UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 10-Q SB/A
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarter report ended March 31, 2000
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, 2000
Common Stock, $0.001 6,598,418
i
TABLE OF CONTENTS
PART 1. FINANCIAL INFORMATION
Heading Page
Item 1. Consolidated Financial Statements 1-2
Consolidated Balance Sheets December 31, 1999
And March 31, 2000 3-4
Consolidated Statements of Operations three months
Ended March 31, 2000 and 1999 5
Consolidated Statements of Stockholders Equity 6-7
Consolidated Statements of Cash Flows three months
Ended March 31, 2000 and March 31, 1999 8
Notes to Consolidated Financial Statements 9-18
Item 2. Managements Discussion and Analysis and
Result of Operations 19
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 19
Item 2. Changes in Securities 19
Item 3. Defaults Upon Senior Securities 19
Item 4. Submission of Matter to be a Vote of 19
Securities Holders
Item 5. Other Information on Form 8-K 20
Item 6. Exhibits and Reports on 8K 20
Signatures S-1
ii
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, 2000, and the
related audited balance sheet of the Company as of December 31, 1999, the
unaudited statement of operations and cash flows for the three months ended
March 31, 2000 and March 31, 1999 the audited statements of stockholders equity
for the period from December 31, 1997 through December 31, 1999 and the
unaudited statement of stock holders equity for the three months from January 1,
2000 through March 31, 2000 are attached hereto and incorporated herein by this
reference.
Operating results for the quarters ended March 31, 2000 are not necessarily
indicative of the results that can be expected for the year ending December 31,
2000.
1
ARMANDO C. IBARRA
CERTIFIED PUBLIC ACCOUNTANTS
( A Professional Corporation)
Armando C. Ibarra,
C.P.A.
Members of the California Society of
Armando Ibarra, 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
We have restated the reviewed accompanying consolidated balance sheets of Triad
Industries, Inc. (formerly RB Capital & Equities, Inc.) as of March 31, 2000 the
related statements of income, changes to stockholders equity, and cash flows
for the three months then ended, 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. The information included in the accompanying schedules of selling
and administrative expenses is presented only for supplementary analysis
purposes. Such information has been subjected to the inquiry and analytical
procedures applied in the review of the basic financial statements, and we are
not aware of any material modifications that should be made to it.
__________________________________
ARMANDO C. IBARRA, C.P.A. - APC
May 12, 2000
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Balance Sheets
As of March 31, 2000 and 1999
ASSETS
Three Months
Ended Year Ended
March 31, December 31,
2000 1999
Current Assets
Cash $ 23,415 $ 43,236
Accounts receivable 354,883 345,235
Marketable securities 707,769 454,460
Impound account 4,062 4,062
Assets held for sale 1,208,195 1,202,095
Deferred tax benefit 333,574 367,300
Total Current Assets 2,631,898 2,416,387
Net Property and Equipment 3,378,357 3,386,717
Other Assets
Investment in securities
available for sale 175,000 175,000
Gift Certificates 6,000 6,000
Loan fees 143,779 143,779
Accumulated amortization (107,835) (71,890)
Total Other Assets 216,944 252,889
TOTAL ASSETS $ 6,227,199 $ 6,055,993
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Balance Sheets
As of March 31, 2000 and 1999
LIABILITIES AND STOCKHOLDERS' EQUITY
Three Months
Ended Year Ended
March 31, December 31,
2000 1999
Current Liabilities
Accounts payable $ 7,109 $ 20,963
Loans payable 166,169 90,715
Greentree lease 1,307 1,655
Taxes payable 16,855 16,855
Line of credit 20,597 25,121
Security deposits 40,775 39,865
Notes payable on assets
held for sale 914,515 918,966
Trust deeds and mortgages 2,782,500 2,782,500
Total Current Liabilities 3,949,827 3,896,640
TOTAL LIABILITIES 3,949,827 3,896,640
Stockholders' Equity
Preferred stock ($1.00
par value, 10,000,000 shares
authorized 850,000 and 700,000
shares issued 850,000 850,000
and outstanding for 2000 and
1999, respectively.)
