UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C., 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter report ended September 30, 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.) 350 West 9th Ave., Escondido, CA 92025 (Address of principal executive office) Registrants telephone no., including area code (760) 291-1710 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 September 30, 2001 Common Stock, $0.001 10,838,165 i TABLE OF CONTENTS PART 1. FINANCIAL INFORMATION Heading Page Item 1. Consolidated Financial Statements 1 Consolidated Balance Sheets September 30, 2001 And December 31, 2000 2-3 Consolidated Statements of Operations nine months Ended September 30, 2001 and September 30, 2000 4 Consolidated Statements of Stockholders Equity 5-7 Consolidated Statements of Cash Flows nine months Ended September 30, 2001 and September 30, 2000 8 Notes to Consolidated Financial Statements 9-21 Item 2. Managements Discussion and Analysis and Result of Operations 22-24 PART II. OTHER INFORMATION Item 1. Legal Proceedings 24 Item 2. Changes in Securities 24 Item 3. Defaults Upon Senior Securities 24 Item 4. Submission of Matter to be a Vote of 24 Securities Holders Item 5. Other Information on Form 8-K 24 Item 6. Exhibits and Reports on 8K 24 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 Septembere 30, 2001, and balance sheet of the Company as of December 31, 2000, derived from the Companys audited financial statement and the unaudited statement of operations and cash flows for the nine months ended September 30, 2001 and September 30, 2000 and the statement of stockholders equity from the period of January 1, 1998 through September 30, 2001 are attached hereto and incorporated herein by this reference. Results as of September 30, 2001 are not necessarily indicative of the results that can be expected for the year ending December 31, 2001. TRIAD INDUSTRIES, INC. (Formerly RB Capital & Equities, Inc.) Notes to the Consolidated Financial Statements For the Nine Months Ended September 30, 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 Armando Ibarra, Jr., C.P.A. Certified Public Accountants To the Board of Directors Triad Industries, Inc. (Formerly RB Capital & Equities, Inc.) 350 West 9th Avenue., Suite A Escondido, CA 92025 INDEPENDENT ACCOUNTANTS REPORT We have reviewed the accompanying consolidated balance sheets of Triad Industries, Inc. (Formerly RB Capital & Equities, Inc.) as of September 30, 2001, and the related statements of operations, changes in stockholders equity, and cash flows for the three and nine months ended September 30, 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. __________________________________ ARMANDO C. IBARRA, C.P.A. - APC November 5, 2001 San Diego, California TRIAD INDUSTRIES, INC. (Formerly RB Capital & Equities, Inc.) Consolidated Balance Sheets Nine Months Ended Year Ended September 30, December 31, 2001 2000 ASSETS CURRENT ASSETS Cash $ 3,310 $ 54,384 Accounts receivable 426,266 49,681 Accounts receivable medical clinic (see note 2g) 1,545,259 1,586,182 Marketable securities 540,229 81,755 Prepaid expenses 4,840 - Impound account 9,045 12,610 Assets held for sale 716,514 1,075,858 Deferred tax benefit 501,300 569,657 Total Current Assets 3,746,763 3,430,127 NET PROPERTY & EQUIPMENT 1,090,608 3,356,160 OTHER ASSETS Note receivable 254,554 254,554 Investment in securities available for sale 508,831 506,612 Net loan fees 9,990 91,528 Total Other Assets 773,375 852,694 TOTAL ASSETS $5,610,746 $7,638,981 TRIAD INDUSTRIES, INC. (Formerly RB Capital & Equities, Inc.) Consolidated Balance Sheets Nine Months Ended Year Ended September 30, December 31, 2001 2000 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 105,369 $ 84,675 Loans payable 246,541 277,433 Line of credit 31,042 30,160 Management fees - - Greentree lease - 224 Taxes payable 6,251 6,251 Security deposits 10,532 47,259 Notes payable on assets held for sale 538,790 787,649 Trust deeds and mortgages Short-term portion 150,910 372,905 Total Current Liabilities 1,089,435 1,606,556 LONG-TERM LIABILITIES Trust deeds and mortgages Long-term portion 853,397 2,663,745 Total Long-Term Liabilities 853,397 2,663,745 TOTAL LIABILITIES 1,942,833 4,270,301 STOCKHOLDERS' EQUITY Preferred stock ($1.00 par value, 10,000,000 shares authorized 850,000 shares issued and outstanding as of September 2001 and December 2000, respectively) 850,000 850,000 Common stock ($0.001 par value, 50,000,000 shares authorized 10,838,165 and 8,658,303 shares issued and outstanding as of September 2001 and December 2000, respectively) 10,838 8,658 Additional paid-in capital 3,911,058 3,644,874 Stock subscription receivable (181,500) (62,500) Retained earnings (797,275) (1,045,230) Comprehensive loss (125,208) (27,122) Total Stockholders' Equity 3,667,913 3,368,680 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 5,610,746 $ 7,638,981 TRIAD INDUSTRIES, INC. (Formerly RB Capital & Equities, Inc.) Consolidated Statements of Operations Nine Months Nine Months Three Months Ended Ended Ended September 30, September 30, September 30, 2001 2000 2001 REVENUES Consulting income $ 560,782 $ 435,617 $ 116,771 Medical fee income 793,377 291,467 266,117 Rental income 325,252 519,414 48,227 Cost of revenues (94,035) (58,068) (20,307) GROSS PROFIT 1,585,375 1,188,430 410,807 OPERATING COSTS Bad debt expense 216,159 98,706 66,348 Depreciation 61,759 119,867 12,933 Administrative expenses 1,383,956 781,445 297,928 Total Operating