SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10QSB
Quarterly Report under Section 13 or 15(d) of
the Securities Exchange Act of 1934
CIK NO.: 0001107384
For Quarter Ended Commission File Number
September 30, 2000 000-31189
TRIAD INNOVATIONS, INC.
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(Exact name of registrant as specified in its charter)
Nevada 93-0863198
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(State of incorporation) (I.R.S. Employer
Identification No.)
800 North Rainbow Boulevard, Suite #208, Las Vegas, NV 89107
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(Address of principal executive offices) (Postal Code)
Registrant's telephone number, including area code: (702) 948-5007
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Indicate by check mark 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), and (2) has been subject to the filing
requirements for at least the past 90 days.
Yes X No
---- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
16,144,806 as of September 30, 2000
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<TABLE>
<CAPTION>
Triad Innovations, Inc.
(A Development Stage Company)
Consolidated Balance Sheets
ASSETS
<S> <C> <C>
September 30, December 31,
2000 1999
Current Assets
Cash $ 44,227 $ 389
Prepaid expenses 22,511 -
------------------- -----------------
Total 66,738 389
Property, Plant & Equipment (Net) 3,013 1,372
Other Assets
Patents 28,719 28,720
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$ 98,470 $ 30,481
=================== =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 68,950 $ 63,697
Short term debt-related party 514,004 364,103
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Total 582,954 427,800
Stockholders' Equity
Common stock, 25,000,000 authorized
$.001 par value, 16,144,806 and 14,536,306
shares outstanding, respectively 16,145 14,536
Additional paid in capital 7,684,051 7,438,859
Retained deficit accumulated during
development stage (8,184,680) (7,850,714)
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(484,484) (397,319)
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$ 98,470 $ 30,481
=================== =================
</TABLE>
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<TABLE>
<CAPTION>
Triad Innovations, Inc.
(A Development Stage Company)
Consolidated Statements of Operations
<S> <C> <C> <C> <C> <C>
From
Inception on
For the Three For the Nine (October 4,
Months Ended Months ended 1995) to
September 30, September 30, September 30,
2000 1999 2000 1999 2000
--------------- ---------- -------- -------- --------
Revenue $ - $ - $ - $ - $ -
Expenses
General, selling & administrative 46,186 71,528 293,051 454,976 859,597
Research & development 40,000 - 40,000 - 238,407
Depreciation 458 233 915 700 5,985
Oil & Gas leases - - - 17,500 4,060
--------------- ------------- -------------- ----------- -------------
Total Expenses 86,644 71,761 333,966 473,176 1,108,049
--------------- ------------- ------------ ----------- ---------
Net (loss) from operations (86,644) (71,761) (333,966) (473,176) (1,108,049)
--------------- ------------- ------------ ---------- -----------
Income Tax - - - - -
Net Loss (86,644) (71,761) $ (333,966) $ (473,176) $(1,108,049)
=============== ============= ============ ============= =============
Net Loss Per Common Share $ (.01) $ (.01) $ (.02) $ (.03)
============== ============ ============ =============
Average Shares Outstanding 16,144,806 14,536,306 15,401,637 14,307,980
=============== ============= ============ =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Triad Innovations, Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
<S> <C> <C> <C>
From
Inception on
For the Nine (October 4,
Months Ended 1995) to
September 30, September 30,
2000 1999 2000
--------------------------------- --------
Cash Flow Provided (Used) by
Operations
Net (Loss) $ (333,966 ) $ (473,176) $(1,108,049 )
Depreciation 915 700 5,985
Decrease/Increase in:
Prepaid expenses 22,511 - 22,511
Accounts payable 133,645 199,988 527,636
Expenses paid by others - 1,657 122,810
Expenses paid by stock 77,489 30,000 107,489
-------------- ------------- ------------
(99,406 ) (240,831) (321,618 )
Cash Flow Provided (Used) by
Investing Activities
Cash paid for patents - (5,378) (28,720)
Property, plant and equipment (2,556 ) - (2,556)
-------------- ------------- -------------
(2,556 ) (5,378) (31,276 )
Cash Flow Provided (Used) by
Financing Activities
Related party loans - 70,453 75,353
Stock sales 125,000 175,968 300,968
Debt paid by stock 20,800 - 20,800
-------------- ------------- -------------
145,800 246,421 397,121
Overall Increase (Decrease) in cash 43,838 212 44,227
Beginning Cash Balance 389 177 -
-------------- ------------- ------------
Ending Cash Balance $ 44,227 $ 389 $ 44,227
============== ============= ============
Supplementary Cash Flow Information:
Cash Paid For:
Interest $ - $ - $ -
Taxes $ - $ 1,657 $ 1,657
Stock Issued For:
Acquisition of Oil & Gas Properties $ - $ 17,500 $ 17,500
Services rendered $ 77,489 $ 12,500 $ 89,989
Conversion of debt $ - $ 106,600 $ 127,400
</TABLE>
<PAGE>
Triad Innovations, Inc.
