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 June 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 June 30, 2000
Common Stock, $0.001 8,047,321
<PAGE>
TABLE OF CONTENTS
PART 1. FINANCIAL INFORMATION
Heading Page
Item 1. Consolidated Financial Statements 3
Consolidated Balance Sheets December 31, 1999
And June 30, 2000 5-6
Consolidated Statements of Operations three and six months
Ended June 30, 2000 and 1999 8-9
Consolidated Statements of Cash Flows six months
Ended June 30, 2000 and 1999 10
Consolidated Statements of Stockholders Equity 11
Notes to Consolidated Financial Statements 12-19
Item 2. Managements Discussion and Analysis and
Result of Operations 19
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 23
Item 2. Changes in Security 23
Item 3. Defaults Upon Senior Securities 23
Item 4. Submission of Matter to a Vote of
Securities Holders 23
Item 5. Other Information 23
Item 6. Exhibits and Reports of Form 8-K 23
Signatures 23
<PAGE>
PART 1
Item 1. Financial Statement
The following unaudited Financial Statements for the period ended June 30,
2000 have been prepared by the Company.
<PAGE>
ARMANDO C. IBARRA
CERTIFIED PUBLIC ACCOUNTANTS
( A Professional Corporation)
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 June 30,
2000 and December 31, 1999 and the related statements of income, changes to
stockholders equity, and cash flows for the six and three months ended June 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
July 25, 2000
<PAGE>
ARMANDO C. IBARRA
CERTIFIED PUBLIC ACCOUNTANTS
( A Professional Corporation)
July 28, 2000
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
RE: TRIAD INDUSTRIES, INC.
This is to confirm that we consent to the use of our June 30, 2000 review
financial statements of Triad Industries, Inc., in your required SEC filings
including the 10Q report.
Sincerly,
ARMANDO IBARRA, C.P.A.
350 E. Street, Chula Vista, CA 91910
Tel: (619) 422-1348 Fax: (619) 422-1465
<PAGE>
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Balance Sheets
As of June 30, 2000 and December 31, 1999
ASSETS
2000 1999
Current assets
Cash $ 75,050 $ 43,236
Accounts receivable 441,167 463,841
Accounts receivable - medical clinic 1,409,561 0
Marketable securities 648,415 454,782
Impound account 1,959 4,062
Assets held for sale 1,165,350 1,345,350
Deferred tax benefit 229,546 193,400
Total current assets 3,971,048 2,504,671
Net Property and Equipment 3,396,008 3,420,612
Investments
Investment in securities available for sale 425,000 425,000
Total investments 425,000 425,000
Other Assets
Security deposits 325 0
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 6,325 77,850
TOTAL ASSETS $ 7,798,381 $ 6,428,133
<PAGE>
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Balance Sheets
As of June 30, 2000 and December 31, 1999
LIABILITIES AND STOCKHOLDERS' EQUITY
2000 1999
Current liabilities
Accounts payable $ 10,187 $ 19,933
Loans payable 242,402 93,862
Deferred revenue 77,158 77,158
Greentree lease 767 1,655
Taxes payable 6,251 16,853
Line of credit 30,000 25,000
Security deposits 39,711 39,865
Notes payable on assets held for sale 796,922 918,966
Trust deeds and mortgages 2,782,500 2,782,500
Total current liabilities 3,985,898 3,975,792
TOTAL LIABILITIES $ 3,985,898 $ 3,975,792
Stockholders' equity
Preferred stock ($1.00 par value, 10,000,000 shares 850,000 850,000
authorized 850,000 shares issued and outstanding.)
