Dave Neville
Attorney at Law Telephone: (805) 640-6468
111 West Topa Topa Street Facsimile: (805) 669-4462
Ojai, California 93023 Email: dave_n@scglobal.net
August 14, 2006
Securities and Exchange Commission
Division of Corporate Finance
Washington, D.C. 20549
Attn: Babette Cooper
Re: National Healthcare Technology, Inc.
Form 8-K/A
Filed June 14, 2006
Dear Ms. Cooper:
I write to respond to your oral comment of August 7, 2006 in regards to the
abovereferenced matter. The alphabetized paragraph A has been amended to read as
follows:
A. The Company improperly recorded a $200,000 escrow deposit as an
asset in the period ended September 30, 2005. In conjunction with the
Company's acquisition of Special Stone Surfaces, Es3, Inc., ("Es3")
pursuant to the terms of an Exchange Agreement by and among the
Company, Crown Partners, Inc., Es3, and certain stockholders of Es3,
Es3 made a $200,000 cash payment to the Company. The correct accounting
for this transaction would have been to debit additional
paid-in-capital and to credit cash. However, the initial accounting was
to incorrectly debit the escrow deposit instead of additional paid in
capital. The effect of this adjustment is to properly reflect prepaid
expense and other current assets and additional paid-in-capital for the
period ended September 30, 2005.
Proposed revised 8-K/A is attached hereto.
Very truly yours,
/s/ Dave Neville
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Dave Neville
DLN\dn
enclosure
cc: Client
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 2
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
May 22, 2006
Date of Report
(Date of Earliest Event Reported)
NATIONAL HEALTHCARE TECHNOLOGY, INC.
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(Exact Name of Registrant as Specified in its Charter)
Colorado 0-28911 91-1869677
- ---------------------------- ------- ----------
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
1660 Union Street, Suite 200
San Diego, California 92101
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(Address of principal executive offices)
(619) 398-8470
Registrant's telephone number
21800 Oxnard Street, Suite 440
Woodland Hills, CA 91367
Former name and former address
Check the appropriate box below if the Form 8-K/A filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 4.02 Non-reliance on Previously Issued Financial Statements or a
Related Audit Report or Completed Interim Review
In preparing National Healthcare Technology, Inc.'s (the "Company") Form 10-KSB
for the year ended December 31, 2005, filed on May 22, 2006, between May 16,
2006, and May 21, 2006, the Company discovered errors in the Company's Form
10-QSB for the three months ended September 30, 2005, filed on February 1, 2006.
Though not an inclusive list, below is a list of the more material errors
discovered in preparing the 10-KSB requiring adjustment:
A. The Company improperly recorded a $200,000 escrow deposit as an asset in the
period ended September 30, 2005. In conjunction with the Company's acquisition
of Special Stone Surfaces, Es3, Inc., ("Es3") pursuant to the terms of an
Exchange Agreement by and among the Company, Crown Partners, Inc., Es3, and
certain stockholders of Es3, Es3 made a $200,000 cash payment to the Company.
The correct accounting for this transaction would have been to debit additional
paid in capital and to credit cash. However, the initial accounting was to
incorrectly debit the escrow deposit instead of additional paid in capital. The
effect of this adjustment is to properly reflect prepaid expense and other
current assets and additional paid-in-capital for the period ended September 30,
2005.
B. The Company incorrectly recorded $278,800 of advances from a related party in
the period ended September 30, 2005. The effect of this adjustment is to
properly reflect note payable - related party in the amount of $328,940 as
opposed to $50,140 as originally recorded.
C. The Company incorrectly recorded $98,912 of deferred stock compensation and
related amortization expense in conjunction with the issuance of stock options
and warrants in the period ended September 30, 2005. The effect of this
adjustment is to properly reflect deferred stock compensation in the amount of
$0 as opposed to $89,256 as originally reported and amortization expense for the
period in the amount of $0 as opposed to $3,811 as originally reported
D. The Company failed to record certain technology license royalty expenses of
$1,764 in the period ended September 30, 2005. The effect of this adjustment is
to properly reflect a technology royalty expense as opposed to $0 technology
royalty expense as originally reported.
E. The Company failed to accrue $45,000 of professional fees in the period ended
September 30, 2005. The effect of this adjustment is to increase professional
fees for the period ended September 30, 2005, by approximately $45,000.
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F. Additionally, there are various other significant adjustments to the
individual accounts that are not disclosed herein due to the fact the
adjustments represent reclassifications with other accounts.
These errors in the Company's Form 10-QSB for the three months ended September
30, 2006, and their effect on our financial statements were discussed between
the Company's chief executive officer and the Company's independent accountant
during the audit of the Company's 10-KSB. Though the full extent of the errors
were not realized until the Form 10-KSB for the year ended December 31, 2005,
was completed, management had concluded by May 16, 2006, that the financial
statements included in the Company's 10-QSB for the period ended September 30,
2005, should not be relied upon and would need to be restated.
Based on these discussions, the Board of Directors of the Company on May 22,
2006, approved management's recommendation that the Company's financial
statements for the three months ended September 30, 2005 and for the period from
January 27, 2005 (inception) through September 30, 2005 be restated. In light of
such restatement, the financial statements and related footnotes should no
longer be relied upon.
As a result of these errors, the Company amended its financial statements and
footnotes for the three months ended September 30, 2005. The Company filed an
amended Form 10-QSB for the three months ended September 30, 2005, on June 8,
2006. Said amended Form 10-QSB restates the consolidated balance sheet,
consolidated statement of operations, and consolidated statement of cash flows,
to reflect such corrections and reclassifies certain operating expenses for the
purposes of financial statement presentation. Additionally, said amended Form
10QSB restates the footnotes related to such corrections and management's report
on internal control over financial reporting, which reflects the Company's
material weakness in internal control over financial reporting during the
period.
SIGNATURES
Pursuant to 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 hereunto duly authorized.
National Healthcare Technology,
Inc. By:
----------------------------------
Chief Executive Officer
Date: , 2006
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