2
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 10-Q SB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter report ended September 30, 2000
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to ___________
Commission File number 000-28581
TRIAD INDUSTRIES, INC.
(Exact name of small business issuer as registrant as specified in charter)
Nevada 88-0422528
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
16935 W. Bernardo Drive, Suite 232, San Diego, CA. 92127
(Address of principal executive office)
Registrants telephone no., including area code (858) 618-1710
Check whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), Yes [X] No [ ] and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuers classes
of common stock, as of the last practicable date.
Class Outstanding as of September 30, 2000
Common Stock, $0.001 8,170,321
TABLE OF CONTENTS
PART 1. FINANCIAL INFORMATION
Heading Page
Item 1. Consolidated Financial Statements 3
Item 2. Managements Discussion and Analysis and
Result of Operations 4
Consolidated Balance Sheets December 31, 1999
And September 30, 2000 6-7
Consolidated Statements of Operations three and
nine months Ended September 30, 2000 and 1999 8
Consolidated Statement of Administration Expenses
three and nine Months ended September 30, 2000
and 1999 9-10
Consolidated Statements of Cash Flows nine months
Ended September 30, 2000 and 1999 11
Consolidated Statements of Stockholders Equity 12
Notes to Consolidated Financial Statements 13-21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 26
Item 2. Changes in Security 26
Item 3. Defaults Upon Senior Securities 26
Item 4. Submission of Matter to a Vote of 26
Securities Holders
Item 5. Other Information 26
Item 6. Exhibits and Reports of Form 8-K 26
Signatures S-1
PART 1 FINANCIAL INFORMATION
Item 1. Financial Statement
The accompanying unaudited financial statements have been prepared in
accordance with the instructions for Form 10-Q pursuant to the rules and
regulations of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a complete presentation of
the financial position, results of operations, cash flows, and stockholders
equity in conformity with generally accepted accounting principles. In the
opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial position have been
included and all such adjustments are of a normal recurring nature.
The unaudited balance sheet of the Company as of September 30, 2000, and
the related audited balance sheet of the Company as of December 31, 1999, the
unaudited statement of operations and cash flows for the three months ended
September 30, 2000 and 1999 and the nine months ended September 30, 2000 and
1999 and the unaudited statements of stockholders equity for the period from
January 1, 1998 through September 30, 2000 are attached hereto and incorporated
herein by this reference.
Operating results for the quarters ended September 30, 2000 are not
necessarily indicative of the results that can be expected for the year ending
December 31, 2000.
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Ability of the Company to Continue
The Company has a net operating loss carry forward of $721,221 since
inceptions through September 30, 2000. The Company has sufficient working
capital to continue its operations with current assets of $3,907,000. The
Company is in escrow, financing one of its major properties on a long term
basis. The net effect of the financing will balance its working capital ratio to
a 3.9 to 1 ratio.
Liquidity and Capital Resources
As of September 30, 2000 the Company has $3,907,000 in total current assets
and equity of $3,704,291 with which to pay its obligations.
Results of Operations
For the three months ended September 30, 2000 the Company has a net income
of $1,159. The Company also has a comprehensive loss of $150,000 and a net
comprehensive loss of $148,841 for the three month period ended September 30,
2000. This loss include $41,010 in depreciation and amortization.
FOr the nine months ending September 30, 2000 the Copany has a net
loss of $104,417. The Company also had a comprehensive loss of $150,000 and
a net operating loss of $254,417 for the nine month period ended September 30,
2000. The loss includes $194,538 in depreciation and amortization.
The Company had revenues of $1,520,000 for the nine months ended
September 30, 2000 compared with$2,158,692 for the same period last year. The
Company had revenues of $584,996 for the three months ended September 30, 2000
compared to $245,824 for the same period last year.
Subsequent Events
The Company has no subsequent events to report during this period.
Sale of Common Capital Stock
During the third quarter of 2000, the Company issued 123,000 shares of
common stock at $.38 per share in payment for services.
See Part 2, Item 2.
ARMANDO C. IBARRA
CERTIFIED PUBLIC ACCOUNTANTS
( A Professional Corporation)
Armando C. Ibarra,
C.P.A.
Members of the California Society of
Armando Ibarra, Jr.,
C.P.A.
Certified Public Accountants
To the Board of Directors
Triad Industries, Inc.
(Formerly Healthcare Resources Management, Inc.)
