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

                                   FORM 10-KSB

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended September 30, 2001

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________.

                        Commission File Number: 01-28911

                     NATIONAL HEALTHCARE TECHNOLOGY, INC.
                (Name of Small Business Issuer in its charter)

      Colorado                                  91-1869677
      --------                                  ----------
(State or other jurisdiction of                 (IRS Employer
 incorporation or organization)                 Identification Number)

            21800 Oxnard Street Suite 440, Woodland Hills CA 91367
            ------------------------------------------------------
               (Address of principal executive offices)(Zip Code)

Issuer's telephone number:  (818) 598-8888
                            --------------

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

Name of each exchange on which registered: None.

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

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

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

State Issuer's Revenues for its most recent fiscal year: $0

The number of shares outstanding of the Company's $.001 Par Value Common Stock,
as of September 30, 2001 were 7,855,500. The aggregate number of shares of the
voting stock held by non-affiliates on December 24, 2001 was 1,114,000. The
market value of these shares, computed by reference to the market closing price
on December 24, 2001 was $27,850. For the purposes of the foregoing calculation
only, all directors and executive officers of the registrant have been deemed
affiliates.

                  DOCUMENTS INCORPORATED BY REFERENCE: None.


                                       1
<PAGE>

PART I

ITEM 1.  BUSINESS

A)    General

National Healthcare Technology, Inc. (the "Company") was incorporated on
February 29, 1996 as "Pyramid Holdings, Inc." under the laws of the State of
Colorado, to engage in any lawful corporate undertaking, including, but not
limited to, selected mergers and acquisitions. On August 26, 1996, the Company
changed its name to "National Healthcare Technology, Inc." At the time of its
name change, the Company entered into certain agreements to acquire a patent for
Magkelate, an intravenous drug developed to re-establish normal electrolyte
balance in ischemic tissue and certain other patents for medical instruments and
medical instrument technology. In exchange, the Company issued certain shares of
stock to the patent holders.

At the time of the Company's patent acquisition, Magkelate had not yet been
approved by the Food and Drug Administration. The Company needed to initiate and
complete Phase III double blind studies of Magkelate in order to secure approval
from the Food and Drug Administration for this new drug. Phases I and II had
been successfully completed prior to the Company's acquisition of the patents.
Although the Company was successful in raising one million dollars to help fund
the Phase III studies, ultimately the Company was unable to undertake and
complete the Phase III studies due to its inability to secure additional
financing to fund the study.

Subsequently, in 1999, the developer of the Magkelate passed away and the patent
expired, leaving the Company unable to proceed with the Phase III study even if
it were able to secure financing for the study. The Board of Directors of the
Company has elected as this time to attempt to locate and consummate a merger or
acquisition with a private entity as the Company's principal business purpose.
On September 14, 2001, the Company entered into a Letter of Intent for a
proposed business combination with Madison Technology Systems, Inc. On November
16, 2001, Madison informed the Company that it was not proceeding with the
proposed business combination. At the present time, the status of this proposed
transaction is uncertain.

The Company's office is located at 21800 Oxnard Street, Suite 440, Woodland
Hills, California 91367.

As of September 30, 2001, the Company had no employees.

Item 2. Properties.

The Company presently shares office space with a related entity and its
attorney. The Company's portion of the monthly rent is approximately $1,500 and
the lease expires in 2002. The Company anticipates that this space is sufficient
for the near future.

Item 3 Legal Proceedings.

None.


                                       2
<PAGE>

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Market for Registrant's Common Equity and Related Shareholder Matters.

The Company's common stock has been traded on the OTC Electronic Bulletin Board
since Winter, 1997 under the symbol "NHKT". The following table reflects the
high and low quarterly bid prices for the fiscal year ended September, 2001.
This information was provided to the Company by the National Association of
Securities Dealers, Inc. (the "NASD"). These quotations reflect inter-dealer
prices, without retail mark-up or mark-down or commissions. These quotations may
not necessarily reflect actual transactions.

Period                      High Bid                   Low Bid
--------------------------  -------------------------- -------------------------

1st Qtr 2001                .02                        .12
--------------------------  -------------------------- -------------------------

2nd Qtr 2001                .12                        .12
--------------------------  -------------------------- -------------------------

3rd Qtr 2001                .12                        .12
--------------------------  -------------------------- -------------------------

4th Qtr 2001                .12                        .15
--------------------------  -------------------------- -------------------------

As of September 30, 2001, the Company had 7,855,500 shares of its common stock
issued and outstanding, of which 1,114,000 were held by non-affiliates.

The Company's CUSIP number is 635904-105. The Company has authorized a total of
25,000,000 shares of common stock, par value $.001. The Company has authorized a
total of 500,000 shares of preferred stock, par value $.01 and presently has no
shares of preferred stock issued and outstanding. As of September 30, 2001, the
Company estimates there are 75 "holders of record" of its common stock and
estimates that there are approximately 85 beneficial shareholders of its common
stock.

Item 6.  Management's Discussion and Analysis or Plan of Operation.

FORWARD-LOOKING STATEMENTS MAY NOT PROVE ACCURATE

When used in this Form 10-KSB, the words "anticipated", "estimate", "expect",
and similar expressions are intended to identify forward-looking statements.
Such statements are subject to certain risks, uncertainties and assumptions
including the possibility that the Company's will fail to generate projected
revenues. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated or projected.

LIQUIDITY AND CAPITAL RESOURCES

Since inception, the Company has experienced no significant change in liquidity
or capital resources or stockholders' equity other than the receipt of
$1,000,000 from an offering conducted under Rule 504 of Regulation D in 1997.
The Company's balance sheet as of September 30, 2001 reflects no assets and
significant


                                       3
<PAGE>

liabilities which the Company is obligated to pay. Further, there exists no
agreements or understandings with regard to loan agreements by or with the
Officers, Directors, principals, affiliates or shareholders of the Company.

