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

                                   FORM 10-KSB
              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

                          Commission File No. 001-28911

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                 ----------------------------------------------
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

          Colorado                                     91-1869677
------------------------------                      ------------------
  (STATE OR JURISDICTION OF                         (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                      IDENTIFICATION NO.)

                1660 Union Street,  Suite 200, San Diego,  CA 92101  (ADDRESS OF
                    PRINCIPAL EXECUTIVE OFFICES)

                                  619/398-8470
                           (ISSUER'S TELEPHONE NUMBER)

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

Check whether the issuer is not required to file reports  pursuant to Section 13
or 15 (d) of the Exchange Act.[ ]

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

<PAGE>

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

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

The issuer's revenues for its most recent fiscal year were $0.00

As of May 16,  2006,  the  aggregate  market  value of the common  stock held by
non-affiliates  based on the closing sale price of Common Stock was $15,510,360.
For the purposes of the foregoing  calculation  only, all  directors,  executive
officers,  related  parties  and  holders  of more  than 10% of the  issued  and
outstanding common stock of the registrant have been deemed affiliates.

     As of May 16,  2006,  the  issuer  had  34,782,759  shares of common  stock
     outstanding.  Documents incorporated by reference:  none Transitional Small
     Business Disclosure Format (check one): Yes [ ] No [X]

                                     PART I

Item 1.  Description of Business

Business Development

On July 19, 2005, National Healthcare Technology,  Inc., a Colorado corporation,
(the  "Company",  "us" or "we")  completed  the  acquisition  of  Special  Stone
Surfaces,  Es3, Inc., a Nevada  corporation  ("Es3") pursuant to the terms of an
Exchange  Agreement (the "Exchange  Agreement") by and among the Company,  Crown
Partners,  Inc., a Nevada corporation and at such time, the largest  stockholder
of the Company  ("Crown  Partners"),  Es3, and certain  stockholders of Es3 (the
"Es3  Stockholders").  The transactions  effected by the Exchange Agreement have
been  accounted  for as a  reverse  merger.  As a  result  of  the  transactions
contemplated by the Exchange Agreement,  we had one active operating subsidiary,
Es3.  Es3 was formed on January  27,  2005 and began  operations  in March 2005.
Effective  October 1, 2005, we transferred  all of the capital stock of Es3 that
we acquired  under the  Exchange  Agreement to Liquid  Stone  Partners  ("Liquid
Stone") in exchange for Liquid Stone assuming all known and unknown  liabilities
of Es3.

                                      -2-
<PAGE>

Business of Issuer

During the year 2005, the Company, through its wholly owned subsidiary, Es3, was
is in the business of manufacturing and distributing a range of decorative stone
veneers and finishes based on two technology  licenses the company had acquired:
"Liquid Stone"  coatings and "Authentic  Stone Veneers." Es3 holds the exclusive
rights to  manufacture,  use and  distribute  "Liquid  Stone"  coatings in North
America,  Central America and South America, under an OEM License Agreement with
Liquid Stone Manufacturing,  Inc. a Nevada corporation, and an affiliate of Es3.
"Liquid Stone" is a water-based polymeric stone coating that can be applied to a
variety of surfaces including wood, stucco,  metal, concrete or asphalt. It is a
flexible, durable all weather surface coating.  Additionally, Es3 also holds the
excusive  rights to  manufacture,  use and distribute  "Authentic  Stone Veneer"
panels in North America, Central America and South America, under an OEM License
Agreement with Stone Mountain Manufacturing,  Inc. a Nevada corporation,  and an
affiliate of Es3.  "Authentic  Stone  Veneer"  panels can be formulated in rough
stone or smooth stone  finishes.  "Authentic  Stone Veneer" panels are made from
proprietary  materials and are molded to form the detailed contours and profiles
of natural stone surfaces.  The rough stone veneers are approximately 1/10th the
weight of concrete, while the smooth stone are approximately 1/7th the weight of
concrete.

Es3 had begun  conducting  research  and  development  on both the Liquid  Stone
Coatings and Authentic Stone Veneer panels and had planned to undertake  product
testing and certification as it prepared for commercial  launch.

Upon the close of the  acquisition  of Es3 by the Company on July 19,  2005,  we
intended to use the public markets to secure  additional  working capital and to
make acquisitions using either common stock or cash. A significant  component of
the  intermediate  term growth  strategy was the  acquisition and integration of
companies  in related  building  materials  fields.  However,  with little or no
investor  interest in Es3 and its  products  we were unable to secure  necessary
working  capital  through  the public  market to develop a  commercially  viable
market for our products.

On April 3, 2006, our Board of Director's approved a change of direction for the
Company,  from the business of manufacturing  and distributing  decorative stone
veneers and finishes, to the business of oil and gas exploration and production,
mineral lease purchasing and all activities associated with acquiring, operating
and  maintaining  the  assets  of  such  operations.  Pursuant  to an  agreement
effective  retroactively  to October 1, 2005, we transferred  all of the capital
stock of Es3 that we  acquired  under the  Exchange  Agreement  to Liquid  Stone
Partners  ("Liquid  Stone") in exchange for Liquid Stone  assuming all known and
unknown liabilities of Es3.

In  furtherance  of  this  change  of  direction,  we  entered  into  consulting
agreements with third parties to provide business management services and advice
as it relates to our future.  These  services  shall  include the  drafting  and
preparation of business  plans,  operating  budgets,  cash flow  projections and
other business management services as we move into the oil and gas business.  As
an initial  step into the oil and gas  business,  in April 2006,  we executed an


                                      -3-
<PAGE>

assignment  of an oil and gas lease under which we intend to exploit  underlying
oil and gas reserves. We currently have two full time employees.

The Company is in the  development  stage as defined in  Statement  of Financial
Accounting Standards No. 7.

Item 2.  Properties.

On March 1, 2005,  the Company  entered into a lease  commitment  for office and
warehouse  space in San Diego,  California  which expires  February 1, 2009. The
terms of the lease provide for monthly rental payments of $3,367 through January
2006  and  increasing  3% each  year  beginning  February  1,  2007.  The  lease
obligation was assumed by Liquid Stone in conjunction  with the sale of Es3. The
Company  currently has an office at 1660 Union Street,  Suite 200, San Diego, CA
92101,  which it maintains under  arrangement  with the landlord at no cost. The
Company also shares an office space with a shareholder  at 9595 Wilshire  Blvd.,
Suite 510, Beverly Hills, CA 90212 at no cost to the Company. As of December 31,
2005, the Company had no future rental commitments.

Item 3.  Legal Proceedings.

We are not a party to any material  pending legal  proceeding and no such action
by or, to the best of our knowledge,  against us have been  threatened.  Item 4.
Submission of Matters to a Vote of Security Holders None.

                                     PART II

Item 5. Market for Registrant's Common Equity and Related  Shareholder  Matters.
Market information Our common stock is quoted on the over-the-counter market and
quoted on the National  Association of Securities  Dealers  Electronic  Bulletin
Board  ("OTC  Bulletin  Board")  under the symbol  "NHCT".  The high and low bid
prices for the common stock, as reported by the National Quotation Bureau, Inc.,
are  indicated for the periods  described  below.  Such prices are  inter-dealer
prices without retail markups, markdowns or commissions, and may not necessarily
represent actual transactions.

                                      -4-
<PAGE>

Fiscal Year Ending December 2004               HIGH    LOW
===========================================   ======= ======
Quarter Ending March 31, 2004                    6.00   2.00
-------------------------------------------   ------- ------
Quarter Ending June 30, 2004                     8.00   3.00
-------------------------------------------   ------- ------
Quarter Ending September 30, 2004                5.00   1.00
-------------------------------------------   ------- ------
Quarter Ending December 31, 2004                 3.15   1.10
-------------------------------------------   ------- ------

Fiscal Year Ending December 2005               HIGH    LOW
===========================================   ======= ======
Quarter Ending March 31, 2005                    3.15   2.50
-------------------------------------------   ------- ------
Quarter Ending June 30, 2005                     3.00   1.50
-------------------------------------------   ------- ------
Quarter Ending September 30, 2005                2.50   2.05
-------------------------------------------   ------- ------
Quarter Ending December 31, 2005                 2.25   1.50
===========================================   ======= ======

(All low and high prices  quoted  adjusted for one for a hundred  reverse  stock
split  effective  October 7, 2004.)

Holders

As of December 31, 2005, there were approximately 111 shareholders of record (in
street name) of our common  stock.

Dividends

We have not declared nor paid cash dividends or made  distributions in the past,
and we do not anticipate  that we will pay cash dividends or make  distributions
in the  foreseeable  future.  We currently  intend to retain and reinvest future
earnings, if any, to finance and expand our operations.

Recent Sales of Unregistered Securities

During the fiscal year ended December 31, 2005, we issued  securities  using the
exemptions  available  under the Securities  Act of 1933 including  unregistered
sales  made  pursuant  to  Section  4(2)  of the  Securities  Act of  1933:  our
subsidiary,  Es3, prior to the reverse merger, issued 8,380,000 shares of common
stock to founding  stockholders,  including  6,250,000 shares to Boston Equities
Corporation;  our subsidiary, Es3, prior to the merger, issued 800,000 shares of
common  stock in exchange  for the  cancellation  of a $400,000  debt for monies
advanced to them by one of the  Company's  shareholders;  our  subsidiary,  Es3,
issued an  aggregate  of 8,618,750  shares of common  stock to  shareholders  of
Aronite  Industries,  Inc. in connection with the license of certain  trademarks
from Aronite;  and we issued  905,438  shares of common stock to Crown  Partners
under the terms of the Exchange Agreement.

                                      -5-
<PAGE>

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

This report contains  forward looking  statements  within the meaning of Section
27A of the  Securities Act of 1933, as amended and Section 21E of the Securities
Exchange  Act of 1934,  as  amended.  When used in this Form  10-KSB,  the words
"anticipate",  "estimate",  "expect",  "project"  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 proposed plan of operation 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.  The Company's actual results could
differ  materially from those set forth on the forward  looking  statements as a
result of the risks set forth in the Company's  filings with the  Securities and
Exchange Commission, general economic conditions, and changes in the assumptions
used in making such forward looking statements.

General

On July 19, 2005, the Company  completed the acquisition of Es3. Pursuant to the
terms of the  Exchange  Agreement  dated as of June 30,  2005,  by and among the
Company,  Crown  Partners,  the largest  stockholder of the Company prior to the
Closing,  Es3, and certain  stockholders of Es3, the Company acquired 17,798,750
shares of the  outstanding  capital  stock of Es3 in exchange for the  Company's
issuance to the Es3  Stockholders of 17,798,750  shares of the Company's  common
stock. In connection with the Exchange Agreement, the Company also issued 78,751
shares to the former owners of National  Healthcare  Technology,  Inc.,  905,438
shares to Crown Partners and 400,000 shares between to two individuals, d.ba. WB
International,  Inc.  that  provided  consulting  and  advisory  services to the
Company (the "Consultants").

As a result of the transactions  contemplated by the Exchange Agreement,  during
the year 2005, we had one active operating  subsidiary,  Es3.  Accordingly,  the
financial statements contained herein reflect the consolidated operations of Es3
and the  Company.  Es3 was formed on January  27, 2005 and began  operations  in
March  2005 in the  business  of  manufacturing  and  distributing  a  range  of
decorative  stone  veneers  and  finishes  based  on  proprietary  Liquid  Stone
Coatings" and "Authentic Stone Veneers".

For the year ended  December  31, 2005,  the Company had $0 revenues,  and a net
operating loss of $870,600.

Plan of Operation

On April 3, 2006, our Board of Directors  approved a change of direction for the
Company,  from the business of manufacturing  and distributing  decorative stone
veneers and finishes, to the business of oil and gas exploration and production,
mineral lease purchasing and all activities associated with acquiring, operating
and maintaining the assets of such operations.

                                      -6-
<PAGE>

Upon the  closing  of the  Exchange  Agreement,  we had  planned  to market  our
coatings  and  veneers to both  commercial  and  residential  markets,  which we
intended  to fund by using  the  public  markets  to secure  additional  working
capital  and  to  make  acquisitions  using  either  Common  Stock  or  cash.  A
significant   component  of  our  intermediate  term  growth  strategy  was  the
acquisition and integration of companies in related building  materials  fields.
We had expected to take  advantage  of synergies  among  related  businesses  to
increase  revenues and take advantage of economies of scale to reduce  operating
costs.