RB Courtyard, Suite 232
16935 W. Bernardo Drive
San Diego, CA 92126
We have reviewed the accompanying consolidated balance sheets of Triad
Industries, Inc. (formerly Healthcare Resources Management, Inc.) as of
September 30, 2000 and December 31, 1999 and the related statements of
operations, changes to stockholders equity, and cash flows for the nine and
three months ended September 30, 2000 and 1999, in accordance with Statements on
Standards for Accounting 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 Triad Industries, 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 modifications that should be
made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
Our review was made for the purpose of expressing limited assurance that
there are no material modifications that should be made to the financial
statements in order for them to be in conformity with generally accepted
accounting principles. The information included in the accompanying schedules of
selling and administrative expenses is presented only for supplementary analysis
purposes. Such information has been subjected to the inquiry and analytical
procedures applied in the review of the basic financial statements, and we are
not aware of any material modifications that should be made to it.
ARMANDO C. IBARRA, C.P.A. - APC
October 27, 2000
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Balance Sheets
As of September 30, 2000 and December 31, 1999
ASSETS
2000 1999
Current assets
Cash $ 69,432 $ 43,236
Accounts receivable 426,801 463,841
Accounts receivable - medical clinic 1,471,044 -
Marketable securities 539,715 454,782
Impound account 1,959 4,062
Assets held for sale 1,165,350 1,345,350
Deferred tax benefit 232,699 193,400
Total current assets 3,907,000 2,504,671
Net Property and Equipment 3,359,235 3,420,612
Investments
Investment in securities available for sale 425,000 425,000
Total investments 425,000 425,000
Other Assets
Gift Certificates 6,000 6,000
Organization expense 25,000 25,000
Loan fees 143,779 143,779
Accumulated amortization (168,779) (96,929)
Total other assets 6,000 77,850
TOTAL ASSETS $ 7,697,235 $ 6,428,133
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Balance Sheets
As of September 30, 2000 and December 31, 1999
LIABILITIES AND STOCKHOLDERS' EQUITY
2000 1999
Current liabilities
Accounts payable $ 50,021 $ 19,933
Loans payable 241,636 93,862
Deferred revenue 77,158 77,158
Greentree lease 402 1,655
Taxes payable 6,251 16,853
Line of credit 29,644 25,000
Security deposits 39,991 39,865
Notes payable on assets held for sale 765,341 918,966
Trust deeds and mortgages 2,782,500 2,782,500
Total current liabilities 3,992,944 3,975,792
TOTAL LIABILITIES $ 3,992,944 $ 3,975,792
Stockholders' equity
Preferred stock ($1.00 par value, 10,000,000 shares
authorized 850,000 shares issued and outstanding.) 850,000 850,000
Common stock ($0.001 par value, 50,000,000 shares 8,171 6,404
authorized 8,170,321 and 6,403,418 shares issued and
outstanding for September 2000 and December 1999, respectively)
Stock subscription receivable (62,500) (62,500)
Paid in capital 3,779,841 2,275,241
Retained earnings (deficit) (721,221) (616,804)
Accumulated comprehensive loss (150,000) -
Total Stockholders' equity 3,704,291 2,452,341
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 7,697,235 6,428,133
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Statements of Operations
For the Nine Months Ended September 30, 2000 and 1999
And for the Three Months Ended September 30, 2000 and 1999
For the Nine Months Ended
Sept. 30, 2000 Sept. 30, 1999
REVENUES
Consulting $ 727,084 $ 268,346
Rental income 519,414 346,522
Utility Charges 1,373 0
Sale of securities 99,175 171,617
Sale of assets 173,000 1,369,500
Fee Income 114 2,710
Total revenues 1,520,160 2,158,695
OPERATING COSTS
Cost of assets sold 174,059 1,576,215
Cost of securities sold 62,865 109,018
Total operating costs 236,924 1,685,233
Operating income 1,283,236 473,462
ADMINISTRATIVE EXPENSES 1,168,754 956,878
Loss before other income & (expenses) 114,482 (483,416)
OTHER INCOME & (EXPENSES)
Interest Income 874 674
Mortgage Refinancing 0 441,000
Other Expense (54) 0
Interest Expense (259,018) (258,720)
Total other income & expenses (258,198) 182,954
NET INCOME (LOSS) BEFORE TAXES (143,716) (300,462)
PROVISION FOR INCOME TAXES (BENEFIT) (39,299) 0
NET INCOME (LOSS) $ (104,417) $ (300,462)
