UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 10-Q SB/A
(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.)
16935 W. Bernardo Drive, Suite 232, San Diego, CA. 92127
(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
PART 1. FINANCIAL INFORMATION
Heading Page
Item 1. Consolidated Financial Statements 3
Consolidated Balance Sheets - March 31, 2000
And December 31, 1999 5
Consolidated Statements of Operations - three months
Ended March 31, 2000 and year ended December 31, 1999 7
Consolidated Statements of Cash Flows - three months
Ended March 31, 2000 and year ended December 31, 1999 9
Consolidated Statements of Stockholders' Equity 10
Notes to Consolidated Financial Statements 11 - 16
Consolidated Financial Statements 17
Consolidated Balance Sheet - for the
Years ended December 31, 1999 and 1998 20 - 21
Consolidated Statements of Operations - for the
Years ended December 31, 1999 and 1998 22
Consolidated Statement of Stockholders' Equity 25
Consolidated Statement of Cash Flows - for the
Years ended December 31, 1999 and 1998 26
Notes to Consolidated Financial Statements 27 -34
Item 2. Management's Discussion and Analysis and
Result of Operations 35
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 36
Item 2. Changes in Security 37
Item 3. Defaults Upon Senior Securities 37
Item 4. Submission of Matter to a Vote of
Securities Holders 37
Item 5. Other Information 37
Item 6. Exhibits and Reports of Form 8-K 37
Signatures 38
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 STATEMENTS
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
Triad Industries, 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
May 12, 2000
637 Third Avenue, Suite H, Chula Vista, CA 91910
Tel (619) 422-1348 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
2000 1999
Current Assets
Cash $ 23,415 $ 43,236
Accounts receivable 473,513 463,841
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
Preferred Stock $1.00
par value, 10,000,000
Shares authorized 850,000
shares issued
And outstanding 850,000 850,000
Common stock, $.001
par value, 50,0000
shares authorized;
6,403,418 and 5,256,716
shares issued
and outstanding. For 1999 and 1998
respectively) $ 6,404 $ 6,404
Paid-in capital 2,351,371 2,275,241
Retained earnings (690,694) (616,804)
TOTAL STOCKHOLDERS' EQUITY 2,517,081 2,514,841
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 6,509,086 $ 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 $ 494,723
Rental Income 166,856 59,420 495,456
Sale of Securities 8,575 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
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 64,262 (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 (164,911)
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 $ 75,596 $142,569
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 (4,901,878)
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, 1999
Additional
Preferred Common Paid-in Retained Total
Shares Amount Shares Amount Capital Earning
Balance,
January 1,
1997 - - 9,301,877 $ 9,302 103,184 (88,791) 23,695
1 fo 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 (87,067) 47,619
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
December Stock Issued
December
1999 - - 489,600 490 28,886 - 29,376
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
Paid in
Capital - - - - 76,130 - -
Operating (loss)
as of
March 31,
2000 - - - - - (73,890) (73,890)
Balance,
March 31,
2000 850,000 $ 850,00 6,403,418 $ 6,404 2,351,371 (690,694)2,517,081
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
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 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
nature of the 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.
NOTE 2. 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.
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. Deferred Income
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 as appropriate.
i. Principles of Consolidation
The consolidated financial statements 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 change 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 SIGNIFICANT ACCOUNTING POLICIES (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. Deprecation
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-eight thousand square foot
commercial building located at 6910-6920 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 3r. 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
NOTE 2. 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 28,500
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.
3at $ 5. 00 a share. In 1999, the company acquired 1,500,000 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. 1,800,000 .10 150,000
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 (CONTINUED)
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 shares on a one for ten (1:10) basis 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 shares of common stock and 700,000
shares of preferred stock outstanding, In December 1999, the company issued
909,600 of common stock shares and 150,000 additional shares of preferred
stock. On December 31, 1999 there were 6,403,422 shares of common stock
and 850,000 shares 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.
NOTES & SUBSQUENT EVENTS
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.
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1999 and 1998
TABLE OF CONTENTS
Page
No.
Independent Auditor's Report........................................1
Audited Financial Statements :
Consolidated Balance Sheets .........................................2-3
Consolidated Statements of Operations ..........................4
Consolidated Schedules of Administrative Expenses ..........5-6
Consolidated Statements of Stockholders' Equity................7
Consolidated Statements of Cash Flow...........................8
Notes to Financial Statements.....................................9-16
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 92127
We have audited the accompanying consolidated balance sheets of Triad
Industries, Inc. (Formerly Healthcare Resources Management, Inc.)