In  conjunction  with our change of direction,  in April 2006, we entered into a
consulting  agreement  with Summitt Oil and Gas,  Inc.  ("Summitt"),  as well as
other third parties, to provide business management  services,  and advice as it
relates to the future of the company.  This service  shall  include the drafting
and preparation of business plans,  operating budgets, cash flow projections and
other business  management services as we venture into the oil and gas business.
Additionally,  in April 2006 we executed an  assignment  of an oil and gas lease
under  which we  acquired  the  rights to drill and  otherwise  exploit  certain
underlying oil and gas reserves which we acquired for 77,000  restricted  shares
of our common stock and an agreement to pay a 3% royalty on the value of the oil
removed or produced and on net proceeds from all gas sold.

We believe  that by changing  our  direction  to the oil and gas markets we have
improved our prospects  for success due to both the current and expected  future
positive  market  conditions  which we  expect  to  exploit  initially  from the
valuable contacts,  industry  expertise and business  opportunities we expect to
derive from Summitt,  an industry  experienced  consulting  resource,  and other
third party consultants.

Additionally,  we intend to  reincorporate  the Company to a Nevada  corporation
("Reincorporation").  The business purpose of the Reincorporation is to allow us
to avail  ourselves to Nevada  corporate law.  Nevada is a recognized  leader in
adopting and implementing  comprehensive,  flexible corporate laws responsive to
the legal and  business  needs of  corporations  organized  under its laws.  The
Nevada Revised  Statutes is an enabling  statute that is frequently  revised and
updated to accommodate changing business needs.


                                      -7-
<PAGE>

Additionally,  consistent  with the change of our direction into the oil and gas
business,  we will also change the Company name to a name in line with a company
in the oil and gas business.

We anticipate that we will have to raise  additional  capital to fund operations
over the next 12 months.  To the extent that we are required to raise additional
funds to cover our costs of  operations,  we intend to do so through  additional
public or private offerings of debt or equity  securities,  including a drilling
fund to raise  $5,000,000.  There are no commitments or  arrangements  for other
offerings in place, no guaranties that any such financings would be forthcoming,
or as to the terms of any such  financings.  Any future  financing  may  involve
substantial  dilution to existing  investors.  We have also been  relying on our
common stock to pay third  parties for services  which has resulted  substantial
dilution to existing investors.

Estimated Funding Required During the Next Twelve Months:

--------------------------------------------- -------------- ---- --------------
Prospect Development & Seismic                $  1,000,000    to   $  5,000,000
--------------------------------------------- -------------- ---- --------------
Drilling & Development                        $  2,500,000    to   $  5,000,000
--------------------------------------------- -------------- ---- --------------
Offering Costs & Expenses                     $     50,000    to   $     50,000
--------------------------------------------- -------------- ---- --------------
General Corporate Expenses                    $    100,000    to   $    150,000
--------------------------------------------- -------------- ---- --------------
Working Capital                               $    700,000    to   $  1,000,000
--------------------------------------------- -------------- ---- --------------
Total                                         $  4,350,000    to   $ 11,200,000
--------------------------------------------- -------------- ---- --------------

The minimum  expenditures noted above will allow us to commence with exploration
and  development of properties and commence  drilling  operations.  In the event
that we are able to raise further funds, we will primarily  expend such funds on
further  prospect  development  and  seismic  studies  and then to fund  further
drilling operations

Consistent with this change of our business, we sold all of the capital stock of
Es3 to Liquid Stone Partners.  A partner  holding a minority  interest in Liquid
Stone  Partnerships  is also a director of the Company.  The Company closed this
transaction on April 4, 2006, and made it effective  retroactively to October 1,
2005.

                                      -8-
<PAGE>

We currently  have two full-time  employees.  We will  primarily rely on outside
consultants and do not currently  foresee any significant  changes in the number
of our employees.

Risk Factors

Risks related to the Company

Need for additional financing.
--------------------------------------------------------------------------------

We currently do not have sufficient  capital reserves to satisfy our obligations
and continue operations through the end of 2006, and therefore have an immediate
need for capital.  While we are exploring various capital raising avenues, there
can be no  assurance  that we will be able to obtain the  sufficient  short-term
capital  needed to  sustain  operations.  The full and  timely  development  and
implementation of our business plan and growth strategy will require significant
resources.  We may  not be able to  obtain  the  working  capital  necessary  to
implement our growth strategy.  Furthermore, our growth strategy may not produce
material revenue even if successfully  funded.  Management  intends to explore a
number of  options  to secure  alternative  sources of  capital,  including  the
issuance of secured debt, volumetric production payments,  subordinated debt, or
additional  equity,  including  preferred  equity  securities  or  other  equity
securities.  We might not succeed, however, in raising additional equity capital
or in negotiating and obtaining additional and acceptable financing when we need
it.  Our  ability  to  obtain  additional  capital  will  also  depend on market
conditions,  national and global economies and other factors beyond our control.
Even if we are able to obtain the  short-term  capital  necessary to sustain our
operations,  if  adequate  capital  is  not  available  or is not  available  on
acceptable terms at a time when we needed it, our ability to close acquisitions,
execute  our  growth  plans,  develop  or  enhance  our  services  or respond to
competitive  pressures will be significantly  impaired.  There are no assurances
that  we  will  be  able  to  implement  or  capitalize  on  various   financing
alternatives or otherwise obtain required working capital, the need for which is
substantial given our operating loss history.

We have a limited operating history.
--------------------------------------------------------------------------------

We are a development stage company with a limited operating history, and we face
all the  risks  common  to  companies  in their  early  stages  of  development,
including  undercapitalization  and uncertainty of funding sources, high initial
expenditure  levels and uncertain  revenue streams,  an unproven business model,
and difficulties in managing  growth.  Our prospects must be considered in light
of the  risks,  expenses,  delays and  difficulties  frequently  encountered  in
establishing a new business.  Any  forward-looking  statements in this report do
not reflect any adjustments that might result from the outcome of these types of
uncertainty.  Since inception, we have incurred significant losses. No assurance
can be given that we will be successful.

                                      -9-
<PAGE>

We may incur  unforeseen  costs and we may need to raise  capital in addition to
that required by our business plan.
--------------------------------------------------------------------------------
We are  currently  operating  at a loss and  intend to  increase  our  operating
expenses  significantly as we begin our acquisitions and oil and gas production.
Additionally,  we may encounter  unforeseen  costs that could also require us to
seek additional capital. There can be no assurance that we will be able to raise
sufficient  additional  capital on acceptable  terms,  if at all. Any additional
financing may result in significant dilution to our existing stockholders.

Maintaining  any  reserves  and revenue we may acquire in the future  depends on
successful development and acquisitions. On
--------------------------------------------------------------------------------

In  general,  the  volume of  production  from oil and  natural  gas  properties
declines  as  reserves  are  depleted,  with the rate of  decline  depending  on
reservoir characteristics. Except to the extent we acquire properties containing
proved  reserves or conduct  successful  development  activities,  or both,  our
proved reserves that we may acquire will decline. Our future oil and natural gas
production is, therefore,  highly dependent upon our level of success in finding
or acquiring additional reserves.

We are subject to substantial operating risks.
--------------------------------------------------------------------------------

The oil and natural gas business involves certain operating hazards such as well
blowouts, mechanical failures, explosions,  uncontrollable flows of oil, natural
gas or well fluids,  fires,  formations  with  abnormal  pressures,  hurricanes,
pollution,  releases of toxic gas and other environmental  hazards and risks. We
could suffer  substantial  losses as a result of any of these  events.  While we
intend to carry general liability, control of well, and operator's extra expense
coverage typical in our industry, we will not be fully insured against all risks
incident to our business, such as acts of God.

We may not  always  be the  operator  of some of our  wells.  As a  result,  our
operating  risks for those wells and our ability to influence the operations for
these wells will be less  subject to our  control.  Operators of these wells may
act in ways that are not in our best interests.

We are dependent upon third party consultants.
--------------------------------------------------------------------------------

Our key personnel have experience in the business of renewable  energy,  but not
in the oil and gas industry. We are therefore highly dependent upon the industry
expertise  and business  opportunities  we expect to derive from Summitt Oil and
Gas, Inc., an industry experienced  consulting  resource,  as well as with other
industry  experienced  consulting  resources.  These consultants may act in ways
that are not in our best interests.

                                      -10-
<PAGE>

Our operations have significant capital requirements.
--------------------------------------------------------------------------------

We expect to experience substantial working capital needs as we begin our active
development  and  acquisition  programs.  Even  if we are  able  to  obtain  the
short-term  capital necessary to maintain our operations,  additional  financing
will be required in the future to fund our growth and operations.  No assurances
can be given as to the  availability or terms of any such  additional  financing
that may be required or that financing  will continue to be available  under new
credit facilities.  In the event such capital resources are not available to us,
our drilling and other activities would be curtailed.

We may have  difficulty  managing  future growth and the related  demands on our
resources and may have difficulty in achieving future growth.
--------------------------------------------------------------------------------

We expect to  experience  rapid  growth  through  acquisitions  and  development
activity for the foreseeable  future.  Any future growth may place a significant
strain on our financial,  technical,  operational and administrative  resources.
Our ability to grow will depend upon a number of factors,  including our ability
to identify and acquire new development or acquisition prospects, our ability to
develop  existing  properties,  our  ability to  continue  to retain and attract
skilled  personnel,  hydrocarbon  prices and access to capital.  There can be no
assurance that we will be successful in achieving  growth or any other aspect of
our business strategy.

We face strong competition from larger oil and natural gas companies.
--------------------------------------------------------------------------------

Our  competitors  include  major  integrated  oil and natural gas  companies and
numerous independent oil and natural gas companies, individuals and drilling and
income programs. Many of our competitors are large,  well-established  companies
with  substantially  larger operating staffs and greater capital  resources than
us. We may not be able to  successfully  conduct our  operations,  evaluate  and
select   suitable   properties  and  consummate   transactions  in  this  highly
competitive environment.  Specifically,  these larger competitors may be able to
pay more for development  projects and productive oil and natural gas properties
and may be able to define,  evaluate,  bid for and purchase a greater  number of
properties  and  prospects  than our  financial or human  resources  permit.  In
addition, such companies may be able to expend greater resources on the existing
and changing technologies that we believe are and will be increasingly important
to attaining success in the industry.

Our acquisition program may be unsuccessful, particularly in light of our recent
formation and limited history of acquisitions.
--------------------------------------------------------------------------------

Our personnel have had significant acquisition experience outside of the oil and
gas  industry.  However,  we  may  not  be in as  good a  position  as our  more
experienced  competitors  to execute a successful  acquisition  program or close
additional  future  transactions.   The  successful   acquisition  of  producing
properties  requires  an  assessment  of  recoverable  reserves,  future oil and
natural  gas  prices,   operating  costs,  potential   environmental  and  other
liabilities  and  other  factors.  Such  assessments,  even  when  performed  by
experienced  personnel,  are necessarily  inexact and their accuracy  inherently
uncertain.  Our review of subject  properties,  which generally includes on-site
inspections  and the review of reports filed with various  regulatory  entities,


                                      -11-
<PAGE>

will  not  reveal  all  existing  or  potential   problems,   deficiencies   and
capabilities.  We may not always perform  inspections on every well, and may not
be able to observe structural and environmental  problems even when we undertake
an inspection. Even when problems are identified, the seller may be unwilling or
unable to provide effective  contractual  protection against all or part of such
problems.  There can be no assurances that any acquisition of property interests
by us will be successful and, if  unsuccessful,  that such failure will not have
an adverse effect on our future results of operations and financial condition.

We cannot market our production without the assistance of third parties.
--------------------------------------------------------------------------------

The  marketability of our production  depends upon the proximity of our reserves
to, and the capacity of, facilities and third party services,  including oil and
natural gas gathering systems,  pipelines,  trucking or terminal facilities, and
processing  facilities.  The unavailability or lack of capacity of such services
and  facilities  could result in the shut-in of producing  wells or the delay or
discontinuance  of  development  plans for  properties.  A  shut-in  or delay or
discontinuance  could  adversely  affect our financial  condition.  In addition,
federal  and  state   regulation   of  oil  and  natural  gas   production   and
transportation  affect our ability to produce and market our oil and natural gas
on a profitable basis.

