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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

                 For the fiscal year ended -- December 31, 1998

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

            For the transition period from ___________ to ___________

                       Commission file number 33-33042-NY


                            CORONADO INDUSTRIES, INC.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

          Nevada                                         22-3161629
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or organization)

  16929 E. Enterprise Drive, Suite 202, Fountain Hills, AZ           85268
--------------------------------------------------------------     ---------
(Address of principal executive offices) (as of date of filing)    (Zip Code)

                    Issuer's telephone number (602) 837-6810
                                             ----------------

       Securities registered under Section 12(b) of the Exchange Act: None
                                                                      ----

Title of each class                    Name of each exchange on which registered
-------------------                    -----------------------------------------


       Securities registered under Section 12(g) of the Exchange Act: None
       -------------------------------------------------------------------
                                (Title of Class)

Check  whether the issuer (1) filed all reports  required to be filed by section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports),  and (2) has been
subject such filing requirements for the past 90 days. Yes[X]  No [ ]

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [X]

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<PAGE>
                            CORONADO INDUSTRIES, INC.

                                   FORM 10-KSB

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

                                                                          Page
                                                                          ----
PART I
        Item 1.  Business Development.....................................  2

        Item 2.  Description of Property..................................  9

        Item 3.  Legal Proceedings........................................  9

        Item 4.  Submission of Matters to a Vote of Security Holders......  9

PART II
        Item 5.  Market for Registrant's Common Equity and Related
                  Stockholders Matters.................................... 10

        Item 6.  Management's Discussion and Analysis or Plan of
                  Operation............................................... 11

        Item 7.  Financial Statements..................................... 15

        Item 8.  Changes In and Disagreement with Accountants on
                  Accounting and Financial disclosure..................... 15

PART III
        Item 9.  Directors, Executive Officers, Promoters and Control
                  Persons' Compliance with Section 16(a) of the
                  Exchange Act............................................ 16

        Item 10. Executive Compensation................................... 18

        Item 11. Security Ownership of Certain Beneficial Owners
                  and Management.......................................... 19

        Item 12. Certain Relationships and Related Transactions........... 20

PART IV
        Item 13. Exhibits, Financial Statements, Schedules and Reports
                  on Form 8-K............................................. 20

SIGNATURES................................................................ 21

SUPPLEMENTAL INFORMATION AND EXHIBITS..................................... 22

                                       1
<PAGE>
                                     PART I

                   SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

         Except for  historical  information  contained  herein,  this  document
contains  forward-looking  statements  within the  meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the
Securities  Exchange  Act of 1934,  as  amended  (the  "Exchange  Act")  and the
Registrant intends that such  forward-looking  statements be subject to the safe
harbors  created  thereby.  Such  forward-looking  statements  involve risks and
uncertainties and include,  but are not limited to, statements  regarding future
events and the Registrant's  plans and  expectations.  The  Registrant's  actual
results may differ  materially  from such  statements.  Although the  Registrant
believes that the assumptions  underlying the forward-looking  statements herein
are reasonable,  any of the assumptions  could prove inaccurate and,  therefore,
there can be no assurance that the results  contemplated in such forward-looking
statements  will be realized.  In addition,  the business and  operations of the
Registrant  are subject to substantial  risks which  increase the  uncertainties
inherent  in the  forward-looking  statements  included  in this  document.  The
inclusion  of such  forward-looking  information  should  not be  regarded  as a
representation  by the  Registrant  or any other person that the future  events,
plans or expectations contemplated by the Registrant will be achieved.

ITEM 1(A). BUSINESS DEVELOPMENT.  INITIAL PUBLIC OFFERING

         The  Registrant  was  incorporated  under the name First Lloyd Funding,
Inc.  pursuant to the laws of the State of New York on December  21,  1989.  The
effective  date of the  Registrant's  public  offering was March 13,  1990.  The
Offering  closed  on  May  1,  1990.  For  further  information  concerning  the
Registration Statement,  see File No. 33-33042-NY at the Securities and Exchange
Commission's  Regional  Office  in New York City or at its  principal  office in
Washington,  D.C. In January 1997,  the New York  corporation at that time named
Coronado  Industries,  Inc.  merged into and became a Nevada  corporation of the
same name.

OPHTHALMIC INTERNATIONAL, L.L.C. AND AMERICAN GLAUCOMA, INC.

         After a series of immaterial  acquisitions  and spin-offs from May 1990
to  September  1996,  on November 5, 1996 the  Registrant  entered into an Asset
Purchase Agreement with Ophthalmic  International,  L.L.C.  ("OI"), and American
Glaucoma,  a joint venture ("AG"), which provided for the purchase of the assets
of OI and AG in exchange for 15,592,224 shares of the Registrant's  common stock
(85%) to be issued to the Registrant's  current three  Directors.  An additional
855,000 shares were issued as finders fees to twelve  entities and  individuals.
The assets of OI transferred  to the Registrant  were a patent pending and other
proprietary  information concerning equipment and a process for the treatment of
open angle  glaucoma.  The assets of AG transferred  to the Registrant  were the
concept and a business plan for forty glaucoma  treatment  centers in the United
States.

                                        2
<PAGE>
ITEM 1(b). BUSINESS OF ISSUER

OVERVIEW

         The  Registrant is a holding  company and all business  operations  are
conducted through its two wholly-owned subsidiaries. The Registrant, through its
Ophthalmic International,  Inc. subsidiary,  manufactures and markets a fixation
device  with a  patented  designed  suction  ring  that  treats  Open  Angle and
Pigmentary  glaucoma.  American Glaucoma,  Inc. ("AGI"),  the Registrant's other
subsidiary,  operated a glaucoma  treatment  center in Scottsdale,  Arizona from
September 1997 to March 1999 and intends to open a similar  treatment  center in
the Clearwater, Florida.

         In the United States, glaucoma is the second leading cause of blindness
affecting  approximately  3,000,000 persons.  Of those, about 60,000 are legally
blind. If detected and treated early,  glaucoma need not cause blindness or even
severe vision loss. While there is no cure for glaucoma, the Registrant believes
that its  patented  device  and  process  provide  an  effective  treatment  for
afflicted persons and that a significant global market for its patented process,
equipment and rings currently exists.

         Glaucoma  may have many  forms  which  cause or  present  a feature  of
progressive  damage to the optic  nerve due to  increased  pressure  within  the
eyeball. As the optic nerve  deteriorates,  blind spots and patterns develop. If
left untreated,  the result may be total  blindness.  The space between the lens
and the cornea in the eye is filled with a fluid called the aqueous humor.  This
fluid  circulates  from behind the colored portion of the eye (the iris) through
the opening at the center of the eye (pupil) and into the space between the iris
and cornea.  The aqueous  humor is  produced  constantly,  so it must be drained
constantly.  The drain is at the point where the iris and cornea meet,  known as
the drainage angle,  which directs fluid into a channel  (Schlemm's  canal) that
then leads it to a system of small  veins  outside  the eye.  When the  drainage
angle does not function properly,  the fluid cannot drain and pressure builds up
within  the eye.  Pressure  also is exerted  on  another  fluid in the eye,  the
vitreous  humor  behind  the lens,  which in turn  presses on the  retina.  This
pressure affects the fibers of the optic nerve, slowly damaging them. The result
over time is a loss of vision.

THE FIXATION DEVICE

         After four years of ongoing  studies  involving  Dr. John T.  LiVecchi,
M.D.,  F.A.C.S.,  Assistant  Clinical  Professor  of  Ophthalmology,   Allegheny
University and Dr. Guillermo Avolos,  Professor of Ophthalmology,  University of
Guadalajara, Mexico, it was determined that a 2 minute treatment with Ophthalmic
International's  "vacuum  fixation  device and  patented  design  suction  ring"
temporarily  reduced  inter-ocular  pressure ("I.O.P.") in the treatment of Open
angle  Glaucoma by  approximately  6 Hg for an average of three  months at which
time the treatment  can be repeated  with no serious side  effects.  This I.O.P.
lowering  is  achieved  when the  external  suction  device is applied  over the
perilimbal  area for a  specified  time.  With  this  treatment  the  Registrant
believes that there are no harmful side effects,  like those associated with eye
drop treatments. In addition, the patent entitled "Open Angle Glaucoma Treatment
Apparatus and Method" has been approved and is believed to allow the  Registrant
to achieve a significant market advantage over competitors.

                                       3
<PAGE>
         The first clinical study of the  Registrant's  product was conducted on
86 patients over an 8 month period in 1992 by Dr. Avolos in Guadalajara, Mexico.
The second  clinical  study of the  Registrant's  product was  conducted  on 250
patients over a two-year  period ending in 1996 by Dr. Avolos and Dr.  LiVecchi.
The  Registrant  initiated a third study in September  1997 was conducted by Dr.
Leo Bores, the Medical Director of the Registrant's Scottsdale treatment center.
This third study involved approximately 150 patients.

         The  Registrant  views  the gross  losses  incurred  at its  Scottsdale
treatment  center  from  September  1997  through  March 2, 1999  (approximately
$464,000) as the major  expense of preparing  the clinical  studies which may be
required for FDA product  approval.  The Registrant  believes the total past and
future costs of its current and future  treatment  centers are recoverable  from
clinical  patients and from the sale of the product to  physicians,  pursuant to
FDA regulations. See "- Governmental Regulation" below.

         Dr.  John  LiVecchi,  a  Registrant  Director,  and Dr. Leo  Bores,  an
employee,  have been  asked to  address  to  different  medical  conventions  of
ophthalmologists  in March and April 1999  concerning the results of the studies
of Registrant's  procedure and equipment.  These  presentations  to the ultimate
end-users  of  Registrant's  products  serve to educate the  industry  about the
Registrant's products and their efficacy.

         Registrant's subsidiary,  Ophthalmic International,  Inc., manufactures
and sells the vacuum equipment, the patented rings and the process in the United
States and abroad  through media  advertising  and  presentations  at ophthalmic
conferences.  In the future the  Registrant  intends to sell  primarily  through
distributors  who will be assigned  specific  geographical  territories,  on the
basis of  continents  or  countries.  Ophthalmic  International  entered  into a
confidentiality  agreement  with  Alcon Co. in March,  1997 as the first step in
negotiating for Alcon to become a distributor.  In 1997 Ophthalmic International
has executed a second  confidentiality  agreement with one additional  potential
distributor for exclusive worldwide distribution rights. Negotiations concerning
distribution  likely will not be completed and  definitive  agreements  executed
until the labeling of the product as a "device to lower  inter-ocular  pressure"
is approved by the FDA.

         The  Registrant  expects  its  distributors  will  purchase  the vacuum
equipment  for  approximately  $5,000-$7,000  per unit and purchase the patented
ring which is placed on the patient's  eye, for  approximately  $10 to $15 each,
depending upon volume.  The Registrant  expects,  without  assurance,  to have a
gross profit margin on the vacuum equipment and patented rings in excess of 60%.