Common stock ($0.001 par value,
50,000,000 shares
authorized 6,598,418 and
6,403,418 shares issued
and outstanding for 2000 and 1999,
respectively.) 6,598 6,403
Paid in capital 2,067,116 2,044,991
Stock subscription receivable (62,500) (62,500)
Retained earnings (608,892) (679,540)
Total Stockholders' Equity 2,252,322 2,159,354
TOTAL LIABILITIES
& STOCKHOLDERS' EQUITY $ 6,202,149 $ 6,055,993
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Statements of Operations
For the Three Months Ended March 31, 2000 and 1999
Three Months Three Months
Ended Ended
March 31, March 31,
2000 1999
REVENUES
Consulting income $ 93,964 $ 119,175
Rental income 166,856 60,245
Cost of revenues (17,400) (61,138)
Total Revenues 243,420 118,282
OPERATING COSTS
Depreciation & Amortization 85,040 21,091
Administrative Expenses 166,897 139,536
Total Operating Costs 251,937 160,627
OTHER INCOME & (EXPENSES)
Interest Income 317 0
Other Income 0 0
Cost of sales of marketable securities (15,198) 0
Unrealized gain on sale of
marketable securities 253,309 89,374
Net gain / (loss) on disposable assets 4,500 0
Utility Charges 1,250 0
Fee Income 20 0
Interest expense (106,259) (38,767)
Total Other Income & Expenses 137,940 50,607
NET INCOME (LOSS) BEFORE TAXES 129,423 8,262
PROVISION FOR INCOME TAXES (BENEFIT) 33,726 1,239
NET INCOME (LOSS) $ 95,697 $ 7,023
BASIC EARNINGS (LOSS) PER SHARE $ 0.0147 $ 0.0016
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
6,514,585 4,414,799
DILUTED EARNINGS (LOSS) PER SHARE $ 0.0116 $ 0.0015
WEIGHTED AVERAGE OF DILUTED
COMMON SHARES OUTSTANDING
8,214,585 4,663,688
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Statement of Stockholders' Equity
From December 31, 1997 to March 31, 2000
Preferred Common Common
Shares Stock Shares Stock
Balance, December 31, 1997 - - 2,339,529 2,340
Common stock issued June 17,1998
for securities valued @ $1.07 per share - - 13,200 13
Common stock issued June 17, 1998 for
securities valued @ $.90066 per share - - 60,000 60
Common stock issued June 17, 1998
for securities valued @ $.084 per share - - 15,000 15
Common stock issued June 17, 1998
for note payable @ $.334 per share - - 30,480 30
Common stock issued June 17, 1998
for securities valued @ $.334 per share - - 135,000 135
Common stock issued June 17, 1998
for services (officers) valued @ $.334
per share - - 300,000 300
Common stock issued November 4,
1998 for subscription receivable
@ $.166 per share - - 375,000 375
Common stock issued December 31, 1998
for note payable @ $.3234 per
share - - 18,750 19
Common stock issued December 31, 1998
for management fees @ $.334 per share - - 60,759 61
Common stock issued December 31, 1998
for note payable @ $.334 per share - - 60,486 60
Common stock issued December 31,1998
for securities valued @ $.206 per share - - 225,000 225
Contributed capital - - - -
Net loss for the year ended
December 31,1998 - - - -
Balance, December 31, 1998 - - 3,633,204 3,633
Additional Stock
Paid in Subscription Retained
Capital Receivable Earnings
Balance, December 31, 1997 $ 634,656 $ - $ 95,266
Common stock issued June 17,1998
for securities valued @ $1.07 per share 14,105 - -
Common stock issued June 17, 1998 for
securities valued @ $.90066 per share 53,980 - -
Common stock issued June 17, 1998
for securities valued @ $.084 per share 1,245 - -
Common stock issued June 17, 1998
for note payable @ $.334 per share 10,150 - -
Common stock issued June 17, 1998
for securities valued @ $.334 per share 44,955 - -
Common stock issued June 17, 1998
for services (officers) valued @ $.334
per share 99,900 - -
Common stock issued November 4,
1998 for subscription receivable
@ $.166 per share 62,375 (62,500) -
Common stock issued December 31, 1998
for note payable @ $.3234 per 6,063
share 6,044 - -
Common stock issued December 31, 1998
for management fees @ $.334 per share 20,233 - -
Common stock issued December 31, 1998
for note payable @ $.334 per share 20,142 - -
Common stock issued December 31,1998
for securities valued @ $.206 per share 46,175 - -
Contributed capital 1,717 - -
