U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 33-33263-NY
TRIAD WARRANTY CORPORATION, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 62-1407521
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
5882 South 900 East, Suite 202, Salt Lake City, Utah 84121
(Address of principal executive offices)
(801) 269-9500
(Issuer's telephone number)
Not Applicable
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the issuer
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's
classes of common equity, as April 10, 2000: 263,411 shares of
common stock.
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13, or 15(d) of the
Exchange Act subsequent to the distribution of securities under
a plan confirmed by a court. Yes [ ] No [ ]
Transitional Small Business Format: Yes [ ] No [ X ]
Documents incorporated by reference: None
<PAGE>
FORM 10-QSB
TRIAD WARRANTY CORPORATION, INC.
INDEX
Page
PART I. Financial Information 3
Management's Discussion and Analysis of 14
Financial Condition or Plan of Operation
PART II. Other Information 14
Signatures 15
2
<PAGE>
PART I.
Financial Information
In the opinion of management, the accompanying unaudited
financial statements included in this Form 10-QSB reflect all
adjustments (consisting only of normal recurring accruals)
necessary for a fair presentation of the results of operations
for the periods presented. The results of operations for the
periods presented are not necessarily indicative of the results
to be expected for the full year.
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2000
3
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
CONTENTS
PAGE
- Accountants' Review Report 5
Unaudited Condensed Balance Sheets,
March 31, 2000 and December 31, 1999 6
Unaudited Condensed Statements of
Operations, for the three month
periods ended March 31, 2000 and
1999 and from the re-entering of 7
development stage on December 27,
1993 through March 31, 2000
Unaudited Condensed Statements of Cash
Flows, for the three month periods ended
March 31, 2000 and 1999 and from the
re-entering of development stage on
December 27, 1993 through March 31, 2000 8
- Notes to Unaudited Condensed Financial
Statements 9 - 13
4
<PAGE>
ACCOUNTANTS' REVIEW REPORT
Board of Directors
TRIAD WARRANTY CORPORATION, INC.
Salt Lake City, Utah
We have reviewed the accompanying condensed balance sheet of
Triad Warranty Corporation, Inc. (A Development Stage Company) as
of March 31, 2000, and the related condensed statements of
operations, stockholders (deficit), and cash flows for the three
months ended March 31, 2000 and 1999, and for the period from the
re-entering of development stage on December 27, 1993 through
March 31, 2000. All information included in these financial
statements is the representation of the management of Triad
Warranty Corporation.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. 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 material
modifications that should be made to the condensed financial
statements reviewed by us, in order for them to be in conformity
with generally accepted accounting principles.
The accompanying condensed financial statements have been
prepared assuming the Company will continue as a going concern.
As discussed in Note 7 to the financial statements, the company
has no on-going operations, has incurred substantial losses since
its inception, has liabilities in excess of assets and has no
working capital. These factors raise substantial doubt about its
ability to continue as a going concern. Management's plans in
regards to these matters are also described in Note 7. The
financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
/s/ Pritchett, Siler & Hardy, P.C.
PRITCHETT, SILER & HARDY, P.C.
April 11, 2000
Salt Lake City, Utah
5
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
CONDENSED BALANCE SHEETS
[Unaudited - See Accountant's Review Report]
ASSETS
March 31, December 31,
2000 1999
___________ ___________
CURRENT ASSETS:
Cash in bank $ - $ -
___________ ___________
Total Current Assets - -
___________ ___________
$ - $ -
____________ ____________
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES:
Liabilities of discontinued operations $ 56,380 $ 56,380
___________ ___________
Total Current Liabilities 56,380 56,380
___________ ___________
STOCKHOLDERS' (DEFICIT):
Common stock, $.001 par value, 25,000,000
shares authorized, 264,886 shares issued
and outstanding 265 265
Capital in excess of par value 77,206 77,206
Retained deficit (76,335) (76,353)
Deficit accumulated during the
development stage 57,498 (57,498)
___________ ___________
Total Stockholders' (Deficit) 56,380 (56,380)
___________ ___________
$ - $ -
____________ ____________
Note: The Balance Sheet of December 31, 1999 was taken from the
audited financial statement at that date.
