option
granted  under the plan to a person  owning  more than ten  percent of the total
combined  voting power of the common stock will have an option price of not less
than  110% of the  fair  market  value  per  share  on the  date of grant of the
incentive  stock option.  The exercise  period of options granted under the plan
may not exceed ten years from the date of grant thereof. Incentive stock options
granted to a person  owning more than ten percent



                                       12
<PAGE>

of the total combined  voting power of our common stock will be for no more than
five years. Except in the case of options granted to disinterested directors who
administer  the plan,  the board will have the authority to accelerate or extend
the  exercisability  of any  outstanding  option  at such  time and  under  such
circumstances  as it, in its sole discretion,  deems  appropriate.  However,  no
exercise  period may be extended to increase  the term of the option  beyond ten
years from the date of the grant.

         An option may not be exercised unless the optionee then is an employee,
officer,  or consultant of us or our  subsidiaries,  and unless the optionee has
remained  continuously as an employee,  officer, or consultant since the date of
grant of the option.  If the  optionee  ceases to be an  employee,  officer,  or
consultant other than by reason of death, disability,  or for cause, all options
granted to such  optionee,  fully vested to such optionee but not yet exercised,
will  terminate  three  months  after  the date  the  optionee  ceases  to be an
employee, officer or consultant. All options that are not vested to an optionee,
under the conditions stated in this paragraph for which employment ceases,  will
immediately terminate on the date the optionee ceases employment or association.

         If an optionee dies while an employee, officer or consultant, or if the
optionee's  employment,  officer,  or consultant  status terminates by reason of
disability,  all options  theretofore  granted to such optionee,  whether or not
otherwise exercisable, unless earlier terminated in accordance with their terms,
may be  exercised  at any  time  within  one  year  after  the  date of death or
disability of said optionee, by the optionee or by the optionee's estate or by a
person who acquired the right to exercise such options by bequest or inheritance
or otherwise by reason of the death or disability of the optionee.

         Options granted under the plan are not transferable  other than by will
or by the laws of descent and  distribution or pursuant to a qualified  domestic
relations order. Options may be exercised,  during the lifetime of the optionee,
only by the  optionee  and  thereafter  only  by his  legal  representative.  An
optionee has no rights as a shareholder with respect to any shares covered by an
option until the option has been exercised.

         Unless otherwise specified in an optionee's agreement,  options granted
under the plan will  become  vested  with the  optionee  over the course of four
years  from  date of grant  under  the  following  schedule:  25% upon the first
anniversary of the option grant and the remaining 75% monthly over the following
36 months.

         RESTRICTED STOCK AWARDS. Shares issued under the plan will be evidenced
by a written restricted stock purchase agreement between us and the participant.
Shares issued under the plan are transferable  only if the transferee  agrees to
be bound by all of the terms of the plan,  including our right to repurchase the
shares,  and only if such  transfer  is  permissible  under  federal  and  state
securities  laws. To facilitate the enforcement of the restrictions on transfer,
the board may require the holder of the shares to deliver the certificate(s) for
such shares to be held in escrow during the period of restriction.

         OUTSTANDING OPTIONS.  As  of  September 30, 2005 there  were no options
granted under this plan.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Other than as disclosed below, none of our present directors,  officers
or principal shareholders,  nor any family member of the foregoing,  nor, to the
best of our information and belief, any of our former directors, senior officers
or  principal  shareholders,  nor any family  member of such  former  directors,
officers or principal shareholders,  has or had any material interest, direct or
indirect,  in  any  transaction,  or  in  any  proposed  transaction  which  has
materially affected or will materially affect us.

         The Company currently has its headquarters  operations in Santa Monica,
California by subleasing  office space from FutureVest,  Inc.  (formerly Diamond
WorldWide).  Term of the  lease is month to month and the rent is $250 per month
and started on January 1, 2005. At December 31, 2004,  the Company owed $184,566
to FutureVest,  Inc. pursuant to an unsecured  revolving line of up to $750,000.
Interest  accrues at 8% per annum and the entire  balance  is due  December  31,
2007.  This debt is


                                       13
<PAGE>

convertible  into shares of common  stock of the Company at a price of $0.35 per
share.  Also as of December 31, 2004,  $7,493 was owed to  FutureVest,  Inc. for
accrued interest.

         As per the terms of  February  6, 2004  Agreement  for the  Purchase of
Assets there were two royalties  payable by the Company to SolutionMED  Ventures
of 1.2% and CNPB,  Inc.  (owned by the inventor,  Ted Russell and his spouse) of
2.2%  on  all  product  revenues  related  to  HEARTSTAT   CNBP/BF   Technology.
SolutionMED Ventures is a related company as it is part of the eAngels Syndicate
of investors, managed by Garrett K. Krause. As no revenues were generated during
2004, no royalty payments were made. Upon the consummation of the Asset Transfer
Agreement, the Company will no longer be subject to such royalty obligations.

         Garrett K. Krause through the eAngels Syndicate is the beneficial owner
of  15,000,000  shares  through  the  investment  funds;  SolutionMed  Ventures,
FutureVest MicroCap Fund, eAngels Technology Fund and Diamond Ventures.