Costs 1,661,874 1,000,018 377,209 NET OPERATING INCOME / (LOSS) (76,499) 188,412 33,598 OTHER INCOME & (EXPENSES) Interest income 2,099 874 265 Other expense (4,536) (54) (4,536) Other income 4,484 - 4,436 Net realized gain on sale of marketable securities 38,047 36,310 21,063 Net gain / (loss) on disposable assets (4,083) (1,059) (4,083) Utility charges - 1,373 - Fee income - 114 - Vending income 10 - - Sale of assets - net 618,455 - - Interest expense (202,290) (381,423) (31,946) Total Other Income & (Expenses) 452,188 (343,876) (14,800) NET INCOME (LOSS) BEFORE TAXES 375,689 (155,464) 18,799 INCOME TAX (PROVISION) / BENEFIT (127,734) 43,877 (2,820) NET INCOME (LOSS) $ 247,955 $ (111,577)$ 15,979 BASIC EARNINGS (LOSS) PER SHARE $ 0.03 $ (0.02)$ 0.00 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 9,463,684 7,107,903 10,838,165 DILUTED EARNINGS (LOSS) PER SHARE $ 0.02 $ (0.01)$ 0.00 WEIGHTED AVERAGE OF DILUTED COMMON SHARES OUTSTANDING 11,163,684 8,807,903 12,538,165 Three Months Ended September 30, 2000 REVENUES Consulting income $ 107,268 Medical fee income 291,467 Rental income 186,098 Cost of revenues (19,933) GROSS PROFIT 564,900 OPERATING COSTS Bad debt expense 98,706 Depreciation 36,773 Administrative expenses 371,387 Total Operating Costs 506,866 NET OPERATING INCOME / (LOSS) 58,034 OTHER INCOME & (EXPENSES) Interest income 213 Other expense - Other income - Net realized gain on sale of marketable securities - Net gain / (loss) on disposable assets - Utility charges 123 Fee income 40 Vending income - Sale of assets - net - Interest expense (95,375) Total Other Income & (Expenses) (94,999) NET INCOME (LOSS) BEFORE TAXES (36,965) INCOME TAX (PROVISION) / BENEFIT 5,545 NET INCOME (LOSS) (31,420) BASIC EARNINGS (LOSS) PER SHARE $ (0.00) WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 7,107,903 DILUTED EARNINGS (LOSS) PER SHARE $ (0.00) WEIGHTED AVERAGE OF DILUTED COMMON SHARES OUTSTANDING 8,807,903 TRIAD INDUSTRIES, INC. (Formerly RB Capital & Equities, Inc.) Consolidated Statement of Comprehensive Income (Loss) For the Nine and Three Months Ended September 30, 2001 and 2000 Nine Months Three Months Ended Ended September 30, September 30, 2001 2000 2001 2000 Net Income (Loss) - Net of Tax $ 247,955 $(111,577) $ 15,979 $ (31,420) Other Comprehensive (Loss) : Unrealized gain (loss) on securities (157,460) 64,333 (46,772) (144,039) Total Other Comprehensive (Loss) (157,460) 64,333 (46,772) (144,039) Comprehensive Income (Loss) Before Income Taxes $(157,460) $ 64,333 $ (46,772) $(144,039) Income Taxes (Provision) / Benefit Related to Items of Comprehensive Income 59,374 (24,645) 7,016 48,297 Comprehensive Income (Loss) $ (98,086) $ 39,688 $ (39,756) $ (95,742) TRIAD INDUSTRIES, INC. (Formerly RB Capital & Equities, Inc.) Consolidated Statement of Stockholders' Equity 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 3,633,204 Additional Stock Common Paid-in Subscription Stock Capital Receivable Balance, December 31, 1997 $ 2,340 $ 633,096 - Common stock issued June 17,1998 for securities valued @ $1.07 per share 13 14,096 Common stock issued June 17, 1998 for securities valued @ $.90066 per share 60 53,940 Common stock issued June 17, 1998 for securities valued @ $.084 per share 15 1,235 Common stock issued June 17, 1998 for note payable @ $.334 per share 30 10,131 Common stock issued June 17, 1998 for securities valued @ $.334 per share 135 44,865 Common stock issued June 17, 1998 for services (officers) valued @ $.334 per share 300 99,700 Common stock issued November 4, 1998 for subscription receivable @ $.166 per share 375 62,125 (62,500) Common stock issued December 31, 1998 for note payable @ $.3234 per share 19 6,031 Common stock issued December 31, 1998 for management fees @ $.334 per share 61 20,192 Common stock issued December 31, 1998 for note payable @ $.334 per share 60 20,102 Common stock issued December 31,1998 for securities valued @ $.206 per share 225 46,025 Contributed capital 4,139 Net loss for the year ended December 31,1998 Balance, December 31, 1998 3,633 1,015,677 (62,500) Comprehensive nRetained Income Total Earnings (Loss) 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 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 Preferred Preferred Common Shares Stock 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 for services 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 Comprehensive Income December 31, 2000 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 for services 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 Comprehensive Income December 31, 2000 Net loss for the year ended December 31, 2000 Balance, December 31, 2000 $ 8,658 $3,644,874 $ (62,500) Comprehensive Retained Income Total Earnings (Loss) 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 (712,680) (712,680) Balance, December 31, 1999 $ (679,540) $ - $ 2,159,354 Stock issued on January 5, 2000 to Directors @ $0.06 a share 4,320 Stock issued on March 1, 2000 for services 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 Comprehensive Income December 31, 2000 (27,122) (27,122) Net loss for the year ended December 31, 2000 (365,689) (365,689) Balance, December 31, 2000 $(1,045,230) $ (27,122) $ 3,368,680 TRIAD INDUSTRIES, INC. (Formerly RB Capital & Equities, Inc.) Consolidated Statement of Stockholders' Equity 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 share 25,100 Stock issued on March 1, 2001 to management fees @ $0.17 a share 700,000 Stock issued on June 