TRIAD INDUSTRIES, INC.
                     (Formerly RB Capital & Equities, Inc.)
                 Notes to the Consolidated Financial Statements
                 For the Years Ended December 31, 2000 and 1999





                       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



We  have  audited  the  accompanying   consolidated   balance  sheets  of  Triad
Industries,  Inc. (Formerly RB Capital & Equities, Inc.) as of December 31, 2000
and 1999 and the  related  consolidated  statements  of  operations,  changes to
shareholders equity and cash flows for the years then ended. These consolidated
financial  statements are the  responsibility of the Companys  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit. We conducted our audit in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable  assurance about whether the  consolidated  financial  statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and disclosures in the  consolidated  financial
statements.  An audit also includes  assessing the overall  financial  statement
presentation.  We believe  that our audit  provides a  reasonable  basis for our
opinion. In our opinion, the consolidated financial statements referred to above
present  fairly,  in all  material  respects,  the  financial  position of Triad
Industries,  Inc. (Formerly RB Capital & Equities, Inc.) and its subsidiaries as
of December  31, 2000 and 1999,  and the results of their  operations  and their
cash  flows for the years  then  ended in  conformity  with  generally  accepted
accounting principles.



__________________________________
ARMANDO C. IBARRA, C.P.A. - APC


March 27, 2001
San Diego, California






                            TRIAD INDUSTRIES, INC.
                    (Formerly RB Capital & Equities, Inc.)
                          Consolidated Balance Sheets
                       As of December 31, 2000 and 1999
                                    ASSETS
                                  2000          1999
CURRENT ASSETS
Cash                           $   54,384   $   43,236
Accounts receivable                49,681       90,681
Accounts receivable
medical clinic (see note 2r)    1,586,182            -
Marketable securities              81,755      454,460
Impound account                    12,610        4,062
Assets held for sale            1,075,858    1,202,095
Deferred tax benefit              569,657      367,300
Total Current Assets            3,430,127    2,161,833
NET PROPERTY & EQUIPMENT        3,356,160    3,386,717
OTHER ASSETS
Note receivable                   254,554      254,554
Investment in securities
available for sale                506,612      175,000
Gift certificates                       -        6,000
Net loan fees                      91,527       71,889
Total Other Assets                852,693      507,443
TOTAL ASSETS                   $7,638,981   $6,055,993



                            TRIAD INDUSTRIES, INC.
                    (Formerly RB Capital & Equities, Inc.)
                          Consolidated Balance Sheets
                       As of December 31, 2000 and 1999
                     LIABILITIES AND STOCKHOLDERS' EQUITY
                                        2000            1999
CURRENT LIABILITIES
Accounts payable                  $    84,675    $    20,963
Loans payable                         277,433         90,715
Line of credit                         30,160         25,121
Greentree lease                           224          1,655
Taxes payable                           6,251         16,855
Security deposits                      47,259         39,865
Notes payable on
assets held for sale                  787,649        918,966
Trust deeds and
mortgages - Std                       372,905      2,782,500
Property tax liability                      -              -
Total Current Liabilities           1,606,556      3,896,639
LONG-TERM LIABILITIES
Trust deeds and mortgages - Ltd     2,663,745              -
Total Long-Term Liabilities         2,663,745              -
TOTAL LIABILITIES                   4,270,301      3,896,639
STOCKHOLDERS' EQUITY
Preferred stock ($1.00 par
value, 10,000,000 shares
authorized 850,000 shares
issued and outstanding for
for December 2000 and
1999, respectively)                   850,000        850,000
Common stock ($0.001 par
value, 50,000,000 shares
authorized 8,658,303 and
6,403,418 shares issued and
outstanding for December
2000 and 1999, respectively)            8,658          6,403
Additional paid-in capital          3,644,874      2,044,991
Stock subscription receivable         (62,500)       (62,500)
Comprehensive loss                    (27,122)             -
Retained earnings                  (1,045,230)      (679,540)
Total Stockholders' Equity          3,368,680      2,159,354
TOTAL LIABILITIES
& STOCKHOLDERS' EQUITY            $ 7,638,981    $ 6,055,993