Risks Relating to the Oil and Gas Industry

Oil and Gas Drilling,  re-completions and re-working are speculative  activities
and involve numerous risks and substantial and uncertain costs.
--------------------------------------------------------------------------------

Our growth will be materially  dependent upon the success of our future drilling
and development program.  Drilling for oil and gas and re-working existing wells
involve numerous risks,  including the risk that no commercially  productive oil
or natural gas reservoirs will be encountered. The cost of drilling,  completing
and operating wells is substantial and uncertain, and drilling operations may be
curtailed,  delayed or cancelled as a result of a variety of factors  beyond our
control, including unexpected drilling conditions, pressure or irregularities in
formations,   equipment  failures  or  accidents,  adverse  weather  conditions,
compliance  with  governmental  requirements  and  shortages  or  delays  in the
availability  of drilling rigs or crews and the delivery of equipment.  Although
we  believe  that our  focus on  re-developing  existing  oil and gas  field and
advanced  drilling  technology should increase the probability of success of our
wells and should reduce average  finding costs through  elimination of prospects
that might  otherwise be drilled using other  traditional  methods,  drilling or
reworking  remains a speculative  activity.  Even when fully  utilized,  lateral
drilling does not  predetermine if hydrocarbons  will in fact be present in such
structures  if they are  drilled.  Our  future  drilling  activities  may not be
successful and, if unsuccessful, such failure will have an adverse effect on our
future results of operations and financial condition.  There can be no assurance
that our overall drilling success rate or our drilling success rate for activity
within a particular  geographic  area will not decline.  Although we may discuss
drilling  prospects  that we have  identified or budgeted for, we may ultimately


                                      -12-
<PAGE>

not lease or drill these prospects within the expected time frame, or at all. We
may identify and develop prospects through a number of methods, some of which do
not include  horizontal  drilling.  The drilling and results for these prospects
may be particularly  uncertain.  Our drilling schedule may vary from our capital
budget. The final determination with respect to the drilling of any scheduled or
budgeted  wells will be  dependent  on a number of factors,  including,  but not
limited to: (i) the results of previous development efforts and the acquisition,
review  and  analysis  of data;  (ii) the  availability  of  sufficient  capital
resources to us and the other  participants  for the drilling of the  prospects;
(iii) the approval of the prospects by other  participants after additional data
has  been  compiled;  (iv)  economic  and  industry  conditions  at the  time of
drilling,  including  prevailing and anticipated  prices for oil and natural gas
and the availability of drilling rigs and crews; (v) our financial resources and
results; (vi) the availability of leases and permits on reasonable terms for the
prospects;  and (vii) the success of our  drilling  technology.  There can be no
assurance  that these projects can be  successfully  developed or that the wells
discussed will, if drilled,  encounter reservoirs of commercially productive oil
or natural gas.  There are numerous  uncertainties  in estimating  quantities of
proved reserves, including many factors beyond our control.

Reliance on technological development and possible technological obsolescence.
--------------------------------------------------------------------------------

Our business is dependent upon utilization of changing technology.  As a result,
our  ability  to adapt to  evolving  technologies,  obtain  new  technology  and
maintain  technological  advantages will be important to our future success.  We
believe that our ability to utilize state of the art  technologies  will give us
an advantage over many of our competitors.  This advantage, however, is based in
part upon technologies  developed by others,  and we may not be able to maintain
this advantage.  As new technologies  develop, we may be placed at a competitive
disadvantage,  and  competitive  pressures  may force us to  implement  such new
technologies at substantial cost. There can be no assurance that we will be able
to successfully utilize, or expend the financial resources necessary to acquire,
new technology,  or that others will not either achieve technological  expertise
comparable to or exceeding that of our Company or that others will not implement
new  technologies  before us. One or more of the technologies we end up adopting
or implementing may, in the future, become obsolete. In such case, our business,
financial  condition  and results of operations  could be  materially  adversely
affected. If we are unable to utilize the most advanced  commercially  available
technology, our business, financial condition and results of operations could be
materially and adversely affected.

Oil and  natural  gas  prices  are highly  volatile  in  general  and low prices
negatively affect our financial results.
--------------------------------------------------------------------------------

Our revenue, profitability, cash flow, future growth and ability to borrow funds
or obtain additional  capital,  as well as the carrying value of our properties,
are substantially dependent upon prevailing prices of oil and natural gas. Lower
oil and  natural  gas prices  also may reduce the amount of oil and  natural gas
that we can produce economically.  Historically, the markets for oil and natural
gas have been  volatile,  and such markets are likely to continue to be volatile
in the future. Prices for oil and natural gas are subject to wide fluctuation in


                                      -13-
<PAGE>

response  to  relatively  minor  changes in the supply of and demand for oil and
natural gas,  market  uncertainty  and a variety of additional  factors that are
beyond our control.  These factors include the level of consumer product demand,
weather conditions, domestic and foreign governmental regulations, the price and
availability of alternative fuels,  political conditions,  the foreign supply of
oil and  natural  gas,  the  price  of  foreign  imports  and  overall  economic
conditions.  It is  impossible  to  predict  future  oil and  natural  gas price
movements with certainty.  Declines in oil and natural gas prices may materially
adversely affect our financial condition,  liquidity, ability to finance planned
capital expenditures and results of operations.

Government  regulation  and  liability for  environmental  matters may adversely
affect our business and results of operations.
--------------------------------------------------------------------------------

Oil and natural gas operations are subject to extensive federal, state and local
government regulations,  which may be changed from time to time. Matters subject
to regulation include discharge permits for drilling operations, drilling bonds,
reports concerning operations,  the spacing of wells, unitization and pooling of
properties  and taxation.  From time to time,  regulatory  agencies have imposed
price controls and  limitations on production by restricting the rate of flow of
oil and natural gas wells below actual production  capacity in order to conserve
supplies of oil and natural  gas.  There are  federal,  state and local laws and
regulations primarily relating to protection of human health and the environment
applicable to the development, production, handling, storage, transportation and
disposal of oil and natural gas,  by-products  thereof and other  substances and
materials produced or used in connection with oil and natural gas operations. In
addition,  we may be liable for environmental  damages caused by previous owners
of  property  we  purchase  or  lease.  As a result,  we may  incur  substantial
liabilities to third parties or  governmental  entities.  We are also subject to
changing and extensive tax laws,  the effects of which cannot be predicted.  The
implementation  of new, or the  modification  of existing,  laws or  regulations
could have a material adverse effect on us.

Risks Associated with Our Stock

Our stock price has been and may continue to be very volatile.
--------------------------------------------------------------------------------

Our common stock is thinly  traded and the market price has been,  and is likely
to continue to be, highly  volatile.  During the 12 months prior to December 31,
2005,  our stock price as traded on the OTC Bulletin Board has ranged from $3.15
to $1.50.  The  variance  in our share  price makes it  extremely  difficult  to
forecast  with any  certainty the stock price at which you may be able to buy or
sell shares of our common stock.  The market price for our common stock could be
subject to wide fluctuations due to factors beyond our control,  such as: actual
or anticipated  variations in our results of operations,  naked short selling of
our common stock and stock price  manipulation,  changes or  fluctuations in the
commodity  prices of oil and natural gas,  general  conditions and trends in the
oil and gas industry, general economic, political and market conditions.

                                      -14-
<PAGE>

Use of our common stock to pay for third party  services  could  dilute  current
investors.
--------------------------------------------------------------------------------

We are highly dependent upon the industry  expertise and business  opportunities
we expect to derive from industry experienced consulting resources.  In the past
we have used our  common  stock to pay for the  services  of these  third  party
consultants.  As of May 16, 2006, we have issued 12,000,000 shares of our common
stock  to  said  consultants,  unrelated  to  the  Exchange  Agreement.  Further
issuances in exchange for such services will dilute  current  investors.  Future
sales of our common stock in the public market could adversely  affect the price
of our common stock.

Sales of  substantial  amounts of common stock in the public market that are not
currently freely tradable,  or even the potential for these sales, could have an
adverse  effect on the market  price for the shares of our common  stock.  These
shares include approximately 28.2 million shares held by founders, investors and
service providers, and 600,000 warrants at May 16, 2006. Unregistered shares may
not be sold except in compliance  with Rule 144  promulgated by the SEC, or some
other exemption from registration.  Rule 144 does not prohibit the sale of these
shares but does place conditions and restrictions on their resale, which must be
complied with before they can be resold.

Future sales of our common stock in the public market could limit our ability to
raise capital.
--------------------------------------------------------------------------------

Sales of  substantial  amounts of our common  stock  pursuant to Rule 144,  upon
exercise or  conversion  of  derivative  securities  or  otherwise,  or even the
potential of these sales, could also affect our ability to raise capital through
the sale of equity securities.

The  Company  has never paid cash  dividends  on its  common  stock and does not
intend to do so in the foreseeable future.
--------------------------------------------------------------------------------

Present  management  and directors may control the election of our directors and
all other matters submitted to the stockholders for approval.
--------------------------------------------------------------------------------

Our  executive  officers  and  directors,  in the  aggregate,  beneficially  own
approximately   23.79%  of  our  outstanding   common  stock.   Boston  Equities
Corporation  holds  25.90%  of  our  common  stock  and is  our  single  largest
shareholder.  Related  parties  to  Boston  Equities  currently  own or  control
approximately  7.1 million  shares,  or  approximately  24.41% of our  currently
issued and  outstanding  common  stock.  Additionally,  Brian  Harcourt and Ross
Lyndon James are former  directors and officers of Boston Equities  Corporation.
As a result,  these holders of our outstanding common stock are able to exercise
control over all matters  submitted to our stockholders for approval  (including
the election and removal of directors and any merger,  consolidation  or sale of
all or  substantially  all of our assets).  Accordingly,  this  concentration of
ownership  may have the effect of delaying,  deferring or preventing a change in
control  of the  Company,  impede a  merger,  consolidation,  takeover  or other
business  combination  involving the Company or discourage a potential  acquirer
from making a tender  offer or  otherwise  attempting  to obtain  control of the
Company,  which in turn could have an adverse  effect on the market price of our
common stock.

                                      -15-
<PAGE>

"Penny stock"  regulations may impose certain  restrictions on  marketability of
securities.
--------------------------------------------------------------------------------

The SEC adopted  regulations,  which  generally  define  "penny  stock" to be an
equity security that has a market price of less than $5.00 per share. Our common
stock may be subject to rules that impose additional sales practice requirements
on  broker-dealers  who sell these  securities to persons other than established
customers and  accredited  investors  (generally  those with assets in excess of
$1,000,000, or annual incomes exceeding $200,000 or $300,000 together with their
spouse).  For transactions covered by these rules, the broker-dealer must make a
special suitability  determination for the purchase of these securities and have
received the purchaser's prior written consent to the transaction.

Additionally, for any transaction,  other than exempt transactions,  involving a
penny stock, the rules require the delivery, prior to the transaction, of a risk
disclosure  document mandated by the SEC relating to the penny stock market. The
broker-dealer   also  must  disclose  the   commissions   payable  to  both  the
broker-dealer  and the  registered  representative,  current  quotations for the
securities and, if the broker-dealer is the sole market-maker, the broker-dealer
must  disclose  this  fact and the  broker-dealer's  presumed  control  over the
market.  Finally,  monthly  statements  must be  sent  disclosing  recent  price
information  for the penny  stock held in the  account  and  information  on the
limited  market in penny  stocks.  Consequently,  the  "penny  stock"  rules may
restrict the ability of  broker-dealers  to sell our common stock and may affect
the ability to sell our common stock in the secondary market.

The market for our Company's  securities is limited and may not provide adequate
liquidity.
--------------------------------------------------------------------------------

Our common stock is  currently  traded on the OTC Bulletin  Board  ("OTCBB"),  a
regulated  quotation service that displays  real-time quotes,  last-sale prices,
and volume information in  over-the-counter  equity securities.  As a result, an
investor may find it more difficult to dispose of, or obtain accurate quotations
as to the price of, our  securities  than if the  securities  were traded on the
Nasdaq Stock market, or another national exchange. There are a limited number of
active market makers of our common stock. In order to trade shares of our common
stock you must use one of these market  makers unless you trade your shares in a
private transaction. In the twelve months prior to December 31, 2005, the actual
trading volume ranged from a low of no shares of common stock to a high of 3,000
shares of common stock. On most days, this trading volume means there is limited
liquidity in our shares of common  stock.  Selling our shares is more  difficult
because smaller quantities of shares are bought and sold and news media coverage
about us is limited.  These factors  result in a limited  trading market for our
common stock and therefore  holders of our Company's stock may be unable to sell
shares purchased should they desire to do so.

Item 7.   Financial Statements.

The report of  independent  auditors and financial  statements  are set forth in
this report  beginning on Page F-1.

                                      -16-
<PAGE>

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.

Item 8A. Controls and Procedures

Our Chief  Executive  Officer and Chief  Financial  Officer have  evaluated  the
effectiveness of our disclosure controls and procedures (as such term is defined
in Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended
(the "Exchange  Act")) as of the end of the period ended December 31, 2005, (the
"Evaluation Date"). During the course of the audit for our year end December 31,
2005 we  discovered,  among other  matters,  that an error in transfer of common
stock of the Company resulted in overstatement of the outstanding  shares of Es3
prior to the Exchange  Agreement of 310,000 shares,  and a payable in the amount
of $330,000 was not  reported.  As a result of this error,  and others,  we will
restate our form 10QSB for the quarter ended  September 30, 2005. Our conclusion
to restate our form 10QSB for the quarter ended  September 30, 2005 has resulted
in affecting our  assessments  regarding  our  controls,  and that they were not
effective as of the period ended in this report.

