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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, 2003

[ ]  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, ARIZONA           85268
(Address of principal executive offices)                              (Zip Code)

                    Issuer's telephone number: (480) 837-6810

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

       Securities registered under Section 12(g) of the Exchange Act: NONE


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 to 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]


<PAGE>

State issuer's revenues for its most recent fiscal year. $0

State the aggregate market value of the voting and non-voting common equity held
by  non-affiliates  computed by  reference to the average bid and asked price of
such common equity, as of a specific date within the past 60 days. $7,090,833 as
of February 9, 2004

State the number of shares  outstanding  of issuer's  common  equity,  as of the
latest practicable date. 162,491,248 as of March 23, 2004

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                                       ii
<PAGE>

                            CORONADO INDUSTRIES, INC.

                                   FORM 10-KSB

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003

                                                                            Page
                                                                            ----
PART I

Item 1(a).  Business Development...........................................   1
Item 1(b).  Business of Issuer.............................................   1
Item 2.  Description of Property...........................................   7
Item 3.  Legal Proceedings.................................................   7
Item 4.  Submission of Matters to a Vote of Security Holders...............   7

PART II

Item 5.  Market for Registrant's Common Equity and Related
         Stockholders Matters..............................................   8
Item 6.  Management's Discussion and Analysis or Plan of Operation.........   9
Item 7.  Financial Statements..............................................  11
Item 8.  Changes In and Disagreements with Accountants on Accounting
         and Financial Disclosure..........................................  11
Item 8A. Controls and Procedures...........................................  11

PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons'
         Compliance with Section 16(a) of the Exchange Act.................  12
Item 10. Executive Compensation............................................  14

Item 11. Security Ownership of Certain Beneficial Owners and Management....  16
Item 12. Certain Relationships and Related Transactions....................  17
Item 13. Exhibits, Financial Statements, Schedules and Reports on
         Form 8-K..........................................................  18
Item 14. Audit Fees........................................................  19

SIGNATURES.................................................................  20

SUPPLEMENTAL INFORMATION AND EXHIBITS......................................  21



                                      iii
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                                     PART I

                   SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS


Except for  historical  information  contained  herein,  this document  contains
forward-looking  statements.  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.

ITEM 1(b). BUSINESS OF ISSUER

OVERVIEW

The  Registrant is a holding  company and all business  operations are conducted
through  its  three  wholly-owned  subsidiaries.  The  Registrant,  through  its
Ophthalmic International,  Inc. subsidiary,  manufactures and markets a fixation


                                       1
<PAGE>

device  with a  patented  designed  suction  ring  that  treats  Open  Angle and
Pigmentary  glaucoma.   American  Glaucoma,  Inc.  ("AGI"),  another  Registrant
subsidiary,  operated a glaucoma  treatment  center in Scottsdale,  Arizona from
September 1997 to March 1999. OI, an Arizona limited  liability  company,  holds
the Registrant's patent.

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.

The first  clinical  study of the  Registrant's  product (the "PNT  device") 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
conducted by Dr. Leo Bores, the Medical Director of the Registrant's  Scottsdale
treatment center. This third study involved approximately 150 patients.


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The  Registrant  views the gross  losses  incurred at its  Scottsdale  treatment
center from September 1997 through March 2, 1999 (approximately $563,000) as the
major  expense of preparing  the clinical  studies which may be required for FDA
product approval.

In recent years, Dr. John LiVecchi, a Registrant Director,  and Dr. Leo Bores, a
consultant,  have been asked to  address to  different  medical  conventions  of
ophthalmologists 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.

In October 2000 Registrant  executed a one-year option  agreement and in October
2001 a six-month  extension  with Ciba  Vision  which  permitted  Ciba Vision to
obtain the exclusive  worldwide license to the patents rights and technology for
Registrant's PNT product. On May 30, 2002 Ciba Vision advised Registrant that it
would not be acquiring the distribution rights to Registrant's products.