Common stock ($0.001 par value, 50,000,000 shares 8,048 6,404
authorized 8,047,321 and 6,403,418 shares issued and
outstanding for June 2000 and December 1999, respectively)
Stock subscription receivable (62,500) (62,500)
Paid in capital 3,733,224 2,275,241
Retained earnings (deficit) (716,289) (616,804)
Total Stockholders' equity 3,812,483 2,452,341
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 7,798,381 $ 6,428,133
<PAGE>
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Statements of Operations
For the six months ended June 30, 2000 and 1999
And for the three months ended June 30, 2000 and 1999
For the six months ended
June 30, 2000 June 30, 1999
REVENUES
Consulting $ 328,349 $ 188,296
Rental income 333,316 184,290
Utility Charges 1,250 0
Sale of securities 99,175 169,782
Marketable securities 0 0
Fee Income 74 953
Total revenues 762,164 543,321
OPERATING COSTS
Cost of good sold 62,865 98,818
Cost of securities sold 0 0
Cost of assets sold 174,059 1,576,215
Total operating costs 236,924 1,675,033
Operating income 525,240 (1,131,711)
ADMINISTRATIVE EXPENSES 620,321 573,588
Loss before other income & (expenses) (95,081) (1,705,299)
OTHER INCOME & (EXPENSES)
Sale of Assets 173,000 1,369,500
Interest Income 661 339
Other Expense (54) 0
Interest Expense (179,926) (86,530)
Interest Mortgage (34,232) (32,134)
Unrecognized Loss on Securities 0 0
Unrecognized Gain/Loss 0 (149)
<PAGE>
For the three months ended
June 30, 2000 June 30, 1999
Total Other income & expenses (40,550) 1,251,026
NET INCOME (LOSS) BEFORE TAXES (135,631) (454,274)
PROVISION FOR INCOME TAXES (BENEFIT) (36,146) (154,453)
NET INCOME (LOSS) $ (99,485) $ (299,821)
BASIC EARNINGS (LOSS) PER SHARE $ (0.02) $ (0.08)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 6,482,472 3,560,989
DILUTED EARNINGS (LOSS) PER SHARE $ (0.01) $ (0.07)
WEIGHTED AVERAGE OF DILUTED
COMMON SHARES OUTSTANDING 8,182,472 4,399,450
REVENUES
Consulting $ 231,029 $ 69,121
Rental income 166,460 124,045
Utility Charges 0 0
Sale of securities 99,175 80,408
Marketable securities (8,575) 0
Fee Income 54 953
Total revenues 488,143 274,527
OPERATING COSTS
Cost of good sold 62,865 37,680
Cost of securities sold (15,198) 0
Cost of assets sold 174,059 1,576,215
Total operating costs 221,726 1,613,895
Operating income 266,417 (1,339,368)
ADMINISTRATIVE EXPENSES 296,691 469,785
Loss before other income & (expenses) (30,274) (1,809,153)
OTHER INCOME & (EXPENSES)
Sale of Assets 168,500 1,369,500
Interest Income 343 339
Other Expense 0 0
Interest Expense (89,610) (47,763)
Interest Mortgage (18,289) (32,134)
Unrecognized Loss on Securities (54) 0
Unrecognized Gain/Loss (33,933) (149)
Total Other income & expenses 26,958 1,289,793
NET INCOME (LOSS) BEFORE TAXES (3,316) (519,360)
PROVISION FOR INCOME TAXES (BENEFIT) (497) (176,582)
NET INCOME (LOSS) $ (2,819) $ (342,778)
BASIC EARNINGS (LOSS) PER SHARE $ (0.00) $ (0.06)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 6,492,692 5,593,818
DILUTED EARNINGS (LOSS) PER SHARE $ (0.00) $ (0.05)
WEIGHTED AVERAGE OF DILUTED
COMMON SHARES OUTSTANDING 8,192,692 6,993,818
<PAGE>
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Schedules of Administrative Expenses
For the six months ended June 30, 2000 and 1999
And for the three months ended June 30, 2000 and 1999
For the six months ended
June 30, 2000 June 30, 1999
ADMINISTRATIVE EXPENSES
Accounting $ 12,760 $ 4,602
Advertising 273 (857)
Appraisal fees 14,397 0
Auto expenses 2,429 967
Bad Debt 0 5,637
Bank charges 529 508
Commissions 897 61,762
Consulting fees 20,735 33,500
Directors fees 40,320 0
Depreciation & Amortization 153,528 51,187