         The  Registrant's  vacuum equipment is composed of special order parts,
such as molded case,  display board,  circuit boards,  and motors, all for which
Registrant  has  established  manufacturing  relationships  with  manufacturers.
Registrant's subsidiary,  Ophthalmic  International,  Inc., assembles the vacuum
fixation  device at its  offices in  Fountain  Hills,  Arizona.  At such time as
Registrant executes an agreement with a major worldwide distributor,  Registrant
may also sell the manufacturing  rights to the same company.  The Registrant has
contracted  for the  manufacture  of the  patented  rings with a medical  device
manufacturer located in California.

         Registrant  has  received  a CE mark for its PNT  product  and has been
advised that its  manufacturing  facility  could be prepared to receive ISO 9000
clearance  in as little as six weeks.  Therefore,  the  Registrant  believes its
manufacturing facility is prepared to move forward with European distribution of
its product as soon as a distributor is located.

                                        4
<PAGE>
TREATMENT CENTERS

         Registrant's  subsidiary,  American  Glaucoma,  Inc.,  opened its first
glaucoma treatment center in Scottsdale,  Arizona in September 1997. During 1998
the Registrant's  Scottsdale  Center generated  approximately  $293,000 of gross
revenues  and a net loss from  operations  of  $220,000,  before  allocation  of
management  overhead.  The Registrant closed the Scottsdale  treatment center on
March 2, 1999.

         The Registrant is hopeful of opening one treatment  center during 1999,
subject to adequate funding. This center was planned for the Clearwater, Florida
area in 1998.  In July  1998 the  Registrant's  Florida  subsidiary  executed  a
three-year  lease for medical  office  space in the  Clearwater  area.  However,
initial   contract   discussions  with  a  local   ophthalmologist   broke  down
subsequently   and  the   Registrant   was  not  able  to   locate  a   suitable
ophthalmologist in 1998 to open the Clearwater  treatment center. The Registrant
anticipates  that its advertising  and  telemarketing  techniques  initiated and
refined  at  the  Registrant's  Scottsdale  treatment  center  will  enable  the
Registrant's  Clearwater  treatment center to reach profitability within a short
time after opening.

GOVERNMENTAL REGULATION

         No medical  device  may be sold or  distributed  in the  United  States
without  FDA  approval  or an  exemption  from  such  approval.  The FDA has the
authority to enjoin the manufacture and sale of a medical device,  to seize such
device and to levy fines against a  manufacturer  or seller of a medical  device
which has not been  registered  or  approval  for sale in the United  States.  A
device  which needs FDA  approval  is  considered  a Class III device,  unless a
similar  product  with a similar  intended use has  previously  been granted FDA
approval (a "Class II  Device")  or the FDA has listed the product as  generally
safe and not needing FDA  approval (a "Class I Device").  The process for having
the FDA remove a device  from the Class III  category  to a Class II category is
called a 510(k) application.

         The Registrant submitted a 510(k) premarket  notification to the FDA on
its PNT product in August of 1998. The FDA rejected this notification in October
of 1998,  on the basis that the  Registrant  PNT produce  was not  substantially
equivalent  to other  products  currently  on the market and  intended  to lower
intraocular  pressure.  The  Registrant  met with the FDA in February of 1999 to
discuss the concerns  expressed  by the agency with  respect to the  substantial
equivalence  and safety of the PNT product.  The  Registrant  is now preparing a
submission  for delivery to the FDA in April of 1999 that is intended to provide
the agency with detailed  information  addressing many of the concerns expressed
by the FDA at the February  meeting.  If the  submission  satisfies the FDA with
respect to the patient risk associated with the clinical use of the PNT product,
the Registrant would expect to file a new 510(k) premarket notification with the
agency by July of 1999.

         If the April  submission  does not  satisfy  the FDA,  the  agency  may
request that more  information be submitted on patients treated to date with the
PNT product,  or that  further  studies be  conducted  on  additional  patients.
Furthermore,  the agency may demand that ongoing patient studies cease until the
agency reviews and approves a new and different clinical protocol.  With respect
to the new 510(k) premarket  notification that the Registrant plans to file with
the FDA by July of 1999,  although  the  Registrant  is hopeful  that it will be
favorably received by the FDA  thereby permitting commercial distribution of the
PNT  product at some  point  during  the  latter  half of 1999,  there can be no
assurance that the  Registrant's PNT product will ever receive the necessary FDA
clearance for commercial marketing.

                                       5
<PAGE>
         A Class III device may be  approved  for sale and  distribution  in the
United States by the FDA pursuant to a Premarket Approval  Application  ("PMA").
The FDA  approves  PMAs  after  a  review  of the  clinical  trials  information
contained  therein  demonstrating  that the device is safe and effective for its
labeled indications.  In addition, the FDA will inspect the facilities where the
device  is  manufactured  prior  to  approving  a PMA.  The  Registrant  has not
discussed  with the FDA the type and  quantity  of  clinical  and  manufacturing
information  that might be required to secure PMA  approval for its PNT product,
because of the Registrant's  continuing belief that the product is more suitably
reviewed by the FDA in a 510(k) premarket notification, rather than a PMA.

         Clinical data to support either a 510(k)  premarket  notification  or a
PMA must be collected  pursuant to the FDA's  Investigational  Device  Exemption
("IDE") regulation The IDE regulation  describes two types of device studies: 1)
significant risk and 2) nonsignificant  risk studios.  The principal  difference
from a  regulatory  point  of view  between  the two  types of  studies  is that
significant  risk  studies  must be reviewed and approved by both the FDA and an
Institutional  Review  Board  ("IRB")  before  they  may  be  initiated,   while
nonsignificant  risk studies require only IRB review and approval prior to study
initiation.  The  Registrant  believes  that its  studies of its PNT product are
nonsignificant  risk in nature.  The Registrant  therefore has conducted several
clinical  studios of the PNT product after receiving IRB approval in 1994, 1996,
and 1998 from three different IRBs. The  approximately  170 patients  treated at
the  Registrant's  Scottsdale  treatment  center  since  1997  were  treated  in
accordance  with the clinical  protocols  that received IRB approval in 1994 and
1998,  while the future  treatment  of patients at the  Registrant's  Clearwater
center will be in  accordance  with the  clinical  protocol  that  received  IRB
approval in 1998. To date, no negative  adverse  reactions have been reported in
connection  with the use of the PNT device on glaucoma  patients  for any of the
studies conducted.

         Under the IDE regulation,  a sponsor of a clinical study may charge for
the investigational device, provided that the price charged for the device is no
larger  than  that  necessary  to  recover  costs  of   manufacture,   research,
development,  and handling  associated with the device.  The IDE regulation does
not  prohibit or limit  charges for medical or  laboratory  services.  It is the
Registrant's  position that  approximately  $1,000,000 of net losses incurred by
the Registrant in connection  with its Scottsdale  treatment  center and certain
past management salaries are properly recoverable under the IDE regulation,  and
the Registrant  therefore  intends to impose a charge on the distribution of PNT
product to clinical investigators who purchase the PNT product and enroll in its
IDE studies which are consistent with the IDE regulation.

         The  manufacturer of a medical device which is to be distributed in the
United  States must be  inspected  and  licensed by the FDA.  The company  which
currently  manufactures  the  Registrants's  suction ring and the company  which
sterilizes and packages this ring are licensed as medical  device  manufacturers
by the FDA. The Registrant's facility was inspected and licensed by the FDA as a
manufacturer of the  predecessor  fixation device product and the PNT product in
1996.

         No medical  device may be advertised for sale in the United States with
a false or misleading label or advertisement. The fixation device which preceded
the PNT  product  device was  advertised,  used and sold as a device for certain
types of invasive  eye  surgeries.  Therefore,  that product was labeled as only
being used for eye surgery,  and not the treatment of glaucoma.  The labeling of
the Registrant's PNT product as a glaucoma  treatment device or a device for the
lowering of inter-ocular  pressure of glaucoma  patients must be approved by the
FDA (or the product must be exempt from FDA  registration  as a Class I or Class
II  device),  for the  Registrant  to  advertise  and sell its PNT  device  as a
glaucoma treatment product.

                                       6
<PAGE>
         In July 1997 the Registrant's  Scottsdale  treatment center  registered
with the State of  Arizona  Department  of  Health  Services  as a "health  care
treatment  institution"  and the proposed  Clearwater  treatment  center will be
required to  register  with the State of Florida.  The  Registrant  is unable to
predict at this time the exact  amount of time and expense  which will be needed
to  register as a health  care  provider  in the State of  Florida.  There is no
assurance that the Registrant will be able to register as a health care provider
in Florida.

PATENT

         On February 11, 1997 the U.S.  Patents and  Trademarks  Office issued a
patent to Ophthalmic  International,  L.L.C.,  Patent Number 5,601,548,  for the
process,  equipment and the procedure which has been licensed to the Registrant.
The  Registrant  believes,  without  assurance,  that this patent  provides  the
Registrant  with a  substantial  competitive  advantage  over current and future
glaucoma treatment competitors.  The Registrant is not aware of any other patent
being granted for glaucoma treatment. The granting of a patent to the Registrant
does not assure that the FDA will ever approve the  commercial  distribution  of
the Registrant's PNT product in the U.S.

         The  Registrant  intends  to follow a policy of  aggressively  pursuing
claims of  infringement  on its patent and the  Registrant  does not believe its
patent, or product or services infringe on the rights of any other person.

COMPETITION

         The medical device and service industries are highly  competitive.  The
Registrant's   patented  device  and  treatment  process  are  and  will  be  in
competition  with  established  and future  glaucoma  treatment  procedures  and
products. The following table sets forth the type and names of the most commonly
recommended  prescription glaucoma  medications,  the approximate monthly retail
cost of such  medications,  and the side effects of each type of  medication  as
published by The American  Academy of  Ophthalmology.  Since  Medicare  does not
currently reimburse patients for the cost of these prescription  medications but
does pay for the PNT procedure,  the Registrant believes a substantial number of
the  glaucoma  patients  in the U.S.  would  benefit  economically  from the PNT
procedure to the extent their prescription medication could be reduced.

                                        7
<PAGE>
        Medication                  Monthly Cost        Side Effects
        ----------                  ------------        ------------
BETA BLOCKERS                                  Congestive Heart Failure
        Timolol                     $21.00     Bronchospasm
        Levobunolol                 $42.00     Bradycardia
        Carleolol                   $36.00     Depression, confusion
        Betaxolol                   $65.00     Worsening of myasthenia gravis

ADRENERGIC AGONISTS                            Increased blood pressure,
        Alphagan                    $50.00     Tachyarrythmia
        Dipivefrin                  $33.00     Tremor, Headache,
        Apracionidine               $41.00     Anxiety, Burning on Instillation,
                                               Conjunctival Injection, Pupullary
                                               dilation, Allergic Reactions
CHOLINERGIC AGONISTS
        Pilocarpine                 $25.00     Increased bronchial secretion
        Carbochol                   $26.00     Nausea
        Echothiophate iodide        $31.00     Vomiting, Diarrhea, Apnea,
                                               Increased myopia, Eye or brow
                                               pain, Decreased vision

ORAL CARBONIC ANHYDRASE INHIBITORS             Malaise, anorexia, depression,
                                               parashesias
        Acetazolamide               $33.00     Serum electrolyte abnormalities
        Methazolamide               $19.00     Renal calculi, Blood dyscrsias

         The  Registrant's  treatment  centers will compete  directly with other
medical  care  providers.  The  future  sale  of the  Registrant's  products  to
ophthalmologists,   optometrists,   medical   clinics  and  hospitals  may  meet
substantial  resistance from distributors and potential customers,  particularly
until the FDA product label is changed and the insurance/Medicare  billing codes
are established. The Registrant is presently unable to predict when such billing
codes will be established on a national basis.  Ophthalmologists not employed by
the Registrant are likely to discount the benefits of the Registrant's  products
to their  patients from fear of losing  patients to the  Registrant's  treatment
centers, even though the clinical results of the Registrant's products have been
presented at ophthalmic  conventions  in the United States for over three years.
Further,  the  Registrant  will need to establish  the  economic  benefit of its
products to the satisfaction of health maintenance  organizations ("HMO") before
the Registrant's  glaucoma treatment centers receive patient treatment referrals
from HMOs. Today HMOs are responsible for the medical treatment of a substantial
percentage of the population of the United States.