Registrant  executed  a  distribution  agreement  dated  September  9, 2003 with
EuPharmed s.r.l. of Rome, Italy ("EuP") which grants the exclusive  distribution
rights  for  Registrant's  PNT  products  for the  country of Italy to EuP for a
period of five years (the "Italian Contract").  EuP may extend the agreement for
an additional two years by agreeing to additional  minimum  purchases.  EuP will
conduct a one year  randomized  clinical trial of PNT involving a minimum of 120
patients and between 5 and 7 different clinics in Italy. EuP will bear all costs
of this trial,  except for the PNT  equipment  and rings which  Registrant  will
provide free of charge.  The clinical  trial was to commence in September  2003,
but  has  been  postponed  until   Registrant   receives  its  Type  2a  product
classification  approval.  This agreement  provides for monthly minimum purchase
quantities commencing in March 2004. That date will be postponed until after the
Type 2a product classification is received by Registrant.

Registrant  executed  another  agreement dated September 29, 2003 with EuP which
grants to EuP the  exclusive  distribution  rights to EuP for the  countries  of
Algeria,  Libya,  Morocco and Tunisia on the same terms as the Italian Contract,
except for the monthly  minimum  purchase  quantities  for these  North  African
countries.

Registrant executed a distribution agreement dated November 10, 2003 with Izasa,
S.A. of Madrid,  Spain ("Izasa") which grants the exclusive  distribution rights
for  Registrant's PNT products for the country of Spain to Izasa for a period of
five  years.  Izasa may  extend the  agreement  for an  additional  two years by
agreeing to additional  minimum  purchases.  This agreement  provides for annual
minimum  purchase  quantities  commencing  in January  2004.  That date has been
postponed  until  after  the  Type 2a  product  classification  is  received  by
Registrant.

In 2003  Registrant  commenced  an  application  for a Type 2a European  medical
product  distribution  certification,  as allowed under EC-Directives on medical
devices, with an appropriate notified body. Successful completion of the Type 2a
certification  process  will allow  Registrant's  devices to be sold  within the
European Union. Since December 2003 Registrant has been assembling and providing


                                       3
<PAGE>

additional  information  as requested by the notified  body.  Registrant can not
sell its product in Europe until the Type 2a certification process is completed.
Registrant  believes this  classification  process will be completed  within the
next few months;  however, there is no assurance as to when this process will be
completed.

The Registrant's  vacuum  equipment is composed of special order parts,  such as
the 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.

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 approved 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's  PNT  product  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 made a submission to
the FDA in April 1999 that was  intended  to provide  the agency  with  detailed
information addressing many of the concerns expressed by the FDA at the February
1999  meeting.  This  submission  did not  satisfy  the FDA with  respect to the
patient risk associated with the clinical use of the PNT product.

In February 1999,  the FDA requested  more  information be submitted on patients
treated  to date with the PNT  product.  In  September  1999,  the FDA  demanded
Registrant  submit a new clinical  protocol for additional  patient studies.  In
October 2000 Registrant negotiated a protocol with the FDA which provides for an
additional  six-month  study  of a  minimum  of 204  patients  (with a  two-year
follow-up)  from 5 different  study sites.  Registrant  continues in negotiation
with the FDA concerning  various features of the protocol and the study, such as
the length of the study and the number of patients,  in hopes of expediting  FDA
approval. However, there can be no assurance Registrant's PNT products will ever
receive FDA approval for sale in the United States.

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


                                       4
<PAGE>

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 studies.  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  studies 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. However, as of March 3, 2000, the FDA is maintaining that the
PNT  product  presents  "significant  risk" to  patients  and is  requiring  the
additional patient study proceed under "significant risk" criteria.

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


                                       5
<PAGE>

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.

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.  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
has paid 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.