6, 2001 for the purchase of Corporate Capital Formation, Inc. @ $0.11 per share 900,000 Stock issued on June 22, 2001 to Directors @ $0.03 a share 360,000 Comprehensive Income September 30, 2001 Net lncome for the nine months ended September 30, 2001 Balance, September 30, 2001 850,000 $ 850,000 $10,838,165 Additional Stock Common Paid-in Subscription Stock Capital Receivable 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 share 25 3,715 Stock issued on March 1, 2001 to management fees @ $0.17 a share 700 118,300 (119,000) Stock issued on June 6, 2001 for the purchase of Corporate Capital Formation, Inc. @ $0.11 per share 900 95,100 0Stock issued on June 22, 2001 to Directors @ $0.03 a share 360 10,440 Comprehensive Income September 30, 2001 (98,086) (98,086) Net lncome for the nine months ended September 30, 2001 Balance, September 30, 2001 $ 10,838 $ 3,911,058 $(181,500) Comprehensive Retained Income Total Earnings (Loss) 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 share 3,740 Stock issued on March 1, 2001 to management fees @ $0.17 a share - Stock issued on June 6, 2001 for the purchase of Corporate Capital Formation, Inc. @ $0.11 per share 96,000 Stock issued on June 22, 2001 to Directors @ $0.03 a share 10,800 Comprehensive Income September 30, 2001 (98,086) (98,086) Net lncome for the nine months ended September 30, 2001 247,955 247,955 Balance, September 30, 2001 $ (797,275) $ (125,208) $3,667,913 TRIAD INDUSTRIES, INC. (Formerly RB Capital & Equities, Inc.) Consolidated Statements of Cash Flows Nine Months Ended September 30, 2001 2000 CASH FLOWS FROM OPERATING ACTIVITIES Income (loss) from operations $ 247,955 $ (111,577)$ 15,979 Depreciation expense 61,759 119,867 12,933 (Increase) in accounts receivable (335,664) (99,729) (33,006) (Increase) in advance expenses (4,840) - (3,390) Decrease in impound account 3,565 2,103 - (Decrease) in loan fees 81,538 - (2,500) Unrealized (gain) loss on available for sale securities (170,896) - 350,473 Purchase of marketable securities (1,211) (250,000) - Sale of marketable securities (52,216) 99,175 - (Decrease) in assets held for sale 355,344 177,393 - (Decrease) in accounts payable 20,694 29,058 38,703 Increase in loans payable 19,108 150,921 8,673 (Decrease) / increase in security deposits (36,727) 126 1,863 (Decrease) / increase in taxes payable - (10,604) (2,437) Deferred tax benefit 127,734 (43,877) 2,820 Common stock issued for services 268,364 93,440 - Net cash provided by operating activities 584,507 156,300 390,111 CASH FLOWS FROM INVESTING ACTIVITIES Disposal of fixed assets 3,325,203 - - Purchase of fixed assets (1,117,409) (51,638) (44,409) Loan fees - 71,890 - Net cash provided / (used) by investing activities 2,207,794 20,252 (44,409) CASH FLOWS FROM FINANCING ACTIVITIES Investment Property Mortgages (4,203) (153,625) - Investment in securities available for sale (393,832) - (393,832) Common stock subscriptions receivable (119,000) - - (Decrease) in line of credit 882 4,523 3,327 Greentree Lease (224) (1,253) - Mortgage Principal (2,326,999) - (39,349) Net cash (used) by financing activities (2,843,376) (150,355) (429,854) Net increase (decrease) in cash (51,073) 26,197 (84,152) Cash at beginning of period 54,384 43,235 87,462 Cash at end of period $ 3,310 $ 69,432 $ 3,310 Supplemental Cash Flow Disclosures Cash paid during year for interest $ 202,290 $ 309,533 $ 31,946 Schedule of Non-Cash Activities Common Stock issued for services $ 268,364 $ 93,440 $ - Common Stock received for services $ 365,916 $ 205,000 $ 49,500 Common Stock issued for acquisition of subsidiary$ - $ 1,463,302 $ - Three Months Ended September 30, 2000 CASH FLOWS FROM OPERATING ACTIVITIES Income (loss) from operations $(31,420) Depreciation expense 36,773 (Increase) in accounts receivable (3,805) (Increase) in advance expenses - Decrease in impound account - (Decrease) in loan fees - Unrealized (gain) loss on available for sale securities - Purchase of marketable securities - Sale of marketable securities - (Decrease) in assets held for sale - (Decrease) in accounts payable 39,834 Increase in loans payable (8,917) (Decrease) / increase in security deposits 604 (Decrease) / increase in taxes payable - Deferred tax benefit (5,545) Common stock issued for services - Net cash provided by operating activities 27,526 CASH FLOWS FROM INVESTING ACTIVITIES Disposal of fixed assets - Purchase of fixed assets - Loan fees - Net cash provided / (used) by investing activities - CASH FLOWS FROM FINANCING ACTIVITIES Investment Property Mortgages (32,423) Investment in securities available for sale - Common stock subscriptions receivable - (Decrease) in line of credit (356) Greentree Lease (365) Mortgage Principal - Net cash (used) by financing activities (33,144) Net increase (decrease) in cash (5,618) Cash at beginning of period 75,050 Cash at end of period $ 69,432 Supplemental Cash Flow Disclosures Cash paid during year for interest $ 95,375 Schedule of Non-Cash Activities Common Stock issued for services $ - Common Stock received for services $ 25,000 Common Stock issued for acquisition of subsidiary$ $ - 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. On June 30, 2000, Triad Industries, Inc. acquired certain assets subject to certain liabilities of Northwest Medical Clinic, Inc., acquired certain assets of Amerimed of Georgia, Inc. (a Georgia Corporation) and acquired certain assets of Florimed of Tampa, Inc. (a Florida Corporation). These certain assets subject to the