                            TRIAD INDUSTRIES, INC.
                    (Formerly RB Capital & Equities, Inc.)
                    Consolidated Statements of Operations
            For the Twelve Months Ended December 31, 2000 and 1999
                                             2000            1999
REVENUES
Consulting income                        $   423,405    $   435,052
Medical fee income                           650,717              -
Rental income                                709,552        529,273
Costs of revenues                           (244,101)      (179,886)
GROSS PROFIT                               1,539,573        784,438
OPERATING COSTS
Bad debt expense                             331,096          5,637
Depreciation                                 163,241        208,473
Administrative expenses                    1,123,393      1,024,358
Total Operating Costs                      1,617,730      1,238,468
NET OPERATING (LOSS)                         (78,157)      (454,030)
OTHER INCOME & (EXPENSES)
Interest income                                1,249          6,723
Other income                                       -         27,806
Other expenses                                     -           (149)
Net realized gain on sale o
f marketable securities                      101,209         64,141
Unrealized (loss) on valuation
of marketable securities                           -       (371,346)
Mortgage refinancing                               -        441,000
Disposition of stock                               -       (250,000)
Net gain / (loss) on disposable assets        18,108       (142,993)
Late charges                                     708             43
Utility Charges                                1,407            782
Fee income                                       201          1,210
Interest expense                            (598,800)      (403,168)
Total Other Income & Expenses               (475,918)      (625,951)
NET (LOSS) BEFORE TAXES                     (554,075)    (1,079,980)
INCOME TAX (PROVISION) / BENEFIT             188,386        367,300
NET (LOSS)                               $  (365,689)   $  (712,680)
BASIC EARNINGS (LOSS) PER SHARE          $     (0.05)   $     (0.14)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING                  7,378,445      5,055,774
DILUTED EARNINGS (LOSS) PER SHARE        $     (0.04)   $     (0.11)
WEIGHTED AVERAGE OF DILUTED
COMMON SHARES OUTSTANDING                  9,078,445      6,276,048


                              TRIAD INDUSTRIES, INC.
                      (Formerly RB Capital & Equities, Inc.)
              Consolidated Statement of Comprehensive Income (Loss)
                  For the Twelve Months Ended December 31, 2000
                                                   For Year
                                                     Ended
                                                  December 31,
                                                       2000
Net Income (Loss) - Net of Tax                    $(365,689)
Other Comprehensive (Loss) :
Unrealized gain (loss) on securities                (41,093)
Total Other Comprehensive (Loss)                    (41,093)
Comprehensive Income (Loss) Before Income Taxes   $ (41,093)
Income Taxes (Provision) / Benefit
Related to Items of Comprehensive Income             13,971
Comprehensive Income (Loss)                       $ (27,122)


      TRIAD INDUSTRIES, INC.
       (Formerly RB Capital & Equities, Inc.)
          From December 31, 1997 to December 31, 2000

                                   PreferredPreferred   Common     Common
                                    Shares    Stock     Shares     Stock
 Balance, December 31, 1997                            2,339,529   $ 2,340

Common stock issued June 17,1998
for securities valued @ $1.07 per share                   13,200        13

Common stock issued June 17, 1998 for
securities valued @ $.90066 per share                     60,000        60

Common stock issued June 17, 1998
for securities valued @ $.084 per share                   15,000        15

Common stock issued June 17, 1998
for note payable @ $.334 per share                        30,480        30

Common stock issued June 17, 1998
for securities valued @ $.334 per share                  135,000       135

Common stock issued June 17, 1998
for services (officers) valued @ $.334
per share                                                300,000       300

Common stock issued November 4,
1998 for subscription receivable
 @ $.166 per share                                       375,000       375

Common stock issued December 31, 1998
for note payable @ $.3234 per share                       18,750        19

Common stock issued December 31, 1998
for management fees @ $.334 per share                     60,759        61

Common stock issued December 31, 1998
for note payable @ $.334 per share                        60,486        60

Common stock issued December 31,1998
for securities valued @ $.206 per share                  225,000       225

Contributed capital

Net loss for the year ended
December 31,1998
Balance, December 31, 1998                             3,633,204     3,633













                                    Additional  Stock              Comprehensive
                                    Paid-In   Subscription  Retained   Income
                                       Capital  Receivable  Earnings     (Loss)
Balance, December 31, 1997            $   633,096  $ -    $ -      $   732,262

Common stock issued June 17,1998
for securities valued @ $1.07 per share    14,096

Common stock issued June 17, 1998 for
securities valued @ $.90066 per share      53,940