Discount on Trust Deed 0 104,634
Dues & subscriptions 0 60
Elevator 0 360
Entertainment 199 0
Equipment rental 2,672 1,636
Filing fees 18,292 6,596
Freight 3,180 1,020
Homeowners fees 300 600
Insurance 9,147 5,903
Janitorial 6,656 1,454
Landscaping 1,070 503
Lease commissions 288 0
Legal fees 4,150 7,115
Licenses & permits 271 0
Management fees 46,950 71,460
Membership fees 0 60
Miscellaneous 2,426 90
Office expenses 24,055 6,058
Outside services 18,757 30,218
Postage and delivery 565 757
<PAGE>
For the three months ended
June 30, 2000 June 30, 1999
Accounting $ 4,500 $ 2,967
Advertising 222 (1,209)
Appraisal fees 6,897 0
Auto expenses 1,318 967
Bad Debt 0 5,637
Bank charges 286 226
Commissions 897 60,801
Consulting fees 3,335 31,500
Directors fees 4,320 0
Depreciation & Amortization 75,328 30,096
Discount on Trust Deed 0 104,634
Dues & subscriptions 0 60
Elevator 0 360
Entertainment 75
Equipment rental 1,284 1,047
Filing fees 0 6,595
Freight 1,806 1,020
Homeowners fees 150 600
Insurance 4,679 5,561
Janitorial 5,635 744
Landscaping 800 503
Lease commissions 288 0
Legal fees 3,750 5,815
Licenses & permits 271 0
Management fees 23,400 21,954
Membership fees 0 60
Miscellaneous 498 29
Office expenses 22,648 5,228
Outside services 6,145 17,524
Postage and delivery 382 437
<PAGE>
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Schedules of Administrative expenses
For the six months ended June 30, 2000 and 1999
And for the three months ended June 30, 2000 and 1999
(CONT.)
2000
Printing 0 308
Professional fees 4,494 51,300
Rent 21,997 6,869
Repairs & maintenance 16,299 15,197
Resident agent fees 96 0
Salaries 114,381 37,408
State filing fees 115 0
Stock transfer fees 5,336 2,398
Supplies 676 4,735
Federal taxes 36 793
Payroll taxes 127 1,332
Property taxes 76 26,474
Other taxes 2,848 838
Telephone 6,215 2,106
Tenant repairs 1,066 0
Title fees 0 2,443
Trash 3,260 1,658
Travel and lodging 23,225 3,615
Utilities 26,418 13,627
Warehouse expense 3,615 1,565
Water 5,170 3,713
Wire fees (brokerage) 25 215
Operating expenses - other 0 1,164
Total Administrative expenses $620,321 $573,588
<PAGE>
1999
Printing 0 227
Professional fees 4,494 51,300
Rent 10,818 6,109
Repairs & maintenance 10,505 14,306
Resident agent fees 96 0
Salaries 62,241 37,408
State filing fees 115 0
Stock transfer fees 2,330 2,353
Supplies 117 2,911
Federal taxes 0 793
Payroll taxes 0 1,332
Property taxes 76 26,474
Other taxes 2,103 (1,662)
Telephone 3,235 (1,712)
Tenant repairs 0 0
Title fees 0 2,443
Trash 1,784 1,429
Travel and lodging 10,186 2,759
Utilities 15,747 13,627
Warehouse expense 1,605 1,565
Water 2,325 3,713
Wire fees (brokerage) 0 90
Operating expenses - other 0 1,164
Total Administrative expenses $296,691 $ 469,785
<PAGE>
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Statement of Stockholders' Equity
For the six months ending June 30, 2000
Preferred Preferred
Shares Stock
Amount
Balance, January 1, 1998 $ 0 0
1:9 reverse stock split March 15, 1998 0 0
Common shares issued March 31, 1998 0 0
Common shares issued July 31, 1998 0 0
Operating Income December 31,1998 0 0
Balance, December 31, 1998 0 0
March 14, 1999
1:10 reverse stock split 0 0
March 15, 1999 - Purchase of
Gam & RB Capital & Equities 0 0
March 15, 1999 - Purchase of
Miramar Road Associates, LLC 700,000 700,000
Preferred Stock issued September 1999 150,000 150,000
Stock subscription receivable 0 0
Common Stock issued December 1999 0 0
Common Stock issued December 1999 0 0
Operating (loss) as of
December 31, 1999 0
Balance, December 31, 1999 850,000 850,000
Stock issued on Janurary 5, 2000
to Directors @ .06 a share 0 0
Stock issued on June 30, 2000 for the