certain liabilities were combined and put into a newly formed and capitalize corporation operating under the name Northwest Medical Clinic, Inc. The acquisition was recorded as a purchase in accordance with Accounting Principles Board Opinions No. 16 (APB No. 16). Northwest Medical Clinic, Inc. operates in the personal injury area and also performs sleep apnea procedures. In June 2001, Triad Industries, Inc. acquired the assets subject to the liabilities of Corporate Capital Formation, Inc. The acquisition was recorded as a purchase in accordance with Accounting Principles Board Opinions No. 16 (APB No. 16). NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS (CONTINUED) Corporate Capital Formation, Inc. operates in the corporate business consulting as well as business formation. The Company has authorized 50,000,000 shares of $0.001 par value common stock. The Company operates through its seven 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. is presently inactive in the property management business. 3. Gam Properties, Inc. owns and rents a three unit and a four unit apartment building. 4. HRM, Inc. is presently inactive in the healthcare industry. 5. Triad Realty 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. 7. Corporate Capital Formation, Inc. is a financial services corporation that operates a merger and acquisition consulting business. 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. Northwest Medical Clinic, Inc., and Corporate Capital Formation, 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. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 2j regarding the Companies revenue recognition policy. 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 debt or equity offerings. Management has yet to decide what type of offering the Company will use or how much capital the Company will raise. There is no guarantee that the Company will be able to raise any capital through any type of offerings. There is not substantial doubt about the Companies ability to continue as a going concern. f. Intangibles Intangible assets consist of loan fee. The loan fees are being amortized on a straight-line basis over a period of twenty-five years. g. Accounts Receivable 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 September 30, 2001. Accounts receivable $ 3,165,322 Reserve for bad debts (1,620,063) $ 1,545,259 The 1,545,259 is a receivable of Northwest Medical Clinic (a subsidiary) for services rendered. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 September 30, 2001 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 in accordance with paragraph 9 of SFAS 107. Note 3 reflects the fair value of notes, trusts, and mortgages payable in accordance with paragraph 11, 12, and 13 of SFAS 107. i. Investments in Securities Marketable securities at September 30, 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 and expenses. j. 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 consists of medical services. Northwest revenue is recognized at the time a patient has had services performed on their behalf. Corporate Capital Formation Inc. revenue consists of consulting income. Corporate Capital recognizes revenue when services on contracts are provided. 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. k. 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. Northwest Medical Clinic, Inc., a Georgia corporation and Corporate Capital Formation Inc., a Nevada corporation. All subsidiaries are wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 $ 31,042 as of September 30, 2001. 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 6 regarding income tax benefit. n. Note receivable The $254,554 note receivable represents a non interest-bearing note the Company received in the acquisition of the final one percent of Miramar Road Associates, Inc. NOTE 3. ASSETS HELD FOR SALE All of the Companys properties held for sale are on a thirty-year mortgage. Location Description Interest Rate Cost 2016-18 Balboa* 4 Units 7.817$ 420,000 2015-17 Hornblend* 2135-39 Grand Ave. Tri-plex 7.667 355,350 NRV (58,836) Total $ 716,514 * This location is a four-unit building. The building is constructed with 2 units being back to back and on separate streets. A net realizable valuation allowance was placed on the properties held for sale in the amount of $ 58,836, in accordance with SFAS 121. May 2001 the Company sold the 51,000 square foot commercial building located at 6920-6910 A & B and 6914 Miramar Road, San Diego, California for $ 3,950,000. The Company also sold the Bancroft property on April 1, 2001 for $ 400,000. NOTE 3. ASSETS HELD FOR SALE (CONTINUED) By classifying these properties as held for sale the Company is bypassing an approximated annual depreciation expense of $26,047. The net operating loss for Gam Properties, Inc. for the period ending September 30, 2001 is $(17,218). NOTE 4. TRUST DEEDS & MORTGAGES Interest Rate Debt Maturity Date - ------------------- ------------------------- ------------------------------------------------------------ 350 W. 9th Avenue 7.820 % $749,000 12/08/26 2016-18 Balboa* 2015-17 Hornblend* 7.796 % 312,294 02/20/20 2135-39 Grand Ave. 7.898 % 226,496 11/20/20 4592 Bancroft 7.796 % 255,307 02/20/20 ------------------- ------------------- $1,543,097 =================== The office building and apartment complexs collateralized the above loans. The loan agreements provide for monthly payments of interest and principle. The office building located at 350 W. 9th Avenue in Escondido, Ca. was purchased June 11, 2001. The total debt of $ 1,543,097 was recorded as follows: current portion (less than one year) of $ 150,910 and long-term portion (more than one year) of $ 1,392,187. NOTE 5. 