Common stock issued June 17, 1998
for securities valued @ $.084 per share     1,235

Common stock issued June 17, 1998
for note payable @ $.334 per share         10,131

Common stock issued June 17, 1998
for securities valued @ $.334 per share    44,865

Common stock issued June 17, 1998
for services (officers) valued @ $.334
per share                                  99,700

Common stock issued November 4,
1998 for subscription receivable
@ $.166 per share                          62,125 (62,500)

Common stock issued December 31, 1998
for note payable @ $.3234 per share         6,031

Common stock issued December 31, 1998
for management fees @ $.334 per share      20,192

Common stock issued December 31, 1998
for note payable @ $.334 per share         20,102

Common stock issued December 31,1998
for securities valued @ $.206 per share    46,025

Contributed capital                         4,139

Net loss for the year ended
December 31,1998                                                  (62,126)
Balance, December 31, 1998                  1,015,677    (62,500)  33,140     -



                                            Total

Balance, December 31, 1997                $ 732,262

Common stock issued June 17,1998
for securities valued @ $1.07 per share      14,118

Common stock issued June 17, 1998 for
securities valued @ $.90066 per share        54,040

Common stock issued June 17, 1998
for securities valued @ $.084 per share       1,260

Common stock issued June 17, 1998
for note payable @ $.334 per share           10,180

Common stock issued June 17, 1998
for securities valued @ $.334 per share      45,090

Common stock issued June 17, 1998
for services (officers) valued @ $.334
per share                                   100,200

Common stock issued November 4,
1998 for subscription receivable
@ $.166 per share                               250

Common stock issued December 31, 1998
for note payable @ $.3234 per share           6,063

Common stock issued December 31, 1998
for management fees @ $.334 per share        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)
Balance, December 31, 1998                  989,950









      TRIAD INDUSTRIES, INC.
       (Formerly RB Capital & Equities, Inc.)
        Consolidated Statement of Stockholders' Equity (continued)
          From December 31, 1997 to December 31, 2000

                                   PreferredPreferred   Common    Common
                                    Shares    Stock     Shares     Stock

Balance, December 31, 1998                             3,633,204     3,633

 Recapitalization (Note 1)                               526,672       527

 Common stock issued March 15, 1999
 for services valued @ $0.63 per share                   313,942       314

 Common stock issued on March 15,
 1999 for the purchase of Gam
 Properties, Inc. @ $0.63 per share                    1,120,000     1,120

 Preferred stock issued on March 15,
 1999 for the purchase of Miramar Road
 Associates, LLC @ $1.00 per share  700,000   700,000

 Preferred stock issued September 1999
 in exchange for 1.5 million shares of
 Pro Glass Technologies, Inc. common
 stock valued @ $1.00 per share     150,000   150,000

 Stock subscription receivable
 Common Stock issued December
 1999 for cash @ $0.22 per share                         320,000       320

 Common Stock issued December 1999
 for management fees @ $0.06 per share                   489,600       489

 Net loss for the year ended
 December 31, 1999

 Balance, December  31, 1999        850,000   850,000  6,403,418     6,403

 Stock issued on January 5, 2000
 to Directors @ $0.06 a share                             72,000        72

Stock issued on March 1, 2000 for
services rendered @ $0.15 a share                        123,000       123

 Stock issued on June 15, 2000
 to Directors @ $0.50 a share                             72,000        72

 Stock issued on June 30, 2000 for
 the Purchase of Northwest, LLC.
 @ $0.96 a share                                       1,463,302     1,463

 Stock issued on June 30, 2000  to Donner
 Investment Corp. @ $0.96 a share                         36,583        37

 Stock issued on October 1, 2000 to
 Novak Capital @ $0.20 a share                           200,000       200

 Stock issued on December 12, 2000
 to Directors @ $0.24 a share                            288,000       288

Comprehensive loss December 31, 2000

 Net loss for the year ended
 December 31, 2000

 Balance, December  31, 2000        850,000 $ 850,000  8,658,303   $ 8,658
















                                            Additional    Stock
                                              Paid-In   Subscription  Retained
                                              Capital   Receivable    Earnings

Balance, December 31, 1998                   1,015,677    (62,500)        33,140

Recapitalization (Note 1)                       33,396     (20,000)

Common stock issued March 15, 1999
for services valued @ $0.63 per share          196,527

