Microsoft Word 10.0.3416;UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarter report ended September 30, 2004
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.)
122 East Grand Avenue, Escondido, CA 92025
(Address of principal executive office)
Registrants telephone no., including area code (760) 741-1128
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, 2004
Common Stock, $0.001 578,135
i
TABLE OF CONTENTS
PART 1. FINANCIAL INFORMATION
Heading Page
Item 1. Consolidated Financial Statements 1-2
Consolidated Balance Sheets September 30, 2004
And December 31, 2003 3-4
Consolidated Statements of Operations for the nine months
Ended September 30, 2004 and 2003 5
Consolidated Statements of Comprehensive Income (Loss)6
Consolidated Statements of Stockholders Equity 7
Consolidated Statements of Cash Flows for the nine months
Ended June 30, 2004 and 2003 8
Notes to Consolidated Financial Statements 9
Item 2. Managements Discussion and Analysis and
Result of Operations 10-11
Item 3. Controls and Procedures 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11-12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matter to be a Vote of
Securities Holders 12
Item 5. Other Information on Form 8-K 12
Item 6. Exhibits and Reports on 8K 12
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-QSB 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 September 30, 2004,
and the related balance sheet of the Company as of December 31, 2003, which is
derived from the Company's audited financial statements, the unaudited statement
of operations and cash flows for the nine months ended September 30, 2004 and
September 30, 2003 and the statement of stockholders equity for the period of
December 31, 2000 to September 30, 2004 are included in this document.
Operating results for the quarter ended September 30, 2004, are not
necessarily indicative of the results that can be expected for the year ending
December 31, 2004.
1
371 "E" Street, Chula Vista, CA 91910
Tel: (619) 422-1348 Fax: (619) 422-1465
---------- -------- --------
A C I 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., JD Certified Public Accountants
Members of the American Institute of
Certified Public Accountants
Members of the Better Business Bureau since 1997
To the Board of Directors
Triad Industries, Inc.
(Formerly RB Capital & Equities, Inc.)
Escondido, CA 92025
Report of Independent Registered Public Accounting Firm
We have reviewed the accompanying consolidated balance sheets of Triad
Industries, Inc. (Formerly RB Capital & Equities, Inc.) as of September 30,
2004, and the related statements of operations, changes in stockholders' equity,
and cash flows for the nine and three months ended September 30, 2004 and 2003,
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.
We conducted our review in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with the standards of the Public Company Accounting Oversight Board, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with U.S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2, the Company in
the past has shown significant operating losses that raise substantial doubt
about its ability to continue as a going concern. The accompanying financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
- ----------------------------------
ARMANDO C. IBARRA, C.P.A. - APC
November 5, 2004
Chula Vista, California
2
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Balance Sheets
ASSETS
As of As of
September 30, December 31,
2004 2003
CURRENT ASSETS
Cash $254,175 $411,614
Accounts receivable 142,801 88,142
Available for sale securities 39,773 72,949
Trading securities 97,029 135,207
Prepaid expenses 8,988 -
Total Current Assets 542,766 707,912
NET PROPERTY & EQUIPMENT 29,613 35,128
OTHER ASSETS
Investment in other companies 120,872 122,637
Security deposits - 1,224
Total Other Assets 120,872 123,861
TOTAL ASSETS $693,251 $866,901
3
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Balance Sheets
LIABILITIES AND STOCKHOLDERS' EQUITY
As of As of
September 30, December 31,
2004 2003
CURRENT LIABILITIES
Accounts payable $ 20,763 $ 20,456
Loans payable 60,530 59,612
Line of credit 2,751 4,354
Client deposits 600 600
Total Current Liabilities 84,644 85,022