   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


                                       6
<PAGE>

   MEDICATION                 MONTHLY COST             SIDE EFFECTS
   ----------                 ------------             ------------

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


EMPLOYEES

In addition to its two officers and Dr. LiVecchi,  its Medical Director,  during
2003 the  Registrant  engaged  three  persons as  full-time  consultants  at the
corporate   headquarters  and  an   administrative   employee.   The  Registrant
anticipates  hiring  additional  administrative  and  marketing  personnel  upon
commencement of product sales.

ITEM 2. DESCRIPTION OF PROPERTY.

During  calendar year 2003,  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  $1,380  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.

Registrant is negotiating a five-year lease for approximately  3,000 square feet
of new  space  at a  monthly  rent of  $3,750  to  commence  on  July  1,  2004.
Registrant's new address will be 13014 Saguaro  Boulevard,  Suite 204,  Fountain
Hills, Arizona 85268. This new space will be adequate for the Registrant's needs
throughout its initial manufacturing and marketing stages, when commenced.

ITEM 3. LEGAL PROCEEDINGS.

No legal proceedings are currently pending against or by the Registrant.

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

During  calendar  year  2003  no  matters  were  submitted  to  a  vote  of  the
Registrant's security holders.


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<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  bulletin
board 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 2002 and 2003,  by fiscal
quarter, and through February 6, 2004.

                                                    Low        High
                                                   -----      -----

       January 1, 2002 - March 31, 2002            $0.15      $0.32
       April 1, 2002 - June 30, 2002               $0.08      $0.51
       July 1, 2002 - September 30, 2002           $0.06      $0.11
       October 1, 2002 - December 31, 2002         $0.01      $0.07

       January 1, 2003 - March 31, 2003            $0.01      $0.04
       April 1, 2003 - June 30, 2003               $0.01      $0.12
       July 1, 2003 - September 30, 2003           $0.05      $0.14
       October 1, 2003 - December 31, 2003         $0.06      $0.17

       January 1, 2004 - March 22, 2004            $0.085     $0.14

Registrant's  common stock is also traded on the Frankfurt and Hamburg,  Germany
exchanges.  Registrant  will attempt to have its common stock listed for trading
on the NASDAQ National Market System or the NASDAQ Small Cap System at such time
as its stock price becomes stabilized at the appropriate price - $5.00 and $4.00
per share, respectively.

RECENT SALES OF RESTRICTED SECURITIES

All securities  sold by Registrant  were registered on Form S-8 or were reported
previously in a quarterly filing by Registrant.

STOCKHOLDERS

The Registrant has approximately  796 stockholders of record,  including nominee
firms for securities dealers.


                                       8
<PAGE>

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

During  2003  the  authorized  capital  stock  of the  Registrant  consisted  of
400,000,000  shares of common stock,  par value $0.001 per share. As of February
6, 2004, there were  161,277,914  shares of common 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.

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., 200 Memorial Parkway, 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.

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

The following  discussion and analysis  should be read in  conjunction  with our
Consolidated Financial Statements and notes appearing elsewhere in this report.

CRITICAL ACCOUNTING POLICIES

"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  discusses  our  consolidated  financial  statements  that have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America. The preparation of these financial statements requires
us to make estimates and  assumptions  that affect the reported amount of assets


                                       9
<PAGE>

and  liabilities  at the date of the  financial  statements,  the  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. On an
on-going basis, we evaluate our estimates and judgments, including those related
to  revenue  recognition,   valuation  allowances  for  inventory  and  accounts
receivable, impairment of long-lived assets. We base our estimates and judgments
on  historical  experience  and on various other factors that are believed to be
reasonable under the circumstances.  The result of these estimates and judgments
form the basis for making  conclusions  about the  carrying  value of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different  assumptions or conditions.  The SEC
suggests that all registrants list their most "critical  accounting policies" in
Management's  Discussion and Analysis. A critical accounting policy is one which
is both  important to the  portrayal of the  Company's  financial  condition and
results of operations and requires  management's  most difficult,  subjective or
complex  judgments,  often as a result of the need to make  estimates  about the
effect  of  matters  that are  inherently  uncertain.  Management  believes  the
following critical accounting policies affect its more significant judgments and
estimates in the preparation of its consolidated financial statements.