(collectively, the company) as of December 31, 1999 and 1998 and the
related consolidated statements of operations, changes to stockholders'
equity and cash flows for the year then ended. These consolidated financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these consolidated statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the
company as of December 31, 1999 and 1998 and the results of its operations
and its cash flows for the year then ended, in conformity with generally
accepted accounting principles.
ARMANDO C. IBARRA, C.P.A. - APC
March 22, 2000
637 Third Avenue, Suite H, Chula Vista, CA 91910
Tel: (619) 422-1348 Fax: (619) 422-1465
TRIAD INDUSTRIES, INC
(Formerly Healthcare Resources Management, Inc.)
Consolidated Balance Sheets
As of December 31, 1999 and 1998
ASSETS 1999 1998
Current assets
Cash $ 43,236 $ 1,187
Accounts receivable 463,841 15,006
Marketable securities 454,782 0
Stock subscription receivable 62,500 20,000
Impound account 4,062 0
Assets held for sale 1,345,350 0
Deferred tax benefit 193,400 11,426
Total current assets 2,567,171 47,619
Net Property and Equipment 3,420,612 0
Investments
Investment in securities
available for sale 425,000 0
Total investments 425,000 0
Other Assets
Gift certificates 6,000 0
Organization expense 25,000 0
Loan fees 143,779 0
Accumulated amortization (96,929) 0
Total other assets 77,850 0
TOTAL ASSETS $ 6,490,633 $ 47,619
See Notes to Consolidated Financial Statements
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Balance Sheets
As of December 31, 1999 and 1998
LIABILITIES AND STOCKHOLDERS' EQUITY
1999 1998
Current liabilities
Accounts payable $ 19,933 $ 0
Loans payable 93,862 0
Deferred revenue 77,158 0
Greentree lease 1,655 0
Taxes payable 16,853 0
Line of credit 25,000 0
Security deposits 39,865 0
Notes payable on assets held for sale 918,966 0
Trusts deeds and mortgages 2,782,500 0
Total current liabilities 3,975,792 0
TOTAL LIABILITIES 3,975,792 0
Stockholders' equity
Preferred stock $ 1.00 par value,
10,000,000 shares. 850,000 0
authorized 850,000 shares
issued and outstanding.
Common stock $0.001
par value, 50,000,000 6,404 5,257
shares authorized 6,403,418
and 5,256,716
shares issued and
outstanding. For 1999 and 1998,
respectively.
Paid in capital 2,275,241 129,429
Retained earnings (616,804) (87,067)
Total Stockholders' equity 2,514,841 47,619
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $ 6,490,633 $ 47,619
See Notes to Consolidated Financial Statements
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Statements of Operations
For the twelve months ended December 31, 1999 and 1998
1999 1889
REVENUES
Consulting $ 494,723 $ 74,174
Rental income 495,456 0
Sale of securities 177,952 0
Sale of assets - net (206,715) 0
Feeincome 1,210 0
interest income 1,169 0
Total revenues 963,795 74,174
OPERATING COSTS
Cost of securities sold 113,811 0
Total operating costs 113,811 0
Operating income 949,994 74,174
ADMINISTRATIVE EXPENSES 1,738,032 72,146
Loss before other income & (expenses) (888,048) 2,028
OTHER INCOME & (EXPENSES)
Other expenses (149) 0
Other income 27,806 0
Mortgage refinancing 441,000 0
Unrecognized loss on securities (303,746) 0
Total Other income & expenses 164,911 0
NET INCOME (LOSS) BEFORE TAXES (723,137) 2,028
PROVISION FOR INCOME TAXES (BENEFIT) (193,400) (304)
NET INCOME ( LOSS) $ (529,737) $ 724
BASIC EARNINGS (LOSS) PER SHARE $ (0.08) $ 0.00
WEIGHTED AVERAGE EARNINGS (LOSS) PER SHARE $ (0.12) $ 0.00
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 4,486,808 3,546,641
See Notes to Consolidated Financial Statements
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Schedules of Administrative Expenses
For the twelve months ended December 31, 1999 and 1998
1999 1998
ADMINISTRATIVE EXPENSES
Accounting 14,346 195
Advertising 284 94
Answering services 0 873
Auto expenses 4,033 0
Bad debt 5,637 0
Bank charges 902 184
Commissions 74,956 0
Compensation expense 29,376 0
Consulting fee 179,886 48,160
Delivery 0 17
Depreciation & Amortization 207,845 0
Discount on Trust Deed 104,634 0
Dues & subscriptions 1,760 0
Elevator 900 0
Employee bonus 1,000 0
Entertainment 134 0
Equipment rental 6,937 0
Fees & services 0 747
Filing fees 10,595 0
Freight 2,669 0
General insurance 18,626 0
Homeowners fees 600 0
Interest expense 378,036 0
Janitorial 4,354 0
Landscaping 1,043 0
Lease commissions 8,250 0
Legal fees 14,960 696
Management fees 163,086 0
Membership fees 60 0
Miscellaneous 1,255 272
Moving expenses 0 100
See Notes to Consolidated Financial Statements
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Schedules of Administrative expenses -
For the twelve months ended December 31, 1999 and 1998
(CONT.)