TOTAL LIABILITIES 84,644 85,022
STOCKHOLDERS' EQUITY
Preferred stock ($1.00 par
value, 10,000,000 shares
authorized 7,500 shares
issued and outstanding for
September 30, 2004 and
December 31, 2003, respectively) 7,500 7,500
Common stock ($0.001 par value,
50,000,000 shares authorized
578,135 and 532,300 shares
issued and outstanding
as of September 30, 2004 and
December 31, 2003, respectively) 578 532
Additional paid-in capital 4,626,552 4,621,098
Stock subscription receivable (62,500) (62,500)
Accumulated other comprehensive loss (707,439) (653,085)
Retained earnings (deficit) (3,256,084) (3,131,666)
Total Stockholders' Equity 608,607 781,879
TOTAL LIABILITIES
& STOCKHOLDERS' EQUITY $ 693,251 $ 866,901
4
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Statements of Operations
Nine Months Nine Months
Ended Ended
September 30, September 30,
2004 2003
REVENUES
Consulting income $ 138,417 $ 112,989
Rental income - 86,371
Total Revenues 138,417 199,360
Costs of revenues (37,653) (46,037)
GROSS PROFIT 100,764 153,323
OPERATING COSTS
Depreciation expense 5,515 34,039
Administrative expense 229,435 369,954
Total Operating Costs 234,950 403,993
OPERATING INCOME (LOSS) (134,186) (250,670)
OTHER INCOME & (EXPENSES)
Interest income 3,308 112
Other income 1,098 -
Other expenses - (5,459)
Net realized gain (loss) on sale
of marketable securities 7,623 (5,924)
Loss in investment (see note 9) (1,765) (5,721)
Interest expense (496) (60,294)
Net gain (loss) on disposable assets - 573,014
Total Other Income & (Expenses) 9,768 495,728
INCOME (LOSS) BEFORE IMPAIRMENT LOSS (124,418) 245,058
IMPAIRMENT LOSS (See Note 12) - (834,691)
INCOME (LOSS) $(124,418) $(589,633)
BASIC EARNINGS (LOSS) PER SHARE $ (0.22) $ (1.11)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 573,953 529,983
DILUTED EARNINGS (LOSS) PER SHARE $ (0.21) $ (1.08)
WEIGHTED AVERAGE NUMBER OF
DILUTED SHARES OUTSTANDING 588,953 543,806
Three Months Three Months
Ended Ended
September 30, September 30,
2004 2003
REVENUES
Consulting income $ 74,023 $ 27,784
Rental income - 12,052
Total Revenues 74,023 39,836
Costs of revenues (14,708) (14,894)
GROSS PROFIT 59,315 24,942
OPERATING COSTS
Depreciation expense 2,106 12,460
Administrative expense 70,627 222,455
Total Operating Costs 72,733 234,915
OPERATING INCOME (LOSS) (13,418) (209,973)
OTHER INCOME & (EXPENSES)
Interest income 1,317 109
Other income 368 -
Other expenses 2,800 (4,209)
Net realized gain (loss) on sale
of marketable securities 2,023 (1,327)
Loss in investment (see note 9) (973) -
Interest expense (80) (36,602)
Net gain (loss) on disposable assets - 573,014
Total Other Income & (Expenses) 5,455 530,985
INCOME (LOSS) BEFORE IMPAIRMENT LOSS (7,963) 321,012
IMPAIRMENT LOSS (See Note 12) - (853,003)
INCOME (LOSS) $ (7,963) $(531,991)
BASIC EARNINGS (LOSS) PER SHARE $ (0.01) $ (1.00)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 578,135 532,300
DILUTED EARNINGS (LOSS) PER SHARE $ (0.01) $ (0.97)
WEIGHTED AVERAGE NUMBER OF
DILUTED SHARES OUTSTANDING 593,135 547,300
5
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Statement of Comprehensive Income (Loss)
Nine Months Nine Months Three Months Three Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
2004 2003 2004 2003
Net Income (Loss)
Net of Tax $ (124,418) $ (589,633) $ (7,963) $ (531,991)
Other Comprehensive
Income (Loss) :
Unrealized gain
(loss) on securities (54,354) (15,743) (37,578) 13,103
Total Other Comprehensive
Income (Loss) (54,354) (15,743) (37,578) 13,103
Other Comprehensive Income
(Loss) Before Income Taxes (54,354) (15,743) (37,578) 13,103
Income Tax (Provision) Benefit
related to Items of
Comprehensive Income (Loss) - - - (902)
Total Other Comprehensive
Income (Loss) $ (54,354) $ (15,743) $ (37,578) $ 12,201
6
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Statement of Stockholders' Equity
From December 31, 2000 through September 30, 2004
Preferred Preferred Common Common
Shares Stock Shares Stock
Balance, December 31, 2000 42,500 42,500 433,972 433
Stock issued on January 15, 2001
for consulting fees @ $3.40 a share 2,500 3
Stock issued on January 18, 2001 for
management fees @ $4.19 a share 7,238 7
Stock issued on February 21, 2001
for consulting fees @ $2.98 a share 1,255 1