OTHER COMPREHENSIVE (LOSS)
Loss on valuation of available for sale (150,000) 0
securities
Total other comprehensive loss (150,000) 0
NET COMPREHENSIVE INCOME (LOSS) $ (254,417) $ (300,462)
BASIC EARNINGS (LOSS) PER SHARE $ (0.01) $ (0.07)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 7,021,363 4,225,048
DILUTED EARNINGS (LOSS) PER SHARE $ (0.01) $ (0.06)
WEIGHTED AVERAGE OF DILUTED
COMMON SHARES OUTSTANDING 8,721,363 4,225,048
For the Three Months Ended
Sept. 30, 2000 Sept. 30, 1999
REVENUES
Consulting $ 398,735 $ 80,050
Rental income 186,098 162,232
Utility Charges 123 0
Sale of securities 0 1,835
Sale of assets 0 0
Fee Income 40 1,757
Total revenues 584,996 245,874
OPERATING COSTS
Cost of assets sold 0 0
Cost of securities sold 0 10,200
Total operating costs 0 10,200
Operating income 584,996 235,673
ADMINISTRATIVE EXPENSES 548,435 383,141
Loss before other income & (expenses) 36,561 (147,468)
OTHER INCOME & (EXPENSES)
Interest Income 213 335
Mortgage Refinancing 0 441,000
Other Expense 0 0
Interest Expense (44,860) (140,056)
Total other income & expenses (44,647) 301,279
NET INCOME (LOSS) BEFORE TAXES (8,086) 153,812
PROVISION FOR INCOME TAXES (BENEFIT) (9,245) 0
NET INCOME (LOSS) $ 1,159 $ 153,812
OTHER COMPREHENSIVE (LOSS)
Loss on valuation of available for sale (150,000) 0
securities
Total other comprehensive loss (150,000) 0
NET COMPREHENSIVE INCOME (LOSS) $ (148,841) $ 153,812
BASIC EARNINGS (LOSS) PER SHARE $ 0.00 $ 0.03
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 8,087,430 5,593,818
DILUTED EARNINGS (LOSS) PER SHARE $ 0.00 $ 0.02
WEIGHTED AVERAGE OF DILUTED
COMMON SHARES OUTSTANDING 9,787,430 7,293,818
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Schedules of Administrative Expenses
For the Nine Months Ended September 30, 2000 and 1999
And for the Three Months Ended September 30, 2000 and 1999
For the Nine Months Ended For the Three Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 1999 2000 1999
ADMINISTRATIVE EXPENSES
Accounting $ 19,736 $ 10,704 $ 6,976 $ 6,102
Advertising 5,443 0 5,170 0
Appraisal Fees 14,397 0 0 0
Auto expenses 3,762 2,125 1,333 1,158
Auto lease 4,000 0 4,000 0
Bad debt expense 98,706 5,637 98,706 0
Bank charges 976 827 447 319
Commissions 7,070 68,262 6,173 6,500
Consulting fees 58,068 122,525 37,333 89,025
Credit card expense 460 0 460 0
Depreciation and amortization 194,538 129,387 41,010 78,200
Directors fees 87,060 0 46,740 0
Discount on trust deed 0 104,634 0 0
Dues & subscriptions 0 1,760 0 1,700
Employee leasing 72,490 0 72,490 0
Enterteinment 199 0 0 0
Equipment rental 4,452 4,982 1,780 3,346
Filing fees 18,292 10,595 0 3,999
Freight 4,836 2,028 1,656 1,008
Homeowners fees 300 600 0 0
Insurance 15,001 11,997 5,854 6,094
Janitorial 8,325 2,596 1,669 1,142
Laboratory expense 3,003 0 3,003 0
Landscaping 1,340 773 270 270
Lease commission 288 8,032 0 8,032
Legal 4,569 9,080 419 1,965
Licenses & permits 271 0 0 0
Linen service 534 0 534 0
Management fees 70,350 106,542 23,400 35,082
Medical equipment lease 586 0 586 0
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Schedules of Administrative Expenses
For the Nine Months Ended September 30, 2000 and 1999
And for the Three Months Ended September 30, 2000 and 1999
ADMINISTRATIVE EXPENSES (CONTINUED)
Medical supplies 3,556 0 3,556 0
Membership fees 0 60 0 0
Miscellaneous 2,425 239 0 0
Office expense 31,713 8,775 7,658 2,717
On line services 0 2,250 0 2,250
Operating expenses-other 0 576 0 269
Outside services 35,645 41,884 16,888 11,666
Patient refunds 3,380 0 3,380 0
Postage and delivery 762 948 197 191
Prescription medication 1,813 0 1,813 0
Printing 0 408 0 100
Professional fees 14,892 56,300 10,398 5,000
Radiology expense 5,671 0 5,671 0
Rent 41,793 17,552 19,796 10,683
Repairs and maintenance 27,730 24,358 11,431 7,143
Resident agents fees 96 0 0 0
Salaries 179,116 88,569 64,735 51,161
State filing fees 115 0 0 0
Stock transfer fees 5,732 9,998 396 7,600
Supplies 676 5,186 0 451
Tax federal 35 793 0 0
Tax payroll 127 1,733 0 401
Tax property 76 26,474 0 0
Taxes other 2,848 846 0 8
Telephone 14,271 5,913 8,056 3,807
Tenant improvements 1,066 3,838 0 3,838
Title fees 0 2,443 0 0
Training & education 1,500 0 1,500 0
Transcription service 871 0 871 0
Trash 4,901 0 1,641 0
Travel 27,862 10,578 4,637 6,963
Utilities 47,164 31,757 20,746 18,130
Warehouse expense 4,685 3,350 1,070 1,785
Water 9,157 8,749 3,987 5,036
