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 quarterly report ended March 31, 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.)
116935 W. Bernardo Drive, Suite 232, San Diego, CA.
(Address of principal executive office)
Registrant's 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 [ ] No [X]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the last practicable date.
Class Outstanding as of March 31, 2000
Common Stock, $0.001 6,403,418
TABLE OF CONTENTS
Heading Page
Item 1. Consolidated Financial Statements 3
Consolidated Balance Sheets - March 31, 2000
And March 31, 1999 5
Consolidated Statements of Operations - three months
Ended March 31, 2000 and 1999 7
Consolidated Statements of Cash Flows - three
Ended March 31, 2000 and 1999 9
Consolidated Statements of Stockholders' Equity 10
Notes to Consolidated Financial Statements 11
Item 2. Management's Discussion and Analysis and
Result of Operations 17
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 18
Item 2. Changes in Security 19
Item 3. Defaults Upon Senior Securities 19
Item 4. Submission of Matter to a Vote of
Securities Holders 19
Item 5. Other Information 19
Item 6. Exhibits and Reports of Form 8-K 19
Signatures
PART 1
Item 1. Financial Statement
The following unaudited Financial Statements for the period ended
March 31, 2000 have been prepared by the Company.
TRIAD INDUSTRIES, INC.
FINANCIAL STATEMENT
MARCH 31, 2000 AND DECEMBER 31, 1999
ARMANDO C. IBARRA
CERTIFIED PUBLIC ACCOUNTANTS
(A Professional Corporation)
INDEPENDENT AUDIT0R'S REPORT
To the Board of Directors
Healthcare Resources Management, Inc.
16935 W. Bernardo Drive
San Diego, CA 92126
We have reviewed the accompanying balance sheet of Triad
Industries, Inc., (formerly Healthcare Resources Management)
as of March 31, 2000 and 1999 and the related statement of
income, changes in stockholders' equity
and cash flows for the for the three months ended,
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. based on our audit.
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
had been subjected to the inquiry and analytical procedures applied in
the review of the basic financial, and we are not aware of any material
modifications that should be made to it.
ARMANDO C. IBARRA, C.P.A. - APC
Chula Vista, California
March 22, 2000
637 Third Avenue, Suite H, Chula Vista, CA 91910
Tel (619) 4224348 Fax: (619) 422-1465
TRIAD INDUSTRIES, INC.
(formerly Healthcare Resources Management, Inc.)
CONSOLIDATED BALANCE SHEET
As of March 31, 2000 and December 31, 1999
ASSETS
March 31 December 31
200 1999
Current Assets
Cash $ 23,415 $ 43,236
Accounts receivable 473,513 15,006
Marketable Securities 512,382 454,782
Stock Subscription Agreement 62,500 62,500
Impound Account 4,062 4,062
Assets Held for Sale 1,351,450 1,345,350
Deferred tax asset 236,463 193,400
Total Current Assets 2,663,785 2,567,171
Net Property and Equipment 3,378,357 3,420,612
Investments
Investments in securities
available for sale 425,000 425,000
Total investments 425,000 425,000
Other Assets
Managed Care Manuals & Contracts 0 0
Management Contract 0 0
Gift Certificates 6,000 6,000
Organization Expense 25,000 25,000
Loan Fees 143,779 143,779
Accumulated Amortization (132,835) (96,929)
Total other assets 41,944 77,850
TOTAL ASSETS 6,509,086 6,490,633
See notes to financial statements and accountants report
TRIAD INDUSTRIES, INC.
(formerly Healthcare Resources Management, Inc.)
