UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [Fee Required]
For the quarterly period ended - March 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [No Fee Required]
For the transition period from ________ to ________
Commission file number 33-33042-NY
CORONADO INDUSTRIES, INC.
----------------------------------------------
(Name of small business issuer in its charter)
Nevada 22-3161629
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
16929 E. Enterprise Drive, Suite 202, Fountain Hills, AZ 85268
- --------------------------------------------------------------- ---------
(Address of Principal executive offices) (as of date of filing) (Zip Code)
Issuer's telephone number (602) 837-6810
---------------
Check whether the issuer (1) filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Registrant was required to file such reports), and (2)
has been subject such filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 20,588,421
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
CORONADO INDUSTRIES, INC.
FORM 10-QSB
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
Page
----
PART I
Item 1 Financial Statements 1
Item 2. Management's Discussion and Analysis
or Plan of Operation 4
PART II
Item 1. Legal Proceedings 5
Item 2. Changes in Securities N/A
Item 3. Defaults Upon Senior Securities N/A
Item 4. Submission of Matter to a Vote of Security Holders N/A
Item 5. Other Matters N/A
Item 6. Exhibits and Reports on Form 8-K 5
SIGNATURES 6
<PAGE>
CORONADO INDUSTRIES, INC.
BALANCE SHEETS
March 31, 1998 and December 31, 1997
March 31, December 31,
1998 1997
(Unaudited) (Audited)
----------- -----------
ASSETS
Current Assets:
Cash $ 210,193 $ 65,631
Accounts Receivable, net
-Trade 77,201 7,809
-Other 3,999 3,999
Inventory 43,031 43,031
Prepaid Expenses 50,750 104,500
---------- ---------
Total Current Assets 385,174 224,970
Property and Equipment, net 142,744 149,402
Other Assets:
Intangible Assets 35,469 36,345
---------- ---------
Total Assets $ 563,387 $ 410,717
========== =========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities:
Notes Payable (Note 4) $ 25,469 $ 224,631
Note Payable to Related Party -
Current Portion 37,500 39,375
Accounts Payable 26,595 76,690
Accrued Salaries 100,000 153,673
Accrued Payroll Taxes 9,829 22,222
---------- ---------
Total Current Liabilities $ 199,393 $ 516,591
Long-term Debt 37,500 39,375
---------- ---------
Total Liabilities 236,893 555,966
---------- ---------
Shareholders' Deficit:
Preferred Stock 0 0
Common Stock - $.001 par value;
25,000,000 shares authorized, 20,588,421
shares outstanding at March 31, 1998;
18,962,653 outstanding at December 31, 1997 20,589 18,962
Additional Paid-in Capital 1,462,967 730,622
Accumulated Deficit (1,157,062) (894,833)
---------- ---------
Total Stockholders' Equity (Deficit) 326,494 (145,249)
---------- ---------
Total Liabilities And Stockholders'
Equity (Deficit) $ 563,387 $ 410,717
========== =========
1
<PAGE>
CORONADO INDUSTRIES, INC.
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
March 31, March 31
1998 1997
(Unaudited) (Unaudited)
----------- -----------
Revenue $ 99,117 $ --
Cost of Patient Revenues 131,958 --
----------- ----------
Gross Loss (32,841) --
General and Administrative Expenses 218,443 101,310
----------- ----------
Loss from Operations (251,284) (101,310)
Interest Expense (11,011) (1,166)
Other Income 66 500
----------- -----------
Net Loss (262,229) (101,976)
=========== ===========
Basic Loss per Share $ (0.1) $ (0.1)
=========== ===========
Weighted Average Shares Outstanding 19,203,814 18,344,253
=========== ===========
2
<PAGE>
CORONADO INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
March 31, March 31
1998 1997
(Unaudited) (Unaudited)
----------- -----------
CASH FLOW FROM OPERATING ACTIVITIES:
Cash paid for operating expenses $(365,613) $(6,624)
CASH FLOW USED IN INVESTING ACTIVITIES:
Acquisition of property and equipment (11,743) --
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from borrowings 25,000 8,000
Proceeds from stock sale 721,549 --
Repayment of debt (224,631) --
--------- -------
NET INCREASE IN CASH 144,562 1,376
CASH, beginning period 65,631 1,403
--------- -------
CASH, end of period $ 210,193 $ 2,779
========= =======
RECONCILIATION OF NET LOSS TO NET CASH
USED IN OPERATING ACTIVITIES:
Net loss $(262,229) $ (199)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation 18,402 --
Amortization 875 --
Interest 5,469 --
Increase in:
Accounts receivable (69,392) (900)
Inventory -- --
Patents -- --
Professional retainers -- --
Increase (decrease) in:
Accounts payable (50,095) (5,700)
Accrued salaries (50,000) --
Accrued expenses -- 175
Accrued payroll taxes (12,393) --
Prepaid expenses 53,750 --
--------- -------
NET CASH USED IN OPERATING ACTIVITIES $(365,613) $(6,624)
========= =======
3
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
OPERATIONS. Registrant was a development stage company through the quarter
ended September 30, 1997, with no revenues having been generated. Also, prior to
November 5, 1996 Registrant had been a dormant shell company with no operations
since 1994. Therefore, there is no comparable prior year's operations to which
to compare the first quarter 1998 operating results.