Stock issued on March 1, 2001 to
management fees @ $3.40 a share 35,000 35
Stock issued on June 6, 2001
for the purchase of Corporate Capital
Formation, Inc. @ $2.13 per share 45,000 45
Stock issued on June 22, 2001
to Directors @ $0.60 a share 18,000 18
October 1, 2001 cancellation of
stock subscription (35,000) (35)
Other comprehensive loss December 31, 2001
Net income for the year ended
December 31, 2001
Balance, December 31, 2001 42,500 42,500 507,965 507
January 1, 2002 sale of Northwest
Medical Clinic, Inc. @ $0.40 a share (73,165) (73)
On October 15, 2002 preferred stock
converted to common stock at 2 for(35,000) (35,000) 70,000 70
Other comprehensive loss December 31, 2002
Net loss for the year ended
December 31, 2002
Balance, December 31, 2002 7,500 7,500 504,800 504
Stock issued on January 24, 2003 for
accrued services rendered @ $0.20 a share 27,500 28
Other comprehensive loss December 31, 2003
Net loss for the year ended
December 31, 2003
Balance, December 31, 2003 7,500 7,500 532,300 532
Stock issued on January 26, 2004 for
accrued services rendered @ $0.12 a share 45,835 46
Other comprehensive loss September 30, 2004
Net loss for the nine months ended
September 30, 2004
Balance, September 30, 2004 7,500 $ 7,500 578,135 $ 578
Additional Stock
Paid In Subscription Retained
Capital Receivable Earnings
Balance, December 31, 2000 4,460,599 (62,500)(1,045,230)
Stock issued on January 15, 2001
for consulting fees @ $3.40 a share 8,497
Stock issued on January 18, 2001 for
management fees @ $4.19 a share 30,317
Stock issued on February 21, 2001
for consulting fees @ $2.98 a share 3,739
Stock issued on March 1, 2001 to
management fees @ $3.40 a share 118,965 (119,000)
Stock issued on June 6, 2001
for the purchase of Corporate Capital
Formation, Inc. @ $2.13 per share 95,955
Stock issued on June 22, 2001
to Directors @ $0.60 a share 10,782
October 1, 2001 cancellation of
stock subscription (118,965) 119,000
Other comprehensive loss December 31, 2001
Net income for the year ended
December 31, 2001 56,249
Balance, December 31, 2001 4,609,889 (62,500) (988,981)
January 1, 2002 sale of Northwest
Medical Clinic, Inc. @ $0.40 a share (29,193)
On October 15, 2002 preferred stock
converted to common stock at 2 for1 34,930
Other comprehensive loss December 31, 2002
Net loss for the year ended
December 31, 2002 - - (1,457,825)
Balance, December 31, 2002 4,615,626 (62,500 )(2,446,806)
Stock issued on January 24, 2003 for
accrued services rendered @ $0.20 a share 5,472
Other comprehensive loss December 31, 2003
Net loss for the year ended
December 31, 2003 - - (684,860)
Balance, December 31, 2003 4,621,098 (62,500) (3,131,666)
Stock issued on January 26, 2004 for
accrued services rendered @ $0.12 a share 5,454
Other comprehensive loss September 30, 2004
Net loss for the nine months ended
September 30, 2004 - - (124,418)
Balance, September 30, 2004 7$4,626,552 $ (62,500)$ (3,256,084)
Accumulated
other
Comprehensive
Income /(Loss) Total
Balance, December 31, 2000 (27,122) 3,760,152
Stock issued on January 15, 2001
for consulting fees @ $3.40 a share - 8,500
Stock issued on January 18, 2001 for
management fees @ $4.19 a share - 30,324
Stock issued on February 21, 2001
for consulting fees @ $2.98 a share - 3,740
Stock issued on March 1, 2001 to
management fees @ $3.40 a share - -
Stock issued on June 6, 2001
for the purchase of Corporate Capital
Formation, Inc. @ $2.13 per share - 96,000
Stock issued on June 22, 2001
to Directors @ $0.60 a share - 10,800
October 1, 2001 cancellation of
stock subscription - -
Other comprehensive loss December 31, 2001 (83,991) (83,991)
Net income for the year ended
December 31, 2001 - 56,249
Balance, December 31, 2001 (111,113) 3,490,302
January 1, 2002 sale of Northwest
Medical Clinic, Inc. @ $0.40 a share - (29,266)
On October 15, 2002 preferred stock- (35,000) - -
Other comprehensive loss December 31, 2002 (529,501) (529,501)
Net loss for the year ended
December 31, 2002 - (1,457,825)
Balance, December 31, 2002 (640,614) 1,473,710
Stock issued on January 24, 2003 for
accrued services rendered @ $0.20 a share - 5,500
Other comprehensive loss December 31, 2003 (12,471) (12,471)
Net loss for the year ended
December 31, 2003 - (684,860)
