UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 10-Q SB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter report ended March 31, 2001
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)
Registrants 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 [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuers classes
of common stock, as of the last practicable date.
Class Outstanding as of March 31, 2001
Common Stock, $0.001 9,578,165
1
TABLE OF CONTENTS
PART 1. FINANCIAL INFORMATION
Heading Page
Item 1. Consolidated Financial Statements 3-4
Consolidated Balance Sheets December 31, 2000
And March 31, 2001 5-6
Consolidated Statements of Operations three months
Ended March 31, 2001 and 2000 7
Consolidated Statements of StockholdersEquity 8-10
Consolidated Statements of Cash Flows three months
Ended March 31, 2001 and 2000 11
Notes to Consolidated Financial Statements 12-22
Item 2. Managements Discussion and Analysis and
Result of Operations 23-24
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 24
Item 2. Changes in Securities 25
Item 3. Defaults Upon Senior Securities 25
Item 4. Submission of Matter to be a Vote of 25
Securities Holders
Item 5. Other Information on Form 8-K 25
Item 6. Exhibits and Reports on 8K 25
Signatures S-1
PART 1 FINANCIAL INFORMATION
Item 1. Financial Statement
The accompanying unaudited financial statements have been prepared in
accordance with the instructions for Form 10-Q pursuant to the rules and
regulations of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a complete presentation of
the financial position, results of operations, cash flows, and stockholders
equity in conformity with generally accepted accounting principles. In the
opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial position have been
included and all such adjustments are of a normal recurring nature.
The unaudited balance sheet of the Company as of March 31, 2001, and the
related audited balance sheet of the Company as of December 31, 2000, the
unaudited statement of operations and cash flows for the three months ended
March 31, 2001 and March 31, 2000 and the audited statements of stockholders
equity for the period of January 1, 1998 to December 31, 2000 and the unaudited
statement of stock holders equity for the three months ended March 31, 2001 are
attached hereto and incorporated herein by this reference.
Operating results for the quarters ended March 31, 2001 are not necessarily
indicative of the results that can be expected for the year ending December 31,
2001.
3
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Notes to the Consolidated Financial Statements
For the Three Months Ended March 31, 2001
350 E Street, Chula Vista, CA 91910
Tel: (619) 422-1348 Fax: (619) 422-1465
ARMANDO C. IBARRA
CERTIFIED PUBLIC ACCOUNTANTS
( A Professional Corporation)
Armando C. Ibarra
C.P.A.
Members of the California Society of Jr.,
C.P.A.
Certified Public Accountants
To the Board of Directors
Triad Industries, Inc.
(Formerly RB Capital & Equities, Inc.)
RB Courtyard, Suite 232
16935 W. Bernardo Drive
San Diego, CA 92126
INDEPENDENT ACCOUNTANTS REPORT
We have reviewed the accompanying consolidated balance sheets of Triad
Industries, Inc. (Formerly RB Capital & Equities, Inc.) as of March 31, 2001,
and the related statements of operations, changes in stockholders equity, and
cash flows for the three months ended March 31, 2001 and 2000 respectively, 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.
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.
/s/ Armando C. Ibarra
ARMANDO C. IBARRA, C.P.A. - APC
May 15, 2001
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Balance Sheets
As of March 31, 2001 and December 31, 2000
ASSETS
Three Months
Ended Year Ended
March 31, December 31,
2001 2000
CURRENT ASSETS
Cash $ 60,702 $ 54,384
Accounts receivable 307,222 304,235
Accounts receivable - medical clinic (see note 2g) 1,491,545 1,552,109
Marketable securities 591,729 473,367
Impound account 12,610 12,610
Assets held for sale 1,047,319 1,075,858
Deferred tax benefit 576,639 581,135
Total Current Assets 4,087,766 4,053,698
NET PROPERTY & EQUIPMENT 3,323,907 3,356,160
OTHER ASSETS
Investment in securities available for sale 115,000 115,000
Loan fees 91,528 235,307
Accumulated amortization (926) (143,779)
Total Other Assets 205,602 206,528
TOTAL ASSETS $ 7,617,275 $ 7,616,386
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Balance Sheets
As of March 31, 2001 and December 31, 2000
LIABILITIES AND STOCKHOLDERS' EQUITY
Three Months
Ended Year Ended
March 31, December 31,
2001 2000
CURRENT LIABILITIES
Accounts payable $ 8,788 $ 84,675
Loans payable 291,497 277,433
Line of credit 29,916 30,160
Greentree lease 62 224
Taxes payable 6,251 6,251