The Company will attempt to carry out its plan of business as discussed above.
The Company cannot predict to what extent its lack of liquidity and capital
resources will hinder its business plan prior to the consummation of a business
combination.

RESULTS OF OPERATIONS

During the period from November 5, 1995 (inception) through September 30, 2001,
the Company engaged in limited operations and attempted to initiate its double
blind study of its drug, Magkelate. The only revenue received by the Company
during this period was approximately $9,500 received from the sale of assets
which were previously written off by the Company.

The Company anticipates that until a business combination is completed with an
acquisition candidate, it will not generate revenues and may operate at a loss
after completing a business combination, depending upon the performance of the
acquired business.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The following discussion of the financial condition, changes in financial
condition and results of operations of the Company for the fiscal years ended
September 30, 2001 and September 30, 2000 should be read in conjunction with the
financial statements of the Company and related notes included therein.

The Company was incorporated on November 5, 1995 as "Patriot Holding
Corporation". On August 26, 1996, the Company amended its Articles of
Incorporation to change its name to "National Healthcare Technology, Inc." At
the same time, the Company entered into agreements to acquire certain assets in
exchange for the issuance of common stock.

In August, 1996, the Company entered into an agreement to issue 685,850 shares
of its common stock to National Medical Technology, Inc. in exchange for all of
its assets. National Medical Technology, Inc. was involved in the manufacturing
and marketing of surgical optics, laryngoscopes, otoscopes, specula, and
portable light sources. The sole shareholder of National Medical Technology,
Inc. was Ivan C. Tiholiz, subsequently President and Chairman of the Board of
the Company. Subsequently, National Medical Technology, Inc. was dissolved and
the shares owned by it were transferred to Dr. Tiholiz.

In August, 1996, the Company entered into an agreement to issue 200,000 shares
of its common stock to Ivan C. Tiholiz, subsequently President and Chairman of
the Board of the Company, and William Ogden, subsequently Vice-President and
Director of the Company. The stock issuance was in exchange for their assignment
of all right, title and interest in the invention and in the patent of the
United States of America for the invention entitled "Co-Active Instruments with
Non-slip Surfaces and Method for their Manufacture". The shares were divided
equally between Dr. Tiholiz and Mr. Ogden.


                                       4
<PAGE>

In August, 1996, the Company entered into an agreement to issue 1,364,150 shares
of its common stock to Ivan C. Tiholiz, subsequently President and Chairman of
the Board of the Company, for the assignment of all right, title and interest in
an invention and patent of the United States of America relating to an invention
entitled "Divalent/Monovalent Bipolar Cation Therapy for Enhancement of Tissue
perfusion and Reperfusion in Disease States". This patent is the patent for
Magkelate.

In August, 1996, the Company entered into an agreement to issue 2,150,000 shares
of its common stock to Phoenix Consulting Services, Inc. in exchange for
investment banking and consulting services that Phoenix provided to the Company.

In March, 2001, the Company issued 2,280,000 shares of its common stock to
Stein's Holdings, Inc. in satisfaction of a note payable of $20,000 and accrued
interest owed to Stein's Holdings, Inc.

Since the agreements described above, the Company has financed its activities
through the distribution of equity capital, including a private placement of
100,000 units which raised $1,000,000 in 1997. The Company used the proceeds
from this offering to commence its operations, to pay salaries, to pay general
and administrative expenses and any necessary expenses. The Company hired
employees and began refining the parameters of the double-blind study for
Magkelate and began to develop its medical instruments division. The Company
ordered a quantity of Magkelate and on May 1, 1998, began to conduct the double-
blind study of Magkelate at Mission Community Hospital in Panorama City,
California. The Company received indications of interest from certain hospitals
in Israel and Los Angeles, California in participating in the double blind study
of Magkelate. However, before the Company could enter into letters of intent
with these hospitals, it would have had to raise an additional three to four
million dollars. Additionally, the Company became concerned that the study being
conducted at Mission Community Hospital was flawed although the results were
encouraging. Due to concerns about the protocols and testing methods being used,
the Company ceased the double-blind study at Mission Community Hospital and
sought and received FDA approval to modify the protocols and testing procedures.
However, at that time, the Company was became low on funds and could not
commence the revised double-blind study without raising additional capital. The
Company was unable to raise this additional capital. Shortly thereafter, the
Company CEO and Chairman, Dr. Tiholiz, was diagnosed with stomach cancer. Dr.
Tiholiz passed away in the fall of 1999. The co-patent holder for the
diamondizing process passed away in late 1997. Following its inability to raise
capital and needing to conserve its financial resources, the Company dismissed
all of its employees in early 1999.

In September, 2001, the Company entered into a letter of intent with Madison
Technology Systems, Inc. for a proposed business combination. Madison paid a
deposit of $52,000 to the Company which the Company utilized to pay its
outstanding bills and to continue operations pending the completion of the
acquisition. Madison subsequently informed the Company in November that it was
not proceeding with the proposed transaction. Discussions are being had by the
parties to resolve this matter but the outcome of the proposed transaction is
doubtful at this time.

The Company will attempt to carry out its business plan as discussed above. The
Company cannot predict to what extent its lack of liquidity and capital
resources


                                       5
<PAGE>

will hinder its business plan prior to the consummation of a business
combination.

NEED FOR ADDITIONAL FINANCING

The Company's existing capital is not be sufficient to meet the Company's cash
needs, including the costs of compliance with the continuing reporting
requirements of the Securities Exchange Act of 1934, as amended. Once a business
combination is completed, the Company's needs for additional financing are
likely to increase substantially.

No commitments to provide additional funds have been made by management or other
stockholders. Accordingly, there can be no assurance that any funds will be
available to the Company to allow it to cover its expenses.