Common stock issued on March 15,
1999 for the purchase of Gam
Properties, Inc. @ $0.63 per share             698,880

Preferred stock issued on March 15,
1999 for the purchase of Miramar Road
Associates, LLC @ $1.00 per share

Preferred stock issued September 1999
in exchange for 1.5 million shares of
Pro Glass Technologies, Inc. common
stock valued @ $1.00 per share

Stock subscription receivable                               20,000

Common Stock issued December
1999 for cash @ $0.22 per share                 71,625

Common Stock issued December 1999
for management fees @ $0.06 per share           28,886

Net loss for the year ended
December 31, 1999                                                      (712,680)

Balance, December 31, 1999                    2,044,991     (62,500)   (679,540)

Stock issued on January 5, 2000
to Directors @ $0.06 a share                     4,248

Stock issued on March 1, 2000 for
services rendered @ $0.15 a share               17,877

Stock issued on June 15, 2000
to Directors @ $0.50 a share                    35,928

Stock issued on June 30, 2000 for
the Purchase of Northwest, LLC.
@ $0.96 a share                              1,399,555

Stock issued on June 30, 2000 to Donner
Investment Corp. @ $0.96 a share                35,083

Stock issued on October 1, 2000 to
Novak Capital @ $0.20 a share                   39,800

Stock issued on December 12, 2000
to Directors @ $0.24 a share                    67,392

Comprehensive loss December 31, 2000

Net loss for the year ended
December 31, 2000                                                   (365,689)

Balance, December 31, 2000                 $ 3,644,874 $ (62,500) $(1,045,230)

















                                          Comprehensive
                                             Income       Total
                                            (Loss)

Balance, December 31, 1998                           -        989,950

Recapitalization (Note 1)                                         13,923

Common stock issued March 15, 1999
for services valued @ $0.63 per share                            196,841

Common stock issued on March 15,
1999 for the purchase of Gam
Properties, Inc. @ $0.63 per share                                700,000

Preferred stock issued on March 15,
1999 for the purchase of Miramar Road
Associates, LLC @ $1.00 per share                                 700,000

Preferred stock issued September 1999
in exchange for 1.5 million shares of
Pro Glass Technologies, Inc. common
stock valued @ $1.00 per share                                      150,000

Stock subscription receivable                                     20,000

Common Stock issued December
1999 for cash @ $0.22 per share                                  71,945

Common Stock issued December 1999
for management fees @ $0.06 per share                              29,375

Net loss for the year ended
December 31, 1999                                                (712,680)

Balance, December 31, 1999                           -      2,159,354

Stock issued on January 5, 2000
to Directors @ $0.06 a share                                      4,320

Stock issued on March 1, 2000 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 loss December 31, 2000           (27,122)       (27,122)

Net loss for the year ended
December 31, 2000                                                (365,689)

Balance, December 31, 2000                 $   (27,122)   $ 3,368,680








                             TRIAD INDUSTRIES, INC.
                     (Formerly RB Capital & Equities, Inc.)
                      Consolidated Statements of Cash Flows
                 For the Years Ended December 31, 2000 and 1999
                                         2000          1999
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) from operations          $(365,689)   $(712,680)
Depreciation expense                     163,241      208,473
(Increase) in accounts receivable       (290,096)    (224,484)
Increase in accounts payable              63,712       15,188
Increase in security deposits              7,394       39,865
(Decrease) in taxes payable              (10,604)     (46,374)
(Increase) in impound account             (8,548)      (4,062)
(Increase) in other assets                 6,000       (6,000)
Unrealized loss on valuation
of marketable securities                       -      371,346
Unrealized (gain) on valuation
of marketable securities                 (60,000)           -
Bad debt expense                         331,096        5,637
Sale of marketable securities            101,209      459,120
Purchase of marketable securities         (3,700)           -
(Increase) in income tax benefit        (188,386)    (367,300)
Common stock issued for services         201,120      226,216
Net cash provided / (used) by
operating activities                     (53,251)     (35,055)
CASH FLOWS FROM INVESTING ACTIVITIES
Disposition of securities
available for sale                             -      250,000
Net purchase of fixed assets            (109,131)    (213,877)
Net cash provided / (used) by
investing activities                    (109,131)      36,123
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in line of credit                 5,039       25,121
Loan fees                                (19,638)    (143,779)
Greentree lease                            1,411        1,655
Increase in loan payable                 186,718       87,035
Common stock issued for cash                   -          320
Paid in capital                                -       71,625
Net cash provided by financing
activities                               173,530       41,977