Security deposits 46,616 47,259
Notes payable on assets held for sale 786,415 787,649
Trust deeds and mortgages - STP 372,905 372,905
Total Current Liabilities 1,542,450 1,606,556
LONG-TERM LIABILITIES
Trust deeds and mortgages - LTP 2,660,701 2,663,745
Total Long-Term Liabilities 2,660,701 2,663,745
TOTAL LIABILITIES 4,203,151 4,270,301
STOCKHOLDERS' EQUITY
Preferred stock ($1.00 par value, 10,000,000 shares
authorized 850,000 shares issued and outstanding for
for 2000 and 1999, respectively) 850,000 850,000
Common stock ($0.001 par value, 50,000,000 shares
authorized 9,578,165 and 8,658,303 shares issued
and outstanding for March 31, 2001 and
December 31, 2000, respectively) 9,578 8,658
Additional paid-in capital 3,805,518 3,644,874
Stock subscription receivable (181,500) (62,500)
Retained earnings (1,069,472) (1,094,947)
Total Stockholders' Equity 3,414,124 3,346,085
TOTAL LIABILITIES
& STOCKHOLDERS' EQUITY $ 7,617,275 $ 7,616,386
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Statements of Operations
For the Three Months Ended March 31, 2001 and 2000
Three Months Three Months
Ended Ended
March 31, March 31,
2001 2000
REVENUES
Consulting income $ 200,102 $ 97,320
Medical fee income 281,939 0
Rental income 189,485 166,856
Costs of revenues (12,880) (17,400)
Total Net Revenues 658,646 246,776
OPERATING COSTS
Depreciation & amortization 36,179 78,200
Bank charges 426 0
Administrative expenses 441,598 173,737
Total Operating Costs 478,203 251,937
OTHER INCOME & (EXPENSES)
Interest income 89 317
Other income 48 20
Realized gain on sale of
marketable securities 21,052 0
Cost of sales of marketable
securities (8,954) (15,198)
Unrealized (loss) on valuation of
marketable securities (61,401) 0
Unrealized gain on valuation of
marketable securities 0 320,145
Net gain / (loss) on
disposable assets 0 4,500
Utility Charges 0 1,250
Interest expense (101,308) (90,316)
Interest mortgage 0 (15,943)
Total Other Income & (Expenses) (150,474) 204,776
NET INCOME BEFORE TAXES 29,970 199,615
PROVISION FOR INCOME TAXES (BENEFIT) 4,496 61,100
NET INCOME $ 25,474 $ 138,515
BASIC EARNINGS (LOSS) PER SHARE $ 0.0028 $ 0.0213
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 9,069,931 6,514,585
DILUTED EARNINGS (LOSS) PER SHARE $ 0.0024 $ 0.0169
WEIGHTED AVERAGE OF DILUTED
COMMON SHARES OUTSTANDING 10,769,931 8,214,585
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Statement of Stockholders' Equity
From December 31, 1997 to March 31, 2001
Preferred Preferred Common
Shares Stock Shares
Balance, December 31, 1997 - - 2,339,529
Common stock issued June 17,1998
for securities valued @ $1.07 per share - - 13,200
Common stock issued June 17, 1998 for
securities valued @ $.90066 per share - - 60,000
Common stock issued June 17, 1998
for securities valued @ $.084 per share - - 15,000
Common stock issued June 17, 1998
for note payable @ $.334 per share - - 30,480
Common stock issued June 17, 1998
for securities valued @ $.334 per share - - 135,000
Common stock issued June 17, 1998
for services (officers) valued @ $.334
per share - - 300,000
Common stock issued November 4,
1998 for subscription receivable
@ $.166 per share - - 375,000
Common stock issued December 31, 1998
for note payable @ $.3234 per
share - - 18,750
Common stock issued December 31, 1998
for management fees @ $.334 per share - - 60,759
Common stock issued December 31, 1998
for note payable @ $.334 per share - - 60,486
Common stock issued December 31,1998
for securities valued @ $.206 per share - - 225,000
Contributed capital - - -
Net loss for the year ended
December 31,1998 - - -
Balance, December 31, 1998 3,663,204 3,366 1,015677
Additional Stock
Common Paid in Subscription
Stock Capital Receivable
Balance, December 31, 1997 $ 2,340 $ 634,656 $ -
Common stock issued June 17,1998
for securities valued @ $1.07 per share 13 14,105 -
Common stock issued June 17, 1998 for
securities valued @ $.90066 per share 60 53,980
Common stock issued June 17, 1998
for securities valued @ $.084 per share 15 1,245 -
Common stock issued June 17, 1998
for note payable @ $.334 per share 30 10,150 -
Common stock issued June 17, 1998
for securities valued @ $.334 per share 135 44,955 -
Common stock issued June 17, 1998
for services (officers) valued @ $.334
per share 300 99,900 -
Common stock issued November 4,
1998 for subscription receivable
@ $.166 per share 375 62,375 (62,500)
Common stock issued December 31, 1998
for note payable @ $.3234 per
share 19 6,044
Common stock issued December 31, 1998
for management fees @ $.334 per share 61 20,233 -
Common stock issued December 31, 1998
for note payable @ $.334 per share 60 20,142 -
Common stock issued December 31,1998
for securities valued @ $.206 per share 225 46,175 -
Contributed capital - 1,717 -