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. September 30, December 31, 2001 2000 -------------------- ------------------- -------------------- ------------------- Land $ 300,000 $ 327,614 Buildings 770,000 3,038,357 Equipment 45,345 34,070 Computer 20,438 4,764 Furniture 13,312 12,223 Tenant Improvements 35,186 161,669 ----------------------------------- ----------------------------------- $ 1,184,281 $ 3,578,697 Less Accumulated Depreciation (93,673) (222,537) ----------------------------------- Net Property and Equipment $ 1,090,608 $ 3,356,160 =================================== NOTE 6. 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. The variance between basic and diluted weighted average is the addition of preferred stock in the calculation of diluted weighted average per share. September 30, December 31, 2001 2000 ---------------------------------------- ---------------------------------------- Numerator income / (loss) $ 150,479 $ (392,811) Denominator weighed average number of shares outstanding 9,463,684 7,378,445 ---------------------------------------- ---------------------------------------- Basic gain / (loss) per share $ 0.02 $ (0.05) ======================================== September 30, December 31, 2001 2000 ---------------------------------------- ---------------------------------------- Numerator income / (loss) $ $ (392,811) 150,479 Denominator weighed average number of shares outstanding 11,163,684 9,078,445 ---------------------------------------- ---------------------------------------- Diluted gain / (loss) per share $ 0.01 $ (0.04) ======================================== NOTE 7. 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 September 30, 2001 the Company has significant operating and capital losses carryfoward. The tax benefits resulting for the purposes have been estimated as follows: September 30, 2001 Beg. Retained Earnings (1,072,352) Net operating gain for September 30, 2001 149,869 -------------------------- Ending Retained Earnings (922,484) -------------------------- -------------------------- Income Tax Benefit $ (501,300) ========================== 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. Net operating loss expires twenty years from the date the loss was incurred. In accordance with SFAS 109 paragraph 24 the Company has deemed that a valuation allowance is not needed. Income tax benefit was decreased by $68,357 for the first nine months of 2001. NOTE 8. MARKETABLE SECURITIES At September 30, 2001, the Company held trading securities of the following companies: Trading Trading Number of Mkt. Price FMV Symbol Market Shares At Year End At Year End ------------ ------------------ ------------------ --------------------- First Genx.com fgnx otc 1,275,000 0.18 229,500 Greenland glcp otc 4,113 0.02 83 Mezzanine Capital mezz otc 107,000 1.45 155,150 Millennium Plastics mpco otc 30,000 0.13 3,900 One Stop Sales ossc otc 5,000 2.40 12,000 Peacock Financial pfck otc 200,000 0.01 2,000 Phantom Film Corp. phlm otc 5,000 0.00 50 Processing Corp. prix otc 20,000 0.00 0 Pro Glass Technologies, Inc. pgti otc 1,118,962 0.10 111,896 Regan Corp. ragn otc 5,000 0.00 0 Spectrum sruv Pinksheets 850,000 0.03 21,250 Thunderstone tgie otc 3,068 0.00 0 Total Entertainment ttln otc 55,000 0.08 4,400 ---------------- Total $ 540,229 ===================== The Company is in accordance with SFAS 130 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 September 30, 2001 in accordance with SFAS 130. NOTE 9. INVESTMENTS IN SECURITIES AVAILABLE FOR SALE At September 30, 2001, the Company held investments in the following companies: Number of Value Price FMV Shares At Period End At Sep. 30, 2001 Advanced Interactive Inc. 5,125 0.97 4,970 American Eagle Financial 55,000 0.10 5,500 Atlantic & Pacific Guarantee 1,000,000 0.02 18,000 Beach Brew Beverage Company 625,000 0.02 17,500 Blue Gold 125,000 0.01 125 Carrara 325,000 0.00 371 Heritage National Corporation 250,000 0.10 25,000 International Sports Marketing, Inc. 100,000 0.01 1,000 Love Calendar (Nevada) 100,000 0.01 1,000 Love Calendar (Utah) 25,000 1.00 25,000 Love Concepts 100,000 0.01 1,000 Merchant Park Communications, Inc. 825,000 0.20 165,000 Nicholas Inv. 364,583 0.00 365 Noble Onie 25,000 0.10 2,500 Oasis Info. Systems 1,200,000 0.10 120,000 Quantum Companies 1,200,000 0.09 102,000 Resume Junction 20,000 0.10 2,000 Spa International 245,165 0.00 0 Sterling Electronic Commerce 300,000 0.05 15,000 The Shops Network 500 0.10 500 Trans Pacific Group 100,000 0.01 1,000 Thunder Mountain 100,000 0.01 1.000 ---------------------- ---------------------- Total $ 508,831 ====================== * 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 Technologies, Inc. at $ .10 a share for 150,000 shares of preferred stock. The Company additionally acquired 368,892 shares of Pro Glass Technologies, Inc. for services rendered at $.06 per share. 