The Company might seek to compensate providers of services by issuances of stock
in lieu of cash.

For the year ended September 30, 2001, the Company had no revenue. For the year
ended September 30, 2000, the Company had revenue of approximately $9,500
resulting from the sale of previously written off equipment. For the year ended
September 30, 2001, the Company had expenses of $52,663 compared to expenses of
approximately $61,000 at September 30, 2000. The Company's expenses consisted
primarily of development costs and general and administrative expenses. The net
loss for the year ended September 30, 2001 was ($53,463) or ($.01) per share of
common stock compared to the net loss for the ended September 30, 2000 of
($52,098) or ($.01) per share of common stock.

At September 30, 2001, shareholders' equity was a deficit of $(65,227) compared
to shareholders' deficit of ($34,564) at September 30, 2000. This increase in
shareholders' deficit is due primarily to the Company's not having adequate
revenues to pay for its expenses at the present time.

Liquidity and Capital Resources

At September 30, 2001, the Company had negative working capital of approximately
($65,000) which consisted of no current assets and current liabilities of
approximately ($65,000). At September 30, 2000, the Company had assets of
approximately $2,000 which consisted of cash. At September 30, 2000, the Company
had current liabilities of approximately $37,000, resulting in negative working
capital of approximately ($35,000). The current liabilities of the Company at
September 30, 2001 are composed primarily of accounts payable to a related
entity of $35,811, deposit on merger of approximately $18,000 and accounts
payable of $10,312.

Effect of Inflation

Inflation did not have any significant effect on the operations of the Company
during the year ended September 30, 2001. Further, inflation is not expected to
have any significant effect on future operations of the Company.

Item 7.     Financial Statements.


                                       6
<PAGE>

Financial statements are audited and included herein beginning on Exhibit 1,
page 1 and are incorporated herein by this reference.

Item 8.     Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

There were no disagreements with accountants on accounting and financial
disclosure during the relevant period.

Part III

Item 9.     Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.

Identification of Directors and Executive Officers of the Company

The following table sets forth the names and ages of all directors and executive
officers of the Company and all persons nominated or chosen to become a
director, indicating all positions and offices with the Company held by each
such person and the period during which he has served as a director:

The principal executive officers and directors of the Company are as follows:

Name                    Age         Positions Held and Tenure
-------------------------------------------------------------
Toni A. Hussain         52          Secretary and Director since August 23,
                                    1997

James Smith             57          President and Director since November 1,
                                    1997

The Directors named above will serve until the next annual meeting of the
Company's stockholders. Thereafter, Directors will be elected for one-year terms
at the annual stockholders' meeting. Officers will hold their positions at the
pleasure of the Board of Directors, absent any employment agreement, of which
none currently exist or is contemplated. There is no arrangement or
understanding between the Directors and Officers of the Company and any other
person pursuant to which any Director or Officer was or is to be selected as a
Director or Officer of the Company.

There is no family relationship between or among any Officer and Director.

The Directors and Officers of the Company will devote their time to the
Company's affairs on an "as needed" basis. As a result, the actual amount of
time which each will devote to the Company's affairs is unknown and is likely to
vary substantially from month to month.

The Company has no audit or compensation committee.

Business Experience. The following is a brief account of the business experience
during at the least the last five years of the directors and executive officers,
indicating their principal occupations and employment during that period, and
the


                                       7
<PAGE>

names and principal businesses of the organizations in which such occupations
and employment were carried out.

JAMES H. SMITH: Mr. Smith has over 30 years of experience in automotive,
electronic component manufacturing and distribution, and pharmaceutical
wholesaling. Mr. Smith was a founder, president and chief executive officer of
Nexion, Inc. Prior to that, Mr. Smith was chief operations officer of Decision
Dynamix Corporation. Prior to that, Mr. Smith served as the president for
McKesson Drug Company, which is an $11 billion wholesaler of pharmaceutical and
generic products, home health care, and health and beauty care products. Prior
to McKesson, Mr. Smith served as the president for the world's largest
electronic component distributor, Hamilton Hallmark, which is a division of
Avnet, Inc. Mr. Smith led the consolidation of Hamilton/Avnet with its third
largest competitor, Hallmark Electronics. Mr. Smith also served as corporate
senior vice president of Avnet, Inc. Mr. Smith is also president and a director
of Stein's Holdings, Inc., which is an affiliate of the Company.

Mr. Smith spent sixteen years with electronic component manufacturing companies:
Harris Semiconductor, Rockwell Microelectronics, ITT Semiconductor Components
Group, Texas Instruments, and International Rectifier. Mr. Smith's vast
experience stems from holding positions in sales, sales management, product line
marketing, customer services, advertising, and worldwide sales and marketing
with offshore profit and loss responsibility.

Mr. Smith graduated from Michigan State University with a Bachelor of Arts in
Economics.

TONI A. HUSSAIN. Mrs. Hussain was employed by the Walt Disney Company as senior
contract administrator where she was responsible for negotiating software
contracts and licensing agreements. Mrs. Hussain also managed the development
and construction of 25 Disney stores located in shopping centers throughout the
United States. Prior to Disney, Mrs. Hussain implemented various cost reduction
procedures at several ITT Corporations resulting in savings in excess of $20
million. Additionally, Mrs. Hussain administered prime contracts for several
major companies ranging from $10 million to $4 billion in value.

Mrs. Hussain received a Bachelor of Arts in Mathematics and Bachelors of Science
in Psychology and Teaching from Southern Illinois University in 1971. In 1973,
Mrs. Hussain received a Master of Arts in Psychology. Mrs. Hussain also attended
the University of Southern California Graduate School of Business where she
received a Corporate Management Effectiveness Degree in 1990.

