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

                                   FORM 10-QSB

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2001

                                       or

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

      For the transition period from N/A to N/A

                          Commission File No. 01-28911

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
             (Exact name of Registrant as specified in its charter)

     Colorado, USA                                         91-1869677
(State of Incorporation)                       (IRS Employer Identification No.)

           21800 Oxnard Street, #440, Woodland Hills, California 91367
                    (Address of principal executive offices)

                    Issuer's Telephone Number, (818) 598-8888

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. |_| Yes |_| No

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State number of shares outstanding of each of the issuer' classes of common
equity, as of the latest practicable date:

       Class                                       Outstanding at March 31, 2001
Common Stock, $.001                                       7,855,500 shares
     par value                                         Outstanding Securities

Transitional Small Business Disclosure Format(check one): Yes |_| No |X|

<PAGE>

NATIONAL HEALTHCARE TECHNOLOGY, INC.

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

A financial statement, unaudited and included herein, beginning on page F-1
(Exhibit 99.0), is incorporated herein by this reference.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

GENERAL

National Healthcare Technology, Inc. (the "Company") was organized February 29,
1996 as "Patriot Holding Corporation" and subsequently changed its name to
"National Healthcare Technology, Inc." on August 26, 1996. Between 1996 and
1999, the Company was unsuccessful in raising sufficient capital to begin and
complete a proposed double-blind study of an intravenous drug called Magkelate.
The Company did raise $1,000,000 which was used to pay its operating expenses
and general and administrative expenses as well as expenses related to starting
the double-blind study. Following its inability to raise capital and needing to
conserve its financial resources, the Company dismissed all of its employees in
early 1999. The developer of Magkelate passed away in the fall of 1999 and the
Magkelate patent has expired. Since 1999, the Company has been substantially
inactive. The Company is in the development stage as defined in Statement of
Financial Accounting Standards No. 7.

When used in this Form 10-QSB, 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.

LIQUIDITY AND CAPITAL RESOURCES

The Company is in the development stage and since inception has experienced no
significant change in liquidity or capital resources or stockholders equity
other than the receipt of $1,000,000 from an offering conducted under Rule 504
of Regulation D in 1997. The Company's balance sheet as of March 31, 2001
reflects no assets and substantial liabilities. Further, there exists no
agreements or understandings with regard to loan agreements by or with the
Officers, Directors, principals, affiliates or shareholders of the Company.

<PAGE>

During the quarter ended March 31, 2000, the Company received a loan of $20,000
from Stein's Holdings, Inc., a publicly held company in which two of the
Company's directors were also directors. The Company used the loan proceeds to
pay its outstanding bills. The note was due on June 1, 2000. At September 30,
2000, the Company repaid the note through the issuance of 2,280,000 shares of
its common stock. The Company is continuing to search for suitable merger
candidates or other businesses to become involved in so that it can commence
operations and generate revenues to continue paying its bills.

The Company will attempt to carry out its plan of business and hopes to enter
into a business combination with another entity. The Company cannot predict to
what extent its lack of liquidity and capital resources will hinder its business
plan prior to the consummation of a business combination.

RESULTS OF OPERATIONS

During the period from November 5, 1989 (inception) through March 31, 2001, the
Company engaged in limited operations and attempted to initiate its double blind
study of its drug, Magkelate. The Company received no revenues during this
period. The capital raised was expended for general office and administrative
expenses and the proposed double-blind study of Magkelate, which double-blind
study the Company was unable to start due to lack of capital.

For the six month period ended March 31, 2001, the Company had no revenues or
income but recorded a net operating loss of ( $11,941) resulting primarily from
general and administrative expenses. For the six month period ended March 31,
2000, the Company had no revenues or income but recorded a net operating loss of
( $25,059), resulting from development costs. The net loss per share for the
periods ended March 31, 2001 and 2000, respectively, was nil.

For the period ended March 31, 2001, the Company had no assets and current
liabilities of approximately $37,000. For the year ended September 30, 2000, the
Company had total assets of approximately $2,000 and current liabilities of
approximately $36,700. Shareholders' equity (deficit) for the period ended March
31, 2001 was approximately ( $37,000) compared to total shareholders' equity
(deficit) of approximately ( $35,000) for the year ended September 30, 2000.

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

<PAGE>

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

NEED FOR ADDITIONAL FINANCING

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

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

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

PART II

Items No. 1, 2, 3, 4, and 5.

Not Applicable.

Item No. 6 - Exhibits and Reports on Form 8-K

(a) No reports on Form 8-K were filed during the three months ended March 31,
2001.

(b) Exhibits

99 Financial Statements for the period ended March 31, 2001
27 Financial Data Schedule

                                   SIGNATURES

      In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                        NATIONAL HEALTHCARE TECHNOLOGY, INC.