Balance, December 31, 2003 (653,085) 781,879
Stock issued on January 26, 2004 for
accrued services rendered @ $0.12 a share - 5,500
Other comprehensive loss September 30, 2004 (54,354) (54,354)
Net loss for the nine months ended
September 30, 2004 - (124,418)
Balance, September 30, 2004 $ (707,439) $ 608,607
7
TRIAD INDUSTRIES, INC.
(Formerly RB Capital & Equities, Inc.)
Consolidated Statements of Cash Flows
Nine Months Nine Months
Ended Ended
September 30 September 30
2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (124,418) $ (589,633)
Depreciation expense 5,515 34,039
(Increase) decrease in
accounts receivable (54,659) (91,836)
(Increase) decrease in
prepaid expenses (8,988) -
(Increase) decrease in
escrow account - 10,102
(Increase) decrease in
income tax benefit - 834,691
Increase (decrease) in
accounts payable 307 (4,365)
Increase (decrease) in
security deposits 1,224 (5,711)
Increase (decrease) in
available for sale securities 17,000 (103,903)
Net (gain) / loss on investments 1,765 -
Common stock issued for services 5,500 5,500
Net Cash Provided by (Used in)
Operating Activities (156,754) 88,884
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of trading securities - -
Net sale (purchase) of fixed assets - 1,026,258
Net Cash Provided by (Used in)
Investing Activities - 1,026,258
CASH FLOWS FROM FINANCING ACTIVITIES
Change in line of credit (1,603) (1,587)
Change in loan fees - 6,902
Change in loan payable 918 2,976
Change in notes and mortgages payable - (734,808)
Net Cash Provided by (Used in)
Financing Activities (685) (726,517)
Net Increase (Decrease) in Cash (157,439) 388,625
Cash at Beginning of Period 411,614 19,832
Cash at End of Period $ 254,175 $ 408,457
Supplemental Cash Flow Disclosures:
Cash paid during period for interest $ 496 $ 60,294
Cash paid during period for taxes $ - $ -
Schedule of Non-Cash Activities:
Common stock issued for accrued services $ 5,500 $ 5,500
Common stock received for services $ 17,000 $ -
Three Months Three Months
Ended Ended
September 30 September 30
2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (7,963)$ (531,991)
Depreciation expense 2,106 12,460
(Increase) decrease in
accounts receivable 44,978 (90,869)
(Increase) decrease in
prepaid expenses (8,988) -
(Increase) decrease in
escrow account - 7,705
(Increase) decrease in
income tax benefit - 853,003
Increase (decrease) in
accounts payable (4,230) (16,412)
Increase (decrease) in
security deposits 1,224 (7,450)
Increase (decrease) in
available for sale securities (21,949) (119,007)
Net (gain) / loss on investments 973 -
Common stock issued for services - -
Net Cash Provided by (Used in)
Operating Activities 6,151 107,439
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of trading securities 3,040 -
Net sale (purchase) of fixed assets - 1,026,758
Net Cash Provided by (Used in)
Investing Activities 3,040 1,026,758
CASH FLOWS FROM FINANCING ACTIVITIES
Change in line of credit (619) (776)
Change in loan fees - 6,750
Change in loan payable (1,743) (3,306)
Change in notes and mortgages payable - (729,311)
Net Cash Provided by (Used in)
Financing Activities (2,362) (726,643)
Net Increase (Decrease) in Cash 6,829 407,554
Cash at Beginning of Period 247,346 903
Cash at End of Period $ 254,175 $ 408,457
Supplemental Cash Flow Disclosures:
Cash paid during period for interest $ 80 $ 36,602
Cash paid during period for taxes $ - $ -
Schedule of Non-Cash Activities:
Common stock issued for accrued services $ - $ -
Common stock received for services $ 17,000 $ -
8
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying September 30, 2004 financial statements have been prepared by
the Company without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at September 30, 2004
and 2003 and for all periods presented have been made. Certain information and
Footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted. It is suggested that these condensed
financial statements be read in conjunction with the financial statements and
notes thereto included in the Company's December 31, 2003 audited financial
statements. The results of operations for periods ended September 30, 2004 and
2003 are not necessarily indicative of the operating results for the full years.