EMPLOYEES

         In addition to its two  officers,  the  Registrant  employs two persons
full-time at the corporate headquarters, including Dr. Leo Bores. The Registrant
anticipates  hiring  additional  administrative  and  marketing  personnel  upon
receipt of additional funding.

                                       8
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTY.

         During  calendar year 1998,  the  Registrant's  offices were located at
16929 E. Enterprise Drive, Suite 202, Fountain Hills, AZ 85268, where Registrant
is currently leasing approximately 1,600 square feet of space from a third party
landlord.  Registrant  is  paying  approximately  $1,000  per  month,  including
utilities,  in rent for this  space on a  five-year  lease.  In June  1998,  the
Registrant  entered into a  month-to-month  lease for 1,800 square feet of space
adjacent to its original space in Fountain  Hills,  Arizona,  for  approximately
$1,400 per month rent, including utilities. This combined space will be adequate
for the Registrant's  needs throughout its initial  manufacturing  stages,  when
commenced.

         On July 28,  1997 the  Registrant  executed a lease with Dr. Leo Bores,
the  Registrant's  Medical  Director,  for a 4,200 square foot medical  facility
located at 8049 N. 85th Way, Scottsdale,  Arizona.  This facility is the site of
the Registrant's first treatment center. The monthly lease rate on this facility
is $3,500.  The Registrant  has a two-year  option to purchase this building for
the sum of $400,000 cash.  The Registrant  believes this facility is adequate to
serve up to 60 glaucoma patients per day.

         In July 1998 the Registrant  entered into a three-year lease of a 3,936
square foot medical office in Largo,  Florida, a suburb of Clearwater,  Florida.
The lease term  commenced  on October 1, 1998 and  requires  an initial  monthly
payment of $3,526 per month with an increase of $.50 per annual square foot rent
each subsequent year.

         In June 1998 the  Registrant  prepaid a one-year lease of a two-bedroom
condo in Clearwater,  Florida for Registrant's  employees and consultants to use
while visiting the planned  Clearwater  treatment center. The monthly lease rate
on this condo is $1,115.

ITEM 3.  LEGAL PROCEEDINGS.

         There were no legal  proceedings  involving the  Registrant  pending or
threatened at December 31, 1998.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         During  calendar  year 1998 no matters were  submitted to a vote of the
Registrant's security holders.

                                       9
<PAGE>
                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         Market Information. The principal U.S. market in which the Registrant's
common shares (all of which are one class,  $.001 par value) were traded was the
over-the-counter  market.  The aforesaid  securities are not traded or quoted on
any automated quotation system. Such over-the-counter  market quotations reflect
inter-dealer  prices without  retail markup,  markdown or commission and may not
necessarily represent actual transactions. The following table shows the low and
the high bid reported by the NASDAQ  Bulletin  Board System in 1997 and 1998, by
fiscal quarter, and through March 22, 1999.

                                                    Low              High
                                                    ---              ----
         January 1, 1997 - March 31, 1997          $3.00             $6.75
         April 1, 1997 - June 30, 1997             $2.50             $5.94
         July 1, 1997 - September 30, 1997         $1.94             $4.38
         October 1, 1997 - December 31, 1997       $1.00             $2.75

         January 1, 1998 - March 27, 1998          $0.63             $3.09
         April 1, 1998 - June 30, 1998             $0.66             $1.75
         July 1, 1998 - September 30, 1998         $0.31             $1.00
         October 1, 1998 - December 31, 1998       $0.09             $0.91

         January 1, 1999 - March 22, 1999          $0.22             $0.59

         HOLDERS.  The Registrant has  approximately  365 stockholders of record
including nominee firms for securities dealers.

         DIVIDENDS.  The  Registrant has not paid or declared any dividends upon
its common  shares since its inception  and, by reason of its present  financial
status and its contemplated  financial  requirements,  does not intend to pay or
declare any dividends upon its common shares within the foreseeable future.

COMMON STOCK

         The authorized  capital stock of the Registrant  consists of 50,000,000
shares of common  stock,  par value $0.001 per share,  and  3,000,000  shares of
Preferred  Stock,  par value $0.0001 per share. As of March 19, 1999, there were
31,623,292  shares of common  stock and 0 shares of  Preferred  Stock issued and
outstanding.  Holders of common  stock are  entitled  to one vote for each share
held  on  each  matter  to be  acted  upon by  stockholders  of the  Registrant.
Stockholders  do not have  preemptive  rights or the right to cumulate votes for
the  election  of  directors.  Shares are not subject to  redemption  nor to any
liability for further calls.  All shares of common stock issued and  outstanding
are entitled to receive such dividends,  if any, as may be declared by the Board
of Directors in its discretion out of funds legally  available for that purpose,
and to participate pro rata in any distribution of the Registrant's  assets upon
liquidation or dissolution.

                                       10
<PAGE>
         In the event of  liquidation  or  dissolution  of the  Registrant,  all
assets  available for  distribution  after  satisfaction  of all debts and other
liabilities and after payment or provision for any liquidation preference on any
issued Preferred Stock are distributable among the holders of the common stock.

         The transfer agent for the  Registrant's  common stock is Olde Monmouth
Stock Transfer Co., Inc., 77 Memorial Parkway,  Suite 101,  Atlantic  Highlands,
New Jersey 07716.

PREFERRED STOCK

         The  Registrant is authorized  to issue  3,000,000  shares of Preferred
Stock,  par  value  $.0001  per  share,  of  which no  shares  were  issued  and
outstanding  at the date of this  Prospectus.  The Preferred  Stock shares shall
have the rights,  limitations and obligations which the Board of Directors shall
determine  at the time the  Preferred  Stock is issued.  The  Registrant  has no
present intention of issuing any Preferred Stock in the foreseeable future.

COMMON STOCK PURCHASE WARRANTS

         The  Registrant  has reserved for issuance  1,805,023  shares of common
stock for issuance in the event of the exercise of 1,805,023  outstanding Common
Stock Purchase Warrants (the "Warrants").  The Warrants themselves have not been
and will not be  registered.  The  Warrants  are  exercisable  at any time at an
exercise  price of $2.50 per share  through  December 31, 2000 on which date the
unexercised Warrants expire.

         The  Warrants  are not subject to  redemption  by the  Registrant.  The
holders  of  the  Warrants  do not  have  any of the  rights  or  privileges  of
stockholders  of the  Registrant,  such as voting rights or the right to receive
dividends, prior to exercise of the Warrants. The exercise price of the Warrants
and the number of Warrants are subject to automatic proportionate  adjustment in
the event of any stock dividend, stock split or other recapitalization affecting
the outstanding Registrant common stock.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

YEAR 2000 ISSUES

         The Company  believes its present  operations  are Year 2000  compliant
because the  Company's  current use of  computers on the  headquarters  level is
minimal  and the  primary  customer of the  Company's  treatment  centers is the
federal  government.  At the headquarters level the Company's computers are used

                                       11
<PAGE>
exclusively for word processing, as opposed to accounting,  functions. Since the
Company's present and future product sales will be done on a cash-on-delivery or
pre-paid  basis,  the Company will have no significant  accounts  receivable for
product sales. All of the Company's  employee payroll functions are handled by a
nationwide  third-party vendor which has advised the Company that its operations
are Year 2000 compliant.

         With respect to the Company's treatment centers,  the Company purchased
a computer  software  system in December 1997 which was represented as Year 2000
compliant and the Company's  computers purchased in 1997 use an operating system
which is represented as Year 2000 compliant.  At this time the Company  believes
the risks to its operations from a Year 2000 problem are minimal.

YEAR ENDING DECEMBER 31, 1998

         OPERATIONS.  Registrant  was a development  stage  company  through the
quarter ended  September 30, 1997,  with revenues having been generated from its
Scottsdale  glaucoma treatment center starting on September 1, 1997.  Therefore,
there is no comparable  complete prior year's operations to which to compare the
operating results of December 31, 1998.

         For the year ending December 31, 1998 Registrant experienced a net loss
from  operations  of  $1,607,063,  which  was  comprised  of  a  net  loss  from
Registrant's  Scottsdale  treatment  center  of  $220,181  and its  general  and
administrative expenses incurred at the corporate level of $1,386,892.  70.0% of
Registrant's  corporate  expenses  consisted  of  officers  salaries of $200,000
(14.4%),  professional  expenses  of  $187,584 (13.5%),  stock  option  issuance
expenses of $186,235  (13.4%) and  shareholder  services and media  promotion of
$397,753 (28.7%). Registrant expects its professional expenses in 1999 to remain
at a high  level as a result of its  continuing  costs  for its FDA  application
presently  estimated at $25,000 per month.  Registrant  expects no change in its
officers  salaries in 1999 and expects some stock option expense may be incurred
at the end of 1999. Since most of Registrant's shareholder services expenses are
paid with Registrant's  stock and not cash,  Registrant's  shareholder  services
expenses are likely to remain high in 1999.

         During 1998 Registrant's Scottsdale treatment center generated $292,788
of gross revenues.  Included in these revenues are billings for the Registrant's
patented procedure from the last quarter of 1997 which were rebilled to Medicare
in the first quarter,  because Medicare began to pay for the patented procedure.
The Registrant  generally recognizes services rendered as revenues when rendered
to the patient.  However, at the end of the final quarter of 1997 the Registrant
wrote-off  approximately $35,000 of revenues from its patented procedure because
Medicare was refusing to pay for these  procedures  at December 31, 1997. At the
present time Medicare is paying over 95% of the amount charged by the Registrant
for its  patented  treatments.  Any  amount  not  paid by  Medicare  or  another
third-party  payor for the  Registrant's  patented  procedure  or a  traditional
diagnostic  or  treatment  procedure  is  written  off  by the  Registrant  on a
patient-by-patient  basis when the payment is received by the Registrant,  which
is the  general  practice  in the  medical  profession.  At  1998  year-end  the
Registrant  wrote-off  $12,655  of  receivables  as  uncollectible,   which  the
Registrant  does not  consider  material  to its total  revenues  or  results of
operations in 1998.