Purchase of Northwest, LLC 0 0
Stock issued on June 30, 2000
to Directors @ .50 a share 0 0
Stock issued on June 30, 2000 to Donner
Investment Corp. @ .50 a share 0 0
Operating (loss) as of
June 30, 2000 0 0
Balance, June 30, 2000 850,000 850,000
<PAGE>
Common Common
Stock Stock
Amount
Balance, January 1, 1998 9,301,877 $ 9,302
1:9 reverse stock split March 15, 1998 (8,245,461) (8,245)5
Common shares issued March 31, 1998 2,200,300 2,200
Common shares issued July 31, 1998 2,000,000 2,000
Operating Income December 31,1998 0 0
Balance, December 31, 1998 5,256,716 0
March 14, 1999
1:10 reverse stock split (4,731,048) (4,731)
March 15, 1999 - Purchase of
Gam & RB Capital & Equities 5,068,150 5,068
March 15, 1999 - Purchase of
Miramar Road Associates, LLC 0 0
Preferred Stock issued September 19999 0 0
Stock subscription receivable 0 0
Common Stock issued December 1999 320,000 320
Common Stock issued December 1999 489,600 490
Operating (loss) as of
December 31, 1999 (529,737)
Balance, December 31, 1999 $ 6,403,418 6,404
Stock issued on Janurary 5, 2000
to Directors @ .06 a share 72,000 72
Stock issued on June 30, 2000 for the
Purchase of Northwest, LLC 1,463,320 1,463
Stock issued on June 30, 2000
to Directors @ .50 a share 72,000 72
Stock issued on June 30, 2000 to Donner
Investment Corp. @ .50 a share 36,583 37
Operating (loss) as of
June 30, 2000 0 0
Balance, June 30, 2000 8,047,321 8,048
<PAGE>
Additional Stock
Paid -in Subscription
Capital Receivable
Balance, January 1, 1998 $ 103,184 0
1:9 reverse stock split March 15, 1998 8,245 0
Common shres issued March 31, 1998 0 0
Common shares issued July 31, 1998 18,000 (20,000)
Operating income Decemember 31, 1998 0 0
Balance, December 31, 1998 129,429 (20,000)
March 14, 1999
1:10 reverse stock split 4,731 0
March 15, 1999 - Purchase of
Gam & RB Capital & Equities 1,966,610 (62,500)
March 15, 1999 - Purchase of
Miramar Road Associates, LLC 773,960 0
Common Stock issued December 1999 71,945 0
Common Stock issued December 1999 28,886 0
Operating (loss) as of 0 0
Balance, December 31, 1999 2,275,241 (62,500)
Stock issued on Janurary 5, 2000
to Directors @ .06 a share 4,248 0
Stock issued on June 30, 2000 for the
Purchase of Northwest, LLC 1,399,555 0
Stock issued on June 30, 2000
to Directors @ .50 a share 35,925 0
Stock issued on June 30, 2000 to Donner
Investment Corp. @ .50 a share 18,255 0
Operating (loss) as of
Balance, June 30, 2000 3,733,224 (62,500)
<PAGE>
Retained
Earnings Total
Balance, January 1, 1998 (88,791) 23,695
1:9 reverse stock split arch 15, 1998 0 0
Common shares issued March 31, 1998 0 0
Common shares issued July 31, 1998 0 0
Operating income December 31, 1998 1,724 1,724
Balance, December 31, 1998 (87,067) 27,6193
March 14, 1999
1:10 reverse stock split 0 0
March 15, 1999 - purchase of
GAM and RB Capital & Equities 0 1,909,178
March 15, 1999 - purchase of
Miramar Road Associates, LLC 0 773,960
Prefered stock issued September 1999 0 150,000
Stock subscription receivable 0 20,000
Common stock issued December 1999 0 71,945
Common stock issued December 1999 0 29,376
Operating (loss) as of
December 31, 1999 (529,737) (529,737)
Balance, December 31, 1999 (616,804) 2,452,341
Stock issued on January 5, 2000
to directors .06 a share 0 4,320
Stock issued on June 30, 2000
Purchase of Northwest, LLC 0 1,401,018
Stock issued on June 30, 2000
to directors @ .50 a share 0 35,997
Stock issued on June 30, 2000 to Donner
Investment Corp. @ .50 a share 0 18,292
Operating (loss) as of
June 30, 2000 (99,485) (99,485)
Balance, June 30, 2000 (716,289) 3,812,483
<PAGE>
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.