CONFLICTS OF INTEREST

The Officers and Directors of the Company will devote only a small portion of
their time to the affairs of the Company, estimated to be no more than
approximately 5 hours per month. There will be occasions when the time
requirements of the Company's business conflict with the demands of their other
business and investment activities. Such conflicts may require that the Company
attempt to employ additional personnel. There is no assurance that the services
of such persons will be available or that they can be obtained upon terms
favorable to the Company.


                                       8
<PAGE>

There is no procedure in place which would allow the Officers and Directors to
resolve potential conflicts in an arms-length fashion. Accordingly, they will be
required to use their discretion to resolve them in a manner which they consider
appropriate.

The Company's Officers and Directors may actively negotiate or otherwise consent
to the purchase of a portion of their common stock as a condition to, or in
connection with, a proposed merger or acquisition transaction. It is anticipated
that a substantial premium over the initial cost of such shares may be paid by
the purchaser in conjunction with any sale of shares by the Company's Officers
and Directors which is made as a condition to, or in connection with, a proposed
merger or acquisition transaction. The fact that a substantial premium may be
paid to the Company's Officers and Directors to acquire their shares creates a
potential conflict of interest for them in satisfying their fiduciary duties to
the Company and its other shareholders. Even though such a sale could result in
a substantial profit to them, they would be legally required to make the
decision based upon the best interests of the Company and the Company's other
shareholders, rather than their own personal pecuniary benefit.

Identification of Certain Significant Employees. The Company does not employ any
persons who make or are expected to make significant contributions to the
business of the Company.

Item 10.    Executive Compensation.

During fiscal 2001, and as of the date of the filing of this report, none of the
Company's officers were paid any compensation by the Company.

Compensation of Directors

The Company adopted an Incentive Stock Option Plan for non-employee directors on
October 1, 1998. The Company has not awarded any options under this Plan. No
director receives or accrues any compensation for his services as a Director,
including committee participation and or special assignments.

Directors are entitled to reimbursement for reasonable travel and other out-of-
pocket expenses incurred in connection with attendance at meeting of the Board
of Directors.

The Company has no material bonus or profit-sharing plans pursuant to which cash
or non-cash compensation is or may be paid to the Company's directors or
executive officers except as described above.

The Company has no compensatory plan or arrangements, including payments to be
received from the Company, with respect to any executive officer or director,
where such plan or arrangement would result in any compensation or remuneration
being paid resulting from the resignation, retirement or any other termination
of such executive officer's employment or from a change-in-control of the
Company or a change in such executive officer's responsibilities following a
change-in- control and the amount, including all periodic payments or
installments where the value of such compensation or remuneration exceeds
$100,000 per executive officer.


                                       9
<PAGE>

During the last completed fiscal year, no funds were set aside or accrued by the
Company to provide pension, retirement or similar benefits for Directors or
Executive Officers.

The Company has no written employment agreements.

Compensation Pursuant to Plans. Other than disclosed above, the Company has no
plan pursuant to which cash or non-cash compensation was paid or distributed
during the last fiscal year, or is proposed to be paid or distributed in the
future, to the individuals and group described in this item.

Compensation of Directors. Directors of the Company are entitled to reasonable
reimbursement for their travel expenses in attending meetings of the Board of
Directors.

Termination of Employment and Change of Control Arrangement. Except as noted
herein, the Company has no compensatory plan or arrangements, including payments
to be received from the Company, with respect to any individual names above from
the latest or next preceding fiscal year, if such plan or arrangement results or
will result from the resignation, retirement or any other termination of such
individual=s employment with the Company, or from a change in control of the
Company or a change in the individual=s responsibilities following a change in
control.

Section 16(a) Beneficial Ownership Reporting Compliance. During the year ended
September 30, 2001, the following persons were officers, directors and more than
ten-percent shareholders of the Company=s common stock:

Name                    Position                            Filed Reports

Toni A. Hussain         Director, Secretary-Treasurer       No
James Smith             Director                            Yes
Phoenix Capital Corp.   Shareholder                         Yes
Estate of Ivan Tiholiz  Shareholder                         Yes
Stein's Holdings, Inc.  Shareholder                         Yes

Item 11.    Security Ownership of Certain Beneficial Owners and Management.

There were 7,855,500 shares of the Company's common stock issued and outstanding
on September 30, 2001. No preferred shares were issued and outstanding at
September 30, 2001. The following tabulates holdings of shares of the Company by
each person who, subject to the above, at the date of this Report, holds or
record or is known by Management to own beneficially more than five percent (5%)
of the Common Shares of the Company and, in addition, by all directors and
officers of the Company individually and as a group.

<TABLE>
<CAPTION>
Name and Address                Number of Shares Owned     Percent of Beneficially Owned
                                Beneficially               Shares
----------------                ----------------------     -----------------------------
<S>                             <C>                        <C>
Cede & Co.                      329,388                    5.9%
PO Box 222
New York NY 10274
</TABLE>


                                       10
<PAGE>

<TABLE>
<CAPTION>

Name and Address                  Number of Shares Owned    Percent of Beneficially Owned
                                  Beneficially              Shares
----------------                 ----------------------     -----------------------------
<S>                              <C>                        <C>
Stein's Holdings, Inc.(1)        2,280,000                  29.02%
21800 Oxnard Street Suite 440
Woodland Hills CA 91367

Toni A. Hussain*                 254,000                    4.56%
21800 Oxnard Street Suite 440
Woodland Hills CA 91367

Phoenix Consulting Services      2,130,000                  38.2%
21800 Oxnard Street ste 440
Woodland Hills CA 91367

James H. Smith*(1)               2,407,520                  30.65%
21800 Oxnard Street Suite 440
Woodland Hills CA 91367

Estate of Ivan C. Tiholiz,       1,950,000                  34.98%
14860 Roscoe Blvd. Ste. 307
Van Nuys CA 91402

All Directors and Executive      2,672,020                  34.01%
Officers as a Group (two persons)
</TABLE>
--------------------------------------------------------------------------------
* Denotes officer or director
(1) Includes 2,280,000 shares owned by Stein's Holdings, Inc., a company in
which Mr. Smith serves as an officer and director. Mr. Smith disclaims an
beneficial interest in the shares owned by Stein's Holdings, Inc.