NOTE 2 - GOING CONCERN
The Company's consolidated financial statements are prepared using generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. The accompanying consolidated financial statements do not include any
adjustments relating to the recoverability and classification of liabilities
that might result from the outcome of this uncertainty. It is management
intention to seek 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.
NOTE 3 - DESCRIPTION OF BUSINESS
The Company operates through its three 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 corporations.
2. HRM, Inc. is presently inactive in the healthcare industry.
3. Corporate Capital Formation, Inc. is a financial services corporation that
operates a merger and acquisition consulting business.
Triad Industries, Inc. (the parent company) is now a holding company.
9
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
As of September 30, 2004, the Company has $542,766 in total current
assets, compared to total current assets of $707,912 as of December 31, 2003.
The major factor in the reduction of current assets was the use of cash in
operations to fund the financial services operation. Available for sale
securities decreased $33,176, mostly due to declining values of these
securities. Currently, the current assets are comprised of $254,175 in cash,
$142,801 in accounts receivable, $39,773 in available for sale securities,
$97,029 in trading securities and prepaid expenses of $8,988.
As of September 30, 2004, the Company has $84,644 in total current liabilities
compared to $85,022 as of December 31, 2003.
Results of Operations
For the three months ending September 30, 2004, the Company had a net loss of
$7,963 compared to a net loss of $531,991 for the same period of 2003. The major
factor contributing to the decrease in the net loss when comparing the same
period of 2004 to 2003, is that in 2003 the Company recognized the impairment
loss on a tax benefit it was carrying in the amount of $853,003. This loss also
includes $2,160 in depreciation and amortization expense compared to $12,460 for
the same period of 2003. Depreciation and Amortization dropped due to the
Company selling the commercial property which was held in the third quarter of
2003. Administrative expenses decreased by $151,828 for the third quarter of
2004 compared to the same period of 2003. The sale of the commercial building in
the beginning of the quarter was the biggest influence in the decreasing of
general and administrative fees. Interest expense decreased approximately
$36,522 due to the Company selling the commercial property.
The Company had revenues of $74,023 for the three months ended
September 30, 2004 compared with $27,784 for the same period last year.
Management is still unhappy with the performance of the financial
services sector. Management had hoped that a steadying of the financial markets
would lead more companies to go public. However, the financial markets are still
uncertain, which in the opinion of management causes smaller companies to
hesitate achieving public status due to market uncertainty. This has a severe
negative impact on the Company and is reflected in the operating results.
However, it should be noted that in the opinion of management this sector is
starting to improve. The third quarter consulting revenues of $74,023 represent
53% of the consulting revenue for the first nine months of 2004.
For the nine months ending September 30, 2004, the Company had a net
loss of $124,418 compared to a net loss of $589,633 for the same period of 2003.