These  policies  include,  but are not  limited  to, the  carrying  value of the
inventory and fixed assets;  the periodic expensing of the costs relating to the
FDA licensing  activity;  and the  valuation of common stock and other  equities
related to compensation and other services.

YEAR ENDING DECEMBER 31, 2003

OPERATIONS

For the year ending  December  31,  2003  Registrant  experienced  a net loss of
$1,324,328,  which was  comprised  primarily  of its general and  administrative
expenses incurred of $1,259,510 and interest expense of $64,818.  The Registrant
had a net loss from  operations of $1,481,121  for the year ending  December 31,
2002. 88.2% of Registrant's 2003 corporate  expenses  consisted of the following
four  categories:   salaries  and  wages  of  $653,538   (51.9%),   stock  bonus
compensation of $146,500 (11.6%),  professional expenses of $227,929 (18.1%) and
shareholder  services and media  promotion  of $83,321  (6.6%).  In  comparison,
during  the  2002  fiscal  year  84.9%  of  Registrant's  corporate  expense  of
$1,435,471  consisted  of salaries  and wages of $601,868  (41.9%),  stock bonus
compensation of $150,000 (10.4%), professional expenses of $432,886 (30.2%), and
shareholder  services  and media  promotion of $33,700  (2.3%).  The increase in
salaries and wages for 2003 over 2002  occurred  primarily as a result of hiring
Mr. John Sharkey in 2003.  The decrease in stock  option  compensation  for 2003
over 2002 resulted from less rewards for management  granted for  performance in
2003.  The  decrease in  professional  expenses in 2003 over 2002  occurred as a
result of less FDA expenses in 2003.  The increase in  shareholder  services and
media  promotion in 2003 over 2002 resulted  from hiring a new public  relations
firm in 2003.  Approximately  82% of Registrant's  corporate  expenses were paid
with Registrant's common stock in order to conserve Registrant's cash resources.
Registrant expects its management salaries to be stable in 2004 until Registrant
is required to appoint as many as two new outside  Directors  in order to obtain
listing  for its  stock on the NASD NMS or Small  Cap  markets.  Registrant  may
compensate  its management and employees with stock options and stock bonuses in
2004  when  significant  events  occur.  As  Registrant  continues  its  foreign
marketing efforts in 2004, its promotional expenses will likely increase.


                                       10
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Because  of  Registrant's  current  inventory  levels,  on  a  short-term  basis
Registrant  requires only minimal  capital to sustain its  manufacturing  of the
patented  equipment,  unless a  substantial  order  is  placed.  Because  of the
Registrant's cash position at year-end and general and  administrative  expenses
totaling  approximately  $1,400,000  per year,  the  Registrant  suffered from a
liquidity shortage during 2002. Through February 3, 2004 Registrant was required
to borrow a total of  $289,000  from three  Directors,  which were  repaid  with
restricted common stock in February 2004. Unless  substantial  product sales are
achieved in the near future,  Registrant will continue to experience a liquidity
shortage.  There can be no assurance that Registrant's  product will be approved
for sale in the United  States by the FDA or when foreign sales will commence in
a  substantial  number.  Registrant  will likely be forced to borrow  additional
funding from its management throughout the remainder of 2004; however,  there is
no assurance Registrant will be able to obtain any financing in the future.

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.

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.

ITEM 8A. CONTROLS AND PROCEDURES.