Limitations  on the  Effectiveness  of  Internal Controls

Disclosure controls and procedures, no matter how well designed and implemented,
can provide  only  reasonable  assurance  of  achieving  an entity's  disclosure
objectives.   The  likelihood  of  achieving  such  objectives  is  affected  by
limitations  inherent in disclosure  controls and procedures.  These include the
fact that human judgment in decision-making can be faulty and that breakdowns in
internal  control can occur  because of human  failures such as simple errors or
mistakes or intentional circumvention of the established process.

There  were  no  changes  in the  Company's  internal  controls  over  financial
reporting,  known to the Chief Executive Officer or the Chief Financial Officer,
that  occurred  during  the most  recent  fiscal  quarter  that have  materially
affected,  or are reasonably likely to materially affect, the Company's internal
control over financial reporting.

In May 2006,  we  remediated  the  material  weakness in internal  control  over
financial  reporting  by having our Chief  Executive  Officer in addition to our
Chief Financial Officer review in detail all adjustments affecting the issuances
of our  securities,  and to retain the services of a controller.  Item 8B. Other
Information No information  was required to be disclosed in a report on Form 8-K
during the fourth quarter of the year covered by this Form 10-KSB.

                                      -17-
<PAGE>

                                    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 Our current officers and directors consist of
the following persons:

NAME                         AGE      OFFICE                          SINCE
- ------------------         ------   -------------------             -----
Ross Lyndon-James            59       Chairman, CEO,                  2005
Brian Harcourt               60       Director, CFO                   2005
William Courtney             63       Director                        2005

The  Directors  named  above will  serve  until the next  annual  meeting of our
shareholders.  Thereafter,  Directors  will be elected for one-year terms at the
annual shareholders' meeting. Officers will hold their positions at the pleasure
of the Board of Directors.  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.

We have no audit  committee.  We have a compensation  committee that administers
our 2006 Employee Stock Option Plan that we adopted in April 2006.

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

Ross  Lyndon-James  has been a Chairman and the Chief  Executive  Officer of Es3
since March 2005. From 2002 to the present,  Mr.  Lyndon-James has served as the
Chairman  and Chief  Executive  Officer  of  Aronite  Industries,  Inc. a market
developer for stone veneers and coatings.  From 2001 to the present, Mr. Lyndon-
James has served as the  Chairman  of  Renergy  Pacific  Corporation,  an entity
engaged in the identification and development of renewable energy sources.  From
1996 to 2001, Mr. Lyndon-James was a director and the Chief Executive Officer of
Fitnessage,  Inc.,  a "dot.com"  developer  and  marketer of fitness  assessment
software.  Fitnessage entered into an assignment for the benefit of creditors in
2001. From 1997 to the present, Mr. Lyndon-James has been a director and officer
of Boston Equities Corporation, a specialist merchant banking organization. From
1984 to 1990,  Mr.  Lyndon James was a founder and Chairman and Chief  Executive
Officer of Ramtron  International  Corp.,  a developer of  semiconductor  memory
chips.

Brian  Harcourt  has been a director of Es3 since  March 2005.  From 2002 to the
present,  Mr.  Harcourt  has  served  as a  financial  advisor  to  Ocean  Power


                                      -18-
<PAGE>

Technologies,  Inc. (LSE:  OPT.L), a U.K. based renewable  energy company.  From
2001 to the present,  Mr.  Harcourt  has served as the Vice  Chairman of Renergy
Pacific Corporation,  an entity engaged in the identification and development of
renewable energy sources.  In 2004, Renergy Pacific  Corporation was acquired by
ReEnergy Group PLC, a U.K. entity engaged in the renewable energy business.  Mr.
Harcourt has served as Deputy Chairman and Executive  Director of ReEnergy Group
PLC from 2004 to the present.  From 1997 to 2001, Mr.  Harcourt was the Chairman
of  Fitnessage,  Inc.  Fitnessage  entered into an assignment for the benefit of
creditors in 2001.  From 1997 to the present,  Mr.  Harcourt has been a director
and  officer of Boston  Equities  Corporation,  a  specialist  merchant  banking
organization.  From 1992 to 1994 Mr.  Harcourt  was the  Executive  Director  of
Concord Resources Group, an international finance and resources group. From 1984
to 1991, Mr. Harcourt was a founder and Chairman and Chief Executive  Officer of
Ramtron Holdings,  Ltd., an Australian  developer of semiconductor memory chips,
which merged into Ramtron  International,  Inc. in 1992. Ramtron  International,
Inc.  listed its shares of Nasdaq  (Nasdaq  NM:RMTR) in 1992,  and Mr.  Harcourt
served as a director of Ramtron International, Inc. from 2002 to 2004.

William D.  Courtney has been a director and Senior Vice  President of Es3 since
March  2005.  Mr.  Courtney  has  extensive  experience  in the  development  of
waterproofing  membranes and polymeric coatings.  From 2002 to 2005 Mr. Courtney
was the  President of Aronite  Industries,  Inc., a market  developer  for stone
veneers and coatings.  From 1993 to 2005, Mr. Courtney was an Executive Director
and Founder of Chemical  Developments Pty Ltd., a developer of coatings based in
Australia.

On or about  March  1,  2006,  in the U.S.  Bankruptcy  Court  for the  Southern
District of California,  an involuntary  petition for bankruptcy under chapter 7
under the  United  States  Bankruptcy  Code was filed  against  Boston  Equities
Corporation,  our largest shareholder holding approximately 25.90% of our issued
and outstanding  common stock.  After such filing,  Boston Equities  Corporation
converted the case from chapter 7 to chapter 11.

Compliance with Section 16(a) of the Exchange Act

Section  16(a) of the  Securities  Exchange Act of 1934  requires the  Company's
directors  and  executive  officers,  and  persons  who own  more  than 10% of a
registered class of the Company's equity  securities to file with the Securities
and Exchange  Commission  initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company.  Officers,
directors and greater than 10%  shareholders  are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.

To our  knowledge,  based  solely on its  review of the  copies of such  reports
furnished to the company and written  representations that no other reports were
required  during the fiscal year ended  December  31,  2005,  all Section  16(a)
filing requirements  applicable to its officers,  directors and greater than 10%
beneficial owners were complied with.

                                      -19-
<PAGE>

Code of Ethics

Code of Ethics  for the Chief  Executive  Officer  and the  Principal  Financial
Officer

Our  Board of  Directors  has  adopted  the  Code of  Ethical  and  Professional
Standards of National Healthcare  Technology,  Inc. and Affiliated Entities Code
of Business  Conduct  and Ethics  that  applies to its  officers  and  employees
effective on April 14, 2006, a copy of which is filed as an exhibit  hereto.  We
will  provide  any person  without  charge,  a copy of our code of ethics,  upon
receiving a written request in writing addressed to the Company at the Company's
address, attention: Secretary.

Item 10. Executive Compensation.

During fiscal 2005 none of our officers were paid any compensation by us.

Employment Agreements

On April 3, 2006, we entered into an employment agreement with Ross Lyndon-James
who has been serving as our President without compensation and written agreement
since being appointed to such office by our Board of Directors in June 2005. Mr.
Lyndon-James had also served without  compensation as a director of the Company.
Under the terms of the agreement,  Mr.  Lyndon-James  will receive  compensation
equal to twenty five thousand  dollars  ($25,000)  per month payable  monthly in
advance.  He was also granted one million  eight  hundred  thousand  (1,800,000)
restricted shares of common stock upon execution of the employment  agreement as
a signing  bonus,  as well as a  termination  grant of two  million  (2,000,000)
shares of  restricted  common  stock.  All shares have  piggy-back  registration
rights. Additionally,  we agreed to grant him a warrant to acquire three hundred
thousand (300,000)  restricted shares of our common stock. The exercise price is
to be based  on the bid  price of the  stock on the date of the  agreement.  The
warrants  expire five years after the date of grant.  Additionally,  Mr. Lyndon-
James will be entitled to participate in any stock option program  offered by us
to our employees.

On April 3, 2006, we entered into an employment  agreement  with Brian  Harcourt
who has been  serving as an  officer of the  Company  without  compensation  and
written agreement since being appointed to such office by the Board of Directors
of the Company in June 2005. Mr.  Harcourt has also served without  compensation
as a director of the Company.  Under the terms of the  agreement,  Mr.  Harcourt
will receive  compensation  equal to twenty five thousand dollars  ($25,000) per
month payable monthly in advance.  He was also granted one million eight hundred
thousand  (1,800,000)  restricted  shares of common stock upon  execution of the
employment  agreement as a signing bonus, as well as a termination  grant of two
million (2,000,000) restricted shares of the common stock. All shares have piggy
back  registration  rights.  Additionally,  we agreed to grant him a warrant  to
acquire three hundred  thousand  (300,000)  restricted  shares of the our common
stock.  The  exercise  price is to be based on the bid price of the stock on the

                                      -20-
<PAGE>

date of the agreement.  The warrants  expire five years after the date of grant.
Additionally,  Mr.  Harcourt will be entitled to participate in any stock option
program offered by us to our employees.

Stock Option Plan

The Company adopted an Incentive Stock Option Plan for non-employee directors on
October 1, 1998.  We have 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.

On April 3, 2006, our Board of Directors authorized and approved the adoption of
the 2006 Stock  Option  Plan  effective  April 3, 2006 (the "2006  Stock  Option
Plan").

The 2006 Stock Option Plan is administered by the duly appointed
compensation  committee.   Our  compensation  committed  consists  of  Rosamaria
DeSimone, a consultant to the Company, and Brian Harcourt. The 2006 Stock Option
Plan provides authorization to grant stock options of up to 2,500,000 shares. At
the time a stock option is granted under the Stock Option Plan, the compensation
committee  shall fix and determine the exercise  price at which shares of common
stock of the Company may be acquired and vesting period thereof.

In the event an optionee ceases to be employed by or to provide  services to the
Company for reasons other than cause, retirement, disability or death, any stock
option that is vested and held by such  optionee  generally  may be  exercisable
within  up to ninety  (90)  calendar  days  after  the  effective  date that his
position ceases, and after such 90-day period any unexercised stock option shall
expire. In the event an optionee ceases to be employed by or to provide services
to the Company for reasons of retirement,  disability or death, any stock option
that is vested and held by such optionee  generally may be exercisable within up
to one-year  after the effective date that his position  ceases,  and after such
one-year  period any  unexercised  stock option shall  expire.

No stock options  granted under the 2006 Stock Option Plan will be  transferable
by the optionee,  and each stock option will be exercisable  during the lifetime
of the optionee  subject to the option  period of ten (10) years or  limitations
described  above.  Any stock option held by an optionee at the time of his death
may be exercised  by his estate  within one (1) year of his death or such longer
period  as the  compensation  committee  may  determine.

Upon  exercise of the options,  the optionee will deliver  consideration  in the
amount of the exercise price  multiplied by the number of shares to be issued as
a  result  of  the  exercise;  provided,  however,  the  compensation  committee
reserves,  at any and all times, the right, in its sole and absolute discretion,
to establish,  decline to approve or terminate any program or procedures for the
exercise of stock options by means of a cashless exercise.

                                      -21-
<PAGE>

Compensation  of  Directors

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.

 We
have no written employment agreements with our directors.  Ross Lyndon James and
Brian Harcourt,  two of our directors,  do have employment  agreement related to
their  positions  as our  officers.

Item  11. Security Ownership of Certain Beneficial Owners and Management

There were  34,782,759  shares of our common stock issued and outstanding on May
16,  2006.  The  following  tabulates  holdings of shares of the Company by each
person who, subject to the above, at the date of this Report, holds of record or
is known by  Management to own  beneficially  more than five percent (5%) of our
common stock and, in addition, by all of our directors and officers individually
and as a group.