         As part of the Agreement for the Purchase of Assets, the Company agreed
to a Commercialization  Partnership  Agreement (Exhibit B to the Agreement) with
the Interest Holders whereby the Interest  Holders agreed that Ted Russell,  the
inventor  of  the  technology,  could  exclusively  license  in  perpetuity  the
HEARTSTAT CNBP/BF Technology for the purpose of financing and concluding product
commercialization  activities  if the  Company  were to fail to  raise  at least
$2,500,000  of net proceeds for product  development  by September 6, 2005.  The
Company was given a 90-day  period to cure the  financing  inadequacy to prevent
the  license  from being  effected.  The terms of the  license  would  include a
provision that Mr. Russell, or an independent entity would repay the Company for
any actual  investment  capital received at the rate of 20% of any net income of
Mr. Russell's independent commercial operations of producing derivative products
using the HEARTSTAT CNBP/BF Technology. In addition, the Company would receive a
royalty on net revenues of such derivative products as follows:

         1.   A  royalty equal to 3% of  net revenues if at lest $1.3 million of
              investment capital was received
         2.   A royalty equal to 2% of net  revenues  if at least  $650,000  but
              less than $1.3 million of investment capital was received, or
         3.   A royalty equal  to 1% of  net revenues if  less than  $650,000 of
              investment capital was received.

         On August 15, 2005, in relation to the Company's inability to raise the
required  $2,500,000,  Mr. Ted Russell  and  HeartSTAT,  Inc.  executed an Asset
Transfer Agreement with the Company for the sale of the Technology to HeartSTAT,
Inc., a private company controlled by Mr. Ted Russell, to facilitate the ability
of Mr. Russell to continue the private funding of and  commercialization  of the
Technology. The Company will receive the following in exchange for the assets:

              o    Mr. Russell and the Hull Family will return 20,000,000 shares
                   of the Company's common stock to treasury, which accounts for
                   41.3% of the issued and outstanding stock in the company.

              o    HeartSTAT,  Inc.  will   issue   98,207   shares   of   stock
                   (representing 8.7% equity interest in HeartSTAT,  Inc.) and a
                   $70,000 promissory note.

              o    Mr.  Russell  and  HeartSTAT,  Inc.  will  fully  release the
                   Company from payment of all amounts owed to them.

         Mr.  Russell and Mr. Pat Maley,  who were not  officers or directors at
the time we filed our  registration  statement on Form 10-SB (October 20, 2004),
resigned  immediately  prior  to the  filing  of this  report  as  officers  and
directors of the Company.  At December 31, 2004,  $24,500 was owed to HeartSTAT,
Inc.  as  long-term  debt and $1,321 was owed to  HeartSTAT,  Inc.  for  accrued
interest on that debt.  Also at December 31, 2004,  the Company owed Ted Russell
$7,500 under the terms of his employment contract.





                                       14
<PAGE>


ITEM 13. EXHIBITS.

--------------------------------------------------------------------------------
REGULATION
S-B NUMBER                                                   EXHIBIT
--------------------------------------------------------------------------------
   3.1          Certificate of Incorporation, as amended (1)
--------------------------------------------------------------------------------
   3.2          Bylaws (1)
--------------------------------------------------------------------------------
  10.1          Agreement for the Purchase of Assets with the Interest holders
                of the HEARTSTAT CNBP/BF Technology (1)
--------------------------------------------------------------------------------
  10.2          Employment Agreement of Ted Russell (1)
--------------------------------------------------------------------------------
  10.3          2004 Stock Option Plan (1)
--------------------------------------------------------------------------------
  10.4          SolutionMed Ventures Royalty Agreement (1)
--------------------------------------------------------------------------------
  10.5          CNBP, Inc. Royalty Agreement (1)
--------------------------------------------------------------------------------
  10.6          Asset Purchase Agreement dated as of August 15, 2005, by and
                between HeartSTAT, Inc., Ted W. Russell, and HeartSTAT
                Technology, Inc. (2)
--------------------------------------------------------------------------------
  10.7          Escrow Agreement dated as of August 15, 2005 (2)
--------------------------------------------------------------------------------
  10.8          Convertible Promissory Note to Diamond WorldWide, Inc.
--------------------------------------------------------------------------------
----------------------

(1)      Incorporated  by reference to the  exhibits filed with the registrant's
         registration statement on Form 10-SB, file no. 0-50993.

(2)      Incorporated by reference to the exhibits  filed with the  registrant's
         amended  current  report  on  Form 8-K  dated August 15, 2005, file no.
         0-50993.


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES

         For the fiscal years ended  December 31, 2004 and 2003,  our  principal
accountant  is  expected  to  bill  approximately   $9,000  and  billed  $9,000,
respectively,  for the audit of our annual  financial  statements  and review of
financial statements included in our Form 10-SB filing.

AUDIT-RELATED FEES

         There  were no fees  billed  for  services  reasonably  related  to the
performance of the audit or review of our financial  statements outside of those
fees disclosed above under "Audit Fees" for fiscal years 2004 and 2003.

TAX FEES

         There  were no fees  billed for tax  compliance,  tax  advice,  and tax
planning services for fiscal years 2004 and 2003.