The Registrant's  principal  executive officer,  G. Richard Smith, and principal
financial officer,  Gary R. Smith,  after reviewing and evaluating  Registrant's
disclosure  controls and  procedures  within 90 days prior to the filing of this
annual  report  have  concluded  that  Registrant's   disclosure   controls  and
procedures  contained no significant  deficiencies or material  weakness.  There
have been no significant  changes in internal controls that could  significantly
affect these  controls  subsequent  to the date of their  evaluation,  including
corrective actions.


                                       11
<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 February 9, 2004
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

Mark A. Smith                                 Director
16929 E. Enterprise Drive Suite 202
Fountain Hills, AZ 85268

The Registrant presently has one vacancy on its Board of Directors.  Richard and
Gary Smith are brothers. Mark Smith is the son of Gary Smith.

G. RICHARD SMITH,  age 55, 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 59, 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,  Inc.,  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


                                       12
<PAGE>

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.

JOHN T. LIVECCHI,  age 55, 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 March 1,  2003,  Dr.
LiVecchi has been in private medical  practice in the field of  ophthalmology in
the Scranton,  Pennsylvania  area. In March, 2003 Dr. LiVecchi commenced private
medical  practice  in the field of  ophthalmology  in Ft.  Myers,  Florida.  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,
Florida,  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.

MARK A. SMITH,  age 33, was  appointed  to  Registrant's  Board of  Directors on
February  13,  2003.  Since  1994 Mr.  Smith has been a  mathematics  teacher at
Fountain Hills Middle School in Fountain Hills,  Arizona. He was selected as the
Fountain Hills School  District  Teacher of the Year in 2001. Mr. Smith received
his  Bachelor of Science  Degree in  Mathematics  in 1993 and his Master of Arts
Degree in Secondary  Education  and  Education  Technology in 2003 from Northern
Arizona University.

Registrant's Board of Directors serves as its Audit Committee because Registrant
is too small to have an Audit  Committee at this time.  Registrant does not have
an audit committee  financial expert because no one on the Board of Directors is
so qualified.

Registrant  has not  adopted a code of ethics for any of its  officers,  because
Registrant  has been  advised  by  counsel  that any such code of ethics  may be
materially  different  than  existing  state and  federal  law,  and, if so, may
subject Registrant's officers to personal liability in addition to and different
from liability under current state and federal law.

JOHN W. SHARKEY  became the Company's  Director of Business  Development in June
2003. Mr. Sharkey has over 15 years experience in global pharmaceutical  product
development and sales. From February 2000 to May 2003 he was the Vice President,
Business Development and Licensing,  for Novartis  Ophthalmics,  Inc. of Duluth,
Georgia.  Mr Sharkey was the  Executive  Director of  Business  Development  and
Licensing   for   Novartis   Pharmaceuticals    Corporation   (formerly   Sandoz
Pharmaceuticals) of East Hanover,  New Jersey from May 1998 to February 2000. He
received  his  Bachelor of Science  Degree in  Chemistry  from State  University
College  at  Oneonta,  New York in 1979 and his Doctor of  Philosophy  Degree in
Electroanalytical  Chemistry from State  University of New York at Buffalo,  New
York in 1986.

                                       13
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION.

The following table sets forth the salaries of the Registrant's two officers for
the fiscal year ending December 31, 2003.
<TABLE>
<CAPTION>

                                   Annual Compensation                  Long-Term Compensation
                           -----------------------------------    -----------------------------------
                                                                                              Awards      Payouts
                                                                                            ----------   ---------
                                                       Other                   Securities
                                                       Annual     Restricted   Underlying                All Other
     Name and                                         Compensa-     Stock       Options/       LTIP      Compensa-
Principal Position  Year   Salary($)     Bonus($)       tion       Awards($)     SARS($)    Payouts($)    tion($)
------------------  ----   ---------     --------     ---------   ----------  ------------  ----------   ---------
<S>                 <C>    <C>           <C>          <C>         <C>         <C>           <C>          <C>
G. Richard Smith,   2003   $150,000(1)   $ 42,500(2)     $0           --      5,298,000(3)      --           --
Chairman            2002   $100,000(4)   $ 80,000(5)     $0           --      2,000,000(6)      --           --
                    2001   $ 80,000(7)   $101,198(8)     $0           --      1,054,500(9)      --           --