Wire fees (brokerage) 25 215 0 0
$1,168,754 $ 956,878 $ 548,437 $ 383,141
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
For the Nine Months Ended September 30, 2000 and 1999
And for the Three Months Ended September 30, 2000 and 1999
For the Nine Months Ended
Sept 30, Sept 30,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) from operations $ (104,417) $ (300,462)
Depreciation & amortization expense 183,629
129,387
(Increase) in accounts receivable (1,464,897) (301,624)
(Increase) decrease in impound 2,103 (4,062)
account
(Increase) decrease in marketable (17,333) (87,529)
securities
(Increase) in prepaid rent 0 0
Decrease in contracts receivable 0 10,000
Decrease in stock subscription 0 20,000
receivable
(Increase) in deferred tax benefit (39,299) 0
Increase (decrease) credit line 4,523 0
(Decrease) in management fees 0 0
Increase in security deposits 126 51,411
Increase (decrease) in property tax (10,604) 10,604
liability
Increase (decrease) in loan payable 181,815 111,476
Increase in accounts payable 29,233 26,403
Net Cash provided (used) by (1,235,121) (334,396)
operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property & equipment (50,361) 0
Sale of investment property 66,996 0
Acquisition of investment property 0 (4,888,849)
Loss of valuation of available for (150,000) 0
sale securities
Loan fees 0 (143,779)
Net cash used by investing activities (133,365) (5,032,628)
CASH FLOWS FROM FINANCING ACTIVITIES
Investment property mortgages (40,621) 479,491
Greentree lease (1,253) (1,538)
Trust deeds 0 2,754,000
Mortgage principle 0 0
Retained earnings 1,293 0
Common stock 1,767 0
Paid in capital 1,433,497 2,187,329
Net cash provided by financing 1,394,683 5,419,282
activities
Net increase (decrease) in cash 26,197 52,258
Cash at beginning of period 43,236 1,286
Cash at end of period $ 69,433 $ 53,544
Supplemental Cash Flow Disclosures
Cash paid during year for interest $ 259,018 $ 258,720
For the Three Months Ended
Sept 30 Sept 30
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) from operations $ (4,932) $ 223,272
Depreciation & amortization expense 41,010 70,376
129,387
(Increase) in accounts receivable (47,117) (316,452)
(Increase) decrease in impound 0 (4,062)
account
(Increase) decrease in marketable 108,700 26,134
securities
(Increase) in prepaid rent 0 (1,490)
Decrease in contracts receivable 0 10,000
Decrease in stock subscription 0 20,000
receivable
(Increase) in deferred tax benefit (3,153) 0
Increase (decrease) credit line (356) 0
(Decrease) in management fees 0 (19,463)
Increase in security deposits 605 59,306
Increase (decrease) in property tax 0 10,604
liability
Increase (decrease) in loan payable (766) 58,653
Increase in accounts payable 39,834 35,245
Net Cash provided (used) by 133,825 172,123
operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property & equipment (4,236) 3,438
Sale of investment property 0 0
Acquisition of investment property 0 (6,466,235)
Loss of valuation of available for (150,000) 0
sale securities
Loan fees 0 0
Net cash used by investing activities (154,236) (6,462,797)
CASH FLOWS FROM FINANCING ACTIVITIES
Investment property mortgages (31,581) 436,252
Greentree lease (365) (486)
Trust deeds 0 2,754,000
Mortgage principle 0 913,364
Retained earnings 0 0
Common stock 123 (5,594)
Paid in capital 46,617 2,187,329
Net cash provided by financing 14,794 6,284,865
activities
Net increase (decrease) in cash (5,617) (5,809)
Cash at beginning of period 75,050 59,353
Cash at end of period $ 69,433 $ 53,544
Supplemental Cash Flow Disclosures
Cash paid during year for interest $ 44,860 $ 140,056
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Statement of Stockholders' Equity
For the Nine Months Ending September 30, 2000
Preferred Preferred Common
Shares Stock Shares
Amount
Balance, January 1, 1998 - $ - $9,301,877
1:9 reverse stock split
March 15, 1998 - - (8,245,461)
Common shares issued
March 31, 1998 - - 2,200,300
Common shares issued
July 31, 1998 - - 2,000,000
Operating Income
December 31,1998 - - -
Balance, December
31, 1998 0 0 5,256,716
March 14, 1999
1:10 reverse stock split - - (4,731,048)
March 15, 1999 - Purchase of
Gam & RB Capital & Equities - - 5,068,150
March 15, 1999 - Purchase
of Miramar Road
Associates, LLC 700,000 700,000 73,960
Preferred Stock issued
September 1, 1999 150,000 150,000 -
Stock subscription
receivable - - -
Common Stock issued