ALL OTHER FEES

         There were no other fees billed by our principal  accountant other than
those disclosed above for fiscal years 2004 and 2003.


                                       15
<PAGE>


PRE-APPROVAL POLICIES AND PROCEDURES

         Prior to engaging our accountants to perform a particular service,  our
board of  directors  obtains an estimate  for the service to be  performed.  The
board of directors in accordance with procedures for the Company approved all of
the services described above.



                                   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.

                                            HEARTSTAT TECHNOLOGY, INC.



Date:    October 31, 2005                   By:    /s/ GARRETT K. KRAUSE
       -------------------                     ---------------------------------
                                                  Garrett K. Krause, CEO


         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>
<S>                                <C>                                          <C>

                                   Chief Executive Officer and
                                   Director (Principal Executive,
/s/ GARRETT K. KRAUSE              Financial, and Accounting Officer)           October 31, 2005
------------------------------
Garrett K. Krause

</TABLE>
















                                       16
<PAGE>















                                  ------------

                              FINANCIAL STATEMENTS

                           HEARTSTAT TECHNOLOGY, INC.
                             (FKA TEC FACTORY, INC.)

                           DECEMBER 31, 2004 AND 2003

                                  ------------






















                                           BONGIOVANNI & ASSOCIATES
                                           ------------------------
                                           CERTIFIED PUBLIC ACCOUNTANTS




                                      F-1
<PAGE>

                                TABLE OF CONTENTS



                                                                PAGE(S)

FINANCIAL STATEMENTS:

        Balance Sheet                                               F-4

        Statements of Operations                                    F-5

        Statement of Stockholders' Deficit                          F-6

        Statements of Cash Flows                                    F-7

        Notes to Financial Statements                        F-8 -F- 17
























                                      F-2
<PAGE>


BONGIOVANNI & ASSOCIATES
CERTIFIED PUBLIC ACCOUNTANTS
                                                17111 Kenton Drive - Suite 100-B
                                                 Cornelius, North Carolina 28031
================================================================================

To the Board of Directors and Stockholders:
HeartSTAT Technology, Inc.
FKA Tec Factory, Inc.
530 Wilshire Blvd, #736
Santa Monica, CA 90401

We have audited the  accompanying  balance sheet of HeartSTAT  Technology,  Inc.
(FKA Tec Factory, Inc.) (a Delaware corporation) as of December 31, 2004 and the
related statements of operations,  stockholders' deficit, and cash flows for the
two years  ended.  These  financial  statements  are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial  statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the 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  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the balance sheet  referred to above  presents  fairly,  in all
material respects, the financial position of HeartSTAT Technology, Inc. (FKA Tec
Factory, Inc.) as of December 31, 2004 and the results of its operations and its
cash flows for the two years  then  ended,  in  conformity  with U.S.  generally
accepted accounting principles.

The accompanying  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 G. The financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.

September 21, 2005

/s/ BONGIOVANNI & ASSOCIATES, P.A.

Bongiovanni & Associates, P.A.
Charlotte, North Carolina


                                      F-3

<PAGE>

                           HEARTSTAT TECHNOLOGY, INC.
                             (FKA Tec Factory, Inc.)
                                  Balance Sheet
                              AT DECEMBER 31, 2004
================================================================================

<TABLE>
<CAPTION>
<S>                                                                   <C>
                                     ASSETS

CURRENT ASSETS
   Cash                                                               $               -
   Prepaid Expense                                                                1,517
                                                                      ------------------
      TOTAL CURRENT ASSETS                                                        1,517
                                                                      ------------------

OTHER ASSETS
   Goodwill                                                                           -
                                                                      ------------------
      TOTAL OTHER ASSETS                                                              -
                                                                      ------------------

      TOTAL ASSETS                                                    $           1,517
                                                                      ==================

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
   Accounts Payable and Accrued Expenses                              $          10,954
   Accrued Interest - Related Parties                                             8,815
   Other Trade Payables - Related Parties                                         7,500
                                                                      ------------------
      TOTAL CURRENT LIABILITIES                                                  27,269
                                                                      ------------------

LONG TERM LIABILITIES
   Convertible Notes Payable - Related Parties                                  209,066
                                                                      ------------------
      TOTAL LONG TERM LIABILITIES                                               209,066
                                                                      ------------------

      TOTAL LIABILITIES                                                         236,335
                                                                      ------------------

STOCKHOLDERS' DEFICIT
   Common Stock (80,000,000 shares authorized, 48,402,887
     shares issued  and outstanding, par value $.001)                            48,403
   Convertible Preferred Stock (5,000,000 shares authorized, no
     shares issued  and outstanding, par value $.001)                                 -
   Retained Deficit                                                            (283,221)
                                                                      ------------------
      TOTAL STOCKHOLDERS' DEFICIT                                              (234,818)
                                                                      ------------------

      TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                     $           1,517
                                                                      ==================

</TABLE>



                                      F-4
<PAGE>

                           HEARTSTAT TECHNOLOGY, INC.
                             (FKA Tec Factory, Inc.)
                            Statements of Operations
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
================================================================================