Gary R. Smith,      2003   $150,000(1)   $ 42,500(2)     $0           --      5,298,000(3)      --           --
President           2002   $100,000(4)   $ 80,000(5)     $0           --      2,000,000(6)      --           --
                    2001   $ 80,000(7)   $ 81,859(8)     $0           --      1,054,500(9)      --           --
</TABLE>
------------------

(1)  $150,000 of annual salary was accrued for each of G. Richard Smith and Gary
     R. Smith during 2003,  with $24,123 of accrued salary being  converted into
     3,616,642  shares and  $33,549  of  accrued  salary  being  converted  into
     5,029,835 shares for Gary R. Smith.

(2)  This bonus was paid in 500,000 restricted shares on December 16, 2003.

(3)  2,000,000 of these  options were  granted in September  2003 and  3,298,000
     were granted in November  2003.  2,000,000 of these options have a ten-year
     term, are  immediately  exercisable  and have an exercise price of $.10 per
     share.  2,000,000 of these options have a ten-year  term,  are  immediately
     exercisable  and have an  exercise  price of $.07 per share.  1,298,000  of
     these options have a five-year  term,  may not be exercised  until November
     2004 and have an exercise price of $.077 per share.

(4)  $150,000 of annual salary was accrued for each of G. Richard Smith and Gary
     R. Smith during 2002,  with $100,000 of salary paid in 2,000,000  shares of
     restricted common stock in September 2002.

(5)  A $50,000  bonus was paid to each of G. Richard  Smith and Gary R. Smith in
     1,000,000  restricted  common stock shares in September  2002 and a $30,000
     bonus was paid to each of G.  Richard  Smith and Gary R. Smith in  December
     2002, in 1,000,000 shares of restricted common stock.

(6)  All of these  options  were  awarded in January  2003.  1,650,000  of these
     options  have a ten-year  term,  are  immediately  exercisable  and have an
     exercise price of $.01 per share. 350,000 of these options have a five-year
     term, may not be exercised until January 2004 and have an exercise price of
     $.02 per share.


                                       14
<PAGE>

(7)  $70,000 of annual salary was accrued for G. Richard Smith and Gary R. Smith
     during  2001,  with $80,000 of salary paid in  restricted  common in August
     2001.

(8)  As a result of an adjustment in the market valuation of the stock issued in
     August 2001 for the payment of loans and accrued salaries, G. Richard Smith
     received a stock bonus of $101,198 and Gary R. Smith received a stock bonus
     of $81,859.

(9)  All of these  options  were  awarded  in  December  2001.  600,000 of these
     options  have a ten-year  term,  are  immediately  exercisable  and have an
     exercise price of $.10 per share. 454,500 of these options have a five-year
     term,  may not be exercised  until December 2002 and have an exercise price
     of $.22 per share.

The following table sets forth certain information  concerning the stock options
(with stock appreciation rights) granted during the fiscal year to the Company's
chief executive officer and each other executive officer.
<TABLE>
<CAPTION>
                      Number of       % of Total
                      Securities     Options/SARs
                      Underlying      Granted to
                     Options/SARs    Employees in    Exercise or Base        Expiration
      Name            Granted (#)    Fiscal Year      Price ($/Sh)              Date
      ----           ------------    ------------    ----------------    ------------------
<S>                  <C>             <C>             <C>                 <C>
G. Richard Smith     20,000,000         37.7%             $.011          February 18, 2013
                      2,000,000          3.8%             $.10           September 16, 2013
                      1,298,000          2.4%             $.077          November 27, 2008
                      2,000,000          3.8%             $.07           November 27, 2013