Changes in Control. There are no arrangements known to the Company, including
any pledge by any person of securities of the Company, the operation of which
may at a subsequent date result in a change of control of the Company.

Item 12.    Certain Relationships and Related Transactions.

The Company shares office space with its attorney and with a shareholder of the
Company who has loaned the Company money to fund its operations for the ast
year. The Company's portion of the rent is approximately $1,500 per month and
the lease runs through November, 2002.

Item 13.  Exhibits and Reports on Form 8-K.

(a)   Financial Statements and Schedules

The following financial statements and schedules are filed as part of this
report:

Independent Auditors' Report dated November 6, 2001
Balance Sheet for the Fiscal Years Ended September 30, 2001 and 2000
Statement of Operations for the Fiscal Years Ended September 30, 2001 and 2000
Statement of Shareholders' (Deficit)
Statements of Cash Flows
Notes to Financial Statements

List of Exhibits

The following exhibits are filed with this report.

Financial Statements.
Financial Data Schedule


                                       11
<PAGE>

(b) There were no Reports filed on Form 8-K during the fourth quarter of the
Company's fiscal year ended September 30, 2001.

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


December 26, 2001                   NATIONAL HEALTHCARE TECHNOLOGY, INC.

                                    /s/ James Smith
                                    ----------------
                                    James Smith, President, Director


                                    /s/ Toni A. Hussain
                                    -------------------
                                    Toni A. Hussain, CFO, Director


                                       12
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                              FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000
<PAGE>

                                TABLE OF CONTENTS

                                                                        Page No.
                                                                        --------

INDEPENDENT AUDITORS' REPORT .......................................        1

FINANCIAL STATEMENTS

       Balance Sheets ..............................................        2

       Statements of Operations ....................................        3

       Statement of Stockholders' (Deficit) ........................      4 - 5

       Statements of Cash Flows ....................................      6 - 7

       Notes to Financial Statements ...............................     8 - 11
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
National Healthcare Technology, Inc.
(A Development Stage Company)
Woodland Hills, California

We have audited the balance sheets of National Healthcare Technology, Inc. (A
Colorado Corporation and a Development Stage Company) as of September 30, 2001
and 2000, and the related statements of operations, stockholders' (deficit) and
cash flows for the years then ended and the statements of operations and cash
flows for the period from November 5, 1995 to September 30, 2001. 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes 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 financial statements referred to above, present fairly, in
all material respects, the financial position of National Healthcare Technology,
Inc. as of September 30, 2001 and 2000, and the results of its operations and
its cash flows for the years then ended and for the period from November 5, 1995
to September 30, 2001 in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in Note 7 to the
financial statements, the company incurred net losses of $1,310,521 from
inception, has no revenue, needs additional capital and has abandoned its
present development programs. These factors raise substantial doubt about its
ability to continue as a going concern. Managements plans regarding these
matters also are described in Note 7. The financial statements do not include
any adjustments that might result from the outcome of these uncertainties.


Moffitt & Company, P.C.
Scottsdale, Arizona

November 6, 2001, except for Note 11 which is dated November 16, 2001.
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEETS
                           SEPTEMBER 30, 2001 AND 2000

<TABLE>
<CAPTION>
                                           ASSETS

                                                            2001             2000
                                                        -----------      -----------
<S>                                                     <C>              <C>
CURRENT ASSETS
  Cash                                                  $         0      $     2,115
                                                        ===========      ===========

                           LIABILITIES AND STOCKHOLDERS' (DEFICIT)

CURRENT LIABILITIES
   Accounts payable
      Trade                                             $    10,312      $    13,679
      Stein's Holdings, Inc.                                 35,811                0
   Note payable, Stein's Holdings, Inc.                           0           22,200
   Corporation income tax payable                               800              800
   Deposit on merger                                         18,304                0
                                                        -----------      -----------

        TOTAL CURRENT LIABILITIES                            65,227           36,679
                                                        -----------      -----------

STOCKHOLDERS' (DEFICIT)
   Preferred stock, par value $.01 per share
      Authorized 500,000 shares
      -0- shares issued and outstanding                           0                0
   Common stock, par value $.001 per share
      Authorized 25,000,000 shares
      Issued and outstanding
         September 30, 2001 - 7,855,500 shares                7,855                0
         September 30, 2000 - 5,575,500 shares                    0            5,575
   Paid in capital in excess of par value of stock        1,237,439        1,216,919
   Deficit accumulated during the development stage      (1,310,521)      (1,257,058)
                                                        -----------      -----------

        TOTAL STOCKHOLDERS' (DEFICIT)                       (65,227)         (34,564)
                                                        -----------      -----------

        TOTAL LIABILITIES AND STOCKHOLDERS'
          (DEFICIT)                                     $         0      $     2,115
                                                        ===========      ===========
</TABLE>

            See Accompanying Notes and Independent Auditors' Report.