December 1999 - - 320,000
Common Stock issued
December 1999 - - 489,600
Operating (loss) as of
December 31, 1999 - - -
Balance, December 31, 1999 850,000 850,000 6,403,418
Stock issued on Janurary 5, 2000
to Directors @ .06
a share - - 72,000
Stock issued on June 30, 2000 for the
Purchase of Northwest, LLC. - - 1,463,320
Stock issued on June 30,
2000 to Directors @ .50
a share - - 72,000
Stock issued on June 30, 2000 to Donner
Investment Corp. @ .50
a share - - 36,583
Stock issued on September 1, 2000
for services rendered @ .38
a share - - 123,000
Loss of valuation of available for
sale securities - - -
Operating (loss) as of
September 30, 2000 - - -
Balance, June 30, 2000 850,000 $ 850,000 8,170,321
Common Additional Comprehensive
Stock Paid In Loss
Amount Capital
Balance, January 1, 1998 $ 9,302 $ 103,184 -
1:9 reverse stock split March 15,
1998 (8,245) 8,245 -
Common shares issued
March 31, 1998 2,200 - -
Common shares issued
July 31, 1998 2,000 18,000 0
Operating Income
December 31,1998 - - -
Balance, December
31, 1998 5,257 129,429 0
March 14, 1999
1:10 reverse stock split (4,731) 4,731 0
March 15, 1999 - Purchase of
Gam & RB Capital & Equities 5,068 1,966,610 0
March 15, 1999 - Purchase
of Miramar Road
Associates, LLC 0 73,960 0
Preferred Stock issued
September 1, 1999 0 0 0
Stock subscription
receivable 0 0 0
Common Stock issued 320 71,625 0
December 1999
Common Stock
issued December 1999 490 28,886 0
Operating (loss) as of
December 31, 1999 0 0 0
Balance, December 31, 1999 6,404 2,275,241 0
Stock issued on Janurary 5, 2000
to Directors @ .06 a share 72 4,248 0
Stock issued on June 30, 2000 for the
Purchase of Northwest, LLC. 1,463 1,399,555 0
Stock issued on June 30,
2000 to Directors @ .50 a share 72 35,925 0
Stock issued on June 30, 2000 to Donner
Investment Corp. @ .50 a share 37 18,255 0
Stock issued on September 1, 2000
for services rendered @ .38 a shar 123 46,617 0
Loss of valuation of available for
sale securities (150,000)
Operating (loss) as of
September 30, 2000
Balance, June 30, 2000 $ 8,171 $ 3,779,841 $(150,000)
Stock Retained Total
Subscription Earnings
Receivable
Balance, January 1, 1998 $ - $ (88,791) $ 23,695
1:9 reverse stock split
March 15,1998 - - -
Common shares issued
March 31, 1998 - - 2,200
Common shares issued
July 31, 1998 (20,000) - 0
Operating Income
December 31,1998 - 1,724 1,724
Balance, December 31, 1998 (20,000) (87,067) 27,619
March 14, 1999
1:10 reverse stock split - - 0
March 15, 1999 - Purchase of
Gam & RB Capital & Equities (62,500) - 1,909,178
March 15, 1999 - Purchase
of Miramar Road Associates, LLC - - 773,960
Preferred Stock issued
September 1, 1999 - - 150,000
Stock subscription
receivable 20,000 - 20,000
Common Stock issued
December 1999 - - 71,945
Common Stock issued
December 1999 - - 29,376
Operating (loss) as of
December 31, 1999 - (529,737) (529,737)
Balance, December 31, 1999 (62,500) (616,804) 2,452,341
Stock issued on Janurary 5, 2000
to Directors @ .06 a share - - 4,320
Stock issued on June 30, 2000 for the
Purchase of Northwest, LLC. - - 1,401,018
Stock issued on June 30,
2000 to Directors @ .50 a share - - 35,997
Stock issued on June 30, 2000 to Donner
Investment Corp. @ .50 a share - - 18,292
Stock issued on September 1, 2000
for services rendered @ .38 a share - - 46,740
Loss of valuation of available for
sale securities - - (150,000)
Operating (loss) as of
September 30, 2000 - (104,417) (104,417)
Balance, June 30, 2000 $ (62,500) $(721,221) $3,704,291
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
The company was originally incorporated in New York as International
Telescript in 1987 and traded under the symbol TELC. The company ceased
trading in 1988. In October 1997, the business base of Interstate Care Systems,
a four-year-old Nevada healthcare management corporation, was acquired through a
structured acquisition, which was a reverse merger. The principles of Interstate
assumed management control of the company, redomiciled in Nevada and changed the
name to Healthcare Management Resources, Inc., to better reflect the nature of
the business. The company made the required filings and resumed trading on the
OTC Bulletin Board as HRCL. On the 15th of March 1999, the company did a reverse
merger and a 1:9 reverse split of its outstanding stock and changed its name to
Triad Industries, Inc. The company now trades under the symbol TRDD on the OTC
Bulletin Board.