CONSOLIDATED BALANCE SHEET
As of March 31, 2000 and December 31, 1999
LIABILITIES & STOCKHOLDERS' EQUITY
March 31 December 31
2000 1999
Current Liabilities $ 7,109 $ 19,993
Loans Payable 131,189 93,862
Deferred Revenue 77,158 77,158
Greentree Lease 1,307 1,655
Taxes Payable 16,855 16,853
Line of Credit 20,597 25,000
Prepaid Rent 0 0
Security Deposits 40,775 39,865
Notes payable on
assets held for sale 914,515 918,966
Trust deeds and mortgages 2,782,500 2,782,500
Total Current liabilities 3,992,005 3,975,792
TOTAL LIABILITES $ 3,992,005 $ 3,975,972
Stockholders' Equity
Common stock, $.001
par value, 50,000,000
shares authorized;
850,000 shares issued
and outstanding $ 6,404 $ 6,404
Paid-in capital 2,275,241 2,275,241
Retained earnings (652,629) (616,804)
TOTAL STOCKHOLDERS' EQUITY 2,440,951 2,514,841
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 6,471,021 $ 6,490,633
See Auditors Report and Notes to the Financial Statement
TRIAD INDUSTRIES, INC.
(formerly Healthcare Resources Management, Inc.)
CONSOLIDATED STATEMENT OF OPERATION
As of March 31, 2000 and December 31, 1999
For the For the
Three months ended year ended
March 31 December 31
2000 1999 1999
REVENUES
Consulting $ 97,230 $ 119,175 $ 494,721
Rental Income 166,856 59,420 495,456
Sale of Securities 0 89,374 177,952
Sale of Assets - net 4,500 0 (206,715)
Fee income 0 0 1,210
Interest Income 0 0 1,169
Marketable Security
Valuation 8,757 0 0
Total Revenues 277,251 267,969 963,795
OPERATING COSTS
Cost of Securities Sold 15,198 61,138 113,811
Total Operating Cost 15,198 61,138 113,811
Operating Income 262,053 206,831 849,984
ADMINISTRATIVE EXPENSES 375,596 142,569 1,738,032
Loss before other
income & (expense) (113,543) 62,262 (888,048 )
OTHER INCOME & (EXPENSE)
Fee Income 20 0 0
Other Expenses 0 0 (149)
Other Income 0 825 27,806
Interest Income 317 0 0
Mortgage Refinance 0 0 441,000
Unrecognized loss on securities 0 0 (303,746)
Utility Charges 1,250 0 0
Total other income & expenses 1,587 825 (723,137)
NET INCOME (LOSS)
BEFORE TAXES (111,955) 65,087 (723,137)
PROVISION FOR
INCOME TAXES (BENEFIT) (38,065) 0 (193,400)
NET INCOME (LOSS) $(73,890) $ 65,087 $ (529,737)
See Auditors Report and Notes to the Financial Statement
TRIAD INDUSTRIES, INC.
(formerly Healthcare Resources Management, Inc.)
CONSOLIDATED SCHEDULES OF ADMINISTRATIVE EXPENSES
As of March 31, 2000 and March 31, 1999
March 31 March 31
2000 1999
Accounting $8,260 $ 1,365
Advertising 51 352
Appraisal Fees 7,500 0
Auto expenses 1,111 0
Bank charges 243 284
Commission 0 961
Consulting 17,400 2,000
Depreciation and Amortization 78,200 21,091
Entertainment 124 0
Equipment rental 1,388 589
Freight 1,374 0
Homeowners Fees 150 0
Insurance 4,468 342
Interest Expense 90,316 38,767
Interest Mortgage 15,943 0
Janitorial 1,021 710
Landscaping 270 0
Legal services 400 1,300
Management 23,550 49,505
Miscellaneous 1,928 60
Office expense 1,407 830
Outside Services 12,612 12,694
Postage and Delivery 183 0
Printing 0 81
Rent 11,179 760
Repairs and Maintenance 5,794 891
Salaries 54,140 0
Stock Transfer Fee 3,006 45
Supplies 559 1,824
Federal Taxes 35 0
Payroll taxes 127 0
Other taxes 745 2,500
Telephone 2,980 3,818
Tenant Repairs 1,066 0
Trash 1,476 229
Travel and Lodging 13,039 856
Utilities 10,671 0
Warehouse expense 2,010 0
Water 2,845 0
Wire Fees (brokerage) 25 125
Total General & Administrative
expenses $ 375,596 $ 142,569
See Auditors Report and Notes to the Financial Statement
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc)
Consolidated Statement of Cash Flows
For the three months ended March 31, 2000 and
the Year ended December 31, 1999
For the three months For the year ended
March 31 December 31