The accompanying notes are an integral part of these unaudited
financial statements.
6
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited - See Accountant's Review Report]
Cumulative from
the Re-entering of
For the Three Development Stage
Months Ended on December 27,
March 31, 1993 through
______________________ March 31,
2000 1999 2000
__________ __________ ___________
REVENUE:
Sales $ - $ - $ -
__________ __________ __________
Total Revenue - - -
__________ __________ __________
EXPENSES:
General and administrative - - 1,118
__________ __________ __________
Total Expenses - - 1,118
__________ __________ __________
LOSS FROM OPERATIONS - - (1,118)
CURRENT INCOME TAXES - - -
DEFERRED INCOME TAX - - -
__________ __________ __________
DISCONTINUED OPERATIONS:
Loss from operations of warranty
service business of former
subsidiary - - (56,380)
__________ __________ ___________
NET LOSS $ - $ - $ (57,498)
__________ __________ ___________
LOSS PER SHARE:
Loss from continuing operations $ - $ - $ (.00)
Loss from discontinued operations
of former subsidiary $ - $ - $ (.22)
__________ __________ ___________
Total Loss Per Share $ - $ - $ (.22)
__________ __________ ___________
The accompanying notes are an integral part of these unaudited
financial statements.
7
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
CONDENSED STATEMENTS OF CASH FLOWS
[Unaudited - See Accountant's Review Report]
Cumulative from
the Re-entering of
For the Three Development Stage
Months Ended on December 27,
March 31, 1993 through
_________________ March 31,
2000 1999 2000
________________________________
Cash Flows Provided by Operating Activities:
Net loss $ - $ - $(57,498)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation - - 1,059
Stock issued for services - - 50
Changes in assets and liabilities:
Increase in accounts payable - - 56,380
________________________________
Net Cash (Used) by
Operating Activities - - -
________________________________
Cash Flows Provided by Investing Activities:
- - -
________________________________
Net Cash (Used) by
Investing Activities - - -
________________________________
Cash Flows Provided by Financing Activities:
- - -
________________________________
Net Cash Provided by
Financing Activities - - -
________________________________
Net Increase (Decrease) in Cash - - -
Cash at Beginning of the Year - - -
________________________________
Cash at End of the Year $ - $ - $ -
________________________________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing
Activities:
For 2000:
None
For 1999:
None
The accompanying notes are an integral part of these Unaudited
Financial Statements.
8
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Triad Warranty Corporation, Inc. (formerly "Fulton
Ventures, Inc.") was organized under the laws of the State of
Nevada on September 21, 1989. Triad Warranty Corporation, Inc.
(the Company) was formed to purchase, merge with or acquire any
business or assets which management believed had potential for
being profitable. On June 14, 1990, the Company exchanged
2,464,829 of its common shares for all the outstanding share of
Triad Warranty Corporation.
Triad Warranty Corporation was organized under the laws of the
state of Texas on November 21, 1988. The purpose of this Company
was to provide extended warranty service coverage for heating and
air conditioning units and their component parts and various
other consumer products. This Company began operations in
January 1989, in Dallas Texas. The Board of Directors met on
December 27, 1993, and determined it was in the best interest of
Triad Warranty Corporation, Inc. (Nevada) and its sole operating
subsidiary, Triad Warranty Corporation, to separate ownership.
To effect this transaction, selected shareholders in the Company
were issued his or her pro rata shares in Triad Warranty
Corporation, and the original 2,464,829 shares of common stock
were returned to the Company for cancellation. This transaction
was accounted for in the financial statement of the Company as a
discontinued operation as of December 27, 1993. The Company is
considered to have re-entered into a new development stage on
December 27,1993.