Date: May 14, 2001                      By /s/ James Smith
                                           -------------------------------------
                                           James Smith, CEO


                                        By /s/ Toni A. Hussain
                                           -------------------------------------
                                        Toni A. Hussain, Secretary/Treasurer

<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                              FINANCIAL STATEMENTS
                                 MARCH 31, 2001

<PAGE>

                                TABLE OF CONTENTS

                                                                        Page No.
                                                                        --------

INDEPENDENT ACCOUNTANTS' REVIEW REPORT ...................................   1

FINANCIAL STATEMENTS

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

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

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

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

       Notes to Financial Statements......................................8 - 11

<PAGE>

                     INDEPENDENT ACCOUNTANTS' REVIEW REPORT

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

We have reviewed the accompanying balance sheet of National Healthcare
Technology, Inc. as of March 31, 2001, and related statements of operations,
stockholders' (deficit) and cash flows for the six months ended March 31, 2001
and 2000, and for the period from November 5, 1995 (date of inception) to March
31, 2001 in accordance with Statements on Standards for Accounting and Review
Services issued by the American Institute of Certified Public Accountants. All
information included in these financial statements is the representation of the
management of National Healthcare Technology, Inc.

A review consists principally of inquiries of company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 6 to the
financial statements, the Company incurred net losses of $1,282,014 from
inception, needs additional working capital and has abandoned its medical
development programs. These factors raise doubt about its ability to continue as
a going concern. The accompanying financial statements do not include any
adjustments to the financial statements that might be necessary should the
Company be unable to continue as a going concern.

We have audited, in accordance with auditing standards generally accepted in the
United States of America, the balance sheet of National Healthcare Technology,
Inc. as of September 30, 2000, and the related statements of operations,
stockholders' (deficit) and cash flows for the year then ended (not presented
herein); and in our report dated October 16, 2000, we expressed an unqualified
opinion on those financial statements, with an additional comment that there
were conditions which raised substantial doubt about the Company's ability to
continue as a going concern. In our opinion, the information set forth in the
accompanying balance sheet as of September 30, 2000, is fairly stated in all
material respects in relation to the balance sheet from which it has been
derived.


Moffitt & Company, P.C.
Scottsdale, Arizona

April 30, 2001

<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEETS
                   AS OF MARCH 31, 2001 AND SEPTEMBER 30, 2000

<TABLE>
<CAPTION>
                                ASSETS

                                                             March 31,      September 30,
                                                                2001            2000
                                                            (Unaudited)       (Audited)
                                                            -----------     -------------
<S>                                                         <C>              <C>
CURRENT ASSETS
  Cash                                                      $         0      $     2,115
                                                            ===========      ===========

                LIABILITIES AND STOCKHOLDERS' (DEFICIT)

CURRENT LIABILITIES
  Bank overdraft                                            $        15      $         0
  Accounts payable
     Trade                                                       14,839           13,679
     Stein's Holdings, Inc.                                      21,066                0
  Note payable                                                        0           22,200
  Corporation income tax payable                                    800              800
                                                            -----------      -----------

       TOTAL CURRENT LIABILITIES                                 36,720           36,679
                                                            -----------      -----------

STOCKHOLDERS' (DEFICIT)
  Preferred stock, par value $.01 per share
    Authorized 500,000 shares
    -0- shares issued and outstanding                                 0                0
  Common stock, par value $.001 per share
    Authorized 25,000,000 shares
    Issued and outstanding
      March 31, 2001 - 7,855,500 shares                           7,855                0
      September 30, 2000 - 5,575,500 shares                           0            5,575
  Paid in capital in excess of par value of stock             1,237,439        1,216,919
  Deficit accumulated during the development stage           (1,282,014)      (1,257,058)
                                                            -----------      -----------

       TOTAL STOCKHOLDERS' (DEFICIT)                            (36,720)         (34,564)
                                                            -----------      -----------

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

       See Accompanying Notes and Independent Accountants' Review Report.


                                       2
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF OPERATIONS
         FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2001 AND 2000 AND
               FOR THE PERIOD NOVEMBER 5, 1995 (DATE OF INCEPTION)
                             THROUGH MARCH 31, 2001
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                        November 5,
                                                                                                           1995
                                           Three Months                       Six Months                 (Date of
                                          Ended March 31,                   Ended March 31,             Inception)
                                   ----------------------------      ----------------------------        Through
                                       2001             2000             2001             2000        March 31, 2001
                                   -----------      -----------      -----------      -----------     --------------
<S>                                <C>              <C>              <C>              <C>              <C>
INCOME                             $         0      $         0      $         0      $         0      $     9,578
                                   -----------      -----------      -----------      -----------      -----------

EXPENSES
   General and Administrative           11,941                0           24,956                0           85,832
   Development costs                         0           25,059                0           39,671        1,203,360
                                   -----------      -----------      -----------      -----------      -----------