2000 1999 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) from operations $ (111,955) $ 65,087 $ (529,737)
(Increase) in note receivable 0 0 0
Depreciation and
Amortization Expense 78,200 21,091 207,845
(Increase) in accounts receivable 20,460 (12,858) (448,835)
(Increase) in Marketable Securities 10,000 (58,332) (454,782)
(Increase) in accounts payable (13,678) (23,023) 0
(Increase) in Loan Payable 728 22,213 93,862
(Increase) in security deposits 550 625 0
(Increase) in prepaid rent 0 2,895 0
(Increase) in deferred tax benefit 0 0 (181,974)
(Increase) in impound account 0 0 (4,062)
(Increase) in Stock Subscription rec. 0 0 (42,500)
Increase in other accounts payable 0 0 138,944
(Increase) in other Assets 0 0 (6,000)
Net cash provided (used) by
operating activities (15,695) 17,698 (1,227,239)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in securities 0 0 (425,000)
Acquisition of investment property 0 0 (4,904,878)
Loan fees 0 0 (143,779)
Net cash used by investing activities 0 0 (5,470,657)
CASH FLOWS FROM FINANCING ACTIVITIES
Investment Property mortgages (232) (98) 918,966
Greentree Lease (349) (566) 1,655
Trust Deeds 0 0 2,782,500
Mortgage Principle (4,219) (4,288) 0
Retained Earnings 2,299 0 0
Long term Liabilities:
Security Deposits 360 0 39,865
Contribution Capital 0 0 2,145,812
Common stock 0 0 1,147
Preferred Stock 0 0 850,000
Net cash provided
by financing activities (2,141) (4,952) 6,739,945
Net increase (decrease) in cash (19,821) 12,487 42,049
Cash at beginning of year 43,236 17,620 1,187
Cash at end of year $ 23,415 $ 30,107 $ 43,236
See notes to financial statements and accountants review report.
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Statement of Stockholders' Equity
For the three months ended March 31, 2000 and December 31, 2000
Additional
Preferred Preferred Common Common Paid-in Retained Total
Shares Stock Shares Stock Capital Earning
Balance,
January 1,
1997 - - 9,301,877 9,302 103,184 (88,791) 23,695
1 for 9 Split
March 31,
1998 - - (8,245,461) (8,245) 8,245 - 0
Common shares
issued March 31,
1998 - - 2,200,300 2,200 - - 2,200
Common shares
issued July 31,
1998 - - 2,000,000 2,000 18,000 - 20,000
Operating Income
December 31,
1998 - - - - - 1,724 1,724
Balance
December 31,
1998 - - 5,256,716 5,257 129,429 (89,067) 47,617
March 14, 1999
1:10 reverse
stock
split - - (4,731,048) (4,731) 4,731 - 0
March 15, 1999
Purchase of
GAM & RB Capital &
Equities - - 5,068,150 5,068 1,966,610 - 1,971,678
March 15, 1999
Purchase of
Miramar Road Associates,
LLC 700,000 700,000 - - 73,960 - 773,960
Preferred Stock Issued
September
1999 150,000 150,000 - - - - 150,000
Common Stock Issued
December
1999 - - 320,000 320 71,625 - 71,945
Operating (loss) as of
December 31,
1999 - - - - - (529,737)(529,737)
Balance,
December 31,
1999 850,000 850,000 6,403,418 6,404 2,275,241 (616,804) 2,514,841
Operating (loss) as of
March 31,
2000 - - - - - (73,890)(73,890)
Balance,
March 31,
2000 850,000 850,000 6,403,418 6,404 2,275,241 (690,694) 2,440,951
See Auditors Report and Notes to the Financial Statement
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Notes to Consolidated Financial Statements
As of March 31, 2000 and 1999
NOTE1 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 1998. In October 1997, the business base of Interstate
Care Systems, a four-year-old Nevada healthcare management corporation,
was acquired through it structured acquisition. 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 natural business. The company made the
required filings and resumed trading on the OTC Bulletin Board as
"HRCI'. On the 15th of March 1999, the company reversed Split 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.