---------------------------------------- -------------------- ------------------
NAME AND ADDRESS                         NUMBER OF SHARES       PERCENT
                                         OWNED BENEFICIALLY     OF SHARES OWNED
---------------------------------------- -------------------- ------------------
Boston Equities Corporation(3)(6)        9,007,503                25.90%
1660 Union Street
San Diego, CA 90802
---------------------------------------- -------------------- -----------------
William Courtney(*)(6)                   575,000                   1.65%
1660 Union Street
San Diego, CA 90802
---------------------------------------- -------------------- -----------------
Credit First Holdings Limited(4)         3,500,000                10.06%
Villa Zimmerman, Number 1
Ta'Xbiex Terrace
Ta'Xbiex Malta
Entity # C 37425 Malta
---------------------------------------- --------------------------------------
Morley Family Investments, LLC           2,258,750                 6.49%
20 Boulder Crescent, 2nd Floor
Colorado Springs, CO 80903
---------------------------------------- --------------------------------------
Ross Lyndon-James(*)(1)                  2,100,000                 6.04%
1660 Union Street
San Diego, CA 90802
---------------------------------------- --------------------------------------
Brian Harcourt(*)(2)                     2,100,000                 6.04%
1660 Union Street
San Diego, CA 90802
---------------------------------------- --------------------------------------
Design Inc(3)                            2,800,000                 8.05%
9595 Wilshire Boulevard Suite 510
Beverly Hills, CA 90212
---------------------------------------- --------------------------------------
Camden Holdings Inc(3)                   2,500,000                 7.19%
9595 Wilshire Boulevard Suite 510
Beverly Hills, CA 90212
---------------------------------------- --------------------------------------
Summitt Oil & Gas(3)                     1,800,000                 5.17%
9595 Wilshire Boulevard Suite 510
Beverly Hills, CA 90212
---------------------------------------- --------------------------------------
ALL DIRECTORS AND EXECUTIVE OFFICERS     8,275,000                23.79%
AS A GROUP (THREE PERSONS)(5)
---------------------------------------- --------------------------------------


(*) Denotes Officer or Director;
(1) On April 3, 2006, we entered into an employment  agreement  with Ross Lyndon
James.  Under the terms of the  agreement,  Mr. Lyndon James will be granted one
million eight hundred thousand shares (1,800,000) of common stock upon execution
of this employment  agreement as a signing bonus, as well as a termination grant
of two million (2,000,000) shares of the common stock (which 2,000,000 shares is
not included in the above table).  All shares will have piggy back  registration
rights.  Further, he will be granted a warrant to acquire three hundred thousand
(300,000) shares of the Company's common stock (which shares are included in the
above table).  The exercise  price will be based upon the bid price of the stock
at the date of this agreement;
(2) On April 3,  2006,  we  entered  into an  employment  agreement  with  Brian
Harcourt.  Under the terms of the  agreement,  Mr.  Harcourt will be granted one
million eight hundred thousand shares (1,800,000) of common stock upon execution


                                      -22-
<PAGE>

of this employment  agreement as a signing bonus, as well as a termination grant
of two million  (2,000,000)  shares of the common  stock  (which  shares are not
included  in the above  table).  All shares  will have  piggy back  registration
rights.  Further, he will be granted a warrant to acquire three hundred thousand
(300,000) shares of the Company's common stock (which shares are included in the
above table).  The exercise  price will be based upon the bid price of the stock
at the date of this agreement;
(3) Boston Equities Corporation,  Design Inc., Camden Holdings Inc., and Summitt
Oil & Gas are related  parties;
(4) Credit First Holdings is a related party to Brian Harcourt;
(5) Includes Credit First Holdings;
(6) Does not include 1,200,000 shares vested under warrants held by Liquid Stone
Manufacturing, Inc. and Stone Mountain Finishes, Inc., related parties to Boston
Equities Corporation and William Courtney.


Changes in Control

There are no  arrangements  known by us,  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.

A.       William Courtney

Pursuant to the terms of a Stock Purchase  Agreement  Effective October 1, 2005,
the  Company  sold all of the issued and  common  stock of ES3 that we  acquired
under the Exchange  Agreement to Liquid Stone Partnership and in exchange Liquid
Stone  Partnership  agreed to assume all known and unknown  liabilities  of Es3.
William Courtney is a holder of a minority interest in Liquid Stone Partnerships
and is also a director of the Company.

B.       Ross Lyndon-James, Brian Harcourt, William Courtney and Boston Equities
         Corporation ("BEC")

On June 15, 2005, the Company acquired an exclusive license to manufacture,  use
and distribute Liquid Stone(TM)  coatings in North America,  Central America and
South America,  under an OEM License Agreement with Liquid Stone  Manufacturing,
Inc. a Nevada corporation. Liquid Stone Manufacturing, Inc. is controlled by BEC
and William  Courtney.  Additionally,  during 2005,  Ross Lyndon-James and Brian
Harcourt were officers and directors in BEC.  Under the terms of the OEM License
Agreement,  we granted Liquid Stone  Manufacturing,  Inc. a five year warrant to
purchase 600,000 shares of its common stock at $0.70 per share which warrant was
assumed by the Company under the terms of the Exchange Agreement.

On June 15, 2005, the Company acquired an exclusive license to manufacture,  use
and distribute Authentic Stone Veneers(TM) in North America, Central America and
South America, under an OEM License Agreement with Stone Mountain Finishes, Inc.
a Nevada  corporation.  Stone Mountain  Finishes,  Inc. is controlled by BEC and
William  Courtney.  Additionally,  during  2005,  Ross  Lyndon  James  and Brian
Harcourt were officers and directors in BEC.  Under the terms of the OEM License
Agreement,  we granted Liquid Stone  Manufacturing,  Inc. a five year warrant to
purchase 600,000 shares of its common stock at $0.70 per share which warrant was
assumed by the Company under the terms of the Exchange Agreement.

On June 15, 2005,  the Company  issued  8,618,750  shares of common stock to the
shareholders of Aronite Industries,  Inc. ("Aronite") as well as agreeing to pay
a royalty in connection with the license of certain trademarks from Aronite. BEC
holds approximately 20% of Aronite's voting stock, and Ross Lyndon-James,  Brian
Harcourt  and  William   Courtney  were   directors  of  Aronite   during  2005.
Additionally,  during 2005, Ross  Lyndon-James  and Brian Harcourt were officers
and directors in BEC.

                                      -23-
<PAGE>

C.       Ross Lyndon-James, Brian Harcourt, and BEC

In June 2005, the Company issued 800,000 shares of unregistered  common stock in
exchange for debt arising out of monies advanced to the Company in the amount of
$400,000 by BEC under the terms of a convertible financing agreement. During the
year 2005,  Ross Lyndon James and Brian  Harcourt were officers and directors of
BEC.

Item  13.  Exhibits and Reports on Form 8-K

Exhibits
<TABLE>
<CAPTION>

------ ------- -----------------------------------------------------------------
<C>    <C>     <C>
2      2.1     Exchange  Agreement  by and  among  the  Company,  Special  Stone
               Surfaces,  Es3, Inc. and certain  stockholders of each dated June
               30, 2005, without schedules and exhibits, attached hereto.
------ ------- -----------------------------------------------------------------
10     10.8    Consulting Agreement by and between us and Camden Holdings,  Inc.
               dated January 8, 2006, attached hereto.
------ ------- -----------------------------------------------------------------
       10.9    Consulting  Agreement  by and between us and Design,  Inc.  dated
               January 8, 2006, attached hereto.
------ ------- -----------------------------------------------------------------
       10.10   Stock  Purchase  Agreement  between us and Liquid Stone  Partners
               dated April 4, 2006, attached hereto.
------ ------- -----------------------------------------------------------------
       10.11   Assignment of leasehold  rights between us and Summitt  Holdings,
               Inc. dated April 4, 2006, attached hereto.
------ ------- -----------------------------------------------------------------
       10.12   Consulting  Agreement between us and Credit First Holdings,  Inc.
               dated April 5, 2006, attached hereto
------ ------- -----------------------------------------------------------------
       10.13   Promissory  note executed  between us and Camden  Holdings  dated
               April 25, 2006, attached hereto.
------ ------- -----------------------------------------------------------------
14     14.1    Code of Ethics, attached hereto.
------ ------- -----------------------------------------------------------------
23     23.1    Consent of Independent  Certified  Public  Accountants,  attached
               hereto.
------ ------- -----------------------------------------------------------------
31     31.1    Certification by Ross Lyndon-James,  Chief Executive Officer,  as
               required  under  Section  302 of  Sarbannes-Oxley  Act  of  2002,
               attached hereto.
------ ------- -----------------------------------------------------------------
       31.2    Certification  by Brian  Harcourt,  Chief Financial  Officer,  as
               required  under Section 302 of the  Sarbannes-Oxley  Act of 2002,
               attached hereto.
------ ------- -----------------------------------------------------------------
32     32.1    Certification  as required  under Section 906 of  Sarbannes-Oxley
               Act of 2002, attached hereto.
------ ------- -----------------------------------------------------------------
</TABLE>

(b) Reports on Form 8-K:

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

July 5, 2005   Under item 1.01 we announced the close of the Exchange Agreement.
-------------- -----------------------------------------------------------------
July 5, 2005   Under  Item  5.01,  we  announced  the  change in  control of the
               Company as a result of the share  issuance under the terms of the
               Exchange Agreement.
-------------- -----------------------------------------------------------------

Item 14.  Principal Accountant Fees and Services.

Audit Fees:  The  aggregate  fees  billed for the last fiscal year for  services
rendered by our principal accountant for the  audit of our  financial statements


                                      -24-
<PAGE>

and review of financial  statements  included in our form 10QSB's for the fiscal
years ended December 31, 2005 were $39,560.

Audit Related Fees: $ -0-

Tax Fees:  $ -0-

All Other Fees: $ -0-


                                   SIGNATURES

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

                      National Healthcare Technology, Inc.


                      By: /s/ Ross Lyndon-James
                      -------------------------------
                              Ross Lyndon-James,
                              Chief Executive Officer

                      Dated: May 22, 2006

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


/s/ Ross Lyndon-James                       May 22, 2006
------------------------------------
    Ross Lyndon-James,
    Chief Executive Officer


/s/ Brian Harcourt                          May 22, 2006
------------------------------------
    Brian Harcourt,
    Chief Financial Officer


                                      -25-

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.

                          (A DEVELOPMENT STAGE COMPANY)

                        CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2005



                                      F-1
<PAGE>



<PAGE>


                      NATIONAL HEALTHCARE TECHNOLOGY, INC.

                          (A DEVELOPMENT STAGE COMPANY)

                        CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2005






                                 C O N T E N T S



Report of Independent Registered Public Accounting Firm                   F-3

Consolidated Balance Sheet                                                F-4

Consolidated Statement of Operations                                      F-5

Consolidated Statement of Changes in Shareholders' Deficit                F-6

Consolidated Statement of Cash Flows                                      F-7

Notes to Consolidated Financial Statements                         F-8 - F-17


                                      F-2
<PAGE>


              REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors
National Healthcare Technologies, Inc.
A Development Stage Company
San Diego, California

We  have  audited  the  accompanying  consolidated  balance  sheet  of  National
Healthcare,  Technologies,  Inc.  as of  December  31,  2005,  and  the  related
statements of operations,  stockholders'  deficit, and cash flows for the period
January  27,  2005  (inception)  through  December  31,  2005.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion of these financial  statements based on
our audit.

We conducted our audit 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 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  audit  provide  a
reasonable basis for our opinion.

In our opinion, the financial statement referred to above present fairly, in all
material respects,  the financial position of National Healthcare  Technologies,
Inc. as of December 31,  2005,  and the results of its  operations  and its cash
flows for the period  January 27, 2005 through  December 31, 2005, in conformity
with the  accounting  principles  generally  accepted  in the  United  States of
America.

The accompanying  financial statements have been prepared assuming that National
Healthcare Technologies,  Inc. will continue as a going concern. As discussed in
Note 2 to the financial statements,  National Healthcare Technologies,  Inc. has
incurred a net loss of  $807,600  and has a  stockholders'  deficit of  $63,260.
National Healthcare  Technologies,  Inc. will require additional working capital
to  develop  its  business  until it either  (1)  achieves  a level of  revenues
adequate  to  generate  sufficient  cash flows from  operations;  or (2) obtains
additional  financing  necessary  to support its working  capital  requirements.
These conditions raise  substantial doubt about National  Healthcare  Technology
Inc.'s ability to continue as a going concern.  Management's  plans in regard to
this matter are described in Note 2. The  accompanying  financial  statements do
not  include  any  adjustments  that  might  results  from the  outcome of these
uncertainties.