<PAGE>
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.
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.
<PAGE>
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED)
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 June 30, 2000 the Company has significant operating and capital losses
carryfoward. The benefits resulting for the purposes is as follows:
Net Operating Losses :
Income Tax Benefit $ ( 229,546 )
j. Accounts Receivable
The company has entered into various contracts, by which the company
provides financial services.
k. Investments in Securities
Marketable securities at June 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.
<PAGE>
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED)
l. Property Held for Sale
All of the Companys properties held for sale are on a thirty-year
mortgage.
Location Description Interest Rate Cost Debt
016-18 Balboa 4 Units 7.817 $420,000 $ 307,908
2015-17 Hornblend
2135-39 Grand Ave Tri-plex 7.66 355,350 233,955
4592 Brancroft 7 Units 7.50 390,000 264,099
Total $1,165,350 $ 805,962
Gam Properties, Inc. sold a property during the first six months of June
2000. On April 30, 2000 3rd Ave. Condo sold for $ 173,000.
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. 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 ................... 3,075,159
Computer .................... 4,764
Furniture ................... 12,223
Tenant Improvements ......... 155,003
$3,608,833
Less Accumulated Depreciation ( 212,825 )
Net Property and Equipment .. $3,396,008
<PAGE>
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED
n. 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
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.
o. 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 1,775,000 $ 425,000
<PAGE>
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( CONTINUED)
p. Accounts Receivable
Accounts receivable consist of the following:
Jun 30, 2000
Accounts receivable Various $ 18,743
Accounts receivable Carrera 520
Accounts receivable Gahi 1,450
Accounts receivable Trans-Caribe 3,687
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 $441,167
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 June 30, 2000.
Accounts receivable $ 2,876,509
Reserve for bad debts (1,469,948)
$ 1,406,561
NOTE 3. OPERATING LEASE
The company operates its facilities under an operating lease agreement with
an unrelated party.
Rent expense was $ 21,997 as of June 30, 2000.
<PAGE>
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 share 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 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.
NOTE 5. STOCKHOLDERS EQUITY
The stockholders equity section of the Company contains the following
classes of capital stock as of June 30, 2000.
A Preferred Stock, nonvoting, 1.00 par value; authorized 10,000 shares;
issued and outstanding 850,000 shares.
Common stock, $ 0.001 par value; authorized 50,000,000 issued and
outstanding 8,047,321 and 6,403,418 shares for June 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
June 30, 2000.
<PAGE>
NOTE 6. 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 nonemployee directors of
the Company. The valuation 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 633,600 shares at were outstanding to management and key
employees for services rendered as of June 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 June 30, 2000 for the purchase of Northwest
Medical Clinic, Inc. The acquistion was recorded as a purchase in accordance
with Accounting Principles Board Opinions No. 16 ( APB No. 16).
<PAGE>
Item 2. Managements 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
Triad Industries, Inc., (the Company) was incorporated under the laws of
the State of Nevada, on October 3, 1997. The Company was originally known as
Telescript Industries, Inc., a New York company incorporated in 1957. Telescript
Industries, Inc., was founded for the purpose of marketing, television, and
broadcasting equipment and services. Telescript Industries, Inc., became a
public company as a result of a Regulation A underwriting in April 1961. The
Company closed operations in late 1964. The Company was then reactivated on May
31, 1984. The Company then did a one for ten share reversal that became
effective October 15, 1987. On October 15, 1997 the Company completed a change
of state domicile merger to the State of Nevada. As of the change of state
domicile merger the Companys name became International Telescript Industries,
Inc. The Company then acquired all the outstanding shares of Interstate Care
Systems, Inc., for 3,734,500 shares of its common stock. In conjunction with
that transaction, the Company, changed its name to Healthcare Resource
Management, Inc. Healthcare Resource Management, Inc., was in the business of
managing medical providers, facilities, and practices. Healthcare Resource
Management, Inc., revenues were derived from consulting income. As a management
company, Healthcare Resource Management, Inc., was not subject to any licensing
restriction. On March 15, 1998, the Company completed a one for nine reverse
split. As of December 31, 1998 there were 5,256,716 shares of common stock
outstanding.