Net loss for the year ended
December 31,1998 - - -
Balance, December 31, 1998 1,015,677 (62,500) 33,140
Retained Total
Earnings
Balance, December 31, 1997 $ 95,266 $ 732,262
Common stock issued June 17,1998
for securities valued @ $1.07 per share - 14,118
Common stock issued June 17, 1998 for
securities valued @ $.90066 per share - 54,040
Common stock issued June 17, 1998
for securities valued @ $.084 per share - 1,260
Common stock issued June 17, 1998
for note payable @ $.334 per share - 10,180
Common stock issued June 17, 1998
for securities valued @ $.334 per share - 45,090
Common stock issued June 17, 1998
for services (officers) valued @ $.334
per share - 100,200
Common stock issued November 4,
1998 for subscription receivable
@ $.166 per share - 250
Common stock issued December 31, 1998
for note payable @ $.3234 per 6,063
share - 6,063
Common stock issued December 31, 1998
for management fees @ $.334 per share - 20,294
Common stock issued December 31, 1998
for note payable @ $.334 per share - 20,202
Common stock issued December 31,1998
for securities valued @ $.206 per share - 46,400
Contributed capital - 1,717
Net loss for the year ended
December 31,1998 (62,126) (62,126)
Balance, December 31, 1998 33,140 989,950
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Statement of Stockholders' Equity (continued)
From December 31, 1997 to March 31, 2001
Preferred Preferred Common
Shares Stcok Shares
Balance, December 31, 1998 - - 3,633,204
Recapitalization (Note 1) - - 526,672
Common stock issued March 15, 1999
for services valued @ $0.63 per share - - 313,942
Common stock issued on March 15,
1999 for the purchase of Gam
Properties, Inc. @ $0.63 per
share - - 1,120,000
Preferred stock issued on March
15, 1999 for the purchase of Miramar Road
Associates, LLC @ $1.00 per share 700,000 700,000 -
Preferred stock issued September 1999
in exchange for 1.5 million
shares of Pro Glass Technologies, Inc. common
stock valued @ $1.00 per share 150,000 150,000 -
Stock subscription receivable - - -
Common Stock issued December
1999 for cash @ $0.22 per share - - 320,000
Common Stock issued December 1999
for management fees @ $0.06 per share - - 489,600
Net loss for the year ended
December 31, 1999 - - -
Balance, December 31, 1999 850,000 $ 850,000 6,403,418
Stock issued on January 5, 2000
to Directors @ $0.06 a share - - 72,000
Stock issued on March 1, 2000
forservices rendered @ $0.15 a share - - 123,000
Stock issued on June 15, 2000
to Directors @ $0.50 a share - - 72,000
Stock issued on June 30, 2000
for the Purchase of Northwest, LLC
@ $0.96 a share - - 1,463,302
Stock issued on June 30, 2000 to Donner
Investment Corp. @ $0.96 a share - - 36,583
Stock issued on October 1, 2000
to Novak Capital @ $0.20 a share - - 200,000
Stock issued on December 12,
2000 to Directors @ $0.24 a share
- - 288,000
Net loss for the year ended
December 31, 2000 - - -
Balance, December 31, 2000 850,000 $ 850,000 8,658,303
Additional Stock
Common Paid in Subscription
Stock Capital Receivable
Balance, December 31, 1998 3,633 1,015,677 (62,500)
Recapitalization (Note 1) 527 33,396 (20,000)
Common stock issued March 15, 1999
for services valued @ $0.63 per share 314 196,527 -
Common stock issued on March 15,
1999 for the purchase of Gam
Properties, Inc. @ $0.63 per
share 1,120 698,880 -
Preferred stock issued on March
15, 1999 for the purchase of Miramar Road
Associates, LLC @ $1.00 per share - - -
Preferred stock issued September 1999
in exchange for 1.5 million
shares of Pro Glass Technologies, Inc. common
stock valued @ $1.00 per share - - -
Stock subscription receivable - - 20,000
Common Stock issued December
1999 for cash @ $0.22 per share 320 71,625 -
Common Stock issued December 1999
for management fees @ $0.06 per share 489 28,886 -
Net loss for the year ended
December 31, 1999 - - -
Balance, December 31, 1999 $ 6,403 $2,044,991 $ (62,500)
Stock issued on January 5, 2000
to Directors @ $0.06 a share 72 4,248 -
Stock issued on March 1, 2000
forservices rendered @ $0.15 a share 123 17,877 -
Stock issued on June 15, 2000
to Directors @ $0.50 a share 72 35,928 -
Stock issued on June 30, 2000
for the Purchase of Northwest, LLC
@ $0.96 a share 1,463 1,399,555 -
Stock issued on June 30, 2000 to Donner
Investment Corp. @ $0.96 a share 37 35,083 -
Stock issued on October 1, 2000
to Novak Capital @ $0.20 a share 200 39,800 -
Stock issued on December 12,
2000 to Directors @ $0.24 a share 288 67,392 -
Net loss for the year ended
December 31, 2000 - - -
Balance, December 31, 2000 $ 8,658 $3,644,874 (62,500)
Retained Total
Earnings
Balance, December 31, 1998 33,140 989,950
Recapitalization (Note 1) - 13,923
Common stock issued March 15, 1999
for services valued @ $0.63 per share - 196,841
Common stock issued on March 15,