               TOTAL EXPENSES           11,941           25,059           24,956           39,671        1,289,192
                                   -----------      -----------      -----------      -----------      -----------

NET (LOSS) BEFORE INCOME TAXES         (11,941)         (25,059)         (24,956)         (39,671)      (1,279,614)

INCOME TAXES                                 0                0                0                0            2,400
                                   -----------      -----------      -----------      -----------      -----------

NET (LOSS)                         $   (11,941)     $   (25,059)     $   (24,956)     $   (39,671)     $(1,282,014)
                                   ===========      ===========      ===========      ===========      ===========

NET (LOSS) PER COMMON SHARE

   Basic and diluted               $      (.00)     $      (.00)     $      (.00)     $      (.01)
                                   ===========      ===========      ===========      ===========

WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING

   Basic and diluted                 7,855,500        5,575,500        7,855,500        5,575,500
                                   ===========      ===========      ===========      ===========
</TABLE>

       See Accompanying Notes and Independent Accountants' Review Report.


                                       3
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      STATEMENT OF STOCKHOLDERS' (DEFICIT)
               FOR THE PERIOD NOVEMBER 5, 1995 (DATE OF INCEPTION)
                             THROUGH MARCH 31, 2001
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                            Paid in         Deficit
                                                                            Capital      Accumulated
                              Preferred Stock          Common Stock        in Excess     During the
                              ---------------     --------------------       of Par      Development
                               Shares  Amount     Shares        Amount   Value of Stock      Stage
                              -------  ------     ------        ------   --------------  -----------
<S>                               <C>    <C>     <C>            <C>         <C>           <C>
BALANCE, NOVEMBER 5, 1995
   (DATE OF INCEPTION)            0      $0              0      $    0      $      0      $       0
SHARES ISSUED FOR PATENT
   RIGHTS                         0       0      1,564,150       1,564             0              0

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

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

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

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

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

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

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

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

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

       See Accompanying Notes and Independent Accountants' Review Report.


                                       4
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                STATEMENT OF STOCKHOLDERS' (DEFICIT) (CONTINUED)
               FOR THE PERIOD NOVEMBER 5, 1995 (DATE OF INCEPTION)
                             THROUGH MARCH 31, 2001
                                   (UNAUDITED)

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

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

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

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

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

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

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

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

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

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

NET (LOSS) FOR THE SIX
   MONTHS ENDED
   MARCH 31, 2001                0       0              0           0               0          (24,956)
                              ----    ----      ---------      ------      ----------      -----------

BALANCE, MARCH 31, 2001          0    $  0      7,855,500      $7,855      $1,237,439      $(1,282,014)
                              ====    ====      =========      ======      ==========      ===========
</TABLE>

       See Accompanying Notes and Independent Accountants' Review Report.


                                       5
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS
              FOR THE SIX MONTHS ENDED MARCH 31, 2001 AND 2000 AND
               FOR THE PERIOD NOVEMBER 5, 1995 (DATE OF INCEPTION)
                             THROUGH MARCH 31, 2001
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                    November 5, 1995
                                                                                        (Date of
                                                               Six Months               Inception)
                                                             Ended March 31,             Through
                                                         -----------------------        March 31,
                                                           2001           2000             2001
                                                         --------       --------       -----------
<S>                                                      <C>            <C>            <C>
CASH FLOWS FROM OPERATING
   ACTIVITIES:
       Net (loss)                                        $(24,956)      $(39,671)      $(1,282,014)
       Adjustments to reconcile net (loss) to net
          cash (used) by operating activities:
             Depreciation and amortization                      0              0            22,977
             Common stock issued as payment for
                interest expense                                0              0            12,300
             Common stock issued for services                   0              0           217,900
             Loss on abandoned assets                           0              0           120,387
             Gain on sale of assets                             0              0              (500)
             Income from sale of abandoned assets               0              0            (9,578)
       Changes in operating assets and liabilities:
          Prepaid insurance                                     0         (1,600)                0
          Accounts receivable                                   0              0             8,678
          Accounts payable                                 22,226          9,239            18,366
          Corporation income tax payable                        0           (800)              800
          Accrued liabilities                                   0             72             9,664
                                                         --------       --------       -----------

          NET CASH (USED) BY
             OPERATING ACTIVITIES                          (2,730)       (32,760)         (881,020)
                                                         --------       --------       -----------

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

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

       See Accompanying Notes and Independent Accountants' Review Report.