                             TRIAD INDUSTRIES, INC.
                     (Formerly RB Capital & Equities, Inc.)
                Consolidated Statements of Cash Flows (continued)
                 For the Years Ended December 31, 2000 and 1999
                                                               2000         1999
Net increase (decrease) in cash                              11,148       43,045
Cash at beginning of year                                    43,236          191
Cash at end of year                                      $   54,384   $   43,236
Supplemental cash flow disclosures
Cash paid during year for interest                       $  598,800   $  403,168
Cash paid during year for taxes                 $             $                -
Schedule of Non-Cash Activities
Common stock issued for services                         $  201,120   $  226,216
Common stock received for services                       $  205,000   $  169,928
Common stock issued for acquisition of subsidiary        $1,401,018   $1,120,000
Disposition of securities available for sale    $                 -   $  250,000
Preferred stock issued for investment in other c$                 -   $  150,000
Preferred stock issued for acquisition of subsidary$              -   $  700,000







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. The Company has authorized 50,000,000 shares of
$0.001 par value common stock.

NOTE 1.  ORGANIZATION AND DESCRIPTION OF BUSINESS (CONTINUED)

The Company operates through its six subsidiaries:

     1. RB Capital and Equities,  Inc. is a financial services  corporation that
operates  a  merger  and  acquisition  consulting  business.  The  company  does
corporate filing and capital reorganization  business for small emerging private
and public client corporations.

     2. Miramar Road  Associates,  LLC.  owns and operates a 51,000  square foot
commercial building.

     3. Gam  Properties,  Inc.  owns and rents a seven unit, a four unit,  and a
three unit apartment building.

     4. HRM, Inc. is presently inactive in the healthcare industry.

     5. Triad  Reality  is not yet  operating  as a  consolidating  real  estate
company.
     6. Northwest Medical Clinic,  Inc. is in the medical field  specializing in
personal injury and somnoplasty.

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a.   Accounting Method

     The Companys financial  statements are prepared using the accrual method of
accounting. The company has elected a December 31, year end.

b.       Basis of Consolidation

     The consolidated  financial  statements of Triad  Industries,  Inc. include
those  accounts of RB Capital & Equity Inc.,  Gam  Properties  Inc.,  Healthcare
Resource  Management Inc., Miramar Road Associates,  LLC., and Northwest Medical
Clinic, Inc. Triad Industries owns title to all of the assets and liabilities of
the consolidated financial statement. All significant intercompany  transactions
have been eliminated.

c.   Cash Equivalents

     The Company  considers  all highly  liquid  investments  with a maturity of
three months or less when purchased to be cash equivalents.

d.   Estimates and Adjustments

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting  period.  Actual  results  could  differ  from  those  estimates.   In
accordance with FASB 16 all  adjustments  are normal and recurring.  See note 2j
regarding the Companies revenue recognition policy.

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


e. Basis of  Presentation  and  Considerations  Related to  Continued  Existence
(going concern)

     The Companys financial statements have been presented on the basis that it
is a going  concern,  which  contemplates  the  realization  of  assets  and the
satisfaction  of  liabilities  in the normal  course of business.  The Companys
management intends to raise additional  operating funds through operations,  and
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 consists of loan fees arrived from the refinancing of the
Miramar  building.  The loan fees are being amortized on a  straight-line  basis
over a period of twenty-five years.

g.  Accounts Receivable

     The  Company  has  entered  into  various  contracts,  by which the Company
provides financial services.

h.  Concentration of Credit Risk

     The  Company   maintains  credit  with  various   financial   institutions.
Management performs periodic  evaluations of the relative credit standing of the
financial institutions. The Company has not sustained any material credit losses
for the  instruments.  The carrying  values  reflected in the balance  sheets at
December  31,  2000 and 1999  reasonable  approximate  the fair  values of cash,
accounts  payable,  and  credit  obligations.  In making  such  assessment,  the
Company,  has utilized  discounted  cash flow  analysis,  estimated,  and quoted
market prices as appropriate in accordance  with paragraph 9 of SFAS 107. Note 3
and 4  reflect  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 December  31, 2000 and 1999 are  classified  and
disclosed as trading  securities  under the  requirements of SFAS No. 115. Under
such  statement,  the Companys  securities  are required to be reflected at fair
market  value.  Changes in the fair value of  investments  are  reflected in the
statement of operations under other income & expenses.