                                       2
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF OPERATIONS
               FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000 AND
               FOR THE PERIOD NOVEMBER 5, 1995 (DATE OF INCEPTION)
                           THROUGH SEPTEMBER 30, 2001

                                                                November 5, 1995
                                                                    (Date of
                                                                    Inception)
                                   Years Ended September 30,         Through
                                 ----------------------------     September 30,
                                     2001            2000             2001
                                 -----------      -----------   ----------------

REVENUE, SALE OF ABANDONED
  EQUIPMENT                      $         0      $     9,578      $     9,578
                                 -----------      -----------      -----------

EXPENSES
    Development costs                      0           60,876        1,264,236
    General and administrative        52,663                0           52,663
                                 -----------      -----------      -----------

         TOTAL EXPENSES               52,663           60,876        1,316,899
                                 -----------      -----------      -----------

(LOSS) BEFORE INCOME TAXES           (52,663)         (51,298)      (1,307,321)

INCOME TAXES                             800              800            3,200
                                 -----------      -----------      -----------

NET (LOSS)                       $   (53,463)     $   (52,098)     $(1,310,521)
                                 ===========      ===========      ===========

NET (LOSS) PER COMMON SHARE

    Basic and diluted            $      (.01)     $      (.01)
                                 ===========      ===========

WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING

    Basic and diluted              6,715,500        5,575,500
                                 ===========      ===========

            See Accompanying Notes and Independent Auditors' Report.


                                       3
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      STATEMENT OF STOCKHOLDERS' (DEFICIT)
               FOR THE PERIOD NOVEMBER 5, 1995 (DATE OF INCEPTION)
                           THROUGH SEPTEMBER 30, 2001

<TABLE>
<CAPTION>
                                                                                              Paid in       Deficit
                                                                                              Capital     Accumulated
                                      Preferred Stock             Common Stock               in Excess    During the
                                   ---------------------     -----------------------           of Par     Development
                                   Shares       Amount        Shares         Amount       Value of Stock     Stage
                                   -------     ---------     ---------     ---------      --------------  -----------
<S>                                      <C>   <C>           <C>           <C>               <C>           <C>
BALANCE, NOVEMBER 5, 1995
   (DATE OF INCEPTION)                   0     $       0             0     $       0         $       0     $       0

SHARES ISSUED FOR PATENT
   RIGHTS                                0             0     1,564,150         1,564                 0             0

NET (LOSS) FOR THE PERIOD
   ENDED SEPTEMBER 30, 1996              0             0             0             0                 0       (49,807)
                                   -------     ---------     ---------     ---------         ---------     ---------

BALANCE, SEPTEMBER 30, 1996              0             0     1,564,150         1,564                 0       (49,807)

SHARES ISSUED TO RELATED
   PARTY FOR EQUIPMENT                   0             0       685,850           686            54,601             0

SHARES ISSUED TO RELATED
   PARTY FOR SERVICES                    0             0     2,150,000         2,150                 0             0

SALE OF COMMON STOCK,
   PURSUANT TO PRIVATE
   OFFERING, NET OF OFFERING
   COSTS OF $25,617                      0             0        61,740            62           272,821             0

CONVERSION OF PROMISSORY
   NOTES AND RELATED ACCRUED
   INTEREST TO COMMON STOCK
   UPON EFFECTIVE DATE OF
   PRIVATE OFFERING                      0             0        37,260            37           187,263             0

SHARES ISSUED TO RELATED
   PARTY FOR VEHICLE, UPON
   EFFECTIVE DATE OF PRIVATE
   OFFERING                              0             0         1,000             1             4,999             0

NET (LOSS) FOR THE YEAR
   ENDED SEPTEMBER 30, 1997              0             0             0             0                 0      (300,410)
                                   -------     ---------     ---------     ---------         ---------     ---------

BALANCE, SEPTEMBER 30, 1997              0             0     4,500,000         4,500           519,684      (350,217)
</TABLE>

            See Accompanying Notes and Independent Auditors' Report.


                                       4
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                STATEMENT OF STOCKHOLDERS' (DEFICIT) (CONTINUED)
               FOR THE PERIOD NOVEMBER 5, 1995 (DATE OF INCEPTION)
                           THROUGH SEPTEMBER 30, 2001

<TABLE>
<CAPTION>
                                                                                                      Paid in           Deficit
                                                                                                      Capital         Accumulated
                                       Preferred Stock                    Common Stock               in Excess        During the
                                  ---------------------------     ---------------------------          of Par         Development
                                    Shares          Amount           Shares         Amount         Value of Stock        Stage
                                  -----------     -----------     -----------     -----------      --------------     -----------
<S>                                         <C>   <C>               <C>           <C>                <C>             <C>
WARRANTS EXERCISED, NET
   OF $17,440 COSTS                         0     $         0       1,000,000     $     1,000        $   481,560     $         0

SHARES ISSUED FOR SERVICES                  0               0          50,000              50            151,950               0

NET (LOSS) FOR THE YEAR
   ENDED SEPTEMBER 30, 1998                 0               0               0               0                  0        (639,269)
                                  -----------     -----------     -----------     -----------        -----------     -----------

BALANCE, SEPTEMBER 30, 1998                 0               0       5,550,000           5,550          1,153,194        (989,486)

SHARES ISSUED FOR SERVICES                  0               0          25,500              25             63,725               0

NET (LOSS) FOR THE YEAR
   ENDED SEPTEMBER 30, 1999                 0               0               0               0                  0        (215,474)
                                  -----------     -----------     -----------     -----------        -----------     -----------

BALANCE, SEPTEMBER 30, 1999                 0               0       5,575,500           5,575          1,216,919      (1,204,960)

NET (LOSS) FOR THE YEAR
   ENDED SEPTEMBER 30, 2000                 0               0               0               0                  0         (52,098)
                                  -----------     -----------     -----------     -----------        -----------     -----------

BALANCE, SEPTEMBER 30, 2000                 0               0       5,575,500           5,575          1,216,919      (1,257,058)

CONVERSION OF PROMISSORY
   NOTE AND RELATED ACCRUED
   INTEREST TO COMMON STOCK -
   MARCH 31, 2001                           0               0       2,280,000           2,280             20,520               0

NET (LOSS) FOR THE YEAR
   ENDED SEPTEMBER 30, 2001                 0               0               0               0                  0         (53,463)
                                  -----------     -----------     -----------     -----------        -----------     -----------

BALANCE, SEPTEMBER 30, 2001                 0     $         0       7,855,500     $     7,855        $ 1,237,439     $(1,310,521)
                                  ===========     ===========     ===========     ===========        ===========     ===========
</TABLE>

            See Accompanying Notes and Independent Auditors' Report.