1999 for the purchase of Gam
Properties, Inc. @ $0.63 per
share - 700,000
Preferred stock issued on March
15, 1999 for the purchase of Miramar Road
Associates, LLC @ $1.00 per share - 700,000
Preferred stock issued September 1999
in exchange for 1.5 million
shares of Pro Glass Technologies, Inc. common
stock valued @ $1.00 per share - 150,000
Stock subscription receivable - 20,000
Common Stock issued December
1999 for cash @ $0.22 per share - 71,945
Common Stock issued December 1999
for management fees @ $0.06 per share - 29,375
Net loss for the year ended
December 31, 1999 (687,630) (687,630)
Balance, December 31, 1999 $ (654,490) $ 2,184,404
Stock issued on January 5, 2000
to Directors @ $0.06 a share - 4,320
Stock issued on March 1, 2000
forservices rendered @ $0.15 a share - 18,000
Stock issued on June 15, 2000
to Directors @ $0.50 a share - 36,000
Stock issued on June 30, 2000
for the Purchase of Northwest, LLC
@ $0.96 a share - 1,401,018
Stock issued on June 30, 2000 to Donner
Investment Corp. @ $0.96 a share - 35,120
Stock issued on October 1, 2000
to Novak Capital @ $0.20 a share - 40,000
Stock issued on December 12,
2000 to Directors @ $0.24 a share - 67,680
Net loss for the year ended
December 31, 2000 (440,456) (440,456)
Balance, December 31, 2000 $(1,094,946) 3,346,086
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Statement of Stockholders' Equity (continued)
From December 31, 1997 to March 31, 2001
Preferred Preferred Common
Shares Stock Shares
Stock issued on January 15, 2001
for consulting fees @ $0.17 a
share - - 50,000
Stock issued on January 18, 2001 for
management fees @ $0.21 a share - - 144,762
Stock issued on February 21, 2001
for consulting fees @ $0.15 a - - 25,100
share
Stock issued on March 1, 2001 to
management fees @ $0.17 a share - - 700,000
Net loss for the three months
ended
March 31, 2001 - - -
Balance, March 31, 2001 850,000 $ 850,000 9,578,165 $
Additional Stock
Common Paid in Subscription
Stock issued on January 15, 2001
for consulting fees @ $0.17 a
share 50 8,450 -
Stock issued on January 18, 2001 for
management fees @ $0.21 a share 145 30,179 -
Stock issued on February 21, 2001
for consulting fees @ $0.15 a 25 3,715 -
share
Stock issued on March 1, 2001 to
management fees @ $0.17 a share 700 118,300 (119,000)
Net loss for the three months
ended
March 31, 2001 - - -
Balance, March 31, 2001 $ 9,578 $3,805,518 $(181,500)
Retained Total
Earnings
Stock issued on January 15, 2001
for consulting fees @ $0.17 a
share - 8,500
Stock issued on January 18, 2001 for
management fees @ $0.21 a share - 30,324
Stock issued on February 21, 2001
for consulting fees @ $0.15 a - 3,740
share
Stock issued on March 1, 2001 to
management fees @ $0.17 a share - 0
Net loss for the three months
ended
March 31, 2001 25,474 25,474
Balance, March 31, 2001 $(1,069,472) 3,414,124
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2001 and 2000
Three Months Three Months
Ended Ended
March 31, March 31,
2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) from operations $ 25,474 199,615
Depreciation & Amortization Expense 36,179 78,200
(Increase) in accounts receivable 57,577 (28,278)
Unrealized (gain) / loss on available
for sale securities 61,401 (320,145)
(Increase) in assets held for sale 28,539 (151,962)
(Decrease) in accounts payable (75,887) (13,864)
Increase in loans payable 14,064 212,875
Increase in deferred revenue 0 77,158
(Decrease) in line of credit (244) (4,524)
(Decrease) / increase in security deposits (643) 910
Deferred tax benefit 4,496 162,673
Common stock issued for services 161,564
22,320
Net Cash provided by operating activities 312,520 234,978
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of marketable securities (158,711) (250,000)
Sale of marketable securities (21,052)
Purchase of fixed assets (3,000) 0
Net cash (used) by investing activities (182,763) (250,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Investment Property Mortgages (1,234) 0
Greentree Lease (162) (348)
Mortgage Principal (3,044) (4,451)
Stock subsription (119,000) 0
Net cash (used) by financing activities (123,440) (4,799)
Net increase (decrease) in cash 6,317 (19,821)
Cash at beginning of year 54,384 43,236
Cash at end of year $ 60,702 $ 23,415
Supplemental Cash Flow Disclosures
Cash paid during year for interest $ $ 106,259
101,308
Schedule of Non-Cash Activities
Common Stock issued for services $ $
161,564 22,320
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Triad Industries, Inc. (the Company) was incorporated under the laws of the
State of Utah on November 25, 1985. The Company was originally known as
Investment Marketing, Inc. Investment Marketing, Inc. was originally
incorporated for the purpose of buying, selling, and dealing in real property.