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. In 1999, the Company returned 50,000 shares of $5.00 preferred stock of American Health Systems that was earned in 1998 because the business plan was not approved by the state of California. This was considered a disposition of stock. All gains and losses will be recorded in the statement of operations under other income and expenses. As of September 30, 2001 the Company had an 8.5% share of Pro Glass Technologies, Inc. Heritage National Corporation is a privately owned Company. NOTE 10. ACQUISITIONS Triad Industries acquired Gam Properties and Miramar Road Associates, LLC on February 26, 1999. Both acquisitions were recorded as a purchase in accordance with Accounting Principles Board Opinions No. 16 (APB No. 16). Gam Properties Inc. is in the residential rental business. Triad Industries issued 1,120,000 shares of common stock, the stocks trading value was $.63 per share in the acquisition of Gam Properties. Gam Properties was valued at $700,000. Miramar Road Associates, LLC. is in the commercial rental business. Triad Industries issued 700,000 shares of $1.00 preferred stock in the acquisition of Miramar Road Associates. Therefore, the interest in Miramar Road Associates, LLC. was valued at $700,000. In September 2000, the Company absorbed a contingent liability on behalf of the old owner of Miramar for the remaining 1%. All shares issued for the acquisition of Gam Properties and Miramar Road Associates were valued at whatever was given up or received whichever is more readily determinable. On March 15, 1999 Triad Industries acquired HRM for 526,672 shares of common stock in conjunction with a recapitalization of the Company. HRM is in the business of healthcare management. On June 30, 2000, Triad Industries, Inc. acquired certain assets subject to certain liabilities of Northwest Medical Clinic, Inc., acquired certain assets of Amerimed of Georgia, Inc. (a Georgia Corporation) and acquired certain assets of Florimed of Tampa, Inc. (a Florida Corporation). These certain assets subject to the certain liabilities were combined and put into a newly formed and capitalize corporation operating under the name Northwest Medical Clinic, Inc. The acquisition was recorded as a purchase in accordance with Accounting Principles Board Opinions No. 16 (APB No. 16). Northwest Medical Clinic, Inc. operates in the personal injury area and also performs sleep apnea procedures. For all intent and purposes Amerimed and Florimed are no longer performing any medical services; however, they still have active accounts receivables that they receive payment on. Triad Industries issued 1,463,302 shares of common stock in the acquisition of Northwest, LLC. The major asset acquired in the transaction was $ 1,512,850 (net of allowance for bad debt) in accounts receivable. The major liabilities were notes payable totaling $ 132,553. Triad Industries, Inc. acquired 100% of the outstanding common stock of Northwest Medical Clinic, Inc. and its two subsidiaries (Amerimed and Florimed). Northwest Medical Clinic, Inc. will become a wholly owned subsidiary of Triad Industries, Inc. As per agreement Triad Industries, Inc. issued 1,463,302 shares of common stock on June 30, 2000 at $.96 per share which was the stocks trading value for the purchase of Northwest Medical Clinic, Inc. For this acquisition 36,583 shares of common stock was issued to Donner Investments Corp. as a finders fee. This issuance was not part of the cost of the acquisition. In June 2001, Triad Industries, Inc. acquired the assets subject to the liabilities of Corporate Capital Formation, Inc. The acquisition was recorded as a purchase in accordance with Accounting Principles Board Opinions No. 16 (APB No. 16). Corporate Capital Formation, Inc. operates in the corporate business consulting as well as business formation. There were no significant assets or liabilities acquired from Corporate Capital Formation, Inc. NOTE 10. ACQUISITIONS (CONTINUED) Triad Industries, Inc. will acquired 100% of the equity interest of from Corporate Capital Formation, Inc. in return for voting common stock, and that from Corporate Capital Formation, Inc. will become a wholly owned subsidiary of Triad Industries, Inc. As per agreement Triad Industries, issued 900,000 shares of common stock on June 6, 2001 for the purchase of Corporate Capital Formation, Inc. All shares issued for the acquisition of Northwest Medical Clinic, Inc. and Corporate Capital Formation, Inc. were valued at market price. The operating results of the acquired entities are included in the Companys consolidated financial statements from the date of acquisition. NOTE 11. STOCK TRANSACTIONS For transactions with other than employees 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. Transactions with employees stock issuance are in accordance with paragraphs (16-44) of SFAS 123, where issuances shall be accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliable measurable. As of January 1, 1998 there were 2,339,529 shares of common stock outstanding. In June of 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 11. 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 its President for services rendered valued at $0.15 per share. NOTE 11. STOCK TRANSACTIONS (CONTINUED) On June 15, 2000 the Company issued 72,000 shares of common stock to Directors for services rendered valued at $ 0.50 per share. 