         During 1998 the Registrant's Scottsdale treatment center produced a net
loss of  $220,181,  with  revenues of $292,788 and costs of revenues of $512,969
without  allocation of management  overhead.  82.1% of the  Scottsdale  center's
expenses were represented by advertising costs of $112,283 (21.9%) and personnel
salaries of $309,039  (60.2%).  In the first quarter of 1999 the services of Dr.
Leo Bores, the Medical Director of the Scottsdale  treatment center, were needed
at the Registrant's headquarters in connection with the Registrant's FDA product
approval  process  and the  Scottsdale  treatment  center was closed on March 2,
1999.  However,  the  Registrant  intends  to  move  the  equipment  used in the
Scottsdale  center to the Clearwater  center without  incurring any loss on that
equipment.  No charges or  write-offs  will be incurred  from the closure of the
Scottsdale  treatment  center,  and  all  losses  incurred  in the  past  at the
Scottsdale  treatment  center are recoverable  from the sale of the Registrant's
patented equipment in the U.S. prior to FDA product approval (see below).

                                       12
<PAGE>
         In July 1998 the Registrant commenced with its plans to open a glaucoma
treatment  center in  Clearwater,  Florida.  The  Registrant  was  successful in
negotiating a three-year  lease on office space which  commenced in October 1998
and Registrant thought it had negotiated an employment  contract with a suitable
physician to serve as medical director of the Clearwater  center.  However,  the
negotiations  with the doctor were not completed and the Registrant has not been
able to locate a suitable  medical  director as yet.  The  Registrant  currently
plans on opening its Clearwater treatment center within three months of securing
the services of a suitable medical director and obtaining  sufficient  financing
for the center (see below). The Registrant  incurred expenses of $54,945 in 1998
in connection with the Clearwater  treatment center.  The Registrant is hopeful,
without  any  assurance,  that  the  right  physician  will be able to make  the
Clearwater  treatment  center  profitable.  However,  the Registrant  will incur
substantial  travel expenses in the future in managing the Clearwater  treatment
center,  expenses which were not involved in managing the  Scottsdale  treatment
center.

         LIQUIDITY AND CAPITAL  RESOURCES.  On a short-term and long-term  basis
Registrant  requires only minimal  capital to sustain its  manufacturing  of the
patented equipment, because of Registrant's current inventory levels. Because of
the   Registrant's   cash   position  at  year-end   and  minimal   general  and
administrative  cash  expenses  totaling  approximately  $700,000 per year,  the
Registrant is currently suffering from a liquidity shortage. The Registrant will
be collecting its  outstanding  accounts  receivable of $61,405 during the first
half  of  1999,  as  well  as  attempting  to  enter  into a  sale-and-leaseback
transaction of its treatment center equipment for approximately $100,000 and the
sale of the building used for the  Scottsdale  treatment  center for $200,000 to
$300,000 of net proceeds.  These funds, if obtained,  would allow the Registrant
to survive  through the first half of 1999.  However,  as of March 15, 1999, the
Registrant was unable to secure any sale-and -leaseback  financing  committment.
Thus far in 1999 the Registrant has borrowed  approximately $12,000 from each of
G. Richard Smith and Gary R. Smith,  the  Registrant's  Chairman and  President,
respectively.  The  Registrant's  Chairman and  President may be willing to loan
additional  funds to the  Registrant  in the  future,  but have made no  written
committment to the Registrant at this time.  The  Registrant's  liquidity in the
second half of 1999 is dependent on obtaining substantial  additional funding or
dramatically increased sales of its patented product (see below).

         Registrant  also  requires   approximately   $400,000  to  $600,000  to
adequately fund the first year's  operation of its planned  Clearwater  glaucoma
treatment center.  Registrant is presently  planning to secure debt financing in
1999  to  finance  the  Clearwater  treatment  center.  However,  at  this  time
Registrant has received no commitments from any source to provide such financing
and its financing sources appear limited.

         In the fourth  quarter of 1998 the  Registrant  commenced the sale of a
limited  number of units of its patented  equipment to  ophthalmologists  in the
United  States over the next  several  months,  pursuant to FDA  investigational
device  exemption  regulations.  These FDA regulations  permit the Registrant to
recover  from the sale of its product an amount  equal to its costs of preparing
its product for FDA approval. The Registrant's patented product was presented to
a  number  of  U.S.   physicians  at  the  convention  of  American  Academy  of
Ophthalmologists  in New Orleans in November  1998 and a conference in Hawaii in
January  1999.  The  Registrant  has arranged with a lender for the financing of
purchases  of up to 200 units of the  Registrant's  patented  equipment  by U.S.
ophthalmologists. The monthly payment for the equipment by the physician will be
approximately equal to the dollar amount reimbursed to the physician by Medicare

                                       13
<PAGE>
for the treatment of one glaucoma patient each month. Through March 15, 1999 the
Registrant had sold 3 units of its product in the U.S. The  Registrant  expects,
without  assurance,  that its limited sale of its product to U.S.  physicians in
the coming  months will have a positive  impact on the  Registrant's  short-term
liquidity; however, its sales effort may be severely limited by the Registrant's
lack of funding for marketing.

         Prior  to  and as a  result  of the  presentation  of the  Registrant's
patented  equipment  at the  New  Orleans'  convention  of  ophthalmologists  in
November 1998, the Registrant has held discussions  with potential  distributors
for the  Registrant's  product in the U.S. on a  non-exclusive  and an exclusive
basis. The Registrant also had negotiations in November and December 1998 with a
European  distributor  concerning  exclusive  distribution  of the  Registrant's
product in Europe  pursuant to a multi-year  agreement.  The Registrant  expects
negotiations  on one or  more  U.S.  and  European  distribution  agreements  to
continue throughout 1999;  however,  there is no assurance that any distribution
contracts will ever be executed by the Registrant.  Any  distribution  agreement
executed in the near future by the Registrant will likely have a positive impact
on the Registrant's liquidity and profitability in 1999.

         On a long-term basis, Registrant anticipates,  without assurances, that
the sale of its product in the U.S. and internationally  will provide sufficient
liquidity to the Registrant.

         In  December  1996  through  April 1997  Registrant  issued a series of
promissory  notes to a third party  aggregating  $220,000,  all payable one year
after issuance and bearing 15% annual interest. These notes and accrued interest
were repaid in full in March 1998.

         In February 1998  Registrant  issued a $25,000  convertible  promissory
note which  bears 15%  interest.  The  interest on this note ceased on March 30,
1998 when  Registrant  offered  to repay this note and the  holder  indicated  a
possibility of converting into equity. 5,000 shares of Registrant's common stock
were issued to the holder in February 1998 as additional  interest on this note.
$20,000 of the principal of this note was repaid and the remaining principal and
interest was converted to Registrant's common stock in May 1998.

         In July 1997 the Registrant  issued a $75,000  promissory  note bearing
10%  annual  interest  in  partial  consideration  for the  purchase  of medical
equipment and office furnishings at the Scottsdale  treatment center.  This note
required a $37,500  principal  payment on July 18,  1998  (which was made) and a
$37,500 final principal payment on January 18, 1999 (which was made).

         In February  and March 1999 the  Registrant  received a loan of $12,000
from each of G. Richard Smith and Gary R. Smith, the  Registrant's  Chairman and
President, respectively. These loans bear annual interest at the rate of 15%.

YEAR ENDING DECEMBER 31, 1997

         For the year ended December 31, 1997 Registrant  experienced a net loss
from operations of $810,806, which was comprised of a net loss from Registrant's
treatment  center  operation  of $243,629  and its  general  and  administrative
expenses  incurred at the  corporate  level of $567,177.  68.7% of  Registrant's
corporate  expenses  consisted  of officers  salaries  of  $200,000  (35.3%) and
professional  expenses of $189,228 (33.4%).  Registrant expects its professional
expenses  to remain at a high  level as a result of its  continued  attempts  to
obtain  financing  in 1998  for two  additional  treatment  centers,  as well as
incurring the legal costs of acquiring and opening additional treatment centers.
See "Liquidity and Capital Resources" below.

                                       14
<PAGE>
         During  the four  months  in which  Registrant's  Scottsdale  treatment
center was receiving patients, the center generated $26,107 of revenues.  During
the first quarter of 1998 the revenues of the center were  substantially  higher
on a monthly basis than in 1997.  Registrant  currently  expects the  Scottsdale
treatment  center to be  profitable  in the second half of 1998,  if not sooner.
Since the Registrant  incurred  advertising  and personnel  expenses  during the
month  preceding  the  opening  of its  treatment  center,  Registrant's  center
expenses of $269,736  represented  five months of costs.  79.0% of the  center's
expenses were represented by advertising costs of $120,300 (44.5%) and personnel
salaries of $93,072 (34.5%). Registrant expects the treatment center's personnel
costs to remain fairly constant during 1998, and perhaps  increase in the second
half of the year as increased patients require additional personnel.  Registrant
expects its advertising costs of the Scottsdale center to decrease substantially
in 1998, because the initial  advertising  expenses will not be required in 1998
and Registrant has sufficient  capital on hand in 1998 to pay for advertising in
advance, which should result in a substantial discount.

         LIQUIDITY AND CAPITAL  RESOURCES.  On a short-term and long-term  basis
Registrant  requires  only  minimal  capital to sustain  its  manufacturing  and
marketing of the patented Vacuum Fixation Device and the patented suction rings,
because of Registrant's  current  inventory levels and the low cost of marketing
these patented  products.  However,  on a short-term basis  Registrant  requires
approximately  $800,000  to  $1,000,000  to  adequately  fund the  first  year's
operation of any additional glaucoma treatment centers.  Registrant is presently
planning to conduct another  private  placement of its securities or secure debt
financing  in 1998 to  secure  financing  for  one or  more  treatment  centers.
However,  at this time Registrant has received no commitments from any source to
provide such financing. On a long-term basis,  Registrant  anticipates,  without
assurances,  that its initial  glaucoma  treatment  centers will be sufficiently
profitable to permit additional  glaucoma  treatment centers to be funded during
subsequent years from a combination of internal and external sources.

         During  the  second  half of 1997 the  Registrant  received  a total of
$710,500 of proceeds  from a private  placement of its  securities.  These funds
were used primarily to purchase and open the Scottsdale  treatment center and to
pay various professional expenses.

         During  the  first  quarter  of 1998  Registrant  received  a total  of
$834,544  from two private  placement  offerings of its  securities.  Registrant
expects  these  funds,  along  with  the  future  profitably  of the  Scottsdale
treatment center, will provide financial stability for the Registrant's  current
operations throughout 1998.

         In  December  1996  through  April 1997  Registrant  issued a series of
promissory notes to a third party aggregating  $220,000 at year end, all payable
on one year after  issuance  and  bearing 15% annual  interest.  These notes and
accrued interest thereon were repaid in full on March 19, 1998.
         
ITEM 7. FINANCIAL STATEMENTS.

         See Financial Statements starting on page F-1 for this information.

ITEM 8. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

         The  Registrant has not changed  accountants  or had any  disagreements
with its accountants during the audits of the last two fiscal years.