<TABLE>
<CAPTION>
                                                                 Year Ended                     Year Ended
                                                             December 31, 2004               December 31, 2003
                                                             -----------------               -----------------
<S>                                                          <C>                             <C>
REVENUES:
   Sales                                                     $              -                $              -
   Cost of sales                                                            -                               -
                                                             -----------------               -----------------
      GROSS PROFIT                                                          -                               -

OPERATING EXPENSES:
   General and Administrative                                         102,003                          21,000
   Consulting R&D Expenses                                             62,000                               -
   Impairment Expense of Intangible Assets                             58,000                               -
                                                             -----------------               -----------------
      TOTAL OPERATING EXPENSES                                        222,003                          21,000
                                                             -----------------               -----------------

      LOSS FROM OPERATIONS                                           (222,003)                        (21,000)

OTHER EXPENSES:
   Interest Expense                                                     8,815                               -
                                                             -----------------               -----------------
      TOTAL OTHER EXPENSES                                              8,815                               -
                                                             -----------------               -----------------

      NET LOSS                                                       (230,818)                        (21,000)
                                                             -----------------               -----------------

Basic and Fully Diluted Net Loss per Share                   $          (0.01)               $             **
                                                             =================               =================

Weighted Average Shares Outstanding                                39,345,353                      10,402,887
                                                             =================               =================


              ** Less than $0.01

</TABLE>



                                      F-5

<PAGE>

                           HEARTSTAT TECHNOLOGY, INC.
                             (FKA Tec Factory, Inc.)
                       Statement of Stockholders' Deficit
                    FOR THE YEARS DECEMBER 31, 2004 AND 2003
================================================================================

<TABLE>
<CAPTION>
                                                                                                    Additional
                                             Common         Common      Preferred    Preferred        Paid in         Retained
                                              Stock         Shares        Stock        Shares         Capital          Deficit
                                         ----------------------------------------------------------------------------------------
<S>                                      <C>              <C>          <C>           <C>            <C>              <C>
Balances, January 1, 2003                $    10,403      10,402,887   $        -    $      -       $        -       $   (31,403)

Net Loss for they year                             -               -            -           -                -           (21,000)
                                         ----------------------------------------------------------------------------------------

Balances, January 1, 2004                     10,403      10,402,887            -           -                -           (52,403)

Common stock issued for acquistion
   of impaired goodwill                       38,000      38,000,000            -           -                -                 -

Net Loss for the year                              -               -            -           -                -          (230,818)
                                         ----------------------------------------------------------------------------------------

Balances, December 31, 2004              $    48,403      48,402,887   $        -    $      -       $        -       $  (283,221)
                                         ========================================================================================

</TABLE>














                                      F-6

<PAGE>

                           HEARTSTAT TECHNOLOGY, INC.
                             (FKA Tec Factory, Inc.)
                            Statements of Cash Flows
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
================================================================================

<TABLE>
<CAPTION>
                                                                       2004               2003
                                                                 ----------------    --------------
<S>                                                              <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                      $      (230,818)    $     (21,000)
   Adjustments to reconcile net loss to net
   cash used in operating activities:
         Impairment of Goodwill                                           58,000                 -
      Increase in operating assets
         Prepaid Expense                                                  (1,517)                -
      Decrease in operating liabilities
         Other trade payable - related parties                             7,500                 -
         Accounts payable and accrued expenses                           158,020            21,000
         Accrued interest - Related Parties                                8,815                 -
                                                                 ----------------    --------------
         NET CASH USED IN OPERATING ACTIVITIES                                 -                 -
                                                                 ----------------------------------

         NET INCREASE (DECREASE) IN CASH AND
         CASH EQUIVALENTS                                                      -                 -
                                                                 ----------------    --------------

CASH AND CASH EQUIVALENTS:
         Beginning of year                                                     -                 -
                                                                 -----------------   --------------
         End of year                                             $             -     $           -
                                                                 =================   ==============

OTHER NON-CASH FINANCING ACTIVITIES:
Incurrence of notes payable for purchase of goodwill             $        20,000     $           -
                                                                 =================   ==============

Issuance of common shares for purchase of goodwill               $        38,000     $           -
                                                                 =================   ==============

</TABLE>




                                      F-7

<PAGE>

                           HEARTSTAT TECHNOLOGY, INC.
                             (FKA TEC FACTORY, INC.)
                      NOTES TO AUDITED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
================================================================================

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BACKGROUND  -  HeartSTAT  Technology,  Inc.  (FKA  "Tec  Factory,  Inc.")  ("The
Company") was  organized  under the laws of the State of Delaware on October 12,
1995 as a corporation. The original name of the Company was Hospital Software of
America,  Inc. On February 13,  2004,  the Company  legally  changed its name to
HeartSTAT  Technology,  Inc. via a Certificate  of Amendment of  Certificate  of
Incorporation  as filed with the State of Delaware.  The Company entered into an
Agreement for the Purchase of Assets,  dated  February 6, 2004 that provided for
the issuance of 38,000,000  shares of common stock and the assumption of $20,000
of debt plus two royalty agreements as consideration for the purchase for a 100%
ownership of the medical technology. At February 6, 2004, the Company's board of
directors and shareholders approved the terms of the HeartSTAT Agreement for the
Purchase  of  Assets.  This  agreement  was  accounted  for  as an  arms  length
transaction.  The  objective of the share  exchange was for the Company to enter
into the field of non-invasive monitoring of blood flow.