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 to its president for services rendered 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. On June 6, 2001 the Company issued 900,000 shares of common stock for the purchase of Corporate Capital Formation Inc. valued at $ 0.11 per share. On June 22, 2001 the Company issued 360,000 shares of common stock to Directors for services rendered valued at $ 0.03 per share. As of September 30, 2001 the Company had 10,838,165 shares of common stock issued and outstanding. NOTE 12. STOCKHOLDERS EQUITY The stockholders equity section of the Company contains the following classes of capital stock as of September 30, 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; 10,838,165 and 8,658,303 shares issued and outstanding as of September 30, 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 September 30, 2001. The preferred stock is (1) non-voting, (2) convertible at the second anniversary from issuance on a two for on (2:1) basis to common stock, (3) has a preference over common stock to be paid $1.00 per share as a preferential liquidation. NOTE 13. 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 valuations 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. As of September 30, 2001 there were no stock options issued or outstanding. NOTE 14. RESTATED FINANCIAL STATEMENTS Management to comply with SEC regulations for the period ended September 30, 2001 has restated the financial statements. 1 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources As of September 30, 2001 the Company had $3,746,763 in current assets, compared to $1,089,435 in current liabilities. This represents a comfortable 3.4 to 1 current ratio. The current assets are comprised of $3,310 in cash, $426,266 in accounts receivable, $1,545,259 in medical clinic receivables, $540,229 in marketable securities, $4,840 in prepaid expenses, $9,045 in tax impound accounts, $716,514 in assets held for sale and $501,300 in deferred tax benefits. The company has a $50,000 bank line of credit, which is mentioned above. The $50,000 credit line is an adjustable rate loan. The loan is an open revolving line of credit, with annual terms of prime plus 3.65%. (ie. If prime was 9% the interest rate would be 12.65%.) There are no restrictions on the use of this line of credit. As of September 30, 2001 there was $31,042 outstanding on this line of credit. It should be noted that a tax benefit carryforward provides benefits to the Company when there is taxable net income. There are uncertainties surrounding the realization of the deferred tax asset. The biggest uncertainty would stem from the Company having the ability to operate on a profitable basis. In the opinion of management this is attainable. Management anticipates that net income would have to increase by about $266,000 a year during the carryforward period to recognize this benefit. Results of Operations For the nine months ended September 30, 2001 the Company has net income of $247,955. Medical fee income was up $501,910 compared to the same period of 2000 due to the fact Northwest Medical Clinic was owned for all nine months of 2001. Rental income was down $194,162 for the first nine months of 2001 compared to the same period of 2000. This stems from the Company selling a 48,000 square foot building and purchasing a 12,500 square foot building. Depreciation and amortization also decreased from $119,867 in the nine months of 2000 to $61,759 for the nine months in 2001 due mostly to the new building. Bad debt expense was up from $117,453 for the nine months ended 2000 to $216,159 in the nine months 2001 due to the Company owning Northwest Medical Clinic for the entire nine months of 2001.Administrative expenses have are up almost 80% for 2001 when compared to 2000.This can bee attributed to the companies purchase of Northwest Medical Clinic and Corporate Capital Formation subsidiaries. For the nine months ended September 30, 2001 the company had a gain of $618,455 from the sale of real estate holdings. Interest expense decreased from $381,423 to $202,290 for the nine months ended 2001 compared to the same period of 2000. This can also be attributed to the sale of a larger commercial building and a purchase of a smaller building. Also, the expensing of all the related remaining loan fees associated with the Miramar property. The Company had revenues of $1,679,410 for the nine months ended 2001 compared to $1,246,498 for the same period of 2000. Nine Months Ending September 30, September 30, 2001 2000 Financial Services Income $ 560,782 $ 435,617 Real Estate Rental Income 325,252 519,414 Medical Services Income 793,377 281,467 Total $ 1,679,410 $ 1,246,498 For the three months ended September 30, 2001 the company has net income of $15,979 compared to a net loss if $31,420 for the same period the year before. Rental income was down for the period by $137,871 due to the smaller commercial building. Depreciation and amortization decreased approximately $24,000 also because of the smaller building. The Company also had a gain of $21,063 from the sale of marketable securities. The Company had a loss of $4,083 on the sale of disposable assets. Interest expense decreased approximately $63,000 for the three months ended September 30, 2001 also because of the smaller building and the sale of the Gam properties. For the nine months ended September 30, 2001 Financial Service revenue increased by $125,165. There was a $132,250 merger and acquisition fee paid to R.B. Capital & Equities, Inc. which can explain this increase. Other than this, revenues seem flat. In the opinion of management, this is due to the continuing decline of the overall financial markets. Overall, operating expenses remained constant in the financial services sector when compared to prior periods. In the opinion of management it appears as if there is an increasing trend of emerging companies trying