                                       15
<PAGE>
                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS'
        COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

         The directors and executive  officers of the  Registrant as of December
31, 1998 were as follows:

           Name and Address                               Position
           ----------------                               --------

      G. Richard Smith                        Director, Chairman and Secretary
      16929 E. Enterprise Drive Suite 202
      Fountain Hills, AZ 85268

      Gary R. Smith                           Director, President and Treasurer
      16929 E. Enterprise Drive Suite 202
      Fountain Hills, AZ 85268

      John T. LiVecchi                        Director
      16929 E. Enterprise Drive Suite 202
      Fountain Hills, AZ 85268

         The  Registrant  presently has two vacancies on its Board of Directors.
Richard and Gary Smith are brothers.

         G. Richard Smith,  age 50, has been a Director of the Registrant  since
November 5, 1996 and  Secretary of the  Registrant  since  November 5, 1996.  He
became  Chairman in March,  1998. From July, 1995 to November 5, 1996 G. Richard
Smith was a joint  venture  partner  in  American  Glaucoma,  the  company  that
developed the concept of glaucoma treatment centers throughout the U.S which was
sold to the Registrant. From July, 1995 to November 5, 1996 G. Richard Smith was
a member and President of  Ophthalmic  International,  L.L.C.,  the company that
developed and patented the glaucoma  treatment which was sold to the Registrant.
From 1987 to June,  1995 G. Richard Smith was co-owner and President of Southern
California Medical Distributors, Ltd. ("SCMD") which developed a turbine powered
keratome for eye surgery.  G.  Richard  Smith  attended  Oakland  University  in
Oakland County, Michigan from 1968 to 1970.

         Gary R.  Smith,  age 54, has been a Director  of the  Registrant  since
November 5, 1996, and President and Treasurer of the  Registrant  since November
5, 1996.  From July,  1995 to November 5, 1996 Gary R. Smith was a joint venture
partner in American Glaucoma, the company that developed the concept of glaucoma
treatment  centers  throughout  the U.S which was sold to the  Registrant.  From
July,  1995 to November 5, 1996 Gary R. Smith was a member and Vice President of
Product Development and Manufacturing of Ophthalmic  International,  L.L.C., the
company that developed and patented the glaucoma treatment which was sold to the
Registrant.  From  1987 to  June,  1995  Gary R.  Smith  was  co-owner  and Vice
President of Product  Development  and  Manufacturing  for  Southern  California
Medical  Distributors,  Ltd.  ("SCMD"),  where he  developed  a turbine  powered
keratome for eye surgery. Gary R. Smith attended Detroit Institute of Technology
in Detroit, Michigan from 1961 through 1963.

                                       16
<PAGE>
         John T. LiVecchi,  age 50, has been a Director of the Registrant  since
December 16, 1996. From July, 1995 to November 5, 1996 Dr. LiVecchi was a member
of Ophthalmic International, L.L.C., the company that developed and patented the
glaucoma  treatment  which  was  sold to the  Registrant.  Dr.  LiVecchi  had no
relationship to American  Glaucoma.  Dr. LiVecchi received his medical degree in
1977 from the University of Rome,  Italy.  From 1983 to present Dr. LiVecchi has
been in private medical  practice in the field of ophthalmology in the Scranton,
Pennsylvania  area. Dr. LiVecchi has been on the staff of several  hospitals and
universities. Dr. LiVecchi is licensed to practice medicine in the States of New
York, Michigan and Pennsylvania. Dr. LiVecchi has authored numerous articles and
presentations.  In  1994  Dr.  LiVecchi  undertook  the  project  of  developing
equipment  and  procedures  for  treating  open angle  glaucoma,  along with the
Registrant's other Directors.

         Messrs.  Smith,  Smith and LiVecchi were the three owners of SCMD which
developed a turbine powered keratome for eye surgery.  They sold this company to
its Chinese  distributor  in 1995.  During the last year  before its sale,  this
company  had  total  revenues  of  approximately  $1,050,000  and net  income of
approximately  $695,000. This company was sold for a multiple of its net income.
Messrs.  Smith,  Smith and  LiVecchi  sold SCMD to devote  their  efforts to the
development of the glaucoma  treatment  process and  equipment,  which they felt
could be more profitable than the turbine keratome.

KEY EMPLOYEE

         Dr.  Leo Bores,  as the former  Medical  Director  of the  Registrant's
Scottsdale  glaucoma treatment center, is a key employee of the Registrant.  Dr.
Bores  received a B.S.  degree in  Biochemistry  and  Biology in 1958 from Wayne
State University.  Dr. Bores received his degree from the Wayne State University
College of Medicine in 1962 and he served his  internship at Harper  Hospital in
Detroit,  Michigan in 1962 and 1963.  Dr. Bores was a resident in  Ophthalmology
from 1963 to 1968 and was certified by the American  Board of  Ophthalmology  in
1969.  Dr.  Bores  is  internationally   known  for  his  contributions  to  the
development  of radial  keratotomy  ("RK").  In 1994, Dr. Bores received the 1st
Annual Award for outstanding  scientific  contributions to eye microsurgery.  In
1995 Dr. Bores  became the 12th  recipient of the  Innovators  in  Ophthalmology
Award  from the  American  Society  for  Cataract  and  Refractive  Surgery  for
outstanding contributions in ophthalmic surgery. Prior to joining the Registrant
in July 1997 Dr. Bores owned and operated The Bores Eye Institute in Scottsdale,
Arizona,  practicing ophthalmic surgery and specializing in RK for approximately
10 years.

                                       17
<PAGE>
ITEM 10.  EXECUTIVE COMPENSATION.

         The following table sets forth the salaries of the  Registrant's  three
directors for the fiscal year ending December 31, 1998.
<TABLE>
<CAPTION>
                                                                  Long Term Compensation
                                 Annual Compensation         -------------------------------
                         ----------------------------------             Securities  Awards        Payouts
Name and                                         Other       Restricted Underlying  ------        -------
Principal                                        Annual        Stock     Options/    LTIP       All Other
Position           Year  Salary($) Bonus($)  Compensation($)  Awards($)   SARS(#)  Payouts($) Compensation($)
--------           ----  --------- --------  ---------------  ---------   -------  ---------- ---------------
<S>                <C>   <C>       <C>        <C>           <C>          <C>      <C>          <C>
G. Richard Smith,  1998    $   0     --          $125,000(1)     --      400,000(2)    --            --
Chairman                                                                
                                                                        
Gary R. Smith,     1998    $   0     --          $125,000(1)     --      400,000(2)    --            --
President                                                               
                                                                        
John LiVecchi      1998    $   0     --                --        --      400,000(2)    --            --
Director                                                            
</TABLE>
----------
(1) $100,000 of accrued  salary for 1998 and $20,000 of salary accrued from 1997
    was  paid to each of G.  Richard  Smith  and  Gary R.  Smith  in the form of
    restricted  common stock at the rate of $.03 per share on December 21, 1998,
    which was the same rate offered to all  employees for accrued  salaries.  G.
    Richard  Smith and Gary R. Smith also  received  $5,000  cash as interest on
    their accrued salaries in October 1998.

(2) These options were awarded in December 1998, have a ten-year term and an
    exercise price of $.05 per share.

         On July 18, 1997, the Registrant executed a two-year agreement with Dr.
Leo Bores, pursuant to which Dr. Bores will be paid a salary of $150,000 for the
first year and $200,000 for the second year.

STOCK OPTION PLAN

         On December 21, 1998, the Registrant's Board of Directors  adopted  The
1998 Stock Option Plan (the "Option Plan") and 1,550,000 shares will be reserved
for issuance  thereunder.  The Option Plan is  structured  to allow the Board of
Directors discretion in creating equity incentives to management,  key employees
and  professional  consultants  for the purpose of assisting  the  Registrant in
motivating  and  retaining   appropriate  talent.  On  December  21,  1998,  the
Registrant  granted  options  for a total of  1,550,000  shares of  Registrant's
common stock.  These options have ten-year  terms and may be exercised  within 3
months  after  termination  of  employment,  except if the  optionee  dies while
employed, the option may be exercised by the optionee's beneficiary. All options
issued have stock  appreciation  rights  whereby the option may be  exercised by
redeeming the appreciated value of the option and without cash being paid by the
optionee,  except the Registrant's officers must wait one year after the date of
grant to exercise stock appreciation rights. The following  individuals received
options for the  following  number of shares at the indicated  option price:  G.
Richard Smith 400,000 shares at $.05;  Gary R. Smith 400,000 shares at $.05; Dr.
John T. LiVecchi  400,000  shares at $.05;  and Dr. Leo Bores 200,000  shares at
$.075. A consultant to the  Registrant  received an option for 150,000 shares at
$.075 per share.  Since these  options  were  granted on a date when the average
market price for the Registrant's  stock was $.10, the Registrant  accounted for
the granting of these options as an expense and increase to stockholder's equity
of $186,235. None of these options has been exercised as of March 15, 1999.

         The Registrant currently has no pension,  retirement,  annuity, savings
or similar benefit plan which provides compensation to its executive officers or
directors.

                                       18
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         As of March 19,  1998 there were  31,623,292  outstanding  shares.  The
following  table sets  forth the name,  address,  number of shares  beneficially
owned, and the percentage of the  Registrant's  total  outstanding  common stock
shares owned by: (i) each of the Registrant's  Officers and Directors;  (ii) the
Registrant's  Officers and Directors as a group; and (iii) other shareholders of
5% or more of the Registrant's total outstanding common stock shares.

                    Name and Address            Amount and Nature of     Percent
Title of Class      Beneficial Owner            Beneficial Ownership    of Class
--------------      ----------------            --------------------    --------

Common Stock   Gary R. Smith                         9,992,512 (1)         31.6%
               16929 E. Enterprise Drive Suite 202
               Fountain Hills, AZ 85268

Common Stock   G. Richard Smith                     10,367,612 (2)         32.8%
               16929 E. Enterprise Drive Suite 202
               Fountain Hills, AZ 85268

Common Stock   John T. LiVecchi                      2,000,000 (3)          6.3%
               16929 E. Enterprise Drive Suite 202
               Fountain Hills, AZ 85268

Common Stock   Officers and Directors, as a         22,360,124 (4)         70.7%
                  Group (3 People)

----------
(1)  Does not  include  400,000  shares of stock which may be  purchased  by Mr.
     Smith under the  Registrant's  Stock  Option  Plan.  In the event Mr. Smith
     purchased  all  of  those  shares,   Mr.  Smith  would  own  32.5%  of  the
     Registrant's total outstanding shares.

(2)  Does not  include  400,000  shares of stock which may be  purchased  by Mr.
     Smith under the  Registrant's  Stock  Option  Plan.  In the event Mr. Smith
     purchased  all  of  those  shares,   Mr.  Smith  would  own  33.6%  of  the
     Registrant's total outstanding shares.

(3)  Does not  include  400,000  shares of stock which may be  purchased  by Dr.
     LiVecchi  under  the  Registrant's  Stock  Option  Plan.  In the  event Dr.
     LiVecchi  purchased all of those shares, Dr. LiVecchi would own 7.5% of the
     Registrant's total outstanding shares.

(4)  Does not include  400,000 shares of stock which may be purchased by each of
     Mr.  Gary R.  Smith,  Mr.  G.  Richard  Smith  and Dr.  LiVecchi  under the
     Registrant's  Stock  Option Plan.  In the event  Messrs.  Smith,  Smith and
     LiVecchi  purchased all of those shares,  they would collectively own 71.8%
     of the Registrant's total outstanding shares.