For the quarter ended March 30, 1998 Registrant experienced a net loss from
operations of $251,284, which was comprised of a net loss from Registrant's
treatment center operation of $32,841 and its general and administrative
expenses incurred at the corporate level of $218,443. 73.8% of Registrant's
corporate expenses consisted of officers salaries of $50,000 (22.8%),
professional expenses of $40,477 (18.5%) and shareholder services and media
promotion of $70,941 (32.5%). Registrant expects its professional expenses to
remain at a high level as a result of its continued attempts to obtain financing
in 1998 for two additional treatment centers, as well as incurring the legal
costs of acquiring and opening additional treatment centers. Registrant expects
no change in its officers salaries in the remainder of 1998. Since most of
Registrant's shareholder services expenses are paid with Registrant's stock and
not cash, Registrant's shareholder services expenses are likely to remain high
for the remainder of 1998.
During the first quarter of 1998 Registrant's Scottsdale treatment center
generated $99,177 of gross revenues. Included in these revenues are prior
quarters billings for PNT which were rebilled to Medicare in the first quarter,
because Medicare began to pay for the PNT procedure. It is not currently known
whether Medicare will pay Registrant for these previous billings or whether
Medicare will continue to pay for the PNT procedure in the future. Registrant
currently expects the Scottsdale treatment center to be profitable in the second
half of 1998. 92.9% of the center's expenses were represented by advertising
costs of $32,327 (24.5%) and personnel salaries of $90,246 (68.4%). Registrant
expects the treatment center's personnel costs to remain fairly constant during
1998, and perhaps increase in the second half of the year as increased patients
usage requires additional personnel. Registrant expects its 1998 advertising
costs for the Scottsdale center to remain comparable to that spent in the first
quarter of 1998.
LIQUIDITY AND CAPITAL RESOURCES. On a short-term and long-term basis
Registrant requires only minimal capital to sustain its manufacturing of the
patented Vacuum Fixation Device and the patented suction rings, because of
Registrant's current inventory levels. However, on a short-term basis Registrant
requires approximately $600,000 to $800,000 to adequately fund the first year's
operation
4
<PAGE>
of any additional glaucoma treatment centers. Registrant is presently planning
to conduct another private placement of its securities or secure debt financing
in 1998 to secure financing for one or more treatment centers. However, at this
time Registrant has received no commitments from any source to provide such
financing. On a long-term basis, Registrant anticipates, without assurances,
that its initial glaucoma treatment centers will be sufficiently profitable to
permit additional glaucoma treatment centers and product marketing to be funded
during subsequent years from a combination of internal and external sources.
During the first quarter of 1998 Registrant received a total of $834,544
from two private placement offerings of its securities. Registrant expects these
funds, along with the future profitably of the Scottsdale treatment center, will
provide financial stability for the Registrant's current operations throughout
1998.
In December 1996 through April 1997 Registrant issued a series of
promissory notes to a third party aggregating $220,000, all payable one year
after issuance and bearing 15% annual interest. These notes and accrued interest
were repaid in full in March 1998.
In February 1998 Registrant issued a $25,000 convertible promissory note
which bears 15% interest. The interest on this note ceased on March 30, 1998
when Registrant offered to repay this note and the holder indicated a
possibility of converting into equity. 5,000 shares of Registrant's common stock
were issued to the holder in February 1998 as additional interest on this note.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There have been no legal proceedings instituted by or against the
Registrant during the quarter ending March 31, 1998.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
27 - Financial Data Schedule
(b) REPORTS ON FORM 8-K
There were no Reports on Form 8-K filed during the quarter ended
March 31, 1998.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto authorized.
CORONADO INDUSTRIES, INC.
Date: May 12, 1998 By: /s/ Gary R. Smith
----------------- ------------------------------
Gary R. Smith, President (Chief
Executive Officer) and Treasurer
(Chief Accounting Officer)
6
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 210,193
<SECURITIES> 0
<RECEIVABLES> 81,200
<ALLOWANCES> 0
<INVENTORY> 43,031
<CURRENT-ASSETS> 385,174
<PP&E> 142,744
<DEPRECIATION> 0
<TOTAL-ASSETS> 563,387
<CURRENT-LIABILITIES> 199,393
<BONDS> 37,500
0
0
<COMMON> 20,589
<OTHER-SE> 305,905
<TOTAL-LIABILITY-AND-EQUITY> 563,387
<SALES> 99,117
<TOTAL-REVENUES> 99,117
<CGS> 131,958
<TOTAL-COSTS> 131,958
<OTHER-EXPENSES> 218,443
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,011
<INCOME-PRETAX> (262,229)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (262,229)
<EPS-PRIMARY> 0.1
<EPS-DILUTED> 0.1
</TABLE>