Notes to the Consolidated Financial Statements
NOTE 1 - Background and History
Triad Innovations, Inc. (formerly Saker One
Corporation)(Triad) was created on December 23, 1981 in the State of
Utah. Over the years, Triad has engaged in various enterprises, none of
which have been successful. In 1998, Triad acquired all of the
outstanding stock of Triad Compressor, Inc. a Texas corporation, which
owned 100% of the outstanding stock of Fuge Systems, Inc, a Texas
corporation. In 1998, Triad created, and later merged with, a Nevada
subsidiary.
Triad Compressor (Compressor) was organized on February 20,
1996 as a wholly owned subsidiary of Intelligent Design Systems, Inc.
(IDS). Compressor became a separately owned company when IDS declared a
dividend and distributed Compressor stock to IDS stockholders. Triad
then acquired all the outstanding stock from IDS stockholders at a
special stockholders meeting on December 21, 1998.
Fuge Systems, Inc. was created on October 4, 1995 as a wholly
owned subsidiary of IDS, which was then spun off as a wholly owned sub-
sidiary of Compressor in November 1998.
Together, all three corporations, Triad, Compressor and Fuge,
constitute a consolidated group of corporations known as the Company.
All intercompany accounts and financial transactions have been
eliminated.
The primary asset of Compressor is a compressor that is an
engine device that is intended to be operated using a mix of gaseous
fuel such as natural gas that can be used in the gas industry and other
applications. In 1999, the Company abandoned all research on the
compressor and all costs of acquiring a patent on the process has been
written off.
The primary asset of Fuge is a gas centrifuge for multiple
applications in the oil and gas industry.
Both products are still in the development stage and all
expenses related to the research and development are expensed as
incurred. Neither product has reached the commercially viable state and
while all activities are directed to that end, the Company is
considered to be a development stage company and all financial activity
of that stage is reported since inception as defined by SFAS #7
NOTE 2 - Property, Plant and Equipment
In 1996, the parent company of Triad Compressor contributed
various office and computer equipment for its operations ($8,269 in
original cost).
<PAGE>
Triad Innovations, Inc.
Notes to the Consolidated Financial Statements
NOTE 2 - Property, Plant and Equipment (continued)
The Company capitalizes all purchases with an estimated useful
life beyond the year of purchase and capitalizes any expenditures which
extends the life of existing equipment. Office and Computer Equipment
is being depreciated over five years at a double declining balance
method. Office and computer equipment consists of the following:
December 31,
1999
Office and Computer Equipment $ 8,269
Less: Accumulated Depreciation (6,897)
--------------
$ 1,372
==============
Depreciation expense for 1999 was $933.
NOTE 3 - Use of Estimates in Financial Statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements and revenues and expenses during the
reporting period. In these financial statements, assets, liabilities,
revenues and expenses involve reliance on management's estimates.
Actual results could differ from those estimates.
NOTE 4 - Short Term Debt - Related Party Transactions
During the current period ended September 30, 2000, certain
officers and/or directors of the Company made cash advances to the
Company, paid amounts to third parties on behalf of the Company or has
accrued salaries and benefits. The amounts owing to these individuals
at September 30, 2000 were:
Jim La Porte - President & Board of Directors $ 196,343
Scott Brossier - CFO & Board of Directors $ 112,096
Mike Bloom - Exec. V.P. & Board of Directors $ 175,315
Houston Wood - Board of Directors $ -
Natural Resources Limited Company $ 30,250
In addition, Houston Wood and Alan Propp were granted 50,000
options each at $5.00 per share for services to the board of directors.
Alan Propp is also paid $400 per day for each day he performs services
for the Company. Houston Wood was issued 25,000 shares valued at $0.50
per share for services to the board of directors.
<PAGE>
Triad Innovations, Inc.
Notes to the Consolidated Financial Statements
NOTE 5 - Income Taxes
The Company adopted Statement of Financial Standards No. 109
"Accounting for Income taxes" in the fiscal year ended December 31,
1998 which was applied retroactively.
Statement of Financial Accounting Standards No. 109 "
Accounting for Income Taxes" requires an asset and liability approach
for financial accounting and reporting for income tax purposes. This
statement recognizes (a) the amount of taxes payable or refundable for
the current year and (b) deferred tax liabilities and assets for future
tax consequences of events that have been recognized in the financial
statements or tax returns.
Deferred income taxes result from temporary differences in the
recognition of accounting transactions for tax and financial reporting
purposes. There were no temporary differences at December 31, 1999 and
earlier years; accordingly, no deferred tax liabilities have been
recognized for all years.
The Company has cumulative net operating loss carryforwards of
over $7,800,000 at December 31, 1999. No effect has been shown in the
financial statements for the net operating loss carryforwards as the
likelihood of future tax benefit from such net operating loss
carryforwards is highly improbable. Accordingly, the potential tax
benefits of the net operating loss carryforwards, estimated based upon
current tax rates at December 31, 1998 and 1999 have been offset by
valuation reserves of the same amount. Minimum state taxes were accrued
through 1997. No state taxes were owed in 1998 and 1999.