                                       19
<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         On November 5, 1996,  the  Registrant  entered into the Asset  Purchase
Agreement with Ophthalmic International,  L.L.C., and American Glaucoma, whereby
6,796,112 restricted shares of the Registrant's common stock were issued to each
of Gary R. Smith and G. Richard  Smith,  and  2,000,000  restricted  shares were
issued to John T.  LiVecchi.  Messrs.  Smith,  Smith  and  LiVecchi  became  the
Registrant's  sole  Directors as a result of this  transaction.  For  accounting
purposes,  Messrs.  Smith,  Smith and LiVecchi are deemed to have no cost in the
assets transferred to the Registrant.

         On July 28, 1997 the Registrant  purchased medical equipment and office
furniture  from Dr. Leo Bores for  $50,000  cash and a $75,000  promissory  note
bearing 10% annual  interest.  One-half of this promissory note was paid in July
1998 and the other half was paid in December 1998. The  approximate  fair market
value of this  furniture  and  equipment  was  determined  to be  $125,000 by an
independent  appraiser.  The Registrant  also executed a two-year lease with Dr.
Bores  in  July,  1997 for the  site of the  Registrant's  Scottsdale  treatment
center.  The  $3,500  monthly  lease rate for this  4,200  square  foot space is
roughly equal to the mortgage payment of Dr. Bores on this space. The Registrant
also has a two-year  option to purchase  this  building  for $400,000  cash,  as
negotiated between the parties.

                                    PART IV

ITEM 13. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8K.

         Reference  is  herewith  made to the  financial  statements  and  notes
thereto  included  herein and to the cover page of this 10-KSB  with  respect to
documents incorporated by reference in accordance with Rule 12b-33.

         Exhibits   10.1   Lease for Clearwater Office
                  
                    10.1   Lease for Clearwater Condo
                  
                    10.3   1998 Stock Option Plan
                  
                    10.4   Stock Option Agreement with Michael K. Hair
                  
                    10.5   Stock Option Agreement with Dr. Leo Bores
                  
                    10.6   Stock Option Agreement with Dr. John T. LiVecchi
                  
                    10.7   Stock Option Agreement with Gary R. Smith
                  
                    10.8   Stock Option Agreement with G. Richard Smith

         Financial Statements -- F-1
                             
                                       20
<PAGE>
                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf on March 30, 1999 by the undersigned, thereunto authorized.

                                         CORONADO INDUSTRIES, INC.


                                         By: /s/ Gary R. Smith
                                            --------------------------------
                                                 Gary R. Smith, President


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following  persons on behalf of the Registrant and in the
capacities on the date(s) indicated.



/s/  G. Richard Smith       Chairman (Chief Executive      Dated: March 30, 1999
-------------------------   Officer), Secretary and
     G. Richard Smith       Director


/s/  Gary R. Smith          President,                     Dated: March 30, 1999
-------------------------   Treasurer (Chief Accounting
     Gary R. Smith          Officer), Director


-------------------------   Director                       Dated:
     John LiVecchi


                                       21
<PAGE>
                      SUPPLEMENTAL INFORMATION AND EXHIBITS

SUPPLEMENTAL  INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE  SECURITIES  EXCHANGE  ACT OF 1934 BY  REGISTRANTS  WHICH  HAVE NOT
REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT.

         The  Registrant's  fiscal year ended  December 31, 1998. The Registrant
currently has not held its Annual Meeting of Stockholders.

         Four copies of all material to be mailed to  stockholders  with respect
to such meeting will be furnished to the Securities and Exchange  Commission but
such  documents,  when  furnished,  will  not be  deemed  to be  filed  with the
Securities  and Exchange  Commission  or  otherwise  subject to  liabilities  of
Section 18 of the Act  (except to the extent  that the  Registrant  specifically
incorporates  such material by reference in any subsequent  Form 10-KSB);  it is
expected that such documents  will consist of a Form of Proxy,  Notice of Annual
Meeting, Information Statement with Schedules and/or Exhibits annexed thereto.

                                       22
<PAGE>







                            CORONADO INDUSTRIES, INC.

                              FINANCIAL STATEMENTS

                               FOR THE YEARS ENDED
                           DECEMBER 31, 1998 AND 1997





                                      F-1
<PAGE>
                          INDEPENDENT AUDITORS' REPORT


To The Stockholders and Board of Directors of
Coronado Industries, Inc.

We  have  audited  the  accompanying  consolidated  balance  sheet  of  Coronado
Industries,  Inc.  as  of  December  31,  1998,  and  the  related  consolidated
statements of operations,  changes in stockholders'  equity,  and cash flows for
the years  ended  December  31,  1998 and  1997.  These  consolidated  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe our audits provide 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 Coronado Industries,
Inc. as of December  31,  1998,  and the results of its  operations,  changes in
stockholders'  equity,  and its cash flows for the years ended December 31, 1998
and 1997 in conformity with generally accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will  continue as a going  concern.  As discussed in Note 11 to
the  consolidated  financial  statements,  the Company's  significant  operating
losses raise substantial doubt about its ability to continue as a going concern.
The consolidated  financial statements do not include any adjustments that might
result from the outcome of this uncertainty.


Certified Public Accountants                  /s/ Semple & Cooper, LLP

Phoenix, Arizona
March 10, 1999

                                       F-2
<PAGE>
                            CORONADO INDUSTRIES, INC.
                           CONSOLIDATED BALANCE SHEET
                                December 31, 1998


                                     ASSETS

Current Assets:
   Cash and cash equivalents (Note 1)                               $    36,844
   Accounts receivable, trade, net (Note 1)                              61,405
   Inventory (Note 1)                                                    24,865
   Prepaid expenses                                                      22,490
                                                                    -----------
        Total Current Assets                                            145,604

Property and Equipment, net (Notes 1 and 2)                             144,436

Other Assets:
   Intangible assets, net (Notes 1 and 3)                                32,589
                                                                    -----------

        Total Assets                                                $   322,629
                                                                    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts payable                                                 $    28,989
                                                                    -----------

        Total Current Liabilities                                        28,989
                                                                    -----------

Commitments: (Notes 4 and 7)                                                 --

Stockholders' Equity: (Note 5)
   Preferred stock - $.0001 par value; 3,000,000 shares
     authorized, none issued or outstanding                                  --
   Common stock - $.001 par value; 50,000,000 shares
     authorized, 31,560,176 shares issued and outstanding                31,561
   Additional paid-in capital                                         2,778,926
   Accumulated deficit                                               (2,516,847)
                                                                    -----------

        Total Stockholders' Equity                                      293,640
                                                                    -----------

        Total Liabilities and Stockholders' Equity                  $   322,629
                                                                    ===========
                   The Accompanying Notes are an Integral Part
                    of the Consolidated Financial Statements

                                       F-3
<PAGE>
                           CORONADO INDUSTRIES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 For The Years Ended December 31, 1998 and 1997


                                                    1998                1997
                                                ------------       ------------

Patient Revenues, Net (Note 1)                  $    292,788       $     26,107

Cost of Patient Revenues                             512,969            269,736
                                                ------------       ------------

Gross Loss                                          (220,181)          (243,629)

General and Administrative Expenses                1,386,892            567,177
                                                ------------       ------------
Loss from Operations                              (1,607,063)          (810,806)

Interest Expense                                     (15,007)           (26,381)

Other Income                                              66              7,485
                                                ------------       ------------

Net Loss                                        $ (1,622,014)      $   (829,702)
                                                ============       ============

Basic Loss per Share (Note 1)                   $       (.08)      $       (.04)
                                                ============       ============

Weighted Average Shares Outstanding               20,741,855         18,504,392
                                                ============       ============

                   The Accompanying Notes are an Integral Part
                    of the Consolidated Financial Statements

                                       F-4
<PAGE>
                            CORONADO INDUSTRIES, INC.
       CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                 For The Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
                                                                                     Total
                                     Common Stock                                    Stock-
                                ---------------------   Additional                   holders'
                                   Shares                 Paid-in    Accumulated     Equity
                                Outstanding    Amount     Capital      Deficit      (Deficit)
                                ----------    -------   ----------   -----------   ----------
<S>                            <C>           <C>       <C>          <C>           <C>
Balance at December 31, 1996    18,344,253    $18,344   $   37,149   $   (65,131)  $   (9,638)

Proceeds from sale of stock,
 net of costs of $138,659          568,400        568      573,523            --       574,091

Stock issued for services           50,000         50      119,950            --       120,000

Net loss                                --         --           --      (829,702)     (829,702)
                                ----------    -------   ----------   -----------   -----------
Balance at December 31, 1997    18,962,653     18,962      730,622      (894,833)     (145,249)

Proceeds from sale of stock,
 net of costs of $259,320        3,715,367      3,716    1,315,079            --     1,318,795

Stock issued for services        8,866,334      8,867      539,095            --       547,962

Stock issued as loan payment        15,822         16        7,895            --         7,911

Stock options issued for 
 services                               --         --      186,235            --       186,235

Net loss                                --         --           --    (1,622,014)   (1,622,014)
                                ----------    -------   ----------   -----------   -----------
Balance at December 31, 1998    31,560,176    $31,561   $2,778,926   $(2,516,847)  $   293,640
                                ==========    =======   ==========   ===========   ===========
</TABLE>
                   The Accompanying Notes are an Integral Part
                    of the Consolidated Financial Statements

                                       F-5
<PAGE>
                            CORONADO INDUSTRIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For The Years Ended December 31, 1998 and 1997


                                                          1998           1997
                                                       ----------     ---------
Cash Flows from Operating Activities:
   Cash received from customers                       $   239,258     $  25,783
   Cash paid to suppliers and employees                (1,249,697)     (609,807)
                                                      -----------     ---------
        Net cash used by operating
          activities                                   (1,010,439)     (584,024)
                                                      -----------     ---------
Cash Flows from Investing Activities:
   Purchase of fixed assets                               (26,666)      (92,935)
   Cash disbursements for patents                              --       (30,684)
                                                      -----------     ---------
        Net cash used by investing
          activities                                      (26,666)     (123,619)
                                                      -----------     ---------
Cash Flows from Financing Activities:
   Cash received from notes payable                            --       192,000
   Repayment of notes payable                            (310,477)           --
   Cash received from sale of stock                     1,318,795       574,091
                                                      -----------     ---------
        Net cash provided by financing
          activities                                    1,008,318       766,091
                                                      -----------     ---------
Net increase (decrease) in cash and
   cash equivalents                                       (28,787)       58,448

Cash and cash equivalents at beginning of year             65,631         7,183
                                                      -----------     ---------

Cash and cash equivalents at end of year              $    36,844     $  65,631
                                                      ===========     =========

                   The Accompanying Notes are an Integral Part
                    of the Consolidated Financial Statements

                                       F-6
<PAGE>
                            CORONADO INDUSTRIES, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                 For The Years Ended December 31, 1998 and 1997