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 consist of medical
services. Northwest revenue is recognized at the time a patient has had services
performed on their behalf.  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.,
and Northwest Medical Clinic, Inc., a Georgia corporation.  All subsidiaries are
wholly  owned   subsidiaries.   All   significant   intercompany   balances  and
transactions have been eliminated in consolidation.

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 $ 30,160 as of December 31, 2000.

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 10 regarding income tax benefit.



NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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.  PROPERTY HELD FOR SALE

All of the Companys properties held for sale are on a thirty-year mortgage.

      Location       Description      Interest Rate   Cost      Debt

2016-18 Balboa*      4 Units                 7.817$  420,000   $  302,148
2015-17 Hornblend*
2135-39 Grand Ave.   Tri-plex                7.667   355,350      228,642
4592 Bancroft        7 Units                 7.500   396,057      256,859
NRV                                                               (95,549)

Total                                             $1,075,858      787,649

     * This location is a four-unit building. The building is constructed with 2
units being back to back and on separate streets.

Gam Properties,  Inc. sold two properties during 1999. In April,  Chase property
sold for $1,170,000.  Total cost for the Chase property was $1,211,285 leaving a
net loss of $41,285.  In June,  3rd Ave. #6 property  sold for  $199,500.  Total
costs for the 3rd Ave. #6 property was $196,574 leaving a net gain of 2,926. Gam
Properties,  Inc sold one property during 2000. In April the 3rd Ave #4 property
sold for $ 173,000.  Total  costs of the asset sold was $ 154,892  leaving a net
gain of $18,108.  Properties  sold were  accounted  for as assets held for sale.
Therefore,  there  is no  effect  regarding  suspending  depreciation  since  no
depreciation  was being taken. By classifying  these properties as held for sale
the Company is bypassing an approximated annual depreciation expense of $35,862.
A net realizable  valuation allowance was placed on the properties held for sale
in the amount of $95,549 in accordance with SFAS 121. The net operating loss for
Gam Properties, Inc. for the year ending December 31, 2000 is $(33,431).


NOTE 4. LONG-TERM DEBT  - MIRAMAR BUILDING

              Interest Rate       Debt      Maturity Date
First Trust Deed    10.470 %   $2,340,000   12/08/25
Second Trust Deed   14 %          559,250   12/08/02
Third Trust Deed    14 %          137,400   12/08/02
                                   -------------------
                                            $3,036,650
                                   ===================

     The office  building  collateralized  the above loans.  The loan agreements
provide for monthly payments of interest and principle.
     On  September  20,  1999 the Company  acquired  the  remaining  one-percent
partner  minority  interest on the Miramar  property  for $ 7,000 and paid off $
192,000  of the  outstanding  mortgage  liability.  The  Company  decreased  its
outstanding  liability to the former owner and increase  paid in capital for the
remaining 1% interest.  The total debt of $3,036,650 on the Miramar building was
recorded  as  follows:  current  portion  (less than one year) of  $372,905  and
long-term portion (more than one year) of $2,663,745.


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. The
company owns a fifty-one  thousand  square foot commercial  building  located at
6920-6910 A & B and 6914 Miramar Road, San Diego, California.

                                   2000           1999
                         --------     -------------------
                        ----------------------------------
Land                            $   327,614    $   327,614
Buildings                         3,038,357      3,038,357
Equipment                            34,070              0
Computer                              4,764          1,000
Furniture                            12,223          7,224
Tenant Improvements                 161,669        151,711
                        ----------------------------------
                        ----------------------------------
                                $ 3,578,697    $ 3,525,906
Less Accumulated Depreciation      (222,537)      (139,189)
                        ----------------------------------
                        ----------------------------------

Net Property and Equipment      $ 3,356,160    $ 3,386,717
                        ==================================


NOTE 6.  OPERATING LEASE

     The Company operates its facilities under an operating lease agreement with
an unrelated party. The base rent is $ 7,100, which will increase to $ 8,164 per
month as of May 1, 2001.  The Companys  lease  agreement  expired  December 31,
2000.  The  Company  has  exercised  the option to  continue on a month to month
basis. Rent expense was $ 62,883 and $ 27,855 for 2000 and 1999, respectively.