Condensed Financial Statements - The accompanying financial
statements have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at March
31, 2000 and 1999 and for the periods then ended have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
It is suggested that these condensed financial statements be read
in conjunction with the financial statements and notes thereto
included in the Company's December 31, 1999 audited financial
statements. The results of operations for the periods ended
March 31, 2000 are not necessarily indicative of the operating
results for the full year.
Development Stage - The Company is considered a development stage
company as defined in SFAS no. 7. Consequently, cumulative
numbers have been provided from December 27,1993 forward to
reflect the change in control and the change in the Company's
planned operations which was effective as of 1994. During 2000
the Company under went a change in ownership control which has
resulted in a change in the officers and Board of Director's of
the Company.
Loss Per Share - The computation of loss per share of common
stock is based on the weighted average number of shares
outstanding during the periods presented, in accordance with
Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" [See Note 6].
Cash and Cash Equivalents - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
9
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [CONTINUED]
Accounting Estimates - The preparation of financial statement in
conformity with generally accepted accounting principles required
management to make estimates and assumptions that effect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the Financial
Statement, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimated by management.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 132, "Employer's Disclosure about
Pensions and Other Postretirement Benefits", SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities",
SFAS No. 134, "Accounting for Mortgage-Backed Securities.", SFAS
No. 135, "Rescission of FASB Statement No. 75 and Technical
Corrections" were SFAS No. 136, "Transfers of Assets to a not
for profit organization or charitable trust that raises or hold
contributions for others", "accounting for derivative instruments
and Hedging Activities - deferral of the effective date of FASB
statement No. 133 ( an amendment of FASB Statement No. 133.),"and
SFAS No. 137 recently issued. SFAS No. 132, 133, 134, 135, 136
and 137 have no current applicability to the Company or their
effect on the financial statement would not have been
significant.
NOTE 2 - CAPITAL STOCK
Common Stock - During 1994, the Company issued 50,000 shares of
its previously authorized, but unissued common stock for services
rendered, valued at $50.
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes" which requires the liability approach for the
effect of income taxes.
The Company has available at March 31, 2000, unused operating
loss carryforwards of approximately $57,000, which may be applied
against future taxable income and which expire in various three
month periods through 2019. If certain substantial changes in
the Company's ownership should occur, there could be an annual
limitation on the amount of net operating loss carryforward which
can be utilized. The amount of and ultimate realization of the
benefits from the operating loss carryforwards for income tax
purposes is dependent, in part, upon the tax laws in effect, the
future earnings of the Company and other future events, the
effects of which cannot be determined. Because of the
uncertainty surrounding the realization of the loss carryforwards
the Company has established a valuation allowance equal to the
tax effect of the loss carryforwards (approximately $19,500) at
March 31, 2000 and, therefore, no deferred tax asset has been
recognized for the loss carryforwards. The change in the
valuation allowance is equal to the tax effect of the current
period's net loss (approximately $0 and $0 for 2000 and 1999,
respectively).
10
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 4 - DISCONTINUED OPERATIONS
The accompanying Financial Statement as of March 31, 2000 and for
the three months ended March 31, 2000 and 1999, have been
reclassified to reflect management's decision to discontinue the
Company's operations in the Warranty Service Business on December
27, 1993. The Company's previous operations through its former
subsidiary in the Warranty Service Business are included as
Discontinued Operations in the financial statement of the
Company.