NOTE 6 - Patent
In 1996, 1997 and 1998, the former parent corporation of Triad
Compressor expended funds for the patent research, legal and filing
fees for the compressor and centrifuge being developed by the Company.
Once the patents are issued, the costs will be amortized over the
estimated useful and commercial life of the products. All costs
incurred for the patent were contributed to the respective subsidiaries
before the spinoff to the shareholders of Triad Compressor and
subsequent acquisition by the new parent corporation. In 1999, the
Company abandoned the compressor development and all patent costs
attributed to the compressor were written off. U. S. Patent Number
5,902,224 relating to the centrifuge was issued on May 11, 1999.
NOTE 7 - Research and Development Costs
In 2000 the Company expended funds for the research and
development costs of the centrifuge being developed by the Company.
Research and development costs incurred were $40,000.
NOTE 8 - Cash and Cash Equivalents
The Company considers all highly liquid investments with
original maturities of three months or less to be cash equivalents.
<PAGE>
Triad Innovations, Inc.
Notes to the Consolidated Financial Statements
NOTE 9 - Options
Stock Option Plans - The Company has awarded options for the purchase
of common stock to the following individuals:
- 300,000 shares to Stancil at $2.00 per share, granted in 2000.
- 50,000 restricted shares each to two directors for $5.00 per
share. The options expire on January 25, 2001 (provisions for
cancellation upon removal or resignation).
- 40,800 restricted shares to two board of directors for
advances advances to the Company in the amount of $20,400 at
$.50 per share. The options are exercisable at anytime and have
no expiration date.
A summary of stock option are as follows:
Options: 2000
----------------------------
Weighted
Number Average
Of Exercise
Shares Price
-------- ------------
Outstanding at beginning of year 196,000 $ 2.75
Granted 1,216,668 .68
Exercised 52,500 .35
Canceled - -
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Outstanding at end of year 1,360,168 $ .99
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Exercisable at end of year 1,360,168 .99
============ =============
As permitted by SFAS #123 "Accounting for Stock-Based
Compensation," the Company has elected to account for the stock option
plans under APB #25 "Accounting for Stock Issued to Employees."
Accordingly, no compensation cost has been recognized for these plans
when options were issued at equal to or more than fair market value.
In addition, after January 1, 2000, three officers have the
option of converting $229,167 in unpaid base compensation to common
stock at $0.25 per share.
NOTE 10 - Earnings Per Share / Average Outstanding Shares
The computation of earnings (loss) per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements. Basic and diluted earnings per share calculations are the same
since any calculation of additional outstanding shares from exercisable
stock options (1,112,668) would be anti-dilutive.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS
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RESULTS OF OPERATIONS FOR NINE MONTH PERIOD ENDED SEPTEMBER 30, 2000 COMPARED TO
THE SAME PERIOD IN 1999.
The Company operations in the period consisted of continuing
development of its technology and discussions with potential customers for its
technology.
The Company had no revenue in the period in 2000 or 1999. The Company
incurred expenses of $333,966 in the period in 2000 compared to $473,176 in the
period in 1999. Of those expenses, in 2000, a total of $295,051 were general and
administrative compared to $454,976 in 1999 for general and administrative
expenses. The Company spent $40,000 in development expenses in 2000 compared to
none in 1999 in the period.
The Company had net losses of ($333,966) and ($473,176) in the period
in 2000 and 1999, respectively. The loss per share was ($.02) and ($.03) in the
period in 2000 and 1999, respectively.
The Company anticipates that its losses will continue in the future
until it is able to generate revenues through use and licensing of its
technology at about the same rate as in the year 2000 to date.
RESULTS OF OPERATIONS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2000
COMPARED TO THE SAME PERIOD IN 1999.
The Company had no revenues in the quarter in 2000 or 1999. The Company
incurred expenses of $86,644 and $71,761 in the quarter in 2000 and 1999,
respectively. General and administrative expenses were $46,186 in 2000 and
$71,528 in 1999 in the quarter. The Company spent $40,000 on development in the
quarter in 2000 and none in 1999.
The Company had a net loss in the quarter of ($86,644) in 2000 and
($71,761) in 1999. The net loss per share in the quarter was ($.01) in 2000 and
($.01) in 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company liquidity increased to $44,227 in cash at period end from
$389 on December 31 1999 as a result of private placement of stock. The Company
liabilities, all of which were current, were $582,954 at September 30, 2000. The
Company has a deficit of current assets to current liabilities of ($516,216) at
September 30, 2000. The Company will need to seek other sources of capital,
loans, or private placements in order to continue its business and pay current
liabilities.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------- ---------------------------------------------------
None
ITEM 5. OTHER INFORMATION
James LaPorte resigned as President effective July 31, 2000 and will be
issued 600,000 shares of common stock for prior services.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRIAD INNOVATIONS, INC.
Date: November 27, 2000 /s/ Janis Monroe
---------------------------------
Janis Monroe, CEO