At a special meeting of the shareholders held June 6, 1990 the Company name was
changed to Combined Communication, Corp. On June 7, 1990 the Company completed
the merger and became a Nevada Corporation. On October 17, 1997, the Company met
to amend the Articles of Incorporation. The name of the Company was changed to
RB Capital & Equities, Inc.
On March 15, 1999, at a special meeting of the shareholders HRM (1) reversed its
common stock on a one for ten (1:10) from 5,256,716 to 526,672 shares
outstanding. Also at the meeting of shareholders, HRM ratified a plan of
reorganization whereby Healthcare Resource Management would acquire 100% of the
outstanding shares of common stock of RB Capital and its subsidiaries (Gam
Properties and Miramar Road Associates) for 5,068,150 shares of HRM post split
common stock and 700,000 shares of $1.00 preferred stock. The only significant
shareholder was American Health Systems, Inc. who owned 373,333 of common shares
before the merger and 1,120,000 of common stock after the merger. The 700,000
shares of preferred stock were issued to American Health Systems, Inc. for the
note payable and the 99% interest RB Capital had acquired in Miramar Road
Associates. 1,120,000 shares of common stock of the 5,068,150 shares issued to
RB Capital & Equities, Inc. went to American Health Systems, Inc. in exchange
for the 373,333 originally received from RB Capital & Equities, Inc. as
consideration for 100% of Gam Properties. This 1,120,000 represents a 3 for 1
forward split of the 373,333 shares of RB Capital & Equities common stock. The
acquisition was accounted for as a recapitalization of RB Capital because the
shareholders of RB Capital & Equities, Inc. controlled HRM after the
acquisition. Therefore, RB Capital & Equities, Inc. was treated as the acquiring
entity for accounting purposes and HRM was the surviving entity for legal
purposes.
On March 15, 1999 the shareholders also approved an amendment to the Articles of
Incorporation changing the corporation name to Triad Industries, Inc. Triad
Industries, Inc. is a holding Company with no operations of its own.
The Company has authorized 50,000,000 shares of $0.001 par value common stock.
The Company operates through its six subsidiaries:
1. RB Capital and Equities, Inc. is a financial services corporation that
operates a merger and acquisition consulting business. The company does
corporate filing and capital reorganization business for small emerging private
and public client corporations.
2. Miramar Road Associates, LLC. owns and operates a 51,000 square foot
commercial building.
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS (CONTINUED)
3. Gam Properties, Inc. owns and rents a seven unit, a four unit, and a
three unit apartment building.
4. HRM, Inc. is presently inactive in the healthcare industry.
5. Triad Reality is not yet operating as a consolidating real estate
company.
6. Northwest Medical Clinic, Inc. is in the medical field specializing in
personal injury and somnoplasty.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Companys financial statements are prepared using the accrual method of
accounting. The company has elected a December 31, year end.
b. Basis of Consolidation
The consolidated financial statements of Triad Industries, Inc. include those
accounts of RB Capital & Equity Inc., Gam Properties Inc., Healthcare Resource
Management Inc., Miramar Road Associates, LLC., and Northwest Medical Clinic,
Inc. Triad Industries owns title to all of the assets and liabilities of the
consolidated financial statement. All significant intercompany transactions have
been eliminated.
c. Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
d. Estimates and Adjustments
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. In accordance with FASB 16 all
adjustments are normal and recurring. See note 2i regarding the Companies
revenue recognition policy.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
e. Basis of Presentation and Considerations Related to Continued Existence
(going concern)
The Companys 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 companys management intends
to raise additional operating funds through operations and/or debt offerings.
f. Intangibles
Intangible assets consists of loan fees arrived from the refinancing of the
Miramar building. The loan fees are being amortized on a straight-line basis
over a period of one year, which is the length of the loan.
g. Accounts Receivable
The Company considers accounts receivable to be fully collectable; accordingly,
no allowance for doubtful accounts is required. If amounts become uncollectible,
they will be charged to operations when that determination is made.
Due to the nature of business that Northwest Medical Clinic Inc. conducts, a
reserve for bad debts must be in place to properly state the account receivable
as of March 31, 2001.
Accounts receivable $ 3,056,107
Reserve for bad debts (1,564,562)
$ 1,491,545
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 sheets at December 31,
2000 and 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. Note 2n and 2p reflect the fair value of notes, trusts, and
mortgages payable in accordance with SFAS 107.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
i. Revenue Recognition and Deferred Revenue
Revenue includes the following: Miramar Road Associates, Inc. revenue consists
of commercial rental income. Revenue for Miramar is recognized at each month
beginning on a receivable basis. Gam Properties Inc. revenue consists of
residential rental income. Revenue for Gam is recognized at each month beginning
on a receivable basis. RB Capital & Equities, Inc. revenue consists of
consulting income. Northwest Medical Clinic, Inc. revenue consist of medical
services. Northwest revenue is recognized when
received.