1999 1998
Office expenses 15,654 35
Office supplies 0 1,405
On-line services 2,250 0
Outside services 56,488 0
Postage and delivery 1,214 501
Printing 408 31
Professional fees 56,441 0
Rent 27,855 4,915
Repairs & maintenance 20,884 65
Services 0 588
Salaries 158,285 0
Stock transfer fees 12,869 0
Supplies 6,977 0
Federal taxes 793 0
Payroll taxes 1,733 0
Property taxes 26,474 0
Other taxes 3,968 0
Telephone 8,813 1,702
Tenant repairs 6,798 0
Title fees 2,443 0
Trash 3,961 0
Travel and lodging 17,426 11,566
Utilities 52,609 0
Warehouse expense 4,615 0
Water 12,690 0
Wire fees (brokerage) 20 0
Total Administrative expenses $ 1,738,032 $ 72,146
See Notes to Consolidated Financial Statements
TRIAD INDUSTRIES, INC
Consolidated Statement of Stockbolders' Equity
For the years ending December 31, 1999 and 1998
Additional
Preferred Common Paid In Retained Total
Shares Amount Shares Amount Capital Earnings
Balance as of
January 1,
1997 - - 9,302,000 $ 9,302 $103,194 $(88,791) $ 23,695
1 for 9 stock
split March 31,
1998 - - (8,245,461) (8,245) 8,245 - 0
Common shares
issued March 31,
1998 - - 2,200,000 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 (87,067) 47,619
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 Shares
issued September
1999 150,000 150,000 - - - - 150,000
Common Shares
issued December
1999 - - 320,000 320 71,625 - 71,945
Common Shares
issued December
1999 - - 489,600 490 28,886 - 29,376
Operating (loss)
as of December
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
See Notes to Consolidated Financial Statement
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Consolidated Statements of Cash Flows
For the twelve months ended December 31, 1999 and 1998
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Income (LOSS)from operations $(529,737) $ 1,724
(Increase) in note receivable - (10,906)
Depreciation & Amortization expense 207,845 -
(Increase) in accounts receivable (448,835) 7,369
(Increase) in deferred tax benefit (181,974) 304
(Increase) in impound account (4,062) -
(Increase) in marketable securities (454,782) -
(Increase) in stock subscription rec. (42,500) -
(Increase) in loan payable 93,862 -
Increase in other accounts payable 138,944 -
(Increase) in other assets (6,000) -
Net Cash provided (used) by operating
activities (1,227,239) (1,50)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in securities (425,000) -
Acquisition of investment property (4,901,878) -
Loan fees (143,779) -
Net cash used by investing activities (5,470,657) 0
CASH FLOWS FROM FINANCING ACTIVITIES
Investment property mortgage's 918,966 -
Greentree lease 1,655 -
Trust deeds 2,782,500 -
Security deposits 39,865 -
Contribution capital 2,145,812 2,200
Common stock 1,147 -
Preferred stock 850,000 -
Net cash provided by financing
activities 6,739,945 2,200
Net increase (decrease) in cash 42,049 691
Cash at beginning of year 1,187 496
Cash at end of year $ 43,236 $ 1,187
Supplemental cash flow disclosures
Cash paid during year for interest $ 378,036 $ 0
See Notes to Consolidated Financial Statements
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 1999 and 1998
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 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. 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 business. The company made the required filings
and resumed trading on the OTC Bulletin Board as "HRCU. 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 POLICIES
a. Accounting Method
The company's financial statements are prepared using the accrual method
of accounting. The company has elected a December 31, yearend.
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.
TRIAD INDUSTRIES, INC. .
(Formerly Healthcare Resources Management, Inc.)
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 1999 and 1998
NOTE2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
d. Basis of Presentation and Considerations Related to Continued
Existence (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-fine basis.
f. Deferred Income
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 Services - Stock Options
Valuation of shares for services is based on the fair market value of
services.
h. 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.
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 1999 and 1998
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICLES (CONTINUED)
l Principles 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, a Nevada corporation, GAM
Properties, a California corporation; Triad Realty, a California
corporation, and Miramar 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
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 December 31, 1999 the company has significant operating and capital
losses carryfoward. The benefits resulting for the purposes have been
estimated as follows
Capital Losses $ (57,800)
Valuation Allowance 57,800
Total 0
Net Operating Losses:
Income Tax Benefit $ (193,400)
k. Accounts Receivable
The company has entered into various contracts, by which the
company provides financial services.