The Company had previously operated as a technology  acquisition and development
company under the name of Tec Factory, Inc.

BASIS OF  PRESENTATION - The financial  statements  included  herein include the
accounts of HeartSTAT  Technology,  Inc. (FKA Tec Factory,  Inc.) prepared under
the accrual basis of accounting.

MANAGEMENT'S  USE OF  ESTIMATES - The  preparation  of financial  statements  in
conformity with accounting principles generally accepted in the United States of
America  requires  management to make estimates and assumptions  that effect the
reported amounts of assets and liabilities, disclosures of contingent assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting  period.  Actual results could differ
from those estimates.

CASH AND CASH  EQUIVALENTS - For purposes of the  Statements of Cash Flows,  the
Company  considers liquid  investments with an original maturity of three months
or less to be cash equivalents.

FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS  - The  carrying  amounts  of  financial
instruments  including  prepaid expense,  accounts payable and accrued expenses,
accrued interest and payable to related parties  approximated fair value because
of the immediate short-term maturity of these instruments.


                                      F-8
<PAGE>

                           HEARTSTAT TECHNOLOGY, INC.
                             (FKA TEC FACTORY, INC.)
                      NOTES TO AUDITED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
================================================================================

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT')

INCOME TAXES - Income  taxes are  provided  for the tax effects of  transactions
reported in the  financial  statements  and consist of  deferred  taxes  related
primarily to differences between the basis of certain assets and liabilities for
financial  and tax reporting and net  operating  loss-carry  forwards.  Deferred
taxes represent the future tax return  consequences of those differences,  which
will  either be  taxable or  deductible  when the  assets  and  liabilities  are
recovered or settled.

The  income  tax  benefit  consists  of taxes  currently  refundable  due to net
operating loss carry back provisions for federal and state governments. Deferred
tax  assets  are  reduced  by a  valuation  allowance  when,  in the  opinion of
management,  it is more likely than not that some portion or the entire deferred
tax asset will not be realized. Deferred tax assets and liabilities are adjusted
for the effect of changes in tax laws and rates on the date of enactment.

LOSS PER SHARE - The Company  reports  earnings  (loss) per share in  accordance
with Statement of Financial  Accounting  Standard (SFAS) No.128.  This statement
requires  dual  presentation  of  basic  and  diluted  earnings  (loss)  with  a
reconciliation   of  the  numerator  and  denominator  of  the  loss  per  share
computations. Basic earnings per share amounts are based on the weighted average
shares of common  outstanding.  If applicable,  diluted earnings per share would
assume the  conversion,  exercise  or  issuance of all  potential  common  stock
instruments  such as options,  warrants and convertible  securities,  unless the
effect is to reduce a loss or increase  earnings  per share.  Accordingly,  this
presentation  has  been  adopted  for  the  period  presented.   There  were  no
adjustments  required to net loss for the period presented in the computation of
diluted earnings per share.

COMPREHENSIVE INCOME (LOSS) - The Company adopted Financial Accounting Standards
Board  Statement  of  Financial   Accounting   Standards  No.  130,   "REPORTING
COMPREHENSIVE INCOME", which establishes standards for the reporting and display
of comprehensive  income and its components in the financial  statements.  There
were no items of  comprehensive  income (loss)  applicable to the Company during
the years covered in the financial statements.




                                      F-9
<PAGE>

                           HEARTSTAT TECHNOLOGY, INC.
                             (FKA TEC FACTORY, INC.)
                      NOTES TO AUDITED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
================================================================================

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT')

RECENT   ACCOUNTING   PRONOUNCEMENTS   -  In  November  2002,  the  FASB  issued
Interpretation  No.  45  ("FIN  45"),  "Guarantor's  Accounting  and  Disclosure
Requirements  for Guarantee,  Including  Indirect  Guarantees or Indebtedness of
Others",  which  addresses  the  disclosures  to be made by a  guarantor  in its
interim and annual financial  statements about its obligations under guarantees.
FIN 45 also  requires  the  recognition  of a liability  by a  guarantor  at the
inception of certain guarantees that are entered into or modified after December
31, 2002.

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation  - Transition and Disclosure - an amendment to SFAS No. 123" ("SFAS
No.  148"),  which  provides  alternative  methods of  transition  for companies
voluntarily  planning on implementing the fair value  recognition  provisions of
SFAS No. 123.  SFAS No. 148 also revises the  disclosure  provisions of SFAS No.
123 to  require  more  promineI1t  disclosure  of the method of  accounting  for
stock-based  compensation,  and requiring disclosure of pro forma net income and
earnings per share as if the fair value  recognition  provisions of SFAS No. 123
had been applied from the original  effective  date of SFAS No. 123. The Company
adopted the disclosure  provisions of SFAS No. 148 for the quarters ending after
December 15, 2002.