RB Capital & Equities, Inc. has various consulting contracts outstanding in
which the Company performs a set of various financial services. RB Capital
recognizes revenue when services on contracts are provided.
j. 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 Inc, a Nevada corporation, GAM Properties Inc., a
California corporation, Miramar Road Associates Inc., a California LLC., and
Northwest Medical Clinic, Inc., a Georgia corporation. All subsidiaries are
wholly owned subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.
k. Investments in Securities
Marketable securities at March 31, 2001 are classified and disclosed as trading
securities under the requirements of SFAS No. 115. Under such statement, the
Companys securities are required to be reflected at fair market value. Changes
in the fair value of investments are reflected in the statement of operations
under other income & expenses.
l. Line of Credit
The Company has a $ 50,000 line of credit. The line of credit is an adjustable
rate loan. The loan is an open revolving line of credit, and annual interest
terms of prime plus 3.65%. (i.e. if prime was 9% the interest rate would be
12.65%.) There are no restrictions on the use of this line of credit. There is
an outstanding balance of $ 29,916 as of March 31, 2001.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
m. Income Taxes
The Company accounts for income taxes using the asset and liability method.
Under the asset and liability method, deferred income taxes are recognized for
the tax consequences of temporary differences by applying enacted statutory
tax rates applicable to future years to differences between the financial
statement carrying amounts and the tax bases of existing assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. See note 5 regarding income tax benefit.
n. Property Held for Sale
All of the Companys properties held for sale are on a thirty-year mortgage.
Location Description Interest Rate Cost Debt
2016-18 Balboa* 4 Units 7.817$ 420,000 $ 301,396
2015-17 Hornblend*
2135-39 Grand Ave Tri-plex 7.667 355,350 228,371
4592 Bancroft 7 Units 7.500 396,057 256,648
NRV
Total $ 1,047,319 $ 786,415
* This location is a four-unit building. The building is constructed with 2
units being back to back and on separate streets.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
o. Long-Term Debt Miramar Building
Interest Rate Debt Maturity Date
First Trust Deed 10.470 % $2,336,956 12/08/25
Second Trust Deed 14 % 559,250 12/08/02
Third Trust Deed 14 % 137,400 12/08/02
-------------------
$3,033,606
------------=================
The office building collateralized the above loans. The loan agreements provide
for monthly payments of interest and principle.
On September 20, 1999 in accordance with paragraph 7 of SFAS 121 Company
acquired the remaining one-percent partner minority interest on the Miramar
property and paid off $ 192,000 of the outstanding mortgage liability
The total debt of $3,033,606 on the Miramar building was recorded as
follows: current portion (less than one year) of $372,905 and long-term portion
(more than one year) of $2,660,701.
p. Property & Equipment
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 fifty-one thousand square foot commercial building located at
6920-6910 A & B and 6914 Miramar Road, San Diego, California.
2001 2000
Land $ 327,614 $ 327,614
------------------------------------------
------------------------------------------
Buildings 3,038,357 3,038,357
------------------------------------------
Equipment 34,070 34,070
------------------------------------------
Computer 4,764 4,764
------------------------------------------
Furniture 12,223 12,223
------------------------------------------
Tenant Improvements 164,669 161,669
----------------------------------
----------------------------------
$ 3,581,697 $ 3,578,697
------------------------------------------
------------------------------------------
Less Accumulated Depreciation (257,790) (222,537)
----------------------------------
----------------------------------
------------------------------------------
------------------------------------------
Net Property and Equipment $ 3,356,160 $ 3,356,160
==================================
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
q. Investments in Securities Available for Sale
In 1995, the Company bought 250,000 shares of Heritage National Corporation
at $ 0.10 a share. In 1999, the Company acquired 1.5 million shares of Pro Glass
at $ .06 a share.
Number of Value Price Balance
Shares At Year End At Year End
Heritage National Corporation 250,000 $ 0.10$ 25,000
Pro Glass Technologies, Inc. 1,500,000 0.06 90,000
Total 1,750,000 $ 115,000
Heritage National Corporation values remained the same due to the companies
not trading at year-end. Unrealized holding gains and loss will be in accordance
with paragraph 13 of SFAS 115 when and if the Companies begin trading. All gains
and losses will be recorded in the statement of operations under other income
and expenses. As of December 31, 2000 the Company had an 8.5% share of Pro Glass
Technologies, Inc. Heritage National Corporation is a privately owned Company.
NOTE 3. OPERATING LEASE
The Company operates its facilities under an operating lease agreement with an
unrelated party. The base rent is $ 7,100 which will increase to $ 8,164 per
month as of May 1, 2001. The Companys lease agreement expired December 31,
2000. The Company has exercised the option to continue on a month to month
basis. Rent expense was $ 22,273 as of March 31, 2001.
The Company has the following lease options:
Year Ending
---------------------
---------------------
2001 93,712
---------------------
---------------------
2002 97,968
---------------------
2003 97,968
---------------------
2004 97,968
---------------------
2005 97,968
---------------
---------------
$485,584
- -----------------====================
NOTE 4. ACQUISITIONS
The acquisitions of RB Capital and Equities, Inc., a Nevada corporation, and its
subsidiaries (Gam Properties and Miramar Road Associates, LLC) were recorded as
a purchase in accordance with Accounting Principles Board Opinions No. 16 (APB
No. 16). Triad Industries, Inc. acquired the assets subject to the liabilities
of Northwest Medical Clinic, Inc. Triad Industries, Inc. will acquired 100% of
the equity interest of Northwest Medical Clinic, Inc. in return for voting
common stock, and that Northwest Medical Clinic, Inc. will become a wholly owned
subsidiary of Triad Industries, Inc. As per agreement Triad Industries, issued
1,463,302 shares of common stock on September 30, 2000 for the purchase of
Northwest Medical Clinic, Inc. The acquisition was recorded as a purchase in
accordance with Accounting Principles Board Opinions No. 16 (APB No. 16).