                                       6
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      STATEMENTS OF CASH FLOWS (CONTINUED)
              FOR THE SIX MONTHS ENDED MARCH 31, 2001 AND 2000 AND
               FOR THE PERIOD NOVEMBER 5, 1995 (DATE OF INCEPTION)
                             THROUGH MARCH 31, 2001
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                              November 5, 1995
                                                                                  (Date of
                                                         Six Months               Inception)
                                                       Ended March 31,             Through
                                                   -----------------------        March 31,
                                                     2001           2000             2001
                                                   --------       --------       -----------
<S>                                                <C>            <C>            <C>
CASH FLOWS FROM FINANCING
   ACTIVITIES:
       Bank overdraft                              $     15       $      0       $      15
       Repayment of loan receivable                     600          3,379
       Proceeds from notes payable                        0         20,000         217,800
       Repayments on notes payable                        0              0         (20,000)
       Proceeds from issuance of common stock
          and subscriptions                               0              0         798,500
       Payments on offering costs                         0              0         (43,059)
                                                   --------       --------       ---------

          NET CASH PROVIDED
             BY FINANCING ACTIVITIES                    615         23,379         953,256
                                                   --------       --------       ---------

NET (DECREASE) IN CASH                               (2,115)        (9,381)              0

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

CASH BALANCE, END OF PERIOD                        $      0       $    275       $       0
                                                   ========       ========       =========

SUPPLEMENTARY DISCLOSURE OF
   CASH FLOW INFORMATION

   Cash paid during the year for:

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

       Taxes                                       $      0       $      0       $   2,400
                                                   ========       ========       =========

NON CASH INVESTING AND
   FINANCING ACTIVITIES

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

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

       Common stock issued for equipment           $      0       $      0       $  60,287
                                                   ========       ========       =========

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

       See Accompanying Notes and Independent Accountants' Review Report.


                                       7
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                             MARCH 31, 2001 AND 2000
                                   (UNAUDITED)

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Organization and Nature of Business

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

      Accounting Estimates

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

      Income Taxes

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

      Net (Loss) Per Share

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

NOTE 2 NOTE PAYABLE

      On March 20, 2000, the Company received a $20,000 loan from Stein's
      Holdings, Inc. The note was unsecured, accrued interest at 12% and was due
      on June 1, 2000.

       See Accompanying Notes and Independent Accountants' Review Report.


                                       8
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                             MARCH 31, 2001 AND 2000
                                   (UNAUDITED)

NOTE 2 NOTE PAYABLE (CONTINUED)

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

NOTE 3 INCOME TAXES

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

(Loss) from operations before income taxes                 $(24,956)   $(39,671)
                                                           --------    --------

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

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

                                                              Deferred Tax
                                                       -------------------------
                                                        Assets       Liabilities
                                                       --------      -----------

Net operating loss                                     $506,000         $  0
Valuation allowance                                     506,000            0
                                                       --------         ----

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

As discussed in Note 6, there is doubt about the Company's ability to continue
as a going concern. Consequently, the Company must maintain a 100% valuation
allowance for the deferred tax asset as there is doubt that the Company will
generate profits which will be absorbed by the tax differences. A reconciliation
of the valuation allowance is as follows:

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

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

Addition to allowance                                   10,000            15,000
                                                      --------          --------

Balance, end of period                                $506,000          $490,000
                                                      ========          ========

       See Accompanying Notes and Independent Accountants' Review Report.


                                       9
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                             MARCH 31, 2001 AND 2000
                                   (UNAUDITED)

NOTE 4 NET OPERATING LOSS CARRYFORWARD

      The Company has the following net operating loss carryforward at March 31,
      2001:

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

March 31, 2001                                    $   24,956             2021
December 31, 2000                                     13,015             2020
September 30, 2000                                    52,098             2020
September 30, 1999                                   215,474             2019
September 30, 1998                                   614,265             2018
September 30, 1997                                   279,456             2012
September 30, 1996                                    78,959             2011
                                                  ----------

                                                  $1,278,223
                                                  ==========

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

NOTE 5 STOCK OPTION PLAN

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

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

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

      The Company did not grant any options under this plan.

      The option plan terminates on September 30, 2008.

       See Accompanying Notes and Independent Accountants' Review Report.


                                       10
<PAGE>

                      NATIONAL HEALTHCARE TECHNOLOGY, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                             MARCH 31, 2001 AND 2000
                                   (UNAUDITED)

NOTE 6 GOING CONCERN

      These financial statements are presented on the basis that the Company is
      a going concern. Going concern contemplates the realization of assets and
      the satisfaction of liabilities in the normal course of business over a
      reasonable length of time. The Company has incurred net losses of
      $1,282,014 since inception. In addition, the Company has abandoned all
      development activities. These factors raise doubt as to the Company's
      ability to continue as a going concern.

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

NOTE 7 PREFERRED STOCK

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

NOTE 8 UNAUDITED FINANCIAL INFORMATION

      The accompanying financial information as of March 31, 2001 and 2000 is
      unaudited. In managements opinion, such information includes all normal
      recurring entries necessary to make the financial information not
      misleading.

       See Accompanying Notes and Independent Accountants' Review Report.


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