Gary R. Smith        15,000,000         28.3%             $.011          February 18, 2013
                      2,000,000          3.8%             $.10           September 16, 2013
                      1,298,000          2.4%             $.077          November 27, 2008
                      2,000,000          3.8%             $.07           November 27, 2013
</TABLE>


                                       15
<PAGE>


The following  table sets forth  information  concerning  each exercise of stock
options and the value of unexercised options (with stock appreciation rights) at
December  31,  2003 for the  Company's  chief  executive  officer and each other
officer.
<TABLE>
<CAPTION>
                                                              Number of Securities              Value of
                                                             Underlying Unexercised     Unexercised In-the-Money
                                                            Options/SARS At FY-End(#)   Options/SARS At FY-End($)
                   Shares Acquired                          -------------------------   -------------------------
     Name          On Exercise (#)    Value Realized ($)    Exercisable/Unexercisable   Exercisable/Unexercisable
     ----          ---------------    ------------------    -------------------------   -------------------------
<S>                <C>                <C>                   <C>                         <C>
G. Richard Smith         --                   --              30,887,833 / 1,298,000     $1,860,000 / $29,854 (1)

Gary R. Smith            --                   --              25,887,833 / 1,298,000     $1,415,000 / $29,854 (1)
</TABLE>
----------------
(1)      Based on a December 31, 2003 bid price of $.10 per share.

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

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

As of February 9, 2004 there were 161,277,914  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.
<TABLE>
<CAPTION>
                  Name and Address of                    Amount and Nature of    Percent
Title of Class    Beneficial Owner                       Beneficial Ownership    of Class
--------------    -------------------                    --------------------    --------

<S>               <C>                                    <C>                     <C>
Common Stock      Gary R. Smith                              29,729,102(1)         18.4%
                  16929 E. Enterprise Drive, Suite 202
                  Fountain Hills, AZ 85268

Common Stock      G. Richard Smith                           36,351,103(2)         22.5%
                  16929 E. Enterprise Drive, Suite 202
                  Fountain Hills, AZ 85268

Common Stock      John T. LiVecchi                           21,757,879(3)         13.5%
                  16929 E. Enterprise Drive, Suite 202
                  Fountain Hills, AZ 85268

Common Stock      Mark A. Smith                                 300,000             0.2%
                  16929 E. Enterprise Drive Suite 202
                  Fountain hills, AZ 85268

Common Stock      Officers and Directors, as a               88,138,084(4)         54.6%
                  Group (4 People)
</TABLE>


                                       16
<PAGE>

---------------

(1)  Does not include  27,185,833  shares of stock which may be purchased by Mr.
     Smith under the  Registrant's  Stock Option  Plans.  In the event Mr. Smith
     purchased  all  of  those  shares,   Mr.  Smith  would  own  30.2%  of  the
     Registrant's  total  outstanding  shares.  This  number  does  not  include
     1,400,000 shares owned by a charitable foundation of which Mr. Smith is the
     sole officer and director.

(2)  Does not include  32,185,833  shares of stock which may be purchased by Mr.
     Smith under the  Registrant's  Stock Option  Plans.  In the event Mr. Smith
     purchased  all  of  those  shares,   Mr.  Smith  would  own  35.4%  of  the
     Registrant's  total  outstanding  shares.  This  number  does  not  include
     1,131,500 shares owned by a charitable foundation of which Mr. Smith is the
     sole officer and director.

(3)  Does not include  11,685,833  shares of stock which may be purchased by Dr.
     LiVecchi  under  the  Registrant's  Stock  Option  Plans.  In the event Dr.
     LiVecchi purchased all of those shares, Dr. LiVecchi would own 19.3% of the
     Registrant's total outstanding shares.

(4)  Does not  include  a total of  71,057,499  shares  of  stock  which  may be
     purchased by Mr. Gary R. Smith, Mr. G. Richard Smith and Dr. LiVecchi under
     the Registrant's Stock Option Plans. In the event Messrs.  Smith, Smith and
     LiVecchi  purchased  all of those  shares,  Registrant's  management  would
     collectively own 68.5% of the Registrant's total outstanding shares.