The operating results of the acquired entities are included in the Companys
consolidated financial statements from the date of acquisition.
6
NOTE 5. STOCK TRANSACTIONS
Stock issuances are in accordance with paragraph 8 of SFAS 123, where
issuances shall be accounted for based on the fair value of the consideration
received.
As of January 1, 1998 there were 2,339,529 shares of common stock
outstanding. On June 1998, the Company issued 13,200 shares of common stock
valued at $1.07 per share for marketable securities. Since there is no market
for the Companys common stock, the shares were valued at the trading price of
the securities that were received.
On June 17, 1998, the Company issued 60,000 shares of common stock valued
at $.90066 per share for marketable securities. Since there is no market for the
Companys common stock, the shares were valued at the trading price of the
securities that were received.
On June 17, 1998 the Company issued 30,480 shares of common stock for the
conversion of debt valued at $.334 per share.
On June 17, 1998. The Company issued 135,000 shares of common stock for
marketable securities valued at $.334 per share. Since there is no market for
the Companys common stock, the shares were valued at the trading price of the
securities, which were received.
On June 17, 1998, the Company issued 300,000 shares of common stock for
services to officers of the Company valued at $.334 per share.
On November 4, 1998, the Company issued 375,000 shares of common stock for
a subscription receivable valued at $.166 per share.
NOTE 5. STOCK TRANSACTIONS (CONTINUED)
On December 31, 1998 the Company issued 18,750 shares of common stock for
debt conversion valued at $.3234 per share.
On December 31, 1998, the Company issued 60,759 shares of common stock for
management fees valued at $.334 per share.
On December 31, 1998, the Company issued 60,486 shares of common stock for
debt conversion valued at $.334 per share.
On December 31, 1998, the Company issued 225,000 shares of common stock for
marketable securities valued at $.206 per share. Since there is no market for
the Companys common stock, the shares were valued at the trading price of the
securities that were received.
As of January 1, 1999 there were 3,633,204 shares of common stock
outstanding. On March 15, 1999 the Company issued 314,946 shares of common stock
for services issued valued at $.625 per share.
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 1,120,000 shares of common stock and 700,000 shares of
preferred stock.
In September the Company issued 150,000 shares of $1.00 par value preferred
stock (transaction was valued at the most readily determinable price; which was
the value of preferred stock) in exchange for 1.5 million shares of Pro Glass
Technologies, Inc. common stock. The 1.5 million shares represented (at the time
of acquisition) 8.5% of Pro Glass Technologies, Inc. outstanding common stock.
In December 1999, the Company issued 489,600 shares of common stock to
management and key employees for services rendered valued at $ 0.06 per share.
In December 1999 the Company issued 320,000 shares of common stock for cash
@ $ 0.22 per share. On December 31, 1999 there were 6,403,418 shares of common
stock and 850,000 shares of preferred stock outstanding.
On January 5, 2000 the Company issued 72,000 shares of common stock to
Directors for services rendered valued at $ 0.06 per share.
On March 1, 2000 the Company issued 123,000 shares of common stock to a
Director for services rendered valued at $0.15 per share.
On June 15, 2000 the Company issued 72,000 shares of common stock to
Directors for services rendered valued at $ 0.50 per share.
NOTE 5. STOCK
TRANSACTIONS (CONTINUED)
On June 30, 2000 the Company issued 1,463,302 shares of common stock for
the purchase of Northwest LLC. valued at $ 0.96 per share.
On June 30, 2000 the Company issued 36,583 shares of common stock to Donner
Investment Corp. valued at $ 0.96 per share.
On October 1, 2000 the Company issued 200,000 shares of common stock to
Novak Capital valued at $ 0.20 per share.
On December 12, 2000 the Company issued 288,000 shares of common stock to
Directors for services rendered valued at $ 0.24 per share.
On January 15, 2001 the Company issued 50,000 shares of common stock for
consulting fees valued at $ 0.17 per share.
On January 18, 2001 the Company issued 144,762 shares of common stock for
management fees valued at $ 0.21 per share.
On February 21, 2001 the Company issued 25,100 shares of common stock for
consulting fees valued at $ 0.15 per share.
On March 1, 2001 the Company issued 700,000 shares of common stock under
the employee stock option plan valued at $ 0.17 per share.
As of March 31, 2001 the Company had 9,578,165 shares of common stock
issued and outstanding.
NOTE 6. STOCKHOLDERS EQUITY
The stockholders equity section of the Company contains the following
classes of capital stock as of March 31, 2001.
(A) Preferred Stock, nonvoting, $ 1.00 par value; 10,000,000 shares
authorized; 850,000 shares issued and outstanding.