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 1999 and 1998
NOTE2. SUMMARY OF SIGNIFICANT ACCOUNING POLICIES (CONTINUED)
L Investments in Securities
Marketable securities at December 31, 1999 and 1998 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. 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 forty eight thousand square foot commercial
building located at 6910-6920 A & B and 14 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 (178,357)
Net Property and Equipment 3,378,357
n. Property Held for Sale
Location Description Cost Debt
2016-18 Balboa 4 Units $ 420,000 $ 307,908
2015-17 Hornblend
2135-39 Grand Ave Tri-plex 355,350 233,955
4592 Brancroft 7 Units 390,000 264,099
3635 3rd. Ave. Condo 180,000 113,004
Total $1,345,350 $ 918,966
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 1999 and 1998
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (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 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 loan 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
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 1,500,000 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
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 1999 and 1998
NOTE2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
q. Accounts Receivable
Accounts receivable consists of the following:
December 31, 1999
Accounts receivable - Various $ 21,323
Accounts receivable - Carrara 520
Accounts receivable - Gahi 1,450
Accounts receivable - Trans - Caribe 2,687
Accounts receivable - Contracts 118,360
Accounts receivable -Fortune Oil 11,500
Accounts receivable - Fees 32,894
Accounts receivable - 3rd Ave. 15,083
Accounts receivable - Ashy 5,000
Accounts receivable - Todd Smith 254,554
Accounts receivable - Trans- Caribe 1,000
Total $ 463,841
The company expects to collect all retainages within one year.
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 1999 and 1998
NOTE3. MARKETABLE SECURITIES
At December 31, 1999, the company held trading securities
of the following companies:
Number of Mkt. Price Balance
Shares At Year End At Year End
Beach Brew 625,000 0.28 17,500
Blue Gold 125,000 0.001 125
Carrara 325,000 0.00114 370
Golden Panther 150,000 0.10 15,000
Fortuneil 33,000 0.18 5,940
Golden Age 1,283,949 0.001 1,283
Greenland 4,113 0.56 2,303
Healthcare Resources 22,289 0.001 22
Littlemark 453,333 0.20 90,666
Mezzanine Capital 107,000 1.25 133,750
Nicholas Inv. 364,583 0.001 364
Peacock Financial 200,000 0.68 136,000
Pro Glass 368,892 0.06 22,133
Spa International 245,165 0.02 4,903
Superior Oil 100,000 0.06 6,000
Thunderstore 3,068 0.06 184
Total Entertainment 55,000 0.31 17,050
Triad Industries 2,000 0.15 300
Regan 5,000 0.11 550
Processing 20,000 0.01695 339
Total $ 463,841
TRIAD INDUSTRIES, INC.
(Formerly Healthcare Resources Management, Inc.)
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 1999 and 1998
NOTE 4. OPERATING LEASE
The company operates its facilities under an operating lease agreement
with an unrelated party. The base rent is $ 3,434 per month.
Rent expense was $ 27,855 in 1999 and $ 4,915 in 1998.
NOTE 5. 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 shares on a one for ten ( 1:10 ) basis 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. On September 30,
1999 there were 5,593,822 shares of common stock and 700,000 shares of
preferred outstanding. In December 1999, the company issued 809,600 of common
shares and 150,000 of additional preferred stock. On December 31, 1999
there were 6,403,422 shares of common stock and 580,000 shares of preferred
stock outstanding.
NOTE 6. 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.
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 subsidaries. RB Capital was incorpoated in
February 1987 as Combined Communication Corporaiton. 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 Incorporaiton changing the
issuers mane 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 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 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 Company's commercial property holdings. The Company's management
has arranged for long term financing on the commercial property. This
would reduce interest expense and amortization in future periods.
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 amount of net operatingloss carryforwards, which can be used. A
tax benefit has been recorded in the financial statelents 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 abilit 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 29, 2000
By:______________________
Gary DeGano
President, Director
By:________________________
Michael Kelleher
Secretary, Treasurer and Director
11
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<PERIOD-END> MAR-31-2000
<CASH> 23,415
<SECURITIES> 512,382
<RECEIVABLES> 536,013
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<COMMON> 6,404
<OTHER-SE> 1,660,677
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<SALES> 277,521
<TOTAL-REVENUES> 277,521
<CGS> 15,198
<TOTAL-COSTS> 375,596
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<INCOME-TAX> (38,065)
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