Net loss for the year ended
December 31,1998 - - (62,126)
Balance, December 31, 1998 1,015,677 (62,500) 33,140
Total
Balance, December 31, 1997 $ 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
share 6,063
Common stock issued December 31, 1998
for management fees @ $.334 per share
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)
Balance, December 31, 1998 989,950
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Statement of Stockholders' Equity (continued)
From December 31, 1997 to March 31, 2000
Preferred Preferred Common Common
Shares Stock Shares Stock
Balance, December 31, 1998 - - 3,633,204 3,633
Recapitalization (Note 1) - - 526,672 527
Common stock issued March 15, 1999
for services valued @ $0.63 per share - - 313,942 314
Common stock issued on March 15,
1999 for the purchase of Gam
Properties, Inc. @ $0.63 per
share - - 1,120,000 1,120
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 - - 320,000 320
Common Stock issued December 1999
for management fees @ $0.06 per share - - 489,600 489
Net loss for the year ended
December 31, 1999 - - - -
Balance, December 31, 1999 850,000 $ 850,000 6,403,418 $ 6,403
Stock issued on January 5, 2000
to Directors @ $0.06 a share - - 72,000 72
Stock issued on March 1, 2000
forservices rendered @ $0.15 a share - - 123,000 123
Net lncome for the three months ended
March 31, 2000 - - - -
Balance, March 31, 2000 850,000 $ 850,000 6,598,418 $ 6,598
Additional Stock
Paid in Subscription Retained
Capital Receivable Earnings
Balance, December 31, 1998 1,015,677 (62,500) 33,140
Recapitalization (Note 1) 33,396 (20,000) -
Common stock issued March 15, 1999
for services valued @ $0.63 per share 196,527 - -
Common stock issued on March 15,
1999 for the purchase of Gam
Properties, Inc. @ $0.63 per
share 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 71,625 - -
Common Stock issued December 1999
for management fees @ $0.06 per share 28,886 - -
Net loss for the year ended
December 31, 1999 - - (712,680)
Balance, December 31, 1999 $ 2,044,991 $ (62,500) $ (679,540)
Stock issued on January 5, 2000
to Directors @ $0.06 a share 4,248 - -
Stock issued on March 1, 2000
forservices rendered @ $0.15 a share 17,877 - -
Net lncome for the three months ended
March 31, 2000 - - 95,697
Balance, March 31, 2000 $ 2,067,116 $ (62,500) $ (583,842)
Total
Balance, December 31, 1998 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 (712,680)
Balance, December 31, 1999 $ 2,159,354
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
Net lncome for the three months ended
March 31, 2000 95,697
Balance, March 31, 2000 $ 2,277,372
TRIAD INDUSTRIES, INC
(Formerly RB Capital & Equities, Inc.)
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2000 and 1999
Three Months Three Months
Ended Ended
March 31, March 31,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) from operations 95,697 7,023
Depreciation & amortization expense 85,040 21,091
(Increase) in accounts receivable (9,648) (12,858)
(Increase) in prepaid rent 0 2,895
Unrealized (gain) on available
for sale securities (253,309) (58,332)
(Increase) in assets held for sale (6,100) 0
(Decrease) in accounts payable (13,864) 33,802
Increase in loans payable 75,454 22,213
(Decrease) in line of credit (4,524) 0
Increase in security deposits 910 625
Deferred tax benefit 33,726 1,239
Common stock issued for services 22,320 0
Net Cash provided by
operating activities 25,702 17,698
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets (40,723) 0
Net cash used by investing activities (40,723) 0
CASH FLOWS FROM FINANCING ACTIVITIES
Investment Property Mortgages 0 (98)
Greentree Lease (348) (566)
Mortgage Principal (4,451) (4,288)
Net cash provided by
financing activities (4,799) (4,952)
Net increase (decrease) in cash (19,821) 12,746
Cash at beginning of period 43,236 17,620
Cash at end of period $ 23,415 $ 30,366
Supplemental Cash Flow Disclosures
Cash paid during the period for interest 106,259 38,767
Schedule of Non-Cash Activities
Common stock issued for services 22,320 0
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.
