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 Sept. 30, 1999
[ ] 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
Unaudited Condensed Balance Sheets as of
Sept. 30, 1999 4
Unaudited Condensed Statements of
Operations as of Sept. 30, 1999 5
Unaudited Condensed Statements of
Cash Flows as of Sept. 30, 1999 6
Notes to Unaudited Consolidated
Financial Statements 7
Management's Discussion and Analysis of 11
Financial Condition or Plan of Operation
PART II. Other Information 11
Signatures 12
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.
3
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
ASSETS
September 30December 31,
1999 1998
___________ ___________
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 at December 31, 1998 was taken from the
audited financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited
condensed financial statements.
4
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
Cumulative from
the Re-entering of
For the Three For the Nine Development Stage
Months Ended Months ended on December 27,
September 30, September 30, 1993 through
___________________________ September 30,
1999 1998 1999 1998 1999
________ ___________________________________
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
condensed financial statements.
5
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Cumulative from
For the the Re-entering of
For the Three Nine Months Development Stage
Months Ended Ended on December 27,
September 30, September 30, 1993 through
_______________________ September 30,
1999 1998 1999 1998 1999
___________________________________________
<S>
Cash Flows Provided by Operating
Activities: <C> <C> <C> <C> <C>
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 $ - $ - $ - $ - $ -
</TABLE>
Supplemental Schedule of Noncash Investing and Financing
Activities:
For 1999:
None
For 1998:
None
The accompanying notes are an integral part of these Unaudited
Condensed Financial Statements.
6
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED 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 statements 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
September 30, 1999 and for all the periods presented 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, 1998 audited financial
statements. The results of operations for the periods ended
September 30, 1999 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. 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 7].
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.
Accounting Estimates - The preparation of Unaudited Condensed
Financial Statements 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 Unaudited Condensed Financial Statements, and
the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimated by management.
7
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
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 were recently issued. SFAS No. 132, 133, 134, 135,
136 and 137 have no current applicability to the Company or their
effect on the Unaudited Condensed Financial Statements would not
have been significant.
NOTE 2 - DISCONTINUED OPERATIONS
The accompanying Unaudited Condensed Financial Statements as
of September 30, 1999 and for the period ended September 30,
1999, have been classified 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 Unaudited Condensed Financial Statements of the Company.
Assets (liabilities) of discontinued operations consisted of the
following at September 30, 1999:
September 30,
1999
__________
Assets of Discontinued Operations $ -
Liabilities of Discontinued Operation -
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 For the From the
Three Months Nine Months Re-entering of
Ended Ended Development Stage
September 30, September 30, on December 27,
___________________________________ 1993 through
1999 1998 1999 1998 September 30, 1999
________________________________________________
Net Sales $ - $ - $ - $ - $ -
Cost of Goods Sold - - - $ - $ -
Other Operating Expenses - - - - (57,498)
________________________________________________
Net Loss $ - $ - $ - $ - $(57,448)
________________________________________________
Loss per Share $ - $ - $ - $ - $ (.22)
________________________________________________
8
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 3 - 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 4 - 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 September 30, 1999, unused operating
loss carryforwards of approximately $57,000, which may be applied
against future taxable income and which expire in various years
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 September 30,
1999 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 1999 and 1998, respectively).
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 - GOING CONCERN
The accompanying Unaudited Condensed Financial Statements 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 Unaudited Condensed
Financial Statements do not include any adjustments that might
result from the outcome of these uncertainties.
9
<PAGE>
TRIAD WARRANTY CORPORATION, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 7 - 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 periods ended September 30, 1999 and 1998 and for the period
from the re-entering of development stage on December 27, 1993
through September 30, 1999:
Cumulative from
For the the Re-entering of
For the Three Nine Months DevelopmentStage
Months Ended Ended on December 27,
September 30, September 30, 1993through
___________________________________ September 30,
1999 1998 1999 1998 1999
___________________________________________
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) 264,886 264,886 264,886 264,886 264,886
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.
10
<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 Sept. 30, 1999.
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 Sept. 30, 1999 (Exhibit ref. No. 27).
11
<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
12
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 56,380
<BONDS> 0
0
0
<COMMON> 265
<OTHER-SE> (56,645)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