The Company has the following lease options:
Year Ending
---------------------
---------------------
2001 93,712
2002     97,968
2003     97,968
2004     97,968
2005     97,968
---------------
---------------
       $485,584
===============


NOTE 7.  ACCOUNTS RECEIVABLE IN THE CONSOLIDATED BALANCE SHEET

Accounts receivable consist of the following:
                                 December 31, 2000

Accounts receivable Various         $ 3,941
Accounts receivable Carrera             520
Accounts receivable Gahi                450
Accounts receivable Trans-Caribe      3,187
Accounts receivable Fortune Oil      11,500
Accounts receivable 3rd. Avenue      15,083
Accounts receivable Ashy              7,000
Accounts receivable Bellissima        8,000
                     ----------------------
                     ----------------------
Total                               $49,681
                     ======================

     The Company expects to collect accounts  receivable  within one year. As of
December 31, 2000 the accounts  receivable  outstanding  is fully expected to be
collected.  Therefore,  the  Company  has not setup an  allowance  for  doubtful
accounts.  Due to the nature of  business  that  Northwest  Medical  Clinic Inc.
conducts,  a reserve for bad Debts that must be in place too properly  state the
account receivable as of December 31, 2000.

Accounts receivable     $ 3,072,377
Reserve for bad debts    (1,486,195)
                        $ 1,586,182

     The 1,586,182 is a receivable of Northwest  Medical  Clinic (a  subsidiary)
for services rendered.

NOTE 8.  BASIC & DILUTED LOSS PER COMMON SHARE

     Basic  loss per  common  share has been  calculated  based on the  weighted
average number of shares of common stock outstanding during the period.  Diluted
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.

                                        December 31,
                                  2000             1999
                         ---------------------------------
                         ---------------------------------
Numerator income (loss)         $  (392,811)   $  (712,680)
Denominator weighed average
number of shares outstanding      7,378,445      5,055,774
                         ---------------------------------
                         ---------------------------------

Basic (loss) per share          $     (0.05)   $     (0.14)
                         =================================

December 31,
                                       2000           1999
                        --------------------------------------
                        --------------------------------------
Numerator income (loss)         $  (392,811)   $  (712,680)
Denominator  weighed average
number of shares outstanding      9,078,445      6,276,048
                        --------------------------------------
                        --------------------------------------
Diluted (loss) per share        $     (0.04)   $     (0.11)
                        ======================================


NOTE 9.  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).

NOTE 9.  ACQUISITIONS (CONTINUED)

     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 were issued to Donner
Investments  Corp.  as a finders fee.  This issuance was not part of the cost of
the  acquisition.  All shares issued for the  acquisition  of Northwest  Medical
Clinic,  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 10.  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 December  31, 2000 the Company  has  significant  operating  and capital
losses carryfoward.  The benefits resulting for the purposes have been estimated
as follows:
                                            2000          1999
   Net Operating Losses :
Beg. Retained Earnings                  (679,540)        33,140
Net operating loss for Years Ended      (392,811)      (712,680)
                             ----------------------------------
                             ----------------------------------
Ending Retained Earnings              (1,072,352)      (679,540)

Income Tax Benefit                   $  (569,657)   $  (367,300)
                             ==================================

NOTE 10.  INCOME TAXES (CONTINUED)

     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.  In
accordance  with SFAS 109  paragraph  24 the Company has deemed that a valuation
allowance  is not needed.  Income tax benefit was  increased by $202,357 for the
year 2000. The increase in operating loss  carryforward will expire twenty years
from the date the loss was incurred.


NOTE 11.  MARKETABLE SECURITIES
     At December 31, 2000, 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          600,000              0.05 30,000
Fortune Oil           fogc   otc           33,000              0.18  5,940
Greenland             glcp   otc            4,113              0.05    206
Peacock Financial     pfck   otc          200,000              0.02  4,000
Phantom Film Corp.    phlm   otc          150,000              0.01  1,500
Total Entertainment   ttln   otc           55,000              0.06  3,300
Spectrum              spuv   pinksheets   600,000               .04 24,960
Toner Systems         tyst   otc              400              1.49    599
Tesmark               tsmk   otc           56,250              0.20 11,250
                                                       -------------------
                                                       -------------------
Total                                                              $81,755
                                                       ===================

     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
December 31, 2000 in accordance
with SFAS 130.