Assets (liabilities) of discontinued operations consisted of the
following at March 31, 2000:
March 31,
2000
_________
Assets of Discontinued Operations $ -
Liabilities of Discontinued Operations:
Judgement payable 56,380
_________
Totals $ 56,380
__________
The following is a condensed, proforma statement of operations
that reflects what the presentation would have been without the
reclassifications required by "discontinued operations"
accounting principles:
For the Three From the
Months Re-entering of
Ended Development Stage
March 31, on December 27,
__________________ 1993 through
2000 1999 March 31, 2000
_________________ ______________
Net Sales $ - $ - $ -
Cost of Goods Sold - - -
Other Operating Expenses - - (57,498)
_________________ ______________
Net Loss $ - $ - (57,448)
_________________ ______________
Loss per Share $ - $ - $ (.22)
_________________ ______________
11
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 5 - RELATED PARTY TRANSACTIONS
Management Compensation - During the periods presented, the
Company did not pay any compensation to its officers and
directors.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use his home as a mailing address, as needed, at no
expense to the Company.
NOTE 6 - EARNINGS (LOSS) PER SHARE
The following data show the amounts used in computing income
(loss) per share and the effect on income and the weighted
average number of shares of dilutive potential common stock for
the three months ended March 31, 2000 and 1999 and for the period
from the re-entering of development stage on December 27, 1993
through March 31, 2000:
Cumulative from
the Re-entering of
For the Three Development Stage
Months Ended on December 27,
March 31, 1993 through
_________________ March 31,
2000 1999 2000
________________________________
Loss from continuing operations available
to common stockholders (numerator) $ - $ - $ (1,118)
________________________________
Loss from discontinued operations available
to common stockholders (numerator) $ - $ - $ (56,380)
________________________________
Weighted average number of
common shares outstanding
used in earnings per share
during the period (denominator) 264,886 264,88 264,886
Dilutive earnings per share was not presented, as the Company had
no common equivalent shares for all periods presented that would
effect the computation of diluted earnings (loss) per share.
Treasury stock which was being held by the Company for
cancellation has not been included in the calculations as it was
considered cancelled for all periods presented.
12
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 7 - GOING CONCERN
The accompanying financial statement have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company has incurred losses since its inception and
has not yet been successful in establishing profitable
operations. Further, the Company has current liabilities in
excess of assets and has no working capital to pay its expenses.
These factors raise substantial doubt about the ability of the
Company to continue as a going concern. In this regard,
management is proposing to raise any necessary additional funds
not provided by operations through loans or through sales of its
common stock or through a possible business combination with
another company. There is no assurance that the Company will be
successful in raising this additional capital or achieving
profitable operations. The financial statement do not include
any adjustments that might result from the outcome of these
uncertainties.
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION OR PLAN OF OPERATION
The Company has -0- in cash. The Company did not generate
any revenue during the quarterly period ended March 31, 2000.
The Company has no material commitments for capital expenditures
for the next twelve months.
The Company is currently in negotiations to settle an
outstanding judgment. The Company believes that its current cash
needs can be met with the cash on hand for at least the next
twelve months. However, should the Company obtain a business
opportunity, it may be necessary to raise additional capital.
This may be accomplished by loans from the principals of the
Company, debt financing, equity financing or a combination of
financing options.
PART II.
OTHER INFORMATION
Legal Proceedings:
Warren Supply Company vs. Triad Warranty Corporation, Inc.,
Triad Warranty Corporation, and Harold Scott. In June 1995, the
Company became subject to a judgment in the amount of $56,379 in
favor of Warren Supply Company. The Company is currently
negotiating a settlement for the outstanding judgment.
Changes in Securities and Use of Proceeds:
None
Defaults upon Senior Securities:
None
Submission of Matters to a Vote of Securities Holders:
None
Other Information:
None
Exhibits and Reports on Form 8-K:
Reports on Form 8-K: None
Exhibits: Included only with the electronic filing of this
report is the Financial Data Schedule for the three month period
ended March 31, 2000 (Exhibit ref. No. 27).
14
<PAGE>
SIGNATURES
In accordance with the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned
thereunto duly authorized.
TRIAD WARRANTY CORPORATION,
INC.
Date:April 14, 2000
By:/s/ Kip Eardley
President, Secretary,
Treasurer and Sole Director
15
<PAGE>
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<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
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0
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