                                                         1998            1997
                                                      ---------       ---------
Reconciliation of Net Loss to Net Cash Used
 by Operating Activities:
     Net loss                                        $(1,622,014)     $(829,702)
                                                     -----------      ---------
Adjustments to reconcile net loss to net
 cash used by operating activities:
    Depreciation                                          31,632         27,332
    Amortization                                           3,756          2,605
    Stock issued for services                            547,962        120,000
    Interest added to principal of notes
      payable                                             15,007         26,381
    Stock options issued for services                    186,235             --

Changes in Assets and Liabilities:
    Accounts receivable
      - trade                                            (53,596)        (7,809)
      - other                                              3,999         (3,999)
    Inventory                                             18,166        (32,464)
    Prepaid expenses                                      82,010       (104,500)
    Accounts payable                                     (47,701)        72,793
    Accrued salaries                                    (153,673)       123,117
    Accrued payroll taxes and other                      (22,222)        22,222
                                                     -----------      ---------

                                                         611,575        245,678
                                                     -----------      ---------

Net Cash Used by Operating Activities                $(1,010,439)     $(584,024)
                                                     ===========      =========

                   The Accompanying Notes are an Integral Part
                    of the Consolidated Financial Statements

                                       F-7
<PAGE>
                            CORONADO INDUSTRIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. Summary of Significant Accounting Policies, Nature of Operations and
   Use of Estimates:

   Organization:

   Coronado Industries, Inc. (the Company) was originally incorporated under the
   laws of the State of New York in December 1989 as First Lloyd Funding,  Inc.,
   which subsequently changed its name to Logical Computer Services of New York,
   Ltd. In September, 1996, the Company changed its name to Coronado Industries,
   Inc.  The Company was a  non-operating  shell  corporation  with  nominal net
   assets prior to its merger on November 5, 1996, when the Company acquired one
   hundred percent (100%) of the assets of Ophthalmic International,  L.L.C. and
   American Glaucoma.

   The stockholders of American Glaucoma and Ophthalmic  International,  L.L.C.,
   which are the same for both  corporations,  obtained  majority control of the
   Company in the  combination,  and therefore,  were  considered the accounting
   acquiror. Therefore, the transaction was accounted for as a reverse merger.

   The Company was in the  development  stage from its acquisition of Ophthalmic
   International,  L.L.C.  and  American  Glaucoma  in  November,  1996  through
   September,  1997. In September,  1997,  American  Glaucoma opened their first
   glaucoma treatment clinic in Scottsdale,  Arizona.  Ophthalmic International,
   L.L.C.  has received a patent on the method for treating Open Angle Glaucoma,
   as well as the devices used in the treatment,  including the Vacuum  Fixation
   Device.  The Company  intends to manufacture  and market the patented  Vacuum
   Fixation  Device  and the  patented  suction  rings to major  medical  supply
   companies and health care providers throughout the world. However, Ophthalmic
   International, L.L.C. has yet to generate any revenues.

   Principles of Consolidation:

   The  consolidated  financial  statements  include  the  activity  of Coronado
   Industries,  Inc.,  together with its wholly-owned  subsidiaries,  Ophthalmic
   International,  Inc., American Glaucoma, Inc. and Arizona Glaucoma Institute,
   Inc.  All  significant  intercompany  accounts  and  transactions  have  been
   eliminated.

   Use of Estimates in the Preparation of Financial Statements:

   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.

                                       F-8
<PAGE>
                            CORONADO INDUSTRIES, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Summary of Significant Accounting Policies, Nature of Operations and
   Use of Estimates: (Continued)

   Cash and Cash Equivalents:

   Cash and cash equivalents are considered to be all highly liquid  investments
   purchased with an initial maturity of three (3) months or less.

   Inventories:

   Inventories consist primarily of raw materials and are stated at the lower of
   cost, as determined on a first-in/first-out (FIFO) basis or market.

   Property and Equipment:

   Property  and  equipment  are stated at cost.  Maintenance  and repairs  that
   neither  materially add to the value of the property nor appreciably  prolong
   its life are charged to operations as incurred.  Betterments  or renewals are
   capitalized when incurred. Depreciation is provided using accelerated methods
   over the following useful lives:

       Office furniture and equipment                        5-7 years
       Machinery and equipment                               5-7 years
       Leasehold improvements                               7-39 years

   Deferred Income Taxes:

   Deferred income taxes are provided on an asset and liability method,  whereby
   deferred tax assets are recognized for deductible  temporary  differences and
   operating loss and tax credit  carryforwards and deferred tax liabilities are
   recognized for taxable temporary  differences.  Temporary differences are the
   differences  between the reported amounts of assets and liabilities and their
   tax basis.  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.  Deferred tax assets and
   liabilities  are adjusted for the effects of changes in tax laws and rates on
   the date of enactment.

   Loss Per Share:

   Basic loss per share includes no dilution and is computed by dividing  income
   available to common  stockholders  by the weighted  average  number of common
   shares  outstanding  for the  period.  Diluted  earnings  per  share  are not
   presented, as their effect is anti-dilutive.

                                       F-9
<PAGE>
                            CORONADO INDUSTRIES, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


1. Summary of Significant Accounting Policies, Nature of Operations and
   Use of Estimates: (Continued)

   Intangible Assets:

   The  Company  reviews  its  intangible  assets at least  annually to evaluate
   potential impairment by comparing the carrying value of the intangible assets
   with expected future net operating cash flows from the related operations. If
   the  expected  future net  operating  cash  flows are less than the  carrying
   value, the Company recognizes an impairment loss equal to the amount by which
   the carrying value exceeds the discounted  expected future net operating cash
   flows from the related operations.

   Accounts Receivable - Trade:

   Accounts  receivable - trade  represents  amounts earned but not collected in
   connection with the performance of medical procedures.

   Allowance for Doubtful Accounts:

   The  Company  follows  the  allowance  method  of  recognizing  uncollectible
   accounts  receivable.  The allowance method  recognizes bad debt expense as a
   percentage of accounts  receivable  based on a review of individual  accounts
   outstanding.  At December 31, 1998, an allowance of $12,655 has been provided
   for potentially  uncollectible accounts receivable.  Bad debt expense for the
   year ended December 31, 1998 was $12,655.

   Allowance for Contractual Adjustments:

   In addition, the Company estimates contractual adjustments to its billings by
   third-party payors based on the Company's historical experience.  At December
   31,  1998,  an allowance in the amount of $10,784 has been accrued and offset
   against revenues.

   Advertising:

   Advertising costs are charged to operations when incurred.  Advertising costs
   for the years ended  December 31, 1998 and 1997 were  $120,102 and  $124,857,
   respectively.

   Revenue Recognition:

   The Company recognizes revenues on the accrual basis, when the procedures are
   performed.

   Stock Based Compensation:

   The Company has elected to follow Accounting Principals Board Opinion No. 25,
   Accounting   for  Stock  Issued  to  Employees   (APB  25)  and  the  related
   interpretations  in accounting for its employee stock options.  Under APB 25,
   if the exercise  price of employee stock options equals or exceeds the market
   price of the underlying  stock on the date of grant, no compensation  expense
   is recorded.  If the exercise  price of employee  stock  options is below the
   market  price of the  underlying  stock on the  date of  grant,  compensation
   expense is recorded in the year of grant in accordance  with FAS No. 123. See
   Note 5 below.  The  Company has adopted  the  disclosure-only  provisions  of
   Statement  of  Financial   Accounting   Standards  No.  123,  Accounting  for
   Stock-based  Compensation  (Statement No. 123) when the exercise price equals
   or exceeds the market price on the date of grant.

   New Accounting Pronouncements:

   During the year ended  December 31, 1997,  the Company  adopted  Statement of
   Financial  Accounting  Standards No. 130,  "Reporting  Comprehensive  Income"
   (SFAS No. 130). SFAS No. 130 establishes  standards for reporting and display
   of comprehensive  income and its components in a full set of  general-purpose
   financial statements. Adoption of SFAS No. 130 did not have any effect on the
   Company's   financial  position  or  results  of  operations.

                                      F-10
<PAGE>
                           CORONADO INDUSTRIES, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


1. Summary of Significant Accounting Policies, Nature of Operations and
   Use of Estimates: (Continued)

   New Accounting Pronouncements: (Continued)

   During the year ended  December 31, 1997,  the Company  adopted  Statement of
   Financial  Accounting  Standards No. 131,  "Disclosures  about Segments of an
   Enterprise and Related  Information",  (SFAS No. 131).  SFAS No. 131 requires
   that public companies report certain  information  about operating  segments,
   products,  services  and  geographical  areas in which they operate and their
   major  customers.  Adoption  of SFAS No.  131 did not have any  effect on the
   Company's financial position or results of operations.

2. Property and Equipment:

   At December 31, 1998, property and equipment consists of the following:

        Office furniture and equipment                       $ 58,433
        Machinery and equipment                               141,270
        Leasehold improvements                                  5,463
                                                             --------
                                                              205,166
            Less: accumulated depreciation                    (60,730)
                                                             --------

        Net property and equipment                           $144,436
                                                             ========

   Depreciation  expense was $31,632 and  $27,332,  respectively,  for the years
   ended December 31, 1998 and 1997.

3. Intangible Assets:

   Intangible  assets  consist of goodwill,  which  represents the excess of the
   cost of the combined companies over the fair value of their net assets at the
   date of combination, and legal costs incurred to secure patents. Goodwill and
   patents are being  amortized  ratably  over five (5) and fifteen  (15) years,
   respectively.  Amortization expense charged to operations for the years ended
   December 31, 1998 and 1997 was $3,756 and $2,605, respectively.

4. Related Party Transactions:

   Commitments:

   The Company  currently leases office space for its glaucoma  treatment center
   in Scottsdale, Arizona from a related party under a non-cancellable operating
   lease  agreement,  which expires in July, 1999. Under the terms of the lease,
   the Company  pays  monthly  rent of $3,500.  For the year ended  December 31,
   1998, rent expense under the aforementioned  non-cancellable  operating lease
   agreement was $42,000.

                                      F-11
<PAGE>
                            CORONADO INDUSTRIES, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


4. Related Party Transactions: (Continued)

   Commitments: (Continued)

   Future  minimum  payments due under the  operating  lease  agreement,  are as
   follows:

               Year Ending
               December 31,                   Amount
               ------------                   ------
                   1999                       $24,500
                                              =======

5. Stockholders' Equity (Deficit):

   Common Stock and Common Stock Warrants:

   The Company issued 3,715,367 shares of stock for $1,318,795,  net of costs of
   $259,320,  through private offerings during the year ended December 31, 1998.
   In  relation to those  offerings,  the  Company  issued a total of  1,236,623
   common stock warrants to the underwriter and their representatives.

   The Company issued 568,400 shares of common stock for $574,091,  net of costs
   of $138,659, through private offerings throughout the year ended December 31,
   1997. In relation to those  offerings,  the Company issued a total of 568,400
   common stock warrants to the underwriter and its representatives.

   All  outstanding  warrants have an exercise  price of $2.50 per share through
   December 31, 2000, when they expire.

   Employee Stock Options and Stock Plans:

   On December 21,  1998,  the Board of  Directors  approved  The 1998  Coronado
   Industries,  Inc. Stock Option Plan. The Plan authorizes the Company to grant
   stock  options  to key  employees  of the  Company.  Under  the  above  Plan,
   1,550,000 shares of common stock are reserved for issuance.