(B) Common stock, $ 0.001 par value; 50,000,000 shares authorized;
9,578,165 and 8,658,303 shares issued and outstanding as of March 31, 2001 and
December 31, 2000, respectively.
The holders of Preferred Stock are entitled to receive dividends calculated
using an Available Cash Flow formula as prescribed by the Certificate of
Designation of Preferred Stock. There have not been any dividends declared as of
March 31, 2001.
NOTE 7. ISSUANCE OF SHARES FOR SERVICES STOCK OPTIONS
The company has a nonqualified stock option plan, which provides for the
granting of options to key employees, consultants, and nonemployees directors of
the Company. The valuation of shares for services are based on the fair market
value of services. The Company has elected to account for the stock option plan
in accordance with paragraph 30 of SFAS 123 were the compensation to employees
should be recognized over the period(s) in which the related employee services
are rendered. In accordance with paragraph 19 of SFAS 123 the fair value of a
stock option granted is estimated using an option-pricing model.
A total of 169,862 shares were issued for services to management and key
employees for the three months ended March 31, 2001.
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Going Concern Ability of the Company to Continue
The Company has a net operating loss carry forward of $1,069,472 since
inception through March 31, 2001.
The Companys consolidated financial statements are prepared using generally
accepted accounting principles applicable to a going concern which contemplated
the realization of assets and liquidation of liabilities in the normal course of
business. The Company has not established revenues sufficient to cover its
operating costs and allow it to continue as a going concern. Management believes
that the Company will soon be able to generate revenues sufficient to cover its
operating costs. In the interim, the Company intends to raise additional capital
through private placements of its common stock.
Liquidity and Capital Resources
As of March 31, 2001 the Company has $4,087,766 in total current assets and
equity of $3,414,124 with which to pay its obligations.
The Company has entered into a sale agreement to sell its commercial
property for $3,950,000, escrow # 1050739 at Commonwealth Title Company. The
Company should net approximately $500,000 in proceeds from the sale of the
building and is considering paying off $300,000 existing in debt. Escrow is
scheduled to close on or about April 30, 2001.
Results of Operations
For the three months ending March 31, 2001 the Company has a net income of
$25,474. This includes $36,179 in depreciation and amortization expense and a
$61,401 unrealized loss in marketable securities. Administrative expenses also
increased $267,861 for the first quarter of 2001 compared to the same period of
2000. This increase is predominately caused by the fact that this is the first
time the results of operations for Northwest Medical Clinic appear in the first
quarter of Triad Industries, Inc., consolidated statement. Northwest Medical
Clinic was acquiredoin June 30, 2000.
The Company had revenues of $658,146 for the three months ended March 31,
2001 compared with $246,776 for the same period last year.
23
The Company functions in three sectors: financial services, real estate,
and medical section.
Three Months Ending
March 31, March 31,
2000 2001
Financial Services 200,102 97,320
Real Estate 189,485 166,856
Medical * 281,939 -
Total
* Northwest Medical Clinic was acquired June 30, 2000.
Sale of Common Capital Stock
On January 15, 2001 the Company issued 50,000 shares of common stock to 5
employees of Northwest Medical Clinic under the Companys Gross Annual Wage
Bonus Plan at $.17 per share.
On January 18, 2001 the Company issued 144,762 shares of common stock to
eight employees of the Company for services accrued as of year end 2000 at $.21
per share.
On February 21, 2001 the Company issued 25,100 shares of common stock to an
employee for services rendered at $.17 per share.
On March 1, 2001, the Company issued 700,000 shares to management and key
employees under the Companys employee stock options plan. The shares were
issued at $.17 per share and a stock subscription receivable was recorded on the
Companys books in the amount of $119,000.
As of March 31, 2001 the Company has 9,578,165 shares of common stock
issued and outstanding.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
24
ITEM 2. CHANGES IN SECURITIES
On January 15, 2001 the Company issued 50,000 shares of common stock to 5
employees of Northwest Medical Clinic under the Companys Gross Annual Wage
Bonus Plan at $.17 per share.
On January 18, 2001 the Company issued 144,762 shares of common stock to
eight employees of the Company for services accrued as of year end 2000 at $.21
per share.
On February 21, 2001 the Company issued 25,100 shares of common stock to an
employee for services rendered at $.17 per share.
On March 1, 2001, the Company issued 700,000 shares to management and key
employees under the Companys employee stock options plan. The shares were
issued at $.17 per share and a stock subscription receivable was recorded on the
Companys books in the amount of $119,000.
As of March 31, 2001 the Company has 9,578,165 shares of common stock
issued and outstanding.
ITEM 3. DEFAULTS UPON SENIOR SECURITES
None.
ITEM 4. SUBMISSION OF MATTERS TO BE A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON 8-K
a. Reports on Form 8K
None.
b. Form 10KSB filed by reference on March 29, 2001.
25
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 16, 2001
By:/S/ Gary DeGano
Gary DeGano
President, Director
By: /S/ Michael Kelleher
Michael Kelleher
Secretary, Treasurer and
Director