                                       5
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS
               FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000 AND
               FOR THE PERIOD NOVEMBER 5, 1995 (DATE OF INCEPTION)
                           THROUGH SEPTEMBER 30, 2001

<TABLE>
<CAPTION>
                                                                                          November 5, 1995
                                                                                              (Date of
                                                                                              Inception)
                                                           Years Ended September 30,           Through
                                                           -------------------------        September 30,
                                                             2001             2000               2001
                                                           --------         --------      ----------------
<S>                                                        <C>              <C>              <C>
CASH FLOWS FROM OPERATING
   ACTIVITIES:
       Net (loss)                                          $(53,463)        $(52,098)        $(1,310,521)
       Adjustments to reconcile net (loss) to net
          cash (used) by operating activities:
             Depreciation and amortization                        0                0              22,977
             Common stock issued as payment for
                interest expense                                600                0              12,900
             Common stock issued for services                     0                0             217,900
             Loss on abandoned assets                             0                0             120,387
             Gain on sale of assets                               0                0                (500)
             Income from sale of abandoned assets                 0                0              (9,578)
       Changes in operating assets and liabilities:
          Accounts receivable                                     0            8,678               8,678
          Accounts payable                                   32,444           13,679              28,584
          Corporation income tax payable                          0                0                 800
          Accrued liabilities                                     0                0               9,664
          Deposit on merger                                  18,304                0              18,304
                                                           --------         --------         -----------

          NET CASH (USED) BY
             OPERATING ACTIVITIES                            (2,115)         (29,741)           (880,405)
                                                           --------         --------         -----------

CASH FLOWS FROM INVESTING
   ACTIVITIES:
       Purchase of property and equipment                         0                0             (87,314)
       Proceeds from sale of equipment                            0                0               5,500
       Proceeds from sale of abandoned assets                     0                0               9,578
                                                           --------         --------         -----------

       NET CASH (USED) BY
          INVESTING ACTIVITIES                                    0                0             (72,236)
                                                           --------         --------         -----------
</TABLE>

            See Accompanying Notes and Independent Auditors' Report.


                                       6
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      STATEMENTS OF CASH FLOWS (CONTINUED)
               FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000 AND
               FOR THE PERIOD NOVEMBER 5, 1995 (DATE OF INCEPTION)
                           THROUGH SEPTEMBER 30, 2001

<TABLE>
<CAPTION>
                                                                                    November 5, 1995
                                                                                       (Date of
                                                                                       Inception)
                                                     Years Ended September 30,          Through
                                                     -------------------------        September 30,
                                                       2001             2000              2001
                                                     --------         --------      ----------------
<S>                                                  <C>              <C>              <C>
CASH FLOWS FROM FINANCING
   ACTIVITIES:
       Proceeds from notes payable                   $      0         $ 22,200         $ 217,200
       Repayments on notes payable                          0                0           (20,000)
       Proceeds from issuance of common stock
          and subscriptions                                 0                0           798,500
       Payments on offering costs                           0                0           (43,059)
                                                     --------         --------         ---------

          NET CASH PROVIDED
             BY FINANCING ACTIVITIES                        0           22,200           952,641
                                                     --------         --------         ---------

NET (DECREASE) IN CASH                                 (2,115)          (7,541)                0

CASH BALANCE, BEGINNING OF
   PERIOD                                               2,115            9,656                 0
                                                     --------         --------         ---------

CASH BALANCE, END OF PERIOD                          $      0         $  2,115         $       0
                                                     ========         ========         =========

SUPPLEMENTARY DISCLOSURE OF
   CASH FLOW INFORMATION

   Cash paid during the year for:

       Interest                                      $      0         $      0         $      55
                                                     ========         ========         =========

       Taxes                                         $    800         $    800         $   2,400
                                                     ========         ========         =========

NON-CASH INVESTING AND
   FINANCING ACTIVITIES

   Common stock issued for notes payable             $ 22,800         $      0         $ 197,800
                                                     ========         ========         =========

   Common stock issued for patent rights             $      0         $      0         $   1,562
                                                     ========         ========         =========
   Common stock issued for equipment                 $      0         $      0         $  60,287
                                                     ========         ========         =========

   Common stock issued for services and
       directors' fees                               $      0         $      0         $ 215,750
                                                     ========         ========         =========
</TABLE>

            See Accompanying Notes and Independent Auditors' Report.


                                       7
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Organization and Nature of Business

      National Healthcare Technology, Inc. was organized on November 5, 1995,
      under the laws of the state of Colorado for the purpose of developing,
      manufacturing and marketing an intravenous drug and several high
      technology products for use in the medical industry. In 1999, the Company
      abandoned all of its medical development programs and is pursuing new
      areas to develop.

      Accounting Estimates

      Management uses estimates and assumptions in preparing financial
      statements in accordance with accounting principles generally accepted in
      the United States of America. Those estimates and assumptions affect the
      reported amounts of assets and liabilities, the disclosure of contingent
      assets and liabilities, and the reported revenues and expenses. Actual
      results could vary from the estimates that were used.

      Income Taxes

      Provisions for income taxes are based on taxes payable or refundable for
      the current year and deferred taxes on temporary differences between the
      amount of taxable income and pretax financial income and between the tax
      basis of assets and liabilities and their reported amounts in the
      financial statements. Deferred tax assets and liabilities are included in
      the financial statements at currently enacted income tax rates applicable
      to the period in which the deferred tax assets and liabilities are
      expected to be realized or settled as prescribed in FASB Statement No.
      109, Accounting for Income Taxes. As changes in tax laws or rates are
      enacted, deferred tax assets and liabilities are adjusted through the
      provision for income taxes.