The  following   table  sets  forth  certain   information   concerning   equity
compensation  plans approved by  Registrant's  shareholders  and not approved by
Registrant's shareholders at December 31, 2003.

                     Number of Shares                         Number of Shares
                       to be Issued      Weighted Average    to be Issued Other
 Plan Category         for Options        Exercise Price        Than Options
----------------     ----------------    ----------------    ------------------

Approved                75,582,499            $.057                  0
By Shareholders

Not Approved                     0              0                    0
By Shareholders


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

During 1999 G.  Richard  Smith loaned  Registrant  a total of $82,500,  of which
$36,800 was repaid in May, 1999.  These loans bear 15% annual  interest rate. At
December 31, 2000 G. Richard Smith was owed  $53,700.  Through March 15, 2001 G.
Richard Smith had loaned an additional $116,000 to Registrant on the same terms.
These loans were repaid in August 2001 by issuance of restricted common stock.


                                       17
<PAGE>

During 1999 Gary R. Smith loaned  Registrant a total of $35,000 of which $11,900
was repaid in May, 1999.  These loan bear 15% annual  interest rate. At December
31, 2000 Gary R. Smith was owed  $26,260.  Through  March 15, 2001 Gary R. Smith
had loaned an additional  $116,000 to Registrant on the same terms.  These loans
were repaid in August 2001 by issuance of restricted common stock.

From  September  2001 through  December 31, 2002 G. Richard Smith had loaned the
Registrant  $101,450;  Gary R. Smith had loaned Registrant $66,950; and Dr. John
T. LiVecchi had loaned Registrant  $76,500.  These loans accrued interest at 15%
per annum.  These loans plus  interest  were  repaid in  February  2003 with the
issuance of 15,209,895 shares to G. Richard Smith,  10,786,109 shares to Gary R.
Smith and 12,535,948 shares to Dr. John T. LiVecchi.

In  March  2002,  G.  Richard  Smith  loaned  Registrant  $230,000  to  repay an
outstanding  promissory  note to a third party.  Since March 2002, Mr. Smith has
loaned an additional $70,000.  Mr. Smith's loan is outstanding at March 22, 2004
and is accruing interest at 16% per annum.

From  February  2003 through  February 3, 2004 G.  Richard  Smith had loaned the
Registrant  $102,000;  Gary R. Smith had loaned Registrant $89,000; and Dr. John
T. LiVecchi had loaned Registrant  $98,000.  These loans accrued interest at 15%
per annum.  These loans plus  interest  were repaid on February 3, 2004 with the
issuance of 1,782,178  shares to G. Richard Smith,  1,569,231  shares to Gary R.
Smith and 1,740,851 shares to Dr. John T. LiVecchi.

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

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    2003 Executive Stock Option Plan

10.2    Form of 2003 Executive Stock Option Agreement

10.3*   2003 Employee Stock Option Plan

10.4*   Form of 2003 Employee Stock Option Agreement

31.1    Certificate of Chief Executive Officer Pursuant to Section 302
        of the Sarbanes-Oxley Act of 2002

31.2    Certificate of Chief Financial Officer Pursuant to Section 302
        of the Sarbanes-Oxley Act of 2002



                                       18
<PAGE>

32.1    Certificate of Chief Executive Officer Pursuant to Section 906
        of the Sarbanes-Oxley Act of 2002

32.2    Certificate of Chief Financial Officer Pursuant to Section 906
        of the Sarbanes-Oxley Act of 2002

--------------
*    Incorporated by reference to Registration  Statement on Form S-8 filed with
     the SEC on January 8, 2004.

Financial Statements -- F-1


ITEM 14. AUDITOR FEES

In the 2003  fiscal year the Company