NOTE 12.  INVESTMENTS IN SECURITIES AVAILABLE FOR SALE

At December 31, 2000, the Company held investments in the following companies:

                              Trading    Number of    Value Price       Balance
                              Market     Shares        At Year End   At Year End

Beach Brew                        n/t     625,000                0.02   17,500
Blue Gold                         n/t     125,000                0.00      125
Carrara                           n/t     325,000                0.00      370
* Heritage National Corporation   n/t     250,000                0.10   25,000
Mezzanine Capital                 n/t     107,000                3.25  347,750
Nicholas Inv.                     n/t     364,583                0.00      364
* Pro Glass                       n/t   1,868,892                0.06  112,133
Spa International                 n/t     245,165                0.00        0
Superior Oil                      n/t     100,000                0.03    3,000
Thunderstone                      n/t       3,068                0.01       31
Regan Corp.                       n/t       5,000                0.00        0
Processing Research Inc.          n/t      20,000                0.01      339
                                                          --------------------
Total                                                                $ 506,612
                                                          ====================

     *  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 December 31, 2000 the Company had an 8.5% share of Pro Glass Technologies,
Inc. Heritage National Corporation is a privately owned Company.











NOTE 13.  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.
On December 31, 1998 the Company  issued  18,750 shares of common stock for debt
conversion  valued at $.3234 per share. On December 31, 1998, the Company issued
60,759 shares of common stock for management  fees valued at $.334 per share. On
December 31, 1998,  the Company  issued  60,486  shares of common stock for debt
conversion  valued at $.334 per share.  On December 31, 1998, the Company issued
225,000  shares of common stock for  marketable  securities  valued at $.206 per
share.  Since there is no market for the Companys common stock, the shares were
valued at the trading price of the securities that were received.

NOTE 13.  STOCK TRANSACTIONS (CONTINUED)

     As of  January  1,  1999  there  were  3,633,204  shares  of  common  stock
outstanding. On March 15, 1999 the Company issued 314,946 shares of common stock
for services issued valued at $.625 per share. At the shareholders  meeting held
March 15,  1999 the  stockholders  approved  the  acquisition  of RB Capital and
Equities, Inc. a Nevada corporation and its subsidiaries for 1,120,000 shares of
common stock and 700,000  shares of preferred  stock.  In September  the Company
issued 150,000 shares of $1.00 par value preferred stock (transaction was valued
at the most readily  determinable price; which was the value of preferred stock)
in exchange for 1.5 million shares of Pro Glass Technologies, Inc. common stock.
The 1.5 million  shares  represented  (at the time of  acquisition)  8.5% of Pro
Glass Technologies, Inc. outstanding common stock. In December 1999, the Company
issued  489,600  shares of common  stock to  management  and key  employees  for
services  rendered  valued at $ 0.06 per share.  In  December  1999 the  Company
issued 320,000  shares of common stock for cash @ $ 0.22 per share.  On December
31,  1999 there were  6,403,418  shares of common  stock and  850,000  shares of
preferred stock outstanding. On January 5, 2000 the Company issued 72,000 shares
of common stock to Directors for services  rendered  valued at $ 0.06 per share.
On March 1, 2000 the  Company  issued  123,000  shares  of  common  stock to its
President for services  rendered valued at $0.15 per share. 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. As of December 31,
2000 the Company had 8,658,303 shares of common stock issued and outstanding.

NOTE 14.  STOCKHOLDERS EQUITY

     The  stockholders  equity  section of the Company  contains the  following
classes of capital stock as of December 31, 2000.

     (A)  Preferred  Stock,  nonvoting,  $ 1.00  par  value;  10,000,000  shares
authorized; 850,000 shares issued and outstanding.

     (B)  Common  stock,  $  0.001  par  value;  50,000,000  shares  authorized;
8,658,303  and  6,403,418  shares  issued  and  outstanding  for 2000 and  1999,
respectively.

     The holders of Preferred Stock are entitled to receive dividends calculated
using an  Available  Cash Flow formula as  prescribed  by the  Certificate  of
Designation of Preferred Stock. There have not been any dividends declared as of
December 31, 2000. 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 15.  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 December
31, 2001 there were no stock options issued or outstanding.


NOTE 16.  RESTATED FINANCIAL STATEMENTS

     Management to comply with SEC  regulations  for the year ended December 31,
2000 has restated the financial statements.