      Net (Loss) Per Share

      The Company adopted Statement of Financial Accounting Standards No. 128
      that requires the reporting of both basic and diluted earnings (loss) per
      share. Basic earnings (loss) per share is computed by dividing net income
      (loss) available to common shareowners by the weighted average number of
      common shares outstanding for the period. Diluted earnings per share
      reflects the potential dilution that could occur if securities or other
      contracts to issue common stock were exercised or converted into common
      stock. In accordance with FASB 128, any anti-dilutive effects on net loss
      per share are excluded.

NOTE 2 DEVELOPMENT STAGE OPERATIONS

      As of September 30, 2001, the Company was in the development stage of
      operations. According to the Financial Accounting Standards Board of the
      Financial Accounting Foundation, a development stage company is defined as
      a company that devotes most of its activities to establishing a new
      business activity. In addition, planned principal activities have not
      commenced.

            See Accompanying Notes and Independent Auditors' Report.


                                       8
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000

NOTE 3 NOTE PAYABLE

      On March 20, 2000, the Company received a $20,000 loan from Stein's
      Holdings, Inc. The note was unsecured, accrued interest at 12% and was due
      on June 1, 2000. The note provided that if the note and accrued interest
      were not paid on June 1, 2000, then the holder of the note could elect to
      receive stock of the Company at a price to be mutually agreed upon by both
      parties. On March 31, 2001, Stein's Holdings, Inc. elected to convert the
      note into 2,280,000 shares of common stock.

NOTE 4 INCOME TAXES

                                                         2001            2000
                                                      ---------       ---------

(Loss) from operations before income taxes            $ (53,463)      $ (52,098)
                                                      ---------       ---------

The provision for income taxes is estimated
  as follows:
      Currently payable                               $       0       $       0
                                                      ---------       ---------
      Deferred                                        $       0       $       0
                                                      ---------       ---------

Significant components of the Company's
  deferred tax asset are as follows:

                                                            Deferred Tax
                                                      -------------------------
                                                         2001            2000
                                                      ---------       ---------
      Net operating loss                              $ 517,000       $ 475,000
      Valuation allowance                               517,000         475,000
                                                      ---------       ---------

             Total deferred taxes                     $       0       $       0
                                                      =========       =========

      As discussed in Note 7, there is substantial doubt about the Company's
      ability to continue as a going concern. Consequently, the Company must
      maintain a 100% valuation allowance for the deferred tax asset as there is
      doubt that the Company will generate profits which will be absorbed by the
      tax differences. A reconciliation of the valuation allowance is as
      follows:

                                                        2001               2000
                                                      --------          --------

Balance, beginning of period                          $496,000          $475,000

Addition to allowance                                   21,000            21,000
                                                      --------          --------

Balance, end of period                                $517,000          $496,000
                                                      ========          ========

            See Accompanying Notes and Independent Auditors' Report.


                                       9
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000

NOTE 5 NET OPERATING LOSS CARRYFORWARD

      The Company has the following net operating loss carryforward at September
      30, 2001:

                                                                      Expiration
                   Year Ended                            Amount          Date
               ------------------                      ----------     ----------

               September 30, 2001                      $   53,463        2021
               September 30, 2000                          52,098        2020
               September 30, 1999                         215,474        2019
               September 30, 1998                         614,265        2018
               September 30, 1997                         279,456        2012
               September 30, 1996                          78,959        2011
                                                       ----------

                                                       $1,293,715
                                                       ==========

      Future changes in ownership may limit the ability of the Company to
      utilize these net operating loss carryforwards prior to their expiration.

NOTE 6 STOCK OPTION PLAN

      The Company adopted the National Healthcare Technology, Inc. 1998 stock
      option plan. The board of directors is required to designate a committee
      of not less then three directors to administer the plan. The committee has
      the power to:

            A. Designate participants
            B. Determine the number of shares to be covered by options
            C. Determine the terms and conditions of any options
            D. Administer the plan

      The maximum number of shares that may be issued under the option plan is
      5,000,000. In addition, no participant shall be granted more than 500,000
      shares in any one fiscal year.

      The Company did not grant any options under this plan.

      The option plan terminates on September 30, 2008.

NOTE 7 GOING CONCERN

      These financial statements are presented on the basis that the Company is
      a going concern. Going concern contemplates the realization of assets and
      the satisfaction of liabilities in the normal course of business over a
      reasonable length of time. The Company has incurred net losses of
      $1,310,521 since inception, has no revenue, needs additional capital and
      has abandoned all development activities. These factors raise substantial
      doubt as to the Company's ability to continue as a going concern.

            See Accompanying Notes and Independent Auditors' Report.


                                       10
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000

NOTE 7 GOING CONCERN (CONTINUED)

      Management's plans to eliminate the going concern situation include but
      are not limited to seeking a merger candidate or sale of the Company to
      another entity.

NOTE 8 PREFERRED STOCK

      No rights or preferences have been assigned to the preferred stock.

NOTE 9 RENT

      The Company rents its office space on a month-to-month basis from a
      related entity. Rent expense for the years ended September 30, 2001 and
      2000 was $18,000 and $19,407, respectively

NOTE 10 INTEREST

      Interest expense for the year ended September 30, 2001 was $1,488.

NOTE 11 PROPOSED BUSINESS COMBINATION

      On September 14, 2001, the Company signed a letter of intent for a
      proposed business combination with Madison Technology Systems, Inc.

      On November 16, 2001, Madison Technology Systems, Inc. notified the
      Company that it planned to cancel the proposed combination. As of the date
      of this report, the status of the combination is not known. Management is
      currently pursuing other potential merger candidates.

            See Accompanying Notes and Independent Auditors' Report.


                                       11