Lopez, Blevins, Bork & Associates, LLP
Houston, Texas
May 19, 2005


                                      F-3
<PAGE>


                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2005



                                     ASSETS
Assets                                                                        0
                                                                   ============

                   LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities
           Current Liabilities

               Accounts Payable                                          63,260
                                                                  -------------
           Total Current Liabilities                                     63,260

Commitments and Contingencies

Stockholders' Deficit
               Preferred Stock, $.01 par value, 10,000,000 shares
                   authorized, none issued and outstanding                 --
               Common Stock, $.001 par value, 100,000,000 shares
                   authorized, 19,182,759 shares issued
                   and outstanding                                       19,183
               Additional paid in Capital                               752,157
               Deficit accumulated during development stage            (807,600)
                                                                   ------------
           Total Stockholders' Deficit                                  (63,260)
                                                                   ------------
                   TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                0
                                                                   ============





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


                                      F-4
<PAGE>



                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENT OF OPERATIONS
                JANUARY 27, 2005 (INCEPTION) TO DECEMBER 31, 2005




Revenues:                                                  $        --

Operating Expenses:
   Professional fees                                             465,304
   Technology license royalties                                  160,417
   Depreciation and amortization                                   3,811
   Other General & administrative                                178,068
                                                           -------------

                Total Operating Expenses                         807,600
                                                           -------------

   Net Loss                                                     (807,600)
                                                           -------------


Net loss per share, basic and fully
diluted                                                    $        (.06)
                                                           =============

Weighted average shares of common
stock outstanding, basic and fully
diluted                                                       14,579,683
                                                           =============




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

                                      F-5

<PAGE>
<TABLE>
<CAPTION>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
                                DECEMBER 31, 2005


                                             Common Stock             Additional
                                     -----------------------------     paid in         Accumulated
                                        Shares           Amount         capital          deficit           Total
                                     -------------   -------------   -------------    -------------    -------------

<S>                                  <C>             <C>             <C>              <C>              <C>
Balance January 27, 2005 (inception)          --     $        --     $        --      $        --      $        --

Founders stock issued                    8,380,000           8,380          (8,380)            --               --


Stock issued for debt                      800,000             800         399,200             --            400,000

Stock issued for license agreement       8,618,750           8,619          (8,619)            --               --

Effect of reverse merger                 1,384,009           1,384        (201,384)            --           (200,000)

Divestiture of subsidiary
  to related party                            --              --           544,340             --            544,340

Net (Loss)                                    --              --              --           (807,600)        (807,600)

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

Balance December 31, 2005               19,182,759   $      19,183   $     725,157    ($    263,260)   ($     63,260)
                                     =============   =============   =============    =============    =============
</TABLE>



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


                                      F-6


<PAGE>

<TABLE>
<CAPTION>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                JANUARY 27, 2005 (INCEPTION) TO DECEMBER 31, 2005

<S>                                                                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net (Loss)                                                             ($    807,600)

Adjustments to reconcile net loss to cash used by operating activities:
     Depreciation and amortization                                                3,811

Changes in certain assets and liabilities, net of divestiture
   Inventory                                                                    (29,102)
   Other assets                                                                  (2,087)
   Accounts payable and accrued expenses                                        144,990
                                                                          -------------

CASH FLOWS USED IN OPERATING ACTIVITIES                                        (689,988)

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures                                                         (38,952)

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

CASH FLOWS USED IN INVESTING ACTIVITIES                                         (38,952)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from convertible note - related party                               400,000
   Related party advances                                                       328,940
                                                                          -------------

CASH FLOWS FROM PROVIDED BYFINANCING
   ACTIVITIES                                                                   728,940
                                                                          -------------

Net increase (decrease) in cash                                                    --
Cash, beginning of the period                                                      --
                                                                          -------------
Cash, end of the year                                                     $        --
                                                                          =============

SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid                                                                      --
Income taxes paid                                                                  --

NON CASH TRANSACTIONS
Net liabilities assumed with recapitalization                             $     200,000
Divestitute of subsidiary to related party                                $     544,340
Common stock issued for debt                                              $     400,000

</TABLE>


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


                                      F-7
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005


1.       Summary of Significant Accounting Policies

A.       Organization and General Description of Business
         ------------------------------------------------

On July 19,  2005,  the  Company  completed  the  acquisition  of Special  Stone
Surfaces,  Es3, Inc., a Nevada  Corporation  ("Es3") pursuant to the terms of an
Exchange  Agreement (the "Exchange  Agreement") by and among the Company,  Crown
Partners,  Inc., a Nevada corporation and at such time, the largest  stockholder
of the Company  ("Crown  Partners"),  Es3, and certain  stockholders of Es3 (the
"Es3  Stockholders").  Under the terms of the  Exchange  Agreement,  the Company
acquired  all of the  outstanding  capital  stock  of Es3 in  exchange  for  the
issuance  of  19,182,759  shares  of the  Company's  common  stock  to  the  Es3
Stockholders,  Crown Partners and certain consultants. The transactions effected
by the Exchange  Agreement  have been  accounted for as a reverse  merger.  This
reverse merger transaction has been accounted for as a recapitalization  of Es3,
as Es3 is the accounting  acquirer,  effective  July 19, 2005. As a result,  the
historical  equity of the Company has been restated on a basis  consistent  with
the recapitalization.  In addition,  the Company changed its accounting year-end
from September 30 to December 31, which is Es3's accounting year-end.

Accordingly the financial  statements contained in report include the operations
of the  Company  in its new line of  business.  As a result of the  transactions
contemplated  by the Exchange  Agreement,  the Company had one active  operating
subsidiary--Es3.  Es3 was formed in January 2005 and began  operations  in March
2005 in the business of  manufacturing  and  distributing  a range of decorative
stone veneers and finishes based on proprietary  Liquid Stone  Coatings(TM)  and
Authentic Stone Veneers(TM).

Effective October 1, 2005, the Company sold all of its shares in Es3.

B.       Basis of Presentation and Organization
         --------------------------------------

The consolidated financial statements of the Company for the period from January
27, 2005 (Inception)  through December 31, 2005 have been prepared in accordance
with  generally  accepted  accounting  principles.  The  consolidated  financial
statements  include the accounts of the Company and its wholly owned subsidiary,
Es3,  through  October  1,  2005  (the  effective  date  of  disposition).   All
inter-company transactions have been eliminated.

C.       Use of Estimates
         ----------------

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the reported  amounts of assets and  liabilities  and the  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.  Estimates and assumptions are
reviewed  periodically  and  the  effects  of  revisions  are  reflected  in the
financial statements in the period they are determined.

                                      F-8
<PAGE>
                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005


D.     Property and Equipment
       ----------------------

Property and  equipment  have been stated at cost and  depreciated  or amortized
using  the  straight-line  method  over  the  assets'  estimated  useful  lives.
Leasehold  improvements  have been amortized over the shorter of the life of the
related asset or the life of the lease.  Costs of  maintenance  and repairs have
been charged to expense as incurred;  significant  renewals and betterments have
been capitalized.  Long-lived assets have been assessed for impairment  whenever
events or changes in  circumstances  have  indicated  that the assets'  carrying
amount may not be  recoverable.  In the event of impairment,  the evaluation has
been  based on an  estimate  of the  future  undiscounted  net cash flows of the
related asset or asset  grouping  over the assets'  remaining  life.  Long-lived
assets that are assessed to be impaired have been reduced to their estimated net
fair market value.


E.     Technology License
       ------------------

The Company's  principal business activity focuses on the  commercialization  of
distributing  decorative  coatings that can be used to resemble stone, which the
Company  licenses  from related  parties.  Minimum  annual  royalties  for these
arrangements have been accrued on the Company's balance sheet.


G.     Stock-Based Compensation
       ------------------------

The Company  accounts for stock based awards to  employees  as  compensatory  in
accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees  ("APB 25").  The Company also issues stock based awards for
services performed by consultants and other  non-employees and accounts for them
in  accordance  with  Statement  of  Financial  Accounting  Standards  No. 123R,
Accounting for Stock-Based Compensation ("SFAS 123R").

Financial   Accounting   Standards  Board  Statement  No.  148,  Accounting  for
Stock-Based  Compensation - Transition and Disclosure ("SFAS 148"), requires the
Company to provide pro forma  information  regarding net income and earnings per
share as if  compensation  cost for all awards had been determined in accordance
with the fair  value  based  method  prescribed  in SFAS  123R.  Net  income and
earnings  per share for the period  ended  December 31, 2005 would not have been
impacted  had  the  compensation  cost  for  these  awards  been  determined  in
accordance with SFAS 123R

Effective  January  1, 2006,  the  Company  will  adopt SFAS No.  123R using the
"prospective   method."  This  statement  replaced   SFAS-123,   Accounting  for
Stock-Based  Compensation,  supersedes APB Opinion No. 25,  Accounting for Stock
Issued to  Employees,  and amends  SFAS-95,  Statement of Cash Flows.  SFAS-123R
requires companies to apply a fair-value-based  measurement method in accounting
for shared-based  payment transactions with employees and to record compensation
cost for all stock  awards  granted  after the required  effective  date and for
awards  modified,  repurchased  or  cancelled  after  that  date.  The  scope of
SFAS-123R  encompasses a wide range of  share-based  compensation  arrangements,
including share options, restricted share plans, performance-based awards, share
appreciation rights, and employee share purchase plans.

                                      F-9
<PAGE>
                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005


H.     Income Taxes
       ------------

The  Company  accounts  for its  income  taxes  using the  Financial  Accounting
Standards  Board   Statements  of  Financial   Accounting   Standards  No.  109,
"Accounting  for Income Taxes," which requires the  establishment  of a deferred
tax asset or  liability  for the  recognition  of future  deductible  or taxable
amounts and operating loss and tax credit carry  forwards.  Deferred tax expense
or  benefit  is  recognized  as a  result  of  timing  differences  between  the
recognition of assets and liabilities for book and tax purposes during the year.

Deferred  tax  assets and  liabilities  are  measured  using  enacted  tax rates
expected  to apply to  taxable  income  in the  years in which  those  temporary
differences  are expected to be  recovered  or settled.  Deferred tax assets are
recognized  for deductible  temporary  differences  and operating  loss, and tax
credit  carry  forwards.  A valuation  allowance is  established  to reduce that
deferred tax asset if it is "more likely than not" that the related tax benefits
will not be realized.


I.    Basic and Diluted Net Earnings (loss) per Share
      -----------------------------------------------

The  Company  adopted  the  provisions  of SFAS No.  128,  "Earnings  Per Share"
("EPS"). SFAS No. 128 provides for the calculation of basic and diluted earnings
per share.  Basic EPS includes no dilution and is computed by dividing income or
loss available to common  shareholders by the weighted  average number of common
shares  outstanding for the period.  Diluted EPS reflects the potential dilution
of securities that could share in the earnings or losses of the entity.  For the
period from  inception  through  December 31,  2005,  basic and diluted loss per
share are the same since the  calculation  of diluted  per share  amounts  would
result in an anti-dilutive calculation.


J.    Recent Accounting Pronouncements
      --------------------------------

In February  2006,  FASB issued SFAS No.  155,  "Accounting  for Certain  Hybrid
Financial  Instruments".  SFAS  No.  155  amends  SFAS No 133,  "Accounting  for
Derivative  Instruments and Hedging  Activities",  and SFAF No. 140, "Accounting
for  Transfers  and  Servicing  of  Financial  Assets  and   Extinguishments  of
Liabilities".  SFAS No. 155,  permits  fair value  remeasurement  for any hybrid
financial  instrument that contains an embedded  derivative that otherwise would
require  bifurcation,  clarifies which  interest-only  strips and principal-only
strips are not  subject  to the  requirements  of SFAS No.  133,  establishes  a
requirement  to evaluate  interest in securitized  financial  assets to identify
interests  that  are  freestanding  derivatives  or that  are  hybrid  financial
instruments that contain an embedded derivative requiring bifurcation, clarifies
that concentrations of credit risk in the form of subordination are not embedded
derivatives,  and  amends  SFAS No.  140 to  eliminate  the  prohibition  on the
qualifying special-purpose entity from holding a derivative financial instrument
that pertains to a beneficial  interest other than another derivative  financial
instrument.  This statement is effective for all financial  instruments acquired
or issued  after the  beginning of the  Company's  first fiscal year that begins
after September 15, 2006.

                                      F-10
<PAGE>
                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005


In June 2005,  the EITF reached  consensus on Issue No.  05-6,  Determining  the
Amortization Period for Leasehold Improvements ("EITF 05-6.") EITF 05-6 provides
guidance on  determining  the  amortization  period for  leasehold  improvements
acquired in a business  combination or acquired  subsequent to lease  inception.
The guidance in EITF 05-6 will be applied  prospectively  and is  effective  for
periods  beginning  after June 29,  2005.  EITF 05-6 is not  expected  to have a
material effect on its consolidated financial position or results of operations.

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections."  This  statement  applies to all  voluntary  changes in accounting
principle and requires  retrospective  application to prior  periods'  financial
statements   of  changes  in   accounting   principle,   unless  this  would  be
impracticable.  This statement also makes a distinction  between  "retrospective
application"  of an  accounting  principle  and the  "restatement"  of financial
statements to reflect the  correction of an error.  This  statement is effective
for accounting  changes and corrections of errors made in fiscal years beginning
after December 15, 2005.

In March 2005, the SEC released Staff Accounting Bulletin No. 107,  "Share-Based
Payment"  ("SAB  107"),  which  provides  interpretive  guidance  related to the
interaction  between SFAS 123(R) and certain SEC rules and regulations.  It also
provides  the SEC staff's  views  regarding  valuation  of  share-based  payment
arrangements.  In April  2005,  the SEC amended  the  compliance  dates for SFAS
123(R),  to allow  companies to implement the standard at the beginning of their
next fiscal year,  instead of the next reporting period beginning after June 15,
2005. Management has implemented the provisions of SFAS 123(R) effective January
1, 2006.