NOTE2 SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
a. Accounting Method
The company's financial statements are prepared using the accrual
method of accounting, The company has elected a December 31, year end.
b. Cash Equivalents
The company considers all highly liquid investments with a maturity
of three months or less when purchased to be cash equivalents.
c. 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 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.
8
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Notes to Consolidated Financial Statements
As of March 31, 2000 and 1999
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
d. Basis, of Presentation and Considerations Related to Continued
Existance (going concern)
The company's 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 company's management intends to raise additional operating funds
through operations and/or debt offerings.
e. Intangibles
Intangible assets consist of organization expenses and loan fees and
are being amortized on a straight-line basis.
f. Intangibles
The company 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.
g. Issuance of Shares for Service - Stock Options
Valuation of shares for services is based on the fair market value
of services-
h. Concentration of Credit Risks
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 March 31, 2000 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 as appropriate.
i. Principles of Consolidation
The consolidated financial states include the amounts of Triad
Industries, Inc., the parent company, Healthcare Management Resources,
a Nevada corporation, RB Capital & Equities, Inc., a Nevada corporation,
GAM Properties, a California corporation, Triad Realty, a California
corporation, and Miramar Road Associates, a California L.L.C. All
subsidiaries are wholly owned subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.
j. Income Taxes
Incomes taxes are provided in accordance with Statement of Financial
Accounting Standards No. 109(SFAS109), Accounting for Income Taxes.
A deferred tax asset of liability is recorded for all temporary
difference between financial and tax reporting and net operating
loss carryforwards. Tax deferred expense (benefit) results from
the net changing during the year of deferred tax assets and liabilities.
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Notes to Consolidated Financial Statements
As of March 31, 2000 and 1999
Note 2 SUMMARY OF SIGNIGICANT ACCOUNTING PROLOCIES (CONTINUED)
k. Accounts Receivable
The Company has entered into various contracts, by which the company
provides financial services.
l. Investment in Securities
Marketable securities at March 31, 2000 and 1999 are classified and
disclosed as trading securities under the requirements of SFAS No. 115.
Under such statement, the company's securities are required to be
reflected at fair market value
m. 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. Depre6ation 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 forty-eighth thou3and square foot
commercial building located at 69206910 A & B and 6914 Miramar Road,
San Diego, California.
Land $ 327,614
Buildings 3,067,619
computer 1,000
Furniture 7,224
Tenant Improvements 153,738
$ 3,557,195
Less Accumulated Depreciation (178,838)
Not Property and Equipment 3,378,357
n. Property held for sale
Location Description Cost Debt
2016-18 Balboa 4 Units $ 420,000 $ 306,838
2015-17 Hornblend
2135-39 Grand Ave. Tri-plex 355,350 233,955
4592 Brancroft 7 Units 396,100 264,000
3635 3 Ave Condo 180,000 113,004
Total 1,351,450 $ 914,515
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Notes to Consolidated Financial Statements
As of March 31, 2000 and 1999
NOTE2 SUMMARY OF SIGNIFICANT ACCOUNTING PROLICIES (CONTINUED)
o. Long Term Debt - Miramar Building
first Trust Deed 2/2000 1,800,000
Second Trust Deed 10/1999 380,000
Third Trust Deed 6/1999 315,000
Forth Trust Deed 4/1999 259,000
Fifth Trust Deed 6/2000 2,782,500
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 150,000 shares
of Pro Glass at $ 1.00 a share.