In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest
Entities". FIN No. 46 requires the consolidation of entities that cannot finance
their  activities  without  the support of other  parties and that lack  certain
characteristics of a controlling interest, such as the ability to make decisions
about the entity's  activities via voting rights or similar  rights.  The entity
that consolidates the variable interest entity is the primary beneficiary of the
entity's  activities.  FIN No.  46  applies  immediately  to  variable  interest
entities created after January 31, 2003, and must be applied in the first period
beginning  after  June  15,2003  for  entities  in which an  enterprise  holds a
variable  interest entity that it acquired before February 1, 2003. The adoption
of this standard did not have any impact on the Company's financial statements.

In January 2003, the EITF released  Issue No. 00-21,  ("EITF  00-21"),  "Revenue
Arrangements with Multiple  Deliveries",  which addressed certain aspects of the
accounting  by a vendor for  arrangement  under which it will  perform  multiple
revenue-generating  activities.  Specifically,  EITF 00-21 addresses  whether an
arrangement  contains more than one unit of accounting and the  measurement  and
allocation to the separate units of accounting in the arrangement. EITF 00-21 is
effective  for revenue  arrangements  entered into in fiscal  periods  beginning
after June 15, 2003. The adoption of this standard did not have an impact on the
Company's financial statements.


                                      F-10
<PAGE>


                           HEARTSTAT TECHNOLOGY, INC.
                             (FKA TEC FACTORY, INC.)
                      NOTES TO AUDITED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
================================================================================

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT')

In May 2003,  the FASB issued  SFAS No.  149,  "Amendment  of  Statement  133 on
Derivative  Instruments  and  Hedging  Activities."  SFAS  No.  149  amends  and
clarifies  accounting for derivative  instruments,  including certain derivative
instruments  embedded in other contracts,  and for hedging activities under SFAS
No. 133. SFAS No. 149 is effective for contracts  entered into or modified after
June 30, 2003 and for hedging relationships  designated after June 30, 2003. The
adoption of this  Standard  did not have any impact on the  Company's  financial
statements.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics  of both Liabilities and Equity." SFAS No. 150
establishes  standards for how companies  classify and measure certain financial
instruments with  characteristics  of both  liabilities and equity.  It requires
companies  to  classify  a  financial  instrument  that is within its scope as a
liability  (or an asset in some  circumstances).  SFAS No. 150 is effective  for
financial  instruments entered into or modified after May 31, 2003. The standard
did impact the Company's financial statements.

In December 2004, the FASB issued SFAS No. 123(R),  "Accounting  for Stock-Based
Compensation".  SFAS No. 123(R)  establishes  standards for the  accounting  for
transactions  in which an entity  exchanges its equity  instruments for goods or
services.  This Statement  focuses  primarily on accounting for  transactions in
which an entity obtains employee services in share-based  payment  transactions.
SGAS  123(R)  requires  that  the  fair  value  of such  equity  instruments  be
recognized  as expense in the  historical  financial  statements as services are
performed.  Prior to SFAS 123(R),  only certain  pro-forma  disclosures  of fair
value were  required.  SFAS 123(R) shall be effective  for the Company as of the
beginning  of the first  interim or annual  reporting  period that begins  after
December 15, 2005. The adoption of this new accounting pronouncement is expected
to have a material impact on the financial  statements of the Company commencing
with the third  quarter of the year ending  September 30, 2006.  Small  business
issuers need not comply with the new standard  until  fiscal  periods  beginning
after  December 15, 2005.  The Company  already  records the expense of employee
stock  options  for annual  and  quarterly  periods  on fair  value  calculation
according to SFAS No.123.



                                      F-11
<PAGE>

                           HEARTSTAT TECHNOLOGY, INC.
                             (FKA TEC FACTORY, INC.)
                      NOTES TO AUDITED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
================================================================================

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT')

RECENT  ACCOUNTING  PRONOUNCEMENTS  (CONT.) - In November  2004, the FASB issued
SFAS No. 151,  "Inventory  Costs" (SFAS 151). This Statement amends the guidance
in ARB No. 43,  Chapter 4,  "Inventory  Pricing," to clarify the  accounting for
abnormal amounts of idle facility expense,  freight,  handling costs, and wasted
material  (spoilage).  SFAS 151  requires  that  those  items be  recognized  as
current-period  charges. In addition, this Statement requires that allocation of
fixed  production  overheads to the costs of  conversion  be based on the normal
capacity  of the  production  facilities.  The  provisions  of SFAS No.  151 are
effective for inventory  costs incurred in fiscal years beginning after June 15,
2005.

In December 2003, the issued Staff Accounting Bulletin ("SAB") No. 104, "Revenue
Recognition,"  rescinded  the  accounting  guidance  contained  in SAB No.  101,
"Revenue  Recognition in Financial  Statements,"  and  incorporated  the body of
previously issued guidance related to multiple-element revenue arrangements. The
Company's  adoption  of SAB No.  104 did not have any  impact  on its  financial
statements.