In December 2004, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting Standards (SFAS) No. 153, "Exchanges of Nonmonetary Assets
- an amendment of APB Opinion No. 29",  which amends  Opinion 29 by  eliminating
the  exception  for  nonmonetary  exchanges  of  similar  productive  assets and
replaces it with a general exception for exchanges of nonmonetary assets that do
not have commercial  substance.  A nonmonetary exchange has commercial substance
if the future cash flows of the entity are expected to change significantly as a
result of the exchange.  SFAS No. 151 is effective  for a fiscal year  beginning
after June 15, 2005, and implementation is done  prospectively.  Management does
not expect the  implementation of this new standard to have a material impact on
its financial position, results of operations and cash flows.

In November 2004, the Financial Accounting Standards Board Statement issued SFAS
No. 151,  "Inventory  Costs,  an  amendment  of ARB No. 43,  Chapter  4",  which
clarifies the accounting for abnormal amounts of idle facility expense, freight,
handling costs, and charges regardless of whether they meet the criterion of "so
abnormal" that was  originally  stated in Accounting  Research  Bulletin No. 43,
chapter 4. In  addition,  SFAS No. 151  requires  that the  allocation  of fixed
production  overheads to conversion costs be based on the normal capacity of the
production  facilities.  SFAS No. 151 is effective for inventory  costs incurred
during fiscal years  beginning  after June 15, 2005.  Management does not expect
the  implementation  of this  new  standard  to have a  material  impact  on its
financial position, results of operations and cash flows

                                      F-11
<PAGE>
                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005


In September  2004, the EITF delayed the effective date for the  recognition and
measurement  guidance  previously  discussed  under EITF Issue No.  03-01,  "The
Meaning  of  Other-Than-Temporary  Impairment  and Its  Application  to  Certain
Investments"  ("EITF  03-01") as included in  paragraphs  10-20 of the  proposed
statement.    The   proposed    statement    will   clarify   the   meaning   of
other-than-temporary  impairment and its  application to investments in debt and
equity securities,  in particular investments within the scope of FASB Statement
No. 115, "Accounting for Certain Investments in Debt and Equity Securities," and
investments  accounted  for under the cost  method.  The  Company  is  currently
evaluating the effect of this proposed  statement on its financial  position and
results of operations.

In March 2004,  the FASB approved the consensus  reached on the Emerging  Issues
Task  Force  (EITF)  Issue  No.  03-1,  "The  Meaning  of   Other-Than-Temporary
Impairment and Its  Application to Certain  Investments."  The objective of this
Issue is to provide  guidance for identifying  impaired  investments.  EITF 03-1
also provides new disclosure  requirements for investments that are deemed to be
temporarily  impaired.  In September 2004, the FASB issued a FASB Staff Position
(FSP)  EITF  03-1-1  that  delays  the  effective  date of the  measurement  and
recognition guidance in EITF 03-1 until after further deliberations by the FASB.
The disclosure  requirements  are effective only for annual periods ending after
June 15,  2004.  The Company  has  evaluated  the impact of the  adoption of the
disclosure requirements of EITF 03-1 and does not believe it will have an impact
to the Company's  overall  consolidated  results of  operations or  consolidated
financial  position.  Once the FASB reaches a final decision on the  measurement
and recognition provisions, the Company will evaluate the impact of the adoption
of EITF 03-1.

2.       Going Concern
         -------------

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles,  which contemplate the continuation of
the Company as a going concern. The Company reported a net loss of $807,600, and
had an accumulated deficit of $63,260.

In view of the matters described, there is substantial doubt as to the Company's
ability  to  continue  as a going  concern  without a  significant  infusion  of
capital.  The Company  acquired all of the  outstanding  capital stock of Es3 in
July 2005 and subsequently  divested its ownership effective October 1, 2005. At
December  31,  2005,  the  Company  had no  operations.  In view of the  matters
described, there is substantial doubt as to the Company's ability to continue as
a going  concern  without a  significant  infusion of  capital.  There can be no
assurance that management will be successful in implementing  its new plans. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.


3.       Income Taxes
         ------------

Current  year and  accumulated  deferred  tax benefit at the  effective  Federal
income tax rate of 34% is $274,584 and a valuation allowance has been set up for


                                      F-12
<PAGE>
                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005


the full amount because of the  unlikelihood  that the accumulated  deferred tax
benefit will be realized in the future.  The cumulative net operating loss carry
forward is $807,600 and will expire in the year 2012.


4.       Disposition of Es3
         ------------------

Effective  October 1, 2005,  the Company  conveyed at no cost all of the capital
stock of Es3 to Liquid Stone  Partners  under an agreement by which Liquid Stone
Partners  agreed to assume all of the known and unknown  liabilities of Es3. One
of the  directors  of the  Company  is an owner of Liquid  Stone  partners.  The
transaction  was  accounted for as a conveyance to a related party and therefore
the Company recorded the excess of Es3's liabilities over its assets at the date
of the  disposition  in the amount of  $544,340 to  additional  paid in capital.
There are no assets or  liabilities  related to Es3 on the balance  sheet of the
Company as of December 31, 2005.


5.       Equity Transactions
         -------------------

A.       Issuance of Common Stock
         ------------------------

In February 2005, the Company issued  8,380,000  shares of  unregistered  common
stock at par value of $0.001 to  founding  stockholders  without  consideration,
including   6,250,000   shares  to  Boston   Equities   Corporation  (a  related
party)("BEC").

In June 2005, the Company issued 800,000 shares of unregistered  common stock at
par value of $0.001 in exchange for the debt  arising out of monies  advanced to
the  Company in the amount of $400,000 by BEC  pursuant  to a  convertible  debt
agreement  dated  March 1, 2005.  The terms of the  convertible  debt  agreement
allowed BEC to convert its debt to shares of common stock at $.50 per share.

In June  2005,  the  Company's  issued  an  aggregate  of  8,618,750  shares  of
unregistered  common at par value of $0.001 stock to the shareholders of Aronite
Industries,   Inc.  ("Aronite")  in  connection  with  the  license  of  certain
trademarks from Aronite.  Certain  officers,  directors and  shareholders of the
Company are former or current  officers,  directors and shareholders of Aronite.
Aronite and the Company are under common control and, therefore, the transaction
was recorded at Aronite's basis, which was zero.

In July 2005, the Company issued 905,438 shares of its unregistered common stock
at par value of $0.001 to Crown  Partners,  Inc. in accordance with the terms of
the Exchange Agreement.

In July  2005,  in  accordance  with the terms of the  Exchange  Agreement,  the
Company issued for no consideration 400,000 shares of registered common stock to
two consultants,  d.b.a. WB International,  Inc. in accordance with the terms of
the Exchange Agreement.

In July 2005,  the  Company  issued for no  consideration  78,571  shares of its
unregistered  common stock at par value of $0.001 to the former  shareholders of
National Healthcare  Technologies,  Inc. and an additional 905,438 shares of its
unregistered  common  stock at par value of $0.001 to Crown  Partners,  a former
major shareholder of National Healthcare Technologies,  Inc., in accordance with
the terms of the Exchange Agreement.

                                      F-13
<PAGE>
                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005


B.       Warrants
         --------

In February  2005,  the Company issued a warrant to acquire up to 600,000 shares
of  unregistered  common  stock at an exercise  price of $0.60 per share to W.B.
International, Inc., in exchange for consulting services. All shares vested upon
grant. The warrant expires 5 years from the date of issuance.

In June 2005,  the Company  issued a warrant to acquire up to 600,000  shares of
unregistered  common  stock at an  exercise  price of $0.70 per share to each of
Liquid  Stone  Manufacturing,   Inc.  and  Stone  Mountain  Finishes,   Inc.  in
consideration of certain license  agreements.  All shares vested upon grant. The
warrants expire 5 years from the date of issuance.

A summary of the warrant  activity for the period ended  December 31, 2005 is as
follows:
<TABLE>
<CAPTION>

------------------------------------------------------------ --------------------- ---------------------
                                                             Number of Shares      Weighted Average
                                                                                   Exercise Price
------------------------------------------------------------ --------------------- ---------------------
<S>                                                          <C>                   <C>
Outstanding at beginning of the period                                       --                     --
------------------------------------------------------------ --------------------- ---------------------
Issued                                                                  1,800,000                 $0.67
------------------------------------------------------------ --------------------- ---------------------
Cancelled, Forfeited or expired                                              --                     --
------------------------------------------------------------ --------------------- ---------------------
Outstanding at December 31, 2005                                        1,800,000                 $0.67
------------------------------------------------------------ --------------------- ---------------------
Exercisable at December 31, 2005                                        1,800,000                 $0.67
------------------------------------------------------------ --------------------- ---------------------
</TABLE>

<TABLE>
<CAPTION>

----------------------- --------------------------------------------- ------------------------------------------------
                                        Outstanding                                     Exercisable
----------------------- --------------------------------------------- ------------------------------------------------
    Exercise Price       Number of Warrants      Weighted Average       Number Exercisable       Weighted Average
                                                     Remaining                                    Exercise Price
                                                 Contractual life
                                                      (Years)
----------------------- ---------------------- ---------------------- ----------------------- ------------------------
<S>     <C>                         <C>                          <C>               <C>                          <C>
        $0.70                       1,200,000                    4.5               1,200,000                    $0.70
----------------------- ---------------------- ---------------------- ----------------------- ------------------------
        $0.60                         600,000                    4.0                 600,000                    $0.60
----------------------- ---------------------- ---------------------- ----------------------- ------------------------
</TABLE>

The Company  estimates the fair value of each stock warrant at the grant date by
using the Black-Scholes option-pricing model with the following weighted-average
assumptions  used for grants for the year ended  December 31, 2005:  no dividend
yield for each year;  expected  volatility of for the warrant shares exercisable
0.1%;   weighted-average   risk-free  interest  rates  for  the  warrant  shares
exercisable  at  $0.60  and  $0.70  were  3.38%  and  3.64%,  respectively;  and
weighted-average  expected  option life of 5 years.  The  weighted  average fair
value of the stock  warrants  granted  during the period ended December 31, 2005
was $0.00.

C.       Employee Options
         ----------------

In June 2005,  the  Company  issued a warrant to an  employee  to purchase up to
100,000 shares of the Company's  restricted common stock at an exercise price of
$0.70 per share.  The shares vested  monthly over three years and have a 10 year
option period. The employee was terminated in February 2006 and the options were
forfeited..

                                      F-14
<PAGE>
                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005


A summary of the option  activity for the period  ended  December 31, 2005 is as
follows:
<TABLE>
<CAPTION>

------------------------------------------------------------ --------------------- ---------------------
                                                             Number of Shares      Weighted Average
                                                                                   Exercise Price
------------------------------------------------------------ --------------------- ---------------------
<S>                                                          <C>                   <C>
Outstanding at beginning of the period                                       --                     --
------------------------------------------------------------ --------------------- ---------------------
Issued                                                                    100,000                 $0.70
------------------------------------------------------------ --------------------- ---------------------
Cancelled, Forfeited or expired                                              --                     --
------------------------------------------------------------ --------------------- ---------------------
Outstanding at December 31, 2005                                          100,000                 $0.70
------------------------------------------------------------ --------------------- ---------------------
Exercisable at December 31, 2005                                           16,667                 $0.70
------------------------------------------------------------ --------------------- ---------------------
</TABLE>

<TABLE>
<CAPTION>
----------------------- --------------------------------------------- ------------------------------------------------
                                        Outstanding                                     Exercisable
----------------------- --------------------------------------------- ------------------------------------------------
    Exercise Price        Number of Options      Weighted Average       Number Exercisable       Weighted Average
                                                     Remaining                                    Exercise Price
                                                 Contractual life
                                                      (Years)
----------------------- ---------------------- ---------------------- ----------------------- ------------------------
<S>     <C>                           <C>                        <C>                  <C>                       <C>
        $0.70                         100,000                    9.5                  16,667                    $0.70
----------------------- ---------------------- ---------------------- ----------------------- ------------------------
</TABLE>

The Company  estimates  the fair value of each stock option at the grant date by
using the Black-Scholes option-pricing model with the following weighted-average
assumptions  used for grants for the year ended  December 31, 2005:  no dividend
yield for each year;  expected  volatility of 0.1%;  weighted-average  risk-free
interest rate of 3.64% and  weighted-average  expected  option life of 10 years.
The weighted  average fair value of the stock warrants granted during the period
ended December 31, 2005 was $0.00.