   Following is a summary of the status of the stock  option plan for  employees
   and directors during the year ended December 31, 1998.

                                                                Weighted
                                                                 Average
                                                   Number       Exercise
                                                 of Options       Price
                                                 ----------       -----

         Outstanding at December 31, 1997         --                --
         Granted in 1998                          1,400,000        .05
                                                  ---------       ----
         Outstanding at December 31, 1998         1,400,000        .05
                                                  =========       ====

                                                                Weighted
                                                                 Average
                                                                Remaining
                              Exercise             Number      Contractual
                               Price             of Options       Life
                               -----             ----------    -----------
                              $.05                1,200,000        10
                              $.075                 200,000        10
                                                  ---------
                                                  1,400,000      
                                                  =========      

   All of the above options are currently exercisable.

                                      F-12
<PAGE>
                            CORONADO INDUSTRIES, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


5. Stockholders' Equity (Deficit): (Continued)

         All stock options  issued to employees have an exercise price less than
the fair market value of the  Company's  common  stock on the date of grant.  In
accordance  with  accounting  for such  options  under FAS No. 123,  $186,235 in
related  compensation expense was recorded in the Company's financial statements
for the year ended December 31, 1998.

   In 1998,  the Company  issued  650,000  options for  services  rendered.  The
   options  were issued to two  entities in the amounts of 500,000 and  150,000.
   The exercise  price for the options is $1.25 and .075,  respectively  and are
   exercisable until February, 1999 and December 2008, respectively.

   Following  is a summary  of the  status of  non-employee  stock  options  and
   warrants during the years ended December 31, 1998 and 1997:

                                                    Number           Weighted
                                                  of Options         Average
                                                      and            Exercise
                                                   Warrants           Price
                                                   --------           -----
        Outstanding at December 31, 1997                  --            --
        Granted in 1998                              650,000           .98
                                                     -------          ----

        Outstanding at December 31, 1998             650,000          $.98
                                                     =======          ====

                                      F-13
<PAGE>
                            CORONADO INDUSTRIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


6. Income Taxes:

   As of December  31,  1998,  the  components  of deferred  income taxes are as
   follows:

       Current Deferred Tax Assets (Liabilities):
         Allowance for doubtful accounts                             $  3,000
         Less: valuation allowance                                     (3,000)
                                                                     ---------
         Net Current Deferred Tax Asset                              $      --
                                                                     =========
       Long-term Deferred Tax Assets (Liabilities):
         Net operating loss carryforwards                            $ 588,500
         Depreciation and amortization                                  (8,000)
                                                       --------
                                                        580,500
         Less: valuation allowance                                    (580,500)
                                                       --------
       Net Long-term Deferred Tax Liability                          $      --
                                                                     =========

   Based on the weight of  available  evidence,  the Company has provided a full
   valuation allowance on its deferred tax asset at December 31, 1998.

   As of December 31, 1998,  the Company has net  operating  loss  carryforwards
   available to offset future federal and state taxable income in the amounts of
   $2,452,685 and $2,315,490, respectively, and expiring as follows:

             Net Loss Carryforward
             ---------------------
                            Amount Available         Year of Expiration
                         ----------------------      ------------------
             Year        Federal          State      Federal      State
             ----        -------          -----      -------      -----

             1993      $  137,195      $       --      2008          --
             1994          65,131          65,131      2009        1999
             1995          96,528          96,528      2010        2000
             1996          31,021          31,021      2011        2001
             1997         673,948         673,948      2012        2002
             1998       1,448,812       1,448,812      2013        2003
                       ----------      ----------

                       $2,452,685      $2,315,490
                       ==========      ==========

                                      F-14
<PAGE>
                            CORONADO INDUSTRIES, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


7. Commitments:

   The Company  currently  leases  office space in Fountain  Hills,  Arizona and
   Largo, Florida under non-cancellable  operating lease agreements which expire
   through September, 2001. Under the terms of the lease agreements, the Company
   pays monthly rents in the  approximate  aggregate  amount of $4,500.  For the
   year ended December 31, 1998 and 1997, rent expense under the  aforementioned
   non-cancellable   operating   lease   agreements  was  $20,234  and  $10,411,
   respectively.

   Future  minimum  payments due under the operating  lease  agreements,  are as
   follows:

               Year Ending
               December 31,                  Amount
               ------------                  ------

                  1999                      $ 53,979
                  2000                        53,979
                  2001                        37,567
                                            --------

                                            $145,525
                                            ========

8.  Non-Cash Investing and Financing Activities:

    The Company  recognized  investing  and financing  activities  that affected
    assets,  liabilities,  and  equity,  but did not result in cash  receipts or
    payments.

    For the year ended  December  31, 1998,  these  non-cash  activities  are as
    follows:

         15,822  shares of common  stock were issued as repayment of a
         note payable and related accrued interest totaling $7,911.

         8,866,334 shares of common stock were issued for services and
         accrued salaries, which were valued at $547,962.

    For the year ended  December  31, 1997,  these  non-cash  activities  are as
    follows:

         50,000 shares of common stock were issued for services valued
         at $120,000.

         Purchased  equipment  through  the  issuance of a note in the
         amount of $75,000.

                                      F-15
<PAGE>
                            CORONADO INDUSTRIES, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


9.  Subsequent Event:

    Subsequent to December 31, 1998, the Company  ceased  patient  operations at
    its Scottsdale,  Arizona facility.  The Company intends to use the equipment
    and  furniture  from the  Scottsdale  treatment  center  at its  Clearwater,
    Florida treatment center,  subject to obtaining sufficient financing to open
    the  Clearwater  facility.  All of the revenues for the years ended December
    31, 1998 and 1997 were generated by this facility.

10. Year 2000 Issue: (Unaudited)

    Like other companies,  Coronado Industries, Inc. could be adversely affected
    if the computer  systems it, its  suppliers or customers use do not properly
    process  and  calculate  date-related  information  and data from the period
    surrounding  and including  January 1, 2000.  This is commonly  known as the
    "Year  2000"  issue.  Additionally,  this issue  could  impact  non-computer
    systems and devices such as production  equipment,  elevators,  etc. At this
    time, because of the complexities  involved in the issue,  management cannot
    provide  assurances  that the Year 2000 issue will not have an impact on the
    Company's operations.

11. Going Concern:

    The accompanying  financial statements have been prepared in conformity with
    generally accepted accounting principles, which contemplates continuation of
    the  Company  as  a  going  concern.  However,  the  Company  has  sustained
    continuing operating losses.

    The primary  business of the Company is to manufacture and market a patented
    treatment device for Open Angle Glaucoma,  and to operate glaucoma treatment
    clinics where the patented treatment procedures are performed.  The first of
    these  clinics was opened in 1997,  but was not  profitable,  and was closed
    subsequent to the balance sheet date.

    In addition,  the Company has incurred net losses of $1,622,014 and $829,702
    in 1998 and 1997, respectively. Unaudited information subsequent to December
    31, 1998, indicates that the losses are continuing.

    The above conditions  indicate that the Company may be unable to continue in
    existence.  The financial statements do not include any adjustments relating
    to the recoverability  and classification of recorded asset amounts,  or the
    amounts and classification of liabilities that might be necessary should the
    Company be unable to continue in existence.

                                      F-16
<PAGE>
                            CORONADO INDUSTRIES, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


12. Unaudited Pro Forma Condensed Consolidated Financial Statements:

    The  following   unaudited  pro  forma  condensed   consolidated   financial
    statements give effect to the closing of the Scottsdale Clinic subsequent to
    December 31, 1998. They are based on the estimates and assumptions set forth
    herein and in the notes to such statements.  This pro forma  information has
    been  prepared  utilizing  the  historical  financial  statements  and notes
    thereto, which are incorporated by reference herein. The pro forma financial
    data does not purport to be indicative of the results which  actually  would
    have been obtained had the closing been  effected on the dates  indicated or
    of the results which may be obtained in the future.

    The pro  forma  entries  are  described  in the  accompanying  notes  to the
    unaudited pro forma condensed  consolidated  financial  statements.  The pro
    forma unaudited condensed  consolidated  statements of operations assume the
    closing took place on the first day of the period presented.

                                      F-17
<PAGE>
                            CORONADO INDUSTRIES, INC.
      PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                      For The Year Ended December 31, 1998

Pro Forma Consolidated Financial Statements:

The  following  represents  pro  forma  condensed  consolidated   statements  of
operations  for the year ended  December 31,  1998,  assuming the closing of the
Scottsdale Clinic was as of January 1, 1998:


                                 Coronado                          Pro Forma
                                Industries,     Pro Forma         Consolidated
                                   Inc.        Adjustments          Amounts
                               -----------     -----------        ------------

Revenues                       $   292,788     $(292,788)(1)               --

Cost of Revenues                  (512,969)      512,969 (1)               --
                               -----------                        -----------

Gross Loss                        (220,181)                                --

General and Administrative
 Expenses                       (1,386,892)     (150,000)(2)       (1,536,892)
                               -----------                        -----------

Loss from Operations            (1,607,083)                        (1,536,892)

Other Expense                      (14,941)                           (14,941)
                               -----------                        -----------

Net Loss                       $(1,622,014)                       $(1,551,833)
                               ===========                        ===========
Loss per Share:
  Basic                        $      (.08)                       $     (.07)
                               ===========                        ===========
Weighted Average Number of
 Shares Outstanding:
  Basic                         20,741,855                         20,741,855
                               ===========                        ===========

(1) To eliminate sales and costs of sales of the Scottsdale Clinic.

(2) To record salaries from the Scottsdale  Clinic which will be absorbed by the
    corporate offices.

                                      F-18
<PAGE>
                            CORONADO INDUSTRIES, INC.
      PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                      For The Year Ended December 31, 1997

Pro Forma Consolidated Financial Statements:

The  following  represents  pro  forma  condensed  consolidated   statements  of
operations  for the year ended  December 31,  1997,  assuming the closing of the
Scottsdale Clinic was as of January 1, 1997:

                                 Coronado                          Pro Forma
                                Industries,     Pro Forma         Consolidated
                                   Inc.        Adjustments          Amounts
                               -----------     -----------        ------------

Revenues                       $   26,107      $(26,107)(1)       $        --

Cost of Revenues                 (269,736)      269,736 (1)                --
                               ----------                         -----------

Gross Loss                       (243,629)                                 --

General and Administrative
 Expenses                        (567,177)      (50,000)(2)          (617,177)
                               ----------                         -----------

Loss from Operations             (810,806)                           (617,177)

Other Expense                     (18,896)                            (18,896)
                               ----------                         -----------

Net Loss                       $ (829,702)                        $  (636,073)
                               ==========                         ===========
Loss per Share:
  Basic                        $     (.04)                        $      (.03)
                               ==========                         ===========
Weighted Average Number of
 Shares Outstanding:
  Basic                        18,504,392                          18,504,392
                               ==========                         ===========


(1) To eliminate sales and costs of sales of the Scottsdale Clinic.

(2) To record salaries from the Scottsdale  Clinic which will be absorbed by the
    corporate offices.

                                      F-19