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., and Miramar Road Associates, LLC. 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
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 2m 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 consist of loan fees arrived from 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 has entered into various contracts, by which the Company provides
financial services.
h. Issuance of Shares for Services Stock Options
Valuation of shares for services is based on the fair market value of services.
i. 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 sheet at March 31,
2000 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 2p and 2q reflect the fair value of notes, trusts, and
mortgages payable in accordance with SFAS 107.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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, a Nevada corporation, GAM Properties, a California
corporation; Triad Realty, a California corporation, and Miramar Associates, a
California L.L.C. All subsidiaries are wholly owned subsidiaries. All
significant intercompany balances and transactions have been eliminated in
consolidation.
k. 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 6 regarding income tax benefit.
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 $ 20,597 as of March 31, 2000.
m. 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.
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.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
n. Investments in Securities
Marketable securities at March 31, 2000 and 1999 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 state statement of
operations under other income & expenses.
o. 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.
Land $ 327,614
Buildings 3,067,619
Computer 1,000
Furniture 7,224
Tenant Improvements 153,738
---------------------
---------------------
$ 3,557,195
-------------------------------------------
-------------------------------------------
Less Accumulated Depreciation (178,838)
---------------------
---------------------
Net Property and Equipment $ 3,378,357
- ------------------------------------=====================
p. Property Held for Sale
Location Description Cost Debt
2016-18 Balboa 4 Units $ 420,000 $ 306,838
2015-17 Hornblend
2135-39 Grand Ave Tri-plex 355,350 233,955
4592 Brancroft 7 Units 396,100 264,099
3635 3rd. Ave Condo 180,000 113,004
NRV (143,255)
Total $1,208,195 $ 914,515
A net realizable valuation allowance was placed on the properties held for
sale in the amount of $ 143,255 in accordance with SFAS 121.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
q. Long Term Debt Miramar Building
First Trust Deed 2/2000 $1,800,000
----------------------------------------
Second Trust Deed 10/1999 380,000
----------------------------------------
Third Trust Deed 6/1999 315,000
----------------------------------------
Forth Trust Deed 4/1999 259,000
----------------------------------------
Fifth Trust Deed 6/2000 28,500
- ---------------------------------------------------
--------------------------
$2,782,500
- -------------------------==========================
The office building collateralized the above loans. The loan agreements
provide for monthly payments of interest with principle due at the above dates.
Management has negotiated with the current lender a short-term extension of
these maturity dates and is attempting to obtain long term financing. Management
has discovered a lien of approximately $ 400,000 on the office building, which
is related to the debt of a stockholder and former officer of the L.L.C.
r. 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 $
.10 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, Inc. 1,500,000 0.10 150,000
Total $ 175,000
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
March 31, 2000 the Company had an 8.5% share of Pro Glass Technologies, Inc.
Heritage National Corporation is a privately owned Company.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
s. Accounts Receivable
Accounts receivable consist of the following:
March 31, 2000
Accounts receivable Various $ 12,162
Accounts receivable Carrera 520
Accounts receivable Gahi 1,450
Accounts receivable Trans-Caribe 2,687
Accounts receivable Fortune Oil 11,500
Accounts receivable Management fees 30,886
Accounts receivable Escondido capital 12,041
Accounts receivable Bellissima 8,000
Accounts receivable 3rd. Avenue 15,083
Accounts receivable Ashy 5,000
Accounts receivable Todd Smith 254,554
Accounts receivable Trans-Caribe 1,000
Total $354,883
- ------------------------------------------------
The Company expects to collect accounts receivable within one year. As of March
31, 2000 the accounts receivable outstanding is fully expected to be collected.