The company operates through its subsidiaries and is in the healthcare,
financial services, and real estate business.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The companys financial statements are prepared using the accrual method of
accounting. The company has elected a December 31, year end.
b. Basis of Consolidation
The consolidated financial statements include the accounts of Triad
Industries, Inc., the parent company, Healthcare Management Resources, a Nevada
corporation, RB Capital & Equities Inc, a Nevada corporation, GAM Properties
Inc., a California corporation, Miramar Road Associates Inc., a California LLC.,
and Northwest Medical Clinic, Inc., a Georgia corporation. All subsidiaries are
wholly owned subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.
c. Cash Equivalents
The company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED )
d. Estimates and Adjustments
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
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. In
accordance with FASB 16 all adjustments are normal and recurring.
e. Basis of Presentation and Considerations Related to Continued Existence
(going concern)
The companys financial statements have been presented on the basis that it
is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business.
The companys management intends to raise additional operating funds through
operations and/or debt offerings.
f. Intangibles
Intangible assets consist of organization expenses and loan fees and are
being amortized on a straight-line basis.
g. Concentration of Credit Risk
The company maintains credit with various financial institutions.
Management performs periodic evaluations of the relative credit standing of the
financial institutions. The company has not sustained any material credit losses
for the instruments. The carrying values reflected in the balance sheet at
December 31, 1999 reasonable approximate the fair values of cash, accounts
payable, and credit obligations. In making such assessment, the company, has
utilized discounted cash flow analysis, estimated, and quoted market prices as
appropriate.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED)
h. Revenue Recognition and Deferred Revenue
Revenue includes the following: Miramar Road Associates, Inc. revenue
consists of commercial rental income. Gam Properties Inc. revenue consists of
residential rental income and assets held for sale. RB Capital & Equity Inc.
revenue consists of consulting income and the sale of securities (at fair market
value). Northwest Medical Clinic, Inc. is in the medical field specializing in
personal injury and somnoplasty. The accrual method of accounting is used where
as revenues are recognized when earned and expenses are recognized when
incurred.
RB Capital & Equity Inc. has various consulting contracts outstanding in
which the company performs a set of various financial services. The company will
recognize revenues when services on each contract are completed. Therefore, RB
Capital & Equities Inc. records deferred revenue.
i. Income Taxes
Income taxes are provided in accordance with Statement of Financial
Accounting Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred
tax asset or liability is recorded for all temporary differences between
financial and tax reporting and net operating loss carryfowards. Deferred tax
expense (benefit) results from the net change during the year of deferred tax
assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in opinion
of management, it is more likely than not that some portion of all of the
deferred tax assets will be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment.
At September 30, 2000 the Company has significant operating and capital
losses carryfoward. The income tax benefit is as follows:
Income Tax Benefit $ (232,699)
j. Accounts Receivable
The company has entered into various contracts, by which the company
provides financial services.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED)
k. Comprehensive Income & (Losses)
The Company adopted the provision of Financial Accounting Standards No.
130, Reporting Comprehensive Income (FAS 130) in the current year. FAS 130
governs the financial statement presentation of changes in shareholders equity
resulting from non-owner sources. Accumulated other comprehensive income as
reported in the accompanying balance sheet represents unrealized losses on
available for sale securities.
Unrealized Losses Accumulated
On Securities Comprehensive Losses
Beginning balance 0 0
Current-period change (150,000) (150,000)
Ending balance $(150,000) $(150,000)
l. Investments in Securities
Marketable securities at September 30, 2000 and December 31, 1999
classified and disclosed as trading securities under the requirements of SFAS
No. 115. Under such statement, the companys securities are required to be
reflected at fair market value.
m. Property Held for Sale
All of the Companys properties held for sale are on a thirty-year
mortgage.