In  March  2004,  the FASB  ratified  EITF  Issue  No.  03-1,  "The  Meaning  of
Other-Than-Temporary  Impairment  and its  Application  to Certain  Investments"
("EITF 03-1"),  but delayed the recognition  and measurement  provisions of EITF
03-1 in September  2004. For reporting  periods  beginning  after June 14, 2004,
only the  disclosure  requirements  for  available-for-sale  securities and cost
method investments are required.  The Company's adoption of the requirements did
not have a significant impact on the Company's disclosures.

In July 2004, the FASB issued EITF Issue No. 02-14,  "Whether an Investor Should
Apply the Equity Method of Accounting  to  Investments  Other than Common Stock"
("EITF  02-14").  EITF  02-14  requires  application  of the  equity  method  of
accounting  when an  investor  is  able  to  exert  significant  influence  over
operating  and  financial  policies of an investee  through  ownership of common
stock or  in-substance  common  stock.  EITF 02-14 is  effective  for  reporting
periods  beginning after September 15, 2004. The adoption of EITF 02-14 will not
have a significant impact on the Company's financial statements.

NOTE B - ASSET ACQUISITION AGREEMENT

On February 6, 2004 the Company completed an asset acquisition agreement whereby
the Company  issued  38,000,000  shares of its common stock to various  interest
holders and assumed  $20,000 in note payables in exchange for a technology  that
will  be  used  for  monitoring  patient  blood  flow,   perfusion,   and  other
cardiovascular and heart values.


                                      F-12
<PAGE>

                           HEARTSTAT TECHNOLOGY, INC.
                             (FKA TEC FACTORY, INC.)
                      NOTES TO AUDITED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
================================================================================

NOTE C - CONVERTIBLE NOTES PAYABLE - RELATED PARTIES

Convertible  notes payable - related parties at December 31, 2004 consist of the
following:

Revolving   line   for   $50,000
payable  to  a   related   party
company  bearing 8.00% interest,
unsecured.  No  monthly payments
of  principal  and interest with
maturity  due December 31, 2006.
Debt is convertible  into common
stock of the Company  at a price
per share of $.35.
                                 Current balance at December 31, 2004 is $24,500

Unsecured  revolving   line  for
$750,000  payable  to a  company
related through common director-
ship  and  ownership bearing  8%
interest.  Entire   balance   of
principal  matures  on  December
31, 2007.  Debt  is  convertible
into common stock of the Company
at a price per share of $.35.
                                Current balance at December 31, 2004 is $184,566


         Total convertible debts outstanding              $ 209,066
         Less: current portion                                  -0-
                                                          ---------
         Long-term portion                                $ 209,066
                                                          =========

Principal  maturities  of  convertible  notes  payable - related  parties  as of
December 31, 2004 for the next five years and thereafter is as follows:

2005                $       -0-
2006                     24,500
2007                    184,566
2008                        -0-
2009                        -0-
                    -----------
Total               $   209,066
                    ===========



                                      F-13
<PAGE>

                           HEARTSTAT TECHNOLOGY, INC.
                             (FKA TEC FACTORY, INC.)
                      NOTES TO AUDITED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
================================================================================

NOTE  D - COMMITTMENTS

Pursuant to the aforementioned agreement for the purchase of assets, the Company
is committed to 2.2% and 1.2% gross royalty payments to other related  entities.
These  percentages are based on total net revenues (net of product  returns) and
any third party license royalties per each of the agreements.

The Company is also  committed  to an  employment  agreement  with its  officer.
Pursuant to the  employment  agreement,  the Company is  committed to paying its
officer  a base  salary  of  $150,000  per  annum  only in the  event it  raises
$750,000.  Until this event  occurs,  the Company was obligated to pay a monthly
consulting  fee to this  individual of $5,000 through  September 30, 2004.  This
amount  increased  to  $7,500  per  month  on  October  1,  2004 the term of the
agreement is five years.  Also, by the seventy-fifth day of each new fiscal year
the employee  shall be granted a ten-year  stock  option based on the  Company's
profit  performance for the prior fiscal accounting year. The option is computed
based on a number of factors including the Company's income taxes, provided that
such pre-tax income exceeds $250,000.

NOTE E - SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental  disclosures of cash flow  information for the years ended December
31, 2004 and 2003 are summarized as follows:

Cash paid during the periods for interest and income taxes:
                                                 2004           2003
                                                 ----           ----
                  Income Taxes                   $ --           $ --
                  Interest                       $ --           $ --

NOTE F - INCOME TAXES

The Company has  approximately  $151,000 of net operating  losses available that
expire in various years through the year 2024.

Due to  operating  losses and the  inability  to recognize an income tax benefit
there from,  there is no provision for current federal or state income taxes for
the years ended December 31, 2004 and 2003.

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amount used for federal and state income tax purposes.


                                      F-14
<PAGE>

                           HEARTSTAT TECHNOLOGY, INC.
                             (FKA TEC FACTORY, INC.)
                      NOTES TO AUDITED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
================================================================================

NOTE F - INCOME TAXES (CONT')

The  Company's  deferred  tax  asset at  December  31,  2004  consists  of a net
operating loss carry forward  calculated  using federal and state  effective tax
rates equating to approximately $51,000 less a valuation allowance in the amount
of approximately $51,000 respectively. Because of the Company's lack of earnings
history,  the deferred tax asset has been fully offset by a valuation allowance.
The valuation  allowance  increased by approximately  $37,000 for the year ended
December 31, 2004.