Therefore, the Company has not set up an allowance for doubtful accounts.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
t. Basic & Diluted Gain / (Loss) Per Common Share
Basic gain / (loss) per common share has been calculated based on the weighted
average number of shares of common stock outstanding during the period. Diluted
gain / (loss) per common share has been calculated based on the weighted average
number of shares of common and preferred stock outstanding during the period.
March 31, December 31,
2000 1999
Numerator income (loss) $ 95,697 $ (712,680)
Denominator weighed average
number of shares outstanding 6,514,585 5,055,774
Basic gain / (loss) per share $ 0.0147 $ (0.1401)
March 31, December 31,
2000 1999
Numerator income (loss) $ 95,697 $ (712,680)
Denominator weighed average
number of shares outstanding 8,214,585 6,276,048
---------------------------------
---------------------------------
Diluted gain / (loss) per share $ 0.0116 $ (0.11)
- ---------------------------------------------=================================
NOTE 3. OPERATING LEASE
The Company operates its facilities under an operating lease agreement with an
unrelated party. The base rent is $ 3,434 per month. The Companys lease
agreement expires December 31, 2000. The Company has an option to continue on a
month to month basis at the end of the current lease.
Rent expense as of March 31, 2000 and 1999 is $ 11,179 and $ 760.
Year Ending
---------------------
---------------------
2000 41,208
---------------------
---------------------
2001 42,000
---------------------
2002 42,000
---------------------
2003 42,000
---------------------
2004 42,000
---------------
---------------
$209,208
- -----------------====================
NOTE 4. MARKETABLE SECURITIES
At March 31, 2000, the Company held trading securities of the following
companies:
Number of Mkt. Price FMV
Shares At March 31, At March 31,
2000 2000
Beach Brew 625,000 0.02 17,500
Blue Gold 125,000 0.00 125
Carrara 325,000 0.00 370
Fortune Oil 33,000 0.12 3,960
Greenland 4,113 1.00 4,113
Mezzanine Capital 107,000 3.25 347,750
Nicholas Inv 364,583 0.00 364
Peacock Financial 200,000 1.50 300,000
Phantom Film Corp. 150,000 0.03 4,500
Pro Glass 368,892 0.06 22,133
Spa International 245,165 0.00 0
Superior Oil 100,000 0.03 3,000
Thunderstore 3,068 0.03 92
Total Entertainment 55,000 0.06 3,300
Regan 5,000 0.05 250
Processing 20,000 0.01 339
-------------------------
-------------------------
Total $707,769
=========================
The Company is in accordance with SFAS 115 when reporting trading securities.
All gain and loss are reported in the statement of operations under other income
and expenses. Trading securities are reported at market value as of March 31,
2000 in accordance with paragraph 13 of SFAS 115.
NOTE 5. STOCK
Stock issuance 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.
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.
NOTE 5. STOCK TRANSACTIONS (CONTINUED)
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 its
President for services rendered valued at $0.15 per share. As of March 31, 2000
there were 6,598,418 shares of common stock and 850,000 shares of preferred
stock outstanding.
NOTE 6. INCOME TAXES
Income taxes are provided in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset
or liability is recorded for all temporary differences between financial and tax
reporting and net operating loss carryfowards. Deferred tax expense (benefit)
results from the net change during the year of deferred tax assets and
liabilities.
At March 31, 2000 the Company has significant operating and capital losses
carryfoward. The benefits resulting for the purposes have been estimated as
follows:
March 31,
2000
------------------
Net Operating Losses :
- --------------------------------------------
- --------------------------------------------
Net operating loss carryforwards 583,842
------------------
------------------
- --------------------------------------------
- --------------------------------------------
Income Tax Benefit $(333,574)
==================
Realization of deferred tax assets is dependent upon sufficient future taxable
income during the period that deductible temporary differences and carryforward
are expected to be available to reduce taxable income.
NOTE 7. 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).
The operating results of the acquired entities are included in the Companys
consolidated financial statements from the date of acquisition.
NOTE 8. SUBSEQUENT EVENT
Gam properties entered into escrow in March for the sale of their 3rd Ave.
property. The property sold for $173,000 with escrow closing on April 4, 2000.