Location Description Interest Rate Cost Debt
2016-18 Balboa 4 Units 7.817 $ 420,000 $ 234,994
2015-17 Hornblend
2135-39 Grand Ave Tri-plex 7.667 355,350 270,113
4592 Brancroft 7 Units 7.500 390,000 260,234
Total $1,165,350 $ 765,341
Gam Properties, Inc. sold a property during the first six months of 2000.
On April 30, 2000 3rd Ave. Condo sold for $ 173,000.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED)
n. Property
Property is stated at cost. Additions, renovations, and improvements are
capitalized. Maintenance and repairs, which do not extend asset lives, are
expensed as incurred. Depreciation is provided on a straight-line basis over the
estimated useful lives ranging from 27.5 years for commercial rental properties,
5 years for tenant improvements, and 5 - 7 years on furniture and equipment. The
company owns a fifty-one thousand square foot commercial building located at
6920-6910 A & B and 6914 Miramar Road, San Diego, California.
Land $ 327,614
Property & equipment 34,070
Buildings 3,075,704
Computer 4,764
Furniture 12,223
Tenant Improvements 158,694
3,613,069
Less Accumulated Depreciation (253,835)
Net Property and Equipment $ 3,359,235
o. Short Term Debt Miramar Building
Interest Rate
First Trust Deed 2/2000 13% $1,800,000
Second Trust Deed 10/1999 12% 380,000
Third Trust Deed 6/1999 13% 315,000
Forth Trust Deed 4/1999 14% 259,000
Fifth Trust Deed 6/2000 14% 28,500
$2,782,500
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED)
The office building collateralized the above loans. The loan agreements
provide for monthly payments of interest with principle due at the above dates.
Management has negotiated with the current lender a short-term extension of
these maturity dates and is attempting to obtain long term financing. Management
has discovered a lien of approximately $ 400,000 on the office building, which
is related to the debt of a stockholder and former officer of the L.L.C. The
company had a contingent liability for this debt and paid it off on September
20, 1999.
On September 20, 1999 the company acquired the remaining one-percent
partner minority interest on the Miramar property and paid off $ 192,000 of the
outstanding mortgage liability.
p. Investments in Securities Available for Sale
In 1995, the company bought 250,000 shares of Heritage National Corporation
at $ 0.10 a share. In June , 1998, the company earned 50,000 shares of preferred
stock of American Health Systems, Inc. at $ 5.00 a share. In 1999, the company
acquired 1.5 million shares of Pro Glass at $ .10 a share.
Number of Mkt. Price Balance
Shares At Year End At Year End
Heritage National Corporation 250,000 $ 0.10 $ 25,000
American Health Systems, Inc. 50,000 5.00 250,000
Pro Glass, Inc. 1,500,000 0.10 150,000
Total 1,800,000 $ 425,000
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED)
q. Accounts Receivable
Accounts receivable consist of the following:
Accounts receivable Various $ 5,877
Accounts receivable Carrera 520
Accounts receivable Gahi 1,450
Accounts receivable Trans-Caribe 3,187
Accounts receivable Contracts 118,630
Accounts receivable Fortune Oil 11,500
Accounts receivable Bellissima 11,000
Accounts receivable 3rd. Avenue 15,083
Accounts receivable Ashy 5,000
Accounts receivable Todd Smith 254,554
Accounts receivable Trans-Caribe 1,000
Total $426,801
The company expects to collect all accounts receivable within one year.
Due to the nature of business that Northwest Medical Clinic Inc. conducts a
reserve for bad debts must be in place to properly state the accounts receivable
as of September 30, 2000.
Accounts receivable $ 2,950,682
Reserve for bad debts (1,479,638)
$ 1,471,044
NOTE 3. OPERATING LEASE
The company operates its facilities under an operating lease agreement with
an unrelated party.
Rent expense was $ 41,793 as of September 30, 2000.
NOTE 4. STOCK
As of January 1, 1998 there were 9,301,877 shares of common stock
outstanding. On March 15, 1998 the Company reversed split the 9,301,877 shares
on a one for tem (1:9) leaving 1,056,416 shares outstanding. On March 31, 1998
the Company issued 2,200,300 shares of stock for $2,200 cash. On July 1, 1998
the Company issued 2,000,000 shares for a stock subscription receivable of
$20,0000. As of December 31, 1998 there were 5,256,716 shares of common stock
outstanding. As of January 1, 1999 there were 5,256,720 shares of common stock
outstanding. On March 14, 1999 the company reversed split the 5,256,720 shares
on a one for ten ( 1:10 ) leaving 525,672 shares outstanding. At the
shareholders meeting held March 15, 1999 the stockholders approved the
acquisition of RB Capital and Equities, Inc. a Nevada corporation and its
subsidiaries for 5,068,150 shares of common stock and 700,000 shares of
preferred stock. In September the Company issued 150,000 shares of preferred
stock in exchange for 1.5 million shares of Pro Glass Technologies, Inc. common
stock. On September 30, 1999 there were 5,593,822 shares of common stock and
850,000 shares of preferred stock outstanding. In December 1999, the company
issued 489,000 shares of common stock to management and key employees for
services rendered. In December 1999 the Company issued 320,000 shares of common
stock for cash in the amount of 71,945. On December 31, 1999 there were
6,403,418 shares of common stock and 850,000 shares of preferred stock
outstanding.