to become public in order to have access to venture capital markets, however, due to the declining financial markets this has proven somewhat difficult. For the nine months ended Septmeber 30, 2001 real estate rental income decreased $194,162. Rental revenues decreased when compared to the same period of 2000 due to the Company selling the Miramar building which was approximately four times bigger than the new building recently purchased. Also, the new building is not currently 100% occupied. General and Administrative costs have decreased at the new building by about half. This is due to the fact that the new building is less labor intensive than the old building because of the buildings size and the new building is only approximately 15 years old compared to approximately 25 years for the old building. Therefore, repairs should be less substantial than the old building due to the size and age of the building. The Company acquired Northwest Medical Clinic on June 30, 2000. This is the first time the Company has presented Northwest Medical Clinic in a nine - month comparison. The medical clinic had revenues of $793,377. However, there was $216,159 in bad debt expense recognized on this revenue. The reason for the increase in bad debt expense is due to the nature of the services performed by Northwest Medical Clinic. Revenues are recognized when services are performed. However, the historical collection rate on the accounts receivable by Northwest Medical Clinic is 65%. This is due to the personal injury service the clinic performs. The clinic performs these services then collects from the clients insurance company. Often the insurance company settles at a discount. This collection rate has been steady for the last 10 years of operations. There has not been a material change in general and administrative costs since the acquisition of the Company by Triad Industries, Inc. according to the management of the medical clinic. There are no known trends, events or uncertainties that management is aware of that are likely to have an impact on liquidity or revenues from continuing operations. The only significant expense that is not an operating expense is interest expense. Interest expense increased by $179,133, for the nine months ended September 30, 2001, due to the real estate holdings the Company acquired in February of 1999. There are no material planned expenditures for plant, property or equipment. There are no seasonal aspects, which had a material impact on the Companys operations. Net Operating Loss The Company has accumulated approximately $797,275 net operating loss carryforwards as of September 30, 2001, which may be offset against taxable income and incomes taxes in future years. The use of these to losses to reduce future incomes taxes will depend on the generation of sufficient taxable income prior to the expiration on the net loss carryforwards. The carryforwards expire in the year 2021. In the event of certain changes in control of the Company, there will be an annual limitation on the amount carryforwards, which can be used. A tax benefit has been recorded in the Company's financial statements for the year ended December 31, 2000 in the amount of $569,657 and for the nine months ended September 30, 2001 in the amount of $501,300. Sale of Common Capital Stock None to report. 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 None. ITEM 2. CHANGES IN SECURITIES None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO BE A VOTE OF SECURITY HOLDERS At the Annual Meeting of Shareholders held August 2, 2001 the shareholders elected directors to serve for one year or until their successors are duly qualified. The nominees for directors was as follows: Gary DeGano Richard Furlong Linda M. Bryson J. William Byrd Michael Kelleher James Crowell Brice Smith For Against Abstain Gary DeGano 8,074,401 0 9 Linda M. Bryson 8,074,401 0 9 Michael Kelleher 8,074,401 0 9 J. William Byrd 8,074,401 0 9 David Czoske 8,074,401 0 9 Richard Furlong 8,074,401 0 9 James Crowell 8,074,401 0 9 All of the above Directors were approved by 99.9% of the represented votes. At the same meeting, the shareholders voted on a proposed 2001 stock option plan. For Against Abstain 7,751,208 6,247 316,955 The stock option plan was approved by 95.9% of the represented votes. The Shareholders also elected to appoint Armando Ibarra as the Companys independent auditor. For Against Abstain 8,074,360 50 0 The Companys independent auditor was approved by 99.9% of the represented votes. The Shareholders also elected to appoint Signature Stock Transfer as the Companys Registrar and Transfer Agent. For Against Abstain 7,761,049 50 313,311 The Companys Registrar and Stock Transfer Agent auditor was approved by 96% of the represented votes. All of the above motions passed at the Annual Shareholder Meeting. These motions were voted on by approximately 84% of the Companys outstanding common stock as of the record date of May 28, 2001. All of the above motions passed, approving the above said motions. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON 8-K a. Form 8K/A filed by reference on 7/10/2001. b. Form 8K/A filed by reference on 7/18/2001. c. Form 10QSB filed by reference on 8/13/2001 d. Form 10QSB/A filed by reference on 8/15/2001. 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: November 15, 2001 By:_/S/ Linda Bryson _____ Linda Bryson President, Director By:_/S/ Michael Kelleher___ Michael Kelleher Secretary, Treasurer and Director