The major factor contributing to the decrease in the net loss when comparing the
same period of 2004 to 2003, is that in 2003 the Company recognized the
impairment loss on a tax benefit it was carrying in the amount of $853,003. This
loss also includes $5,515 in depreciation and amortization expense compared to
$34,039 for the same period of 2003. Depreciation and Amortization dropped due
to the Company selling the commercial property which was held in the first six
months of 2003. Administrative expenses decreased by $140,519 for the first nine
months of 2004 compared to the same period of 2003. The sale of the commercial
building in the beginning of the quarter was the biggest influence in the
decreasing of general and administrative fees. Interest expense decreased
$59,798 due to the Company selling the commercial property. For the first nine
months of 2004, the Company had a gain of $7,623 from the sale of securities,
compared to a net loss of $5,924 for the same period the year before. Also, the
Company had a loss from investment of $1,765, compared to a loss of $5,721 for
the same period the year before. The Company also had interest income of $3,308
for the first nine months of 2004, compared to interest income of $112 for the
same period of 2003.
The Company had revenues of $138,417 for the nine months ended
September 30, 2004 compared with $112,989 for the same period last year.
10
Net Operating Loss
The Company has accumulated approximately $3,256,084 of net
operating loss carryforwards as of Septemeber 30, 2004, which may be offset
against taxable income and incomes taxes in future years. However, of this
accumulated net operating loss $1,542,394 was from the sale of a discontinued
operation. The loss from the discontinued operation can not be used to offset
future income. The use of these to losses to reduce future incomes 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 2024. 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.
Sale of Common Capital Stock
None.
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 Company's periodic report
filings with the Securities and Exchange Commission.
Item 3. Controls and Procedures
The Company's management, including our President and Chief
Financial Officer, have conducted an evaluation of the effectiveness of the
design and operation of our disclosure controls and procedures (as defined in
Rule 13a-14(c) promulgated under the Securities Exchange Act of 1934, as
amended) as of the quarter ended March 31, 2004, the end of the period covered
by this report. Based upon that evaluation, our Chief Executive Officer and
Chief Financial Officer have concluded, that our disclosure controls and
procedures are effective for timely gathering, analyzing and disclosing the
information we are required to disclose in our reports filed under the
Securities Exchange Act of 1934, as amended.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is named in a legal proceeding that was filed on October 5, 2004, in
the Superior Court of California, County of San Diego, Central Division, case
number 836664. The principal parties to this action are the plaintiffs, Kevin
Smith and Canyon Capital Marketing, an entity controlled by Smith, and the
defendants, Triad Industries, Inc., Golden Age Homes, Inc., Robert M. Bryson and
Signature Stock Transfer, Inc.
The alleged facts underlying the proceeding as they relate to Triad Industries,
Inc. are as follows. The plaintiffs allege that Triad Industries, Inc.
interfered with a contract between the plaintiffs and Louis Montulli for the
sale of Golden Age Homes, Inc. stock by buying the stock for itself. The
plaintiffs also allege that they tendered shares of Triad Industries, Inc. stock
which contained restrictive legends to Triad to be re-issued without a
restrictive legend and that Triad has unlawfully refused to do so. Triad
contends that it did not interfere with the contract and it has never purchased
any preferred Golden Age Homes such stock for itself. Triad further contends
that the certificates were never tendered to it as alleged due to the
certificate being cancelled fifteen months prior to the date it was allegedly
tendered to the Company.
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The plaintiffs have claimed general damages from the interference with contract
claim of $1,000,000, and an unspecified amount of punitive damages.
The Company believes the alleged claims are baseless. Management believes the
Company will be successful in defending itself. Therefore, no accrual or charge
has been made in the Company's financial statements to reflect these
proceedings.
ITEM 2. CHANGES IN SECURITIES
None.
As of September 30, 2004, the Company has 578,135 shares of common stock issued
and outstanding.
ITEM 3. DEFAULTS UPON SENIOR SECURITES
None.
ITEM 4. SUBMISSION OF MATTERS TO BE A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON 8-K
a. 33.1 302 Certification of the President
b. 33.2 302 Certification of the CFO
c. 99.1 906 Certification of Linda Bryson
d. 99.2 906 Certification of Michael Kelleher
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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 12, 2004
By:/s/ Linda Bryson
Linda Bryson
President, Director
Dated: November 12, 2004
By:/s/ Michael Kelleher
Michael Kelleher
Secretary, Treasurer and
Director
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