On March 15, 1999 at a Special Meeting of Shareholders, the Company (1)
reversed its outstanding common stock from 5,256,716 on a one for ten basis to
526,672 shares outstanding and (2) approved an Agreement and Plan of
Reorganization whereby the Company acquired 100% of the capital stock of RB
Capital and Equities, Inc., a Nevada Corporation, and its subsidiary Gam
Properties, Inc., in exchange for 5,068,150 shares of common stock. As a result
of the reverse merger acquisition, RB Capital and Equities, Inc., is the
predecessor of Triad Industries, Inc. The Company also agreed to issue 700,000
shares of $1.00 preferred stock for a 99% interest in Miramar Road Associates,
LLC., and (3) approved an Amendment to the Articles of Incorporation changing
the corporate name to Triad Industries, Inc. Triad Industries, Inc., is a
holding Company with no operations. As of December 31, 1999 there were 6,403,418
shares of common stock and 850,000 shares of preferred stock outstanding.
<PAGE>
On June 30, 2000 the Company acquired 100% of the assets subject to
liabilities of Northwest Medical Clinic, Inc., Amerimed of Georgia, Inc., and
Florimed of Tampa, Inc., in exchange for 1,463,302 shares of common stock.
As of June 30, 2000 there were 8,047,321 shares of common stock outstanding
and 850,000 shares of preferred stock outstanding.
The Company owns six subsidiaries:
1- RB Capital and Equities, Inc., a Nevada corporation, is a financial
service corporation that operates a merger and acquisition consulting business.
The company does corporate filings and capital reorganization business for small
emerging private and public client corporations. 100% owned.
2- Miramar Road Associates, LLC., a California Limited Liability Company,
owns and operates a 51,000 square foot commercial building located at 6920
Miramar Rd., Suite 102 San Diego, CA 92121. 100% owned.
3- Gam Properties, Inc., a California corporation, owns and rents
apartments: Seven units located at 4592 Bancroft, San Diego, CA 92117. Four
units located at 2016-18 and 2015-17 Hornblend and Balboa, San Diego, CA 92109.
Three units located at 3635 3rd Ave, San Diego, CA 92103.100% owned.
4- HRM, Inc., a newly formed Nevada corporation, was capitalized with the
Healthcare Resource Management assets after the Triad transaction. The company
is presently inactive in the healthcare industry. 100% owned.
5- Triad Reality, a newly formed California corporation, is not yet
operating as a consolidating real estate company. 100% owned.
6- Northwest Medical Clinic, Inc., a Georgia medical operation. 100% owned.
RB Capital & Equities, Inc. 100% owned
The services that are provided by the Company are for client companies. The
Company prepares forms such as S-1, S-4, and S-18 Registration Statements,
15c2-11, Private Placement Regulation D 504, 505, 506, and other reports such as
12q, 10SB, 10K, 10KSB, 12G, 8K, Standard and Poors filings, Blue Sky listings,
Annual Reports, NASDAQ filings, and National Quotation Bureau listing forms. In
addition RB Capital and Equities, Inc., prepares Plans of Reorganizations re
368(a)(1)(a)(b) and (c) and change of domicile forms. The Company also prepares
and files Articles of Incorporation, Officer and Director filings, federal and
state annual reports, business plans, and does general accounting. The Company
arranges auditing and legal services for clients, these services are preformed
by outside firms. Shareholders communications, including assistance with
shareholder letters, corporate profile newsletter and press releases. The main
function is consulting in business merger and acquisitions.
<PAGE>
Miramar Road Associates,LLC. 100% owned as of September 20, 1999
Miramar Road Associates, LLC., owns, and operates a 51,000 square foot
commercial center located at 6920 Miramar Rd., San Diego, CA 92121. The building
is over 100% occupied. This includes leasing the roof space for local cellular
communications companies. There are 47 tenants who occupy the building. There
are 5 material leases that occupy 23,515 square feet or 46% of the building and
contribute 47% of the rental income per month. Rental revenues for the last ten
months of the fiscal year for the commercial center were $383,251.