The Company's total deferred tax asset as of December 31, 2004 is as follows:

         Net operating loss carry forwards           $    51,000
         Valuation allowance                             (51,000)
                                                     ------------
                  Net deferred tax asset             $        --
                                                     ============

The  reconciliation of income taxes computed at the federal statutory income tax
rate to total income taxes for the years ended  December 31, 2004 and 2003 is as
follows:

                                                              2004         2003
                                                              ----         ----
         Income tax computed at the federal statutory rate      34%          34%
         State income taxes, net of federal tax benefit        -0-%         -0-%
                                                              -----        -----
         Valuation allowance                                  (34%)        (34%)
                                                              -----        -----
         Net deferred tax asset                                -0-%         -0-%
                                                              =====        =====

NOTE G - GOING CONCERN

As shown in the  accompanying  financial  statements,  the Company has  suffered
recurring  losses from  operations  to date. It  experienced  losses of $230,818
during 2004 and $21,000 during 2003 respectively, had a net deficiency in equity
of $234,818  and a net  working  capital  deficit of $25,752 as of December  31,
2004.  These factors  raise  substantial  doubt about the  Company's  ability to
continue as a going concern.

Management's plans in regard to this matter are to raise equity capital and seek
strategic relationships and alliances in order to increase sales in an effort to
generate  positive  cash flow.  Additionally,  the Company must continue to rely
upon equity  infusions from investors in order to improve  liquidity and sustain
operations.  The financial  statements do not include any adjustments that might
result from the outcome of this uncertainty.



                                      F-15
<PAGE>

                           HEARTSTAT TECHNOLOGY, INC.
                             (FKA TEC FACTORY, INC.)
                      NOTES TO AUDITED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
================================================================================

NOTE H - SEGMENT REPORTING

Statement of Financial Accounting Standards No. 131, "DISCLOSURES ABOUT SEGMENTS
OF  AN  ENTERPRISE  AND  RELATED  INFORMATION"   requires  companies  to  report
information about operating segments in interim and annual financial statements.
It also requires  segment  disclosures  about products and services,  geographic
areas and  major  customers.  The  Company  determined  that it did not have any
separately reportable operating segments as of December 31, 2004 and 2003.

NOTE I - EQUITY

During the year ended  December  31,  2004,  the  Company  legally  amended  its
Articles of Incorporation to increase the number of authorization  common shares
from 25,000,000 to 80,000,000. The par value of $0.001 remained the same.

During the year ended  December 31, 2004,  the Company also legally  amended its
Articles of Incorporation to authorize 5,000,000  convertible  preferred shares.
These shares have a par value of $0.001. The ratio of convertibility has not yet
been determined by the Company.

NOTE  J - RELATED PARTY TRANSACTIONS

Included in the accounts payable in the  accompanying  balance sheet at December
31, 2004 is $7,500 other trade payable and $8,815  payable to an entity  related
through former directorship and accrued interest.

NOTE  K - SUBSEQUENT EVENTS

On August 15, 2005, the Company modified,  Exhibit B of the original February 6,
2004 asset  acquisition  agreement and entered into a Asset  Transfer  Agreement
whereby all parties  have agreed to the  following  terms and  conditions  which
provide for closing concurrently with the filing of the Company's Form 10-KSB.

         - The Company  will sell the  acquired  assets  back a private  company
controlled  by one of the  company's  officers  in order that this  officer  can
continue with private funding for the development and  commercialization  of the
medical  technology.  The Company will receive the following in exchange for the
assets:


                                      F-16
<PAGE>

                           HEARTSTAT TECHNOLOGY, INC.
                             (FKA TEC FACTORY, INC.)
                      NOTES TO AUDITED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
================================================================================

NOTE  K - SUBSEQUENT EVENTS (CONT')

         - The officer and other parties will return 20,000,000 shares of common
stock to treasury,  which accounts for 41.3% of the issued and outstanding stock
in the Company at December 31, 2004.

         - The  related  party will  issue  113,207  shares of its common  stock
(representing  9.99%  equity  interest  in  the  related  party  and  a  $70,000
promissory note to a new company to be formed by that Company and held as a 100%
subsidiary. This Company is to be called Alexis BioMedical Technology Fund, Inc.

         -All  royalty  and  employment  obligations  and  commitments  would be
relinquished at closing of the above transfer.

NOTE L - GOODWILL, NET OF IMPAIRMENT CHARGE

The Company currently does not present any indefinite-lived intangible assets in
its balance sheet.  For the year ended December 31, 2004 and in accordance  with
SFAS No. 142, the Company  performed its annual  impairment test of its existing
goodwill and  concluded  that an  impairment  existed at that date.  The factors
considered  led to a substantial  doubt of the Company to recover its investment
due to a lack of certainty in future cash flows  calculated  on an  undiscounted
basis. In addition,  based its fair market value estimate the related write down
was  required  to record the  intangible  asset on its fair market  value.  As a
result,  the Company recorded an impairment  charge in the amount of $58,000 for
the full carrying value of goodwill during the year ended December 31, 2004.














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