Number of Mkt. Price Balance
Shared At At Year End
Year end
Heritage National Corporation 250,000 0.10 $ 25,000
American Health Systems, Inc. 50,000 5.00 250,000
Pro Glass, Inc. 150,000 1.00 150,000
Total 450,000 $ 425,000
q. Accounts Receivable
Accounts receivable consist of the following:
December 31, 1999
Accounts receivable - Various $ 12,162
Accounts receivable - Carrara 520
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Notes to Consolidated Financial Statements
As of March 31, 2000 and 1999
NOTE2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUDS)
Accounts receivable - Gahi 1,450
Accounts receivable - Trans-Caribe 2,687
Accounts receivable - Contracts 118,630
Accounts receivable - Fortune Oil 11,500
Accounts receivable - Fees 30,886
Accounts receivable - Escondido capital 12,041
Accounts receivable - Bellissima 8,000
Accounts receivable - 3rd Avenue 15,083
Accounts receivable - Ashy 5,000
Accounts receivable - Todd Smith 254,554
Accounts receivable - Trans-Caribe 1,000
Total 473,513
The company expects to collect all retainages within one year.
NOTE 3. OPERATING LEASE
The company operates its facilities under an operating
agreement with an unrelated party. The ban rent is $ 3,434 per month.
Rent expense as of March 31, 2000 and 1999 is $11,179 and $ 760.
NOTE 4 STOCK
As of December 31,1998 there were 5,256,720 shares of common stock
outstanding. On March 14, 1999 the company reversed split the 5,256,720
shams 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 5,069,150 shares of common stock and 700,000 shares
of preferred stock. On September 30, 1999 there were 5,593,822 shares of
common stock shares of preferred stock outstanding, In December 1999,
the company issued 909,600 of common stock shares and 150,000 of additional
preferred stock. On December 31, 1999 there were 6,403,422 shares of common
stock and 850,000 shams of preferred stock outstanding.
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Notes to Consolidated Financial Statements
As of March 31, 2000 and 1999
NOTE 5. ACQUISITIONS
The acquisitions of RB Capital and Equities, Inc., a Nevada
corporation, and its subsidiaries were recorded as a purchase
in accordance with Accounting Principles Board Opinions No. 16
(APB No. 16) Business Combinations.
The operating results of the acquired entities are
included in the company's consolidated financial
statements from the date of acquisition.
NOTE & SUBSUQUENTEVENT
Gam properties entered into escrow in march for the
sale of their 3rd Ave. property. The property sold
for $173,000 with escrow closing on April 4, 2000.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following information should be read in conjunction with
financial statements and notes thereto appearing elsewhere in
this Form 10-QSB.
Overview
The Company began operation in October 1997 as Healthcare Management
Resources, Inc. The corporation was incorporated in Nevada on October
1997 as International Telescript, Inc., and was successor to C.P.S.
Tele-Script, Inc., a New York Corporation, formed November 21, 1957.
The filed an amendment to change their name to Telescript-CSP, Inc.,
on December 26, 1957 and changed their name again to Telescript Industries,
Inc. on April 26, 1984. On March 15, 1999, the Company acquired all of the
capital stock of RB Capital and Equities, Inc., a Nevada corporation, and
its subsidiaries. RB Capital was incorporated in February 1987 as Combined
Communication Corporation. The acquisition was in compliance with Section
308(a)(1)(B) of the Internal Revenue Code of 1986, as amended. Based on
the terms of the reverse merger, the shareholders of RB Capital owned 90%
plus, of the consolidated Company. At the meeting of shareholders held
March 15, 1999, the shareholders approved an amendment to the Articles of
Incorporation to changing the issuer's name to Triad Industries, Inc.
The Company's current capital was provided by rental income, fee
increase and the sale of Company owned real estate, the sales of
securities, mortgage financing and a bank line of credit. The
Company generated sufficient cash from operations to pay its
operating expenses.