6.       Related Party Transactions
         --------------------------

During the year the  following  transactions  occurred  between  the Company and
certain related parties:

A.       Boston Equities Corporation, William Courtney, Ross Lyndon James, Brian
         Harcourt
         -----------------------------------------------------------------------

The following transactions took place between the Company and BEC, a shareholder
holding greater than 10% of the outstanding common stock of the Company, William
Courtney,  a former  shareholder and director of Es3 and a current member on the
Company's  board of  directors,  and Ross Lyndon  James and Brian  Harcourt  who
served as officers and directors in BEC during the year 2005.

On June 15, 2005, the Company acquired an exclusive license to manufacture,  use
and distribute Liquid Stone(TM)  coatings in North America,  Central America and
South America,  under an OEM License Agreement with Liquid Stone  Manufacturing,
Inc. a Nevada corporation. Liquid Stone Manufacturing, Inc. is controlled by BEC
and William Courtney.  Under the terms of the OEM License Agreement, the Company
granted Liquid Stone Manufacturing, Inc. a five year warrant to purchase 600,000
shares of its common  stock at $0.70 per share which  warrant was assumed by the
Company  under  the terms of the  Exchange  Agreement.  (See  Note 5.B,  above.)
Minimum annual royalties  payable by the Company to Liquid Stone  Manufacturing,
Inc.  under the agreement are $200,000.  The licensing  agreement was assumed by
the purchaser  when Es3 was sold.  Expenses for the year ended December 31, 2005
were $58,333.

                                      F-15
<PAGE>
                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005


On June 15, 2005, the Company acquired an exclusive license to manufacture,  use
and distribute Authentic Stone Veneers(TM) in North America, Central America and
South America, under an OEM License Agreement with Stone Mountain Finishes, Inc.
a Nevada  corporation.  Stone Mountain  Finishes,  Inc. is controlled by BEC and
William  Courtney.  Under the terms of the OEM  License  Agreement,  the Company
granted Liquid Stone Manufacturing, Inc. a five year warrant to purchase 600,000
shares of its common  stock at $0.70 per share which  warrant was assumed by the
Company  under  the terms of the  Exchange  Agreement.  (See  Note 5.B,  above.)
Minimum  annual fees  payable by the Company to Stone  Mountain  Finishes,  Inc.
under the  agreement are  $250,000.  The licensing  agreement was assumed by the
purchaser  when Es3 was sold.  Expenses  under the  agreement for the year ended
December 31, 2005 were $72,917.

B.       Boston Equities Corporation, Ross Lyndon James and Brian Harcourt
         -----------------------------------------------------------------

The following transaction took place between the Company and BEC:

In June 2005, the Company issued 800,000 shares of unregistered  common stock in
exchange for debt arising out of monies advanced to the Company in the amount of
$400,000 by BEC under the terms of a convertible financing agreement.

In 2005 the Company entered into a financial advisory  representation  agreement
with BEC. For the period ended  December 31, 2005,  the Company paid BEC $90,000
for the services provided under the agreement.

C.       William Courtney
         ----------------

The following transactions took place between the Company and William Courtney.

Effective October 1, 2005 the Company conveyed all of the outstanding and issued
capital stock of Es3 to Liquid Stone  Partners in exchange for the assumption of
all of the known and  unknown  liabilities  of Es3.  William  Courtney is one of
three partners in Liquid Stone Partners.

On June 15, 2005,  the company  issued  8,618,750  shares of common stock to the
shareholders of Aronite Industries,  Inc. ("Aronite") as well as agreeing to pay
a royalty in  connection  with the license of certain  trademarks  from aronite.
Minimum  annual fees  payable by the Company to Aronite uner the  agreement  are
$200,000.  The licensing  agreement  was assumed by the  purchaser  when Es3 was
sold.  Expenses  under the agreement  for the year ended  December 31, 2005 were
$29,167.  BEC  holds  approximately  20%  of  Aronite  voting  stock,  and  Ross
Lyndon-James,   Brian  Harcourt and William  Courtney were  directors of Aronite
during 2005.

In 2005 the company  entered into a business  consulting  agreement with William
Courtney.  For the period  ended  December  31,  2005 the Company  paid  William
Courtney approximately $27,000 for the services provided under the agreement.

7.       Commitments and Contingencies
         -----------------------------

A.       Legal
         -----

The Company is periodically involved in legal actions and claims that arise as a
result of events that occur in the normal course of  operations.  The Company is
not currently  aware of any formal legal  proceedings or claims that the Company
believes will have,  individually or in the aggregate, a material adverse effect
on the Company's financial position or results of operations.

B.       Operating Leases
         ----------------

On March 1, 2005,  the Company'  entered into a lease  commitment for office and
warehouse  space in San Diego,  California  which expires  February 1, 2009. The
terms of the lease provide for monthly rental payments of $3,367 through January
2006 and  increasing 3% each year beginning  February 1, 2007.  Rent expense for
the period  ended  December  31, 2005 was $26,078.  The lease  obligations  were
assumed as part of the sale of Es3.

                                      F-16
<PAGE>
                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005


The Company currently has an office at 1660 Union Street,  Suite 200, San Diego,
CA 92101, which it maintains under arrangement with the landlord at no cost. The
Company also shares an office space with a shareholder  at 9595 Wilshire  Blvd.,
Suite 510, Beverly Hills, CA 90212 without cost to the Company.

As of December 31, 2005, the Company had no future rental commitments.


8.     Subsequent Events (unaudited)
       -----------------------------

In April 2006,  the Company's  Board of Director  approved a change of direction
for the Company, from the business of manufacturing and distributing  decorative
stone  veneers and  finishes,  to the  business of oil and gas  exploration  and
production,   mineral  lease  purchasing  and  all  activities  associated  with
acquiring,   operating  and  maintaining  the  assets  of  such  operations.  In
furtherance  of this change of direction,  the Company  entered into  consulting
agreements with third parties to provide business management services and advice
as it relates to the future of the company.  These  services  shall  include the
drafting  and  preparation  of  business  plans,  operating  budgets,  cash flow
projections and other business  management services as the Company ventures into
the oil and gas business.  As an initial step into the oil and gas business,  in
April 2006,  the Company  executed an  assignment  of an oil and gas lease under
which the  Company  intends to exploit  underlying  oil and gas  reserves.  (See
discussion, below.)

A.       Related Party Transactions
         --------------------------

The  following  transactions  occurred  between the Company and certain  related
parties subsequent to December 31, 2005:

On January 8, 2006,  the  Company  executed a  Consulting  contract  with Camden
Holdings,  Inc.  ("Camden")  under  which  Camden  agreed  to  provide  business
management  services and advice as it relates to the future of the  company.  In
consideration  of these services,  the Company agreed to pay Camden a fee of two
hundred and fifty  thousand  dollars  ($250,000)  and two million  five  hundred
thousand   (2,500,000)   shares  of  restricted   common   stock.   The  fee  is
non-refundable and considered earned when the shares are delivered.  Camden is a
related party to BEC.

On January 8, 2006, the Company  entered into a consulting  contract with Design
Inc. ("Design") to provide business management services and advice as it relates
to the Company's future. Under the terms of the agreement, the Company agreed to
pay to Design a fee of two million eight hundred thousand (2,800,000) restricted
shares of the Company's common stock. The fee is  non-refundable  and considered
earned when the shares are delivered. Design is a related party to BEC.

On April 3, 2006, the Company  entered into a consulting  agreement with Summitt
Oil and Gas, Inc.  ("Summit") to provide business management services and advice
as it relates to the future of the  company.  Under the terms of the  Agreement,
the Company  shall pay Summitt a fee of two hundred and fifty  thousand  dollars
($250,000)  in  cash  plus  one  million  eight  hundred  thousand   (1,800,000)


                                      F-17
<PAGE>
                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005


restricted  of  the  Company's  common  stock.  The  fee is  non-refundable  and
considered  earned when the shares are  delivered.  Summit is a related party to
BEC ("Boston").

On April 3, 2006,  the Company  entered into an employment  agreement  with Ross
Lyndon  James  who  has  been  serving  as  the  Company's   President   without
compensation  and written  agreement since being appointed to such office by the
Board of Directors of the Company in June 2005. Mr. Lyndon James had also served
without  compensation  as a  director  of the  Company.  Under  the terms of the
agreement,  Mr.  Lyndon  James will  receive  compensation  equal to twenty five
thousand  dollars  ($25,000) per month payable  monthly in advance.  He was also
granted one million  eight hundred  thousand  (1,800,000)  restricted  shares of
common stock upon execution of the employment  agreement as a signing bonus,  as
well as a  termination  grant of two million  (2,000,000)  shares of  restricted
common stock. All shares have piggy-back registration rights. Additionally,  the
Company  agreed  to grant  him a  warrant  to  acquire  three  hundred  thousand
(300,000)  restricted shares of the Company' common stock. The exercise price is
to be based  on the bid  price of the  stock on the date of the  agreement.  The
warrants  expire five years after the date of grant.  Additionally,  Mr.  Lyndon
James will be entitled to participate in any stock option program offered by the
Company to its employees.

On April 3, 2006,  the Company  entered into an employment  agreement with Brian
Harcourt who has been serving as an officer of the Company without  compensation
and  written  agreement  since  being  appointed  to such office by the Board of
Directors  of the Company in June 2005.  Mr.  Harcourt  has also served  without
compensation as a director of the Company. Under the terms of the agreement, Mr.
Harcourt  will  receive  compensation  equal to  twenty  five  thousand  dollars
($25,000) per month payable monthly in advance.  He was also granted one million
eight  hundred  thousand  (1,800,000)  restricted  shares of common  stock  upon
execution  of  the  employment  agreement  as a  signing  bonus,  as  well  as a
termination  grant of two million  (2,000,000)  restricted  shares of the common
stock. All shares have piggy back registration rights. Additionally, the Company
agreed  to grant him a warrant  to  acquire  three  hundred  thousand  (300,000)
restricted  shares of the Company's  common stock.  The exercise  price is to be
based on the bid price of the stock on the date of the  agreement.  The warrants
expire five years after the date of grant.  Additionally,  Mr.  Harcourt will be
entitled to participate  in any stock option  program  offered by the Company to
its employees.

On April 4, 2006, the Company entered into an assignment of an oil and gas lease
with  Summitt.  Under the  agreement  the  Company  has  agreed  to pay  Summitt
consideration of four hundred thousand dollars  ($400,000)  payable with seventy
seven thousand (77,000) restricted shares of the Company's common stock.

April 5, 2006, the Company entered into a consulting agreement with First Credit
Holding Ltd ("First Credit") to provide business  management services and advice
as it relates to the Company's  future.  Under the terms of the  agreement,  the
Company agreed to pay First Credit a fee of three million five hundred  thousand
(3,500,000)  restricted  shares of common stock. The fee is  non-refundable  and
considered  earned when the shares are  delivered.  Brian  Harcourt,  one of our
directors, is the controlling shareholder of First Credit.

                                      F-18
<PAGE>
                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005

On April 25, 2006, the Company entered into a Short Term Bridge Financing in the
form of a promissory note to Camden Holdings,  Inc. in the amount of two hundred
and fifty thousand dollars ($250,000) to be used as working capital. The Note is
due on August 25, 2006. No interest is payable on the note.

B.       Non-related party transactions
         -------------------------------

On April 5, 2006,  the Company  retained  the  services of  Monterosa  Group Ltd
("Monterosa")  for a  period  of three  years  for  operational  administration,
transaction processing and management,  systems development,  staff recruitment,
acquisition transaction support services,  shareholder  communications and other
business management services.  Under the agreement,  the Company agreed to pay a
fee of seven  hundred  thousand  (700,000)  shares of the  Company's  restricted
common stock as  compensation  in lieu of cash.  The fee is  non-refundable  and
considered earned when the shares are delivered.

On April 5, 2006, the Company  entered into a consulting  agreement with BlueFin
LLC ("BlueFin") to provide business  development,  investor relations  services,
introductions  to  qualified  funding  sources,  introductions  to oil  and  gas
business prospects,  and introductions to accredited investors.  Under the terms
of the  agreement,  the  Company  agreed to pay  BlueFin a fee of seven  hundred
thousand  (700,000) shares of the Company's  restricted common stock. The fee is
non-refundable and considered earned when the shares are delivered.

C.       Other
         -----

In February 2006 the Company terminated the employment  agreement with its Chief
Operating Officer, Steve Ferguson.

On April 3, 2006, the Board of Directors of the Company  authorized and approved
the adoption of the 2006 Stock Option Plan effective April 3, 2006 (the "Plan").
The Plan is administered by the duly appointed compensation committee.  The Plan
is authorized to grant stock options of up to 2,500,000  shares of the Company's
common  stock.  At the time a stock  option  is  granted  under  the  Plan,  the
compensation  committee  shall fix and determine the exercise  price and vesting
schedules at which such shares of common stock of the Company may be acquired.

                                      F-19