On January 5, 2000 the Company issued 72,000 shares of common stock to
directors of Triad Industries, Inc. for services rendered. On June 30, 2000 the
Company issued 1,463,320 shares of common stock for the purchase of Northwest
Medical Clinic, Inc. On June 30, 2000 the Company issued 72,000 shares of common
stock to directors of Triad Industries, Inc. for services rendered. On June 30,
2000 the Company issued 36,583 shares of common stock for services rendered in
the acquisition of Northwest Medical Clinic, Inc. On September 1, 2000 the
Company issued 123,000 shares of common stock to a director of Triad Industries,
Inc. for services rendered. On September 30, 2000 there were 8,170,321 shares of
common stock and 850,000 shares of preferred stock outstanding.
NOTE 5. ISSUANCE OF SHARES FOR SERVICES STOCK OPTIONS
The company has a nonqualified stock option plan, which provides for the
granting of options to key employees, consultants, and non-employee directors of
the Company. The valuations of shares for services are based on the fair market
value of services. The Company has elected to account for the stock option plan
under Accounting Principles Board Opinion No. 25 Accounting for Stock Issued to
Employees, and related interpretations.
A total of 756,600 shares were outstanding to management and key employees
for services rendered as of September 30, 2000.
NOTE 6. STOCKHOLDERS EQUITY
The stockholders equity section of the Company contains the following
classes of capital stock as of September 30, 2000.
A Preferred Stock, nonvoting, 1.00 par value; 10,000,000 shares authorized;
850,000 shares issued and outstanding.
Common stock, $ 0.001 par value; 50,000,000 shares authorized 8,170,321 and
6,403,418 issued and outstanding for September 30, 2000 and December 31, 1999
respectively.
The holders of Preferred Stock are entitled to receive dividends calculated
using an Available Cash Flow formula as prescribed by the Certificate of
Designation of Preferred Stock. There have not been any dividends declared as of
September 30, 2000.
NOTE 7. ACQUISITIONS
Triad Industries, Inc. acquired the assets subject to the liabilities of
Northwest Medical Clinic, Inc. Triad Industries, Inc. will acquire 100% of the
equity interest of Northwest Medical Clinic, Inc. in return for voting common
stock, and that Northwest Medical Clinic, Inc. will become a wholly owned
subsidiary of Triad Industries, Inc. As per agreement Triad Industries, issued
1,463,302 shares of common stock on September 30, 2000 for the purchase of
Northwest Medical Clinic, Inc. The acquisition was recorded as a purchase in
accordance with Accounting Principles Boar
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
On September 1, 2000 the Company issued 123,000 shares of common stock at
$.38 per share in payment for services.
ITEM 3. DEFAULTS UPON SENIOR SECURITES
None.
ITEM 4. SUBMISSION OF MATTERS TO BE A VOTE OF SECURITY HOLDERS
On August 1, 2000, the Company filed a Notice of Annual Meeting and Proxy
Statement wit the Commission. On September 15, 2000 the Annual Meeting was held.
The shareholders elected Gary DeGano, Linda M. Bryson, Michael Kelleher, J.
William Byrd, and Richard Furlong to serve as directors for the coming year or
until the next Annual Meeting. The shareholders also appointed Armando Ibarra
PC, CPA as the Companys independent auditor and appointed Signature Stock
Transfer as Registrar and Transfer Agent for the Company. The shareholders also
approved a 2000 Stock Option Plan previously ratified by the Directors.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON 8-K
a. Exhibit 27 Financial Data Schedule
b. Notice of Annual Meeting, Proxy Information & Proxy, Filed August 1,
2000 regarding September 15, 2000 meeting
c. Reports on Form 8K
* Report on Form 8-K was filed on June 30, 2000 regarding
the purchase of Northwest Medical Clinic, Inc., Florimed
of Tampa, Inc., and Amerimed of Georgia, Inc.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
TRIAD INDUSTRIES, INC.
Dated: November 6, 2000
By:/S/Gary DeGano
Gary DeGano
President, Director
By:/S/ Michael Kelleher
Michael Kelleher
Secretary, Treasurer and
Director