Gam Properties, Inc. 100% owned. Owns and rents on a month to month basis
four apartment properties of 15 units, all located in San Diego, Ca. 4592
Bancroft
2016-18 Balboa
2015-17 Hornblend
3635 3rd Ave.
2135-39 Grand Ave.
Gam Properties, Inc., is currently experiencing a 100% occupancy rates.
There are 15 tenants who occupy the properties. Gam does not have any material
leases. Rental revenues, for the last ten months of fiscal year 1999, for the
properties were $ 112,205.
HRM, Inc. The Company is currently analyzing the healthcare industry. The
Company is looking to find a new cutting edge healthcare industry to enter, or
to acquire existing healthcare management facilities. As of yet, the Company has
not decided on a specific trade or acquisition in the healthcare industry.
<PAGE>
Triad Realty, Inc. The Company is not yet operating as a consolidated real
estate company. The Company will make Gam Properties, Inc., and Miramar Road
Associates, LLC., subsidiary operations to consolidate the Companys real estate
holdings. Also, all new real estate holdings will be acquired as a subsidiary of
Triad Realty.
Northwest Medical Clinic, Inc. On June, 30, 2000 the Company completed the
acquisition of assets subject to liabilities of Northwest Medical Clinic, Inc.,
a Georgia corporation and the assets of Amerimed of Georgia, a Georgia
corporation, and Florimed of Tampa, a Florida corporation in exchange for common
stock. The companies commenced operations July 1, 2000 as a wholly owned
healthcare subsidiary. 1,463,000 shares of common stock were issued for net
assets of $1,463,000.
The consolidated companies employs sixteen persons. Management does not
anticipate hiring additional employees until warranted by revenues. The
Companys directors will perform most of the duties a of the duties associated
with Triad Industries, Inc. If adequate revenues are realized, the Company will
consider additional employees.
Results of Operations the First Six Months of 2000
In the first six months the operating subsidiaries generated $762,164 in
gross revenues:
RB Capital & equities, Inc. $427,524
Miramar Road Associates, LLC 276,380
Gam Properties, Inc. 58,260
Sale of Real Estate (1,059)
For the second quarter and the first six months of 2000 the consolidated
Company showed gross revenues of $ 488,143 and $ 762,164 respectively
represented a 40% and 77% increase over 1999. Operating expenses of 296,691 for
the second quarter of 2000 decreased 37% over a like period in 1999. Operating
expenses for the six month period of $469,785 representing a 80% increase over
1999. Gross revenues will increase in the balance of 2000 when revenues will be
achieved from the Northwest Medical Clinic, Inc., acquisition.
<PAGE>
Net Operating Loss
The Company has accumulated approximately $ 716,289 of net operating loss
carryforwards as of June 30, 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 amount of net 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 $
193,450 and for the three months period ending June 30, 2000 in the amount of $
229,546.
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 Companys periodic report filings with
the Securities and Exchange Commission.
<PAGE>
Part II
Item 1. Legal Proceedings
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 Companys knowledge, no such
actions against the Company are contemplated or threatened.
Item 2. Changes in Securities
On June 15, 2000 the Company issued 72,000 shares of common stock to its
directors (6 at 12,000 each) in exchange for services.
On June 30, 2000 one million four hundred sixty three thousand three
hundred and seven shares of common stock were issued to 12 companies and
individuals as consideration of the purchase of the assets of Northwest Medical
Clinic, inc., Florimed of Tampa, Inc., and Amerimed of Georgia, Inc.
All of the shares issued in the forementioned transaction bear restrictive
legends.
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.
<PAGE>
Item 6. Exhibits and Reports on 8-K
a. Exhibit 27 Financial Data Schedule
b. Reports on Form 8-K
* 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: July 31, 2000
By:/S/Gary DeGano
Gary DeGano
President, Director
By:/S/ Michael Kelleher
Michael Kelleher
Secretary, Treasurer
and Director
<PAGE>