Triad Industries, Inc. acquired the assets subject to the liabilities of
Northwest Medical Clinic, Inc. Triad Industries, Inc. will acquire 100% of the
equity interest Northwest Medical Clinic, Inc. in return for voting common
stock, and the Northwest Medical Clinic, Inc. will become a wholly owned
subsidiary of the Company. The acquisition was recorded as a purchase in
accordance with Accounting Principles Board Opinions No. 16 (APB No. 16).
NOTE 9. STOCKHOLDERS EQUITY
The stockholders equity section of the Company contains the following classes of
capital stock as of March 31, 2000.
(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; 6,598,418 and
6,403,418 shares issued and outstanding for 2000 and 1999, 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, 2000.
NOTE 10. 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 195,000 shares were issued for services to management and key
employees for the
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
As of March 31, 2000 the Company has $2,631,998 in current assets and
equity of $2,277,372 of which to pay its obligations.
Results of Operations
For the quarter ended March 31, 2000 the Company had revenues of $234,420
and operating expenses of $251,937 compared to revenues of $117,457 and
operating expenses of $103,802 for the same period of 1999.
Depreciation and amortization was up $63,949 for the first three months of
2000 compared to the same period of 1999. This is attributed to the fact the
Company acquired the Gam and Miramar Properties at the end of February 1999,
therefore; in 2000 the Company had a full three months depreciation on these
assets. There was also approximately a $68,000 increase in interest expense for
the first quarter of 2000. This can also be attributed to the acquisition of the
Gam and Miramar properties. There was also a $163,935 unrealized gain in
marketable securities.
Net Operating Loss
The Company has accumulated approximately $583,842 of net operating loss
carryforwards as of March 31, 2000, which may be offset against taxable income
and incomes taxes in future years. The use of these to losses to reduce future
income taxes will depend on the generation of sufficient taxable income prior to
the expiration of the net loss carryforwards. The carryforwards expire in the
year 2015. In the event of certain changes in control of the Company, there will
be an annual limitation on the amount of carryforwards, which can be used. A tax
benefit has been recorded in the Companys financial statements for the year
ended December 31, 1999 in the amount of $367,300 and for the three months ended
March 31, 2000 in the amount of $333,574.
Sale of Common Capital Stock
On January 5, 2000 the Company issued 72,000 shares of common stock to
six directors for directors fees at $.06 per share. 19
On March 1, 2000 the Company issued 123,000 shares of common stock to
its President for services rendered at $.15 per share.
As of March 31, 2000 the Company has 6,598,418 shares of common stock
outstanding.
Risk Factors and Cautionary Statements
Forward-looking statements in this report are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. The Company wished to advise readers that actual results may differ
substantially from such forward-looking statements. Forward-looking
statements involve the risk and uncertainties that could cause actual
results to differ materially from those expressed on or implied by the
statements, including, but not limited to, the following: the ability of
the Company to successfully meet its cash and working capital needs, the
ability of the Company to successfully market its product, and other risks
detailed in the Companys periodic report filings with the Securities and
Exchange Commission.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
A lawsuit was filed (case #729554) naming GAM Properties, Inc., a
wholly owned subsidiary, as a defendant. The Companys attorneys advised
the suit was without merit. The case was dismissed with prejudice on March
21, 2000.
ITEM 2. CHANGES IN SECURITIES
On January 5, 2000 the Company issued 72,000 shares of common stock to six
directors for fees at $.06 per share.
On March 1, 2000 the Company issued 123,000 shares of common stock to
its President for services rendered at $.15 per share.
As of March 31, 2000 the Company has 6,598,418 shares of common stock
outstanding.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO BE A VOTE OF SECURITY HOLDERS
None.
20
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON 8-K
a. Form 10SB/A filed by reference on January 28, 2000.
b. Reports on 8K
None.
21
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 23, 2001
By:/S/ Gary DeGano
Gary DeGano
President, Director
By:/S/ Michael Kelleher
Michael Kelleher
Secretary, Treasurer
and Director
S-1