It is management's intent to acquire additional companies that
fit its mix of financial services, real estate and healthcare
services. Those acquisitions for stock, cash and debt will require
additional capital. To that end the Board of Directors is preparing
a private placement memorandum for the sale of securities to take place
in the second and third quarter of 2000. Although there has not been
any definitive agreement and there is no assurance that the sale of
securities will be successful. The Company may also sell some of its real
estate assets to provide the necessary cash.
Management for its present operations does not anticipate
hiring additional employees until they warranted by income
and is dependent on the Company having sufficient capital.
Results of Operations the First Three Month of 2000
The Company had revenues of $279,521 for the first quarter
with operating expenses of $ 375,596. These amounts represent
a 3.6% increase and a 162% increase (decrease) over first quarter
1999 figures.
The increase in expenses were due to the following factors.
A significant increase in depreciation and amortization due to
the real estate holdings the Company acquired in 1999. Also,
due to the real estate holdings the Company had sizable interest
expenditures due to the short term nature of the financing on the
companies commercial property holdings. The companies management
has arranged for long term financing on the commercial property.
This would reduce interest expense and amortization in future
Net Operating Loss
The Company has accumulated approximately 690,694 of net operating
loss carryforwards as of March 31, 2000, which may be offset against
taxable income and income taxes in future years. The use of these
losses to reduce future income taxes will depend on the generation
of sufficient taxable income prior to the expiration of the net
operating loss carryforwards. The carryforwards expire in the
year 2014. In the event of certain changes in control of the
Company, there will be an annual limitation on the a
operating loss carryforwards, which can be used. A
tax benefit has been recorded in the financial statements
for the year ended December 31, 1999 in the amount of $193,400
and for the three months period ending March 31, 2000 in the
amount of 236,463.
Inflation
In the opinion of management, inflation has not had a material
effect on the operations of the Company.
Risk Factors and Cautionary Statements
Forward-looking statements in this report are made pursuant to
the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. The Company wishes to advise readers that actual
results may differ substantially from such forward-looking statements.
Forward-looking statements involve risks and uncertainties that could
cause actual results to differ materially from those expressed on or
implied by the statements, including, but not limited to, the
following: the ability of the Company to successfully meet its cash
and working capital needs, the ability of the Company to successfully
market its product, and other risks detailed in the Company's periodic
report filings with the Securities and Exchange Commission.
Part II
Item 1. Legal Proceedings
A lawsuit was filed (case # 729554) naming Gam Properties, Inc., a
wholly owned subsidiary, as a defendant. The Company's attorneys
advised the suit was without merit. The case was dismissed with
prejudice on March 21, 2000.
There are presently no other material pending legal
proceedings to which the Company of any of its subsidiaries
is a party on to which any of its properties are subject and,
to the best of the Company's knowledge, no such actions against
the Company are contemplated or threatened.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to be a Vote of Security Holders
None.
Item 5. Other Information
This item is not applicable to the Company.
Item 6. Exhibits and Reports on 8-K
a. Exhibit 27 Financial Data Schedule
b. Reports on Form 8-K
No report on Form 8-K was filed by the Company during the three months
ended March 31, 1999.
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: May 9, 2000
By:_____________________
Gary DeGano
President, Director
By:_____________________
Michael Kelleher
Secretary, Treasurer and Director
19
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-2000
<CASH> 23,415
<SECURITIES> 512,382
<RECEIVABLES> 536,013
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,662,785
<PP&E> 3,378,957
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,509,086
<CURRENT-LIABILITIES> 3,992,005
<BONDS> 0
0
850,000
<COMMON> 6,404
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,517,081
<SALES> 277,251
<TOTAL-REVENUES> 278,838
<CGS> 15,198
<TOTAL-COSTS> 375,596
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (38,065)
<INTEREST-EXPENSE> 90,316
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (111,955)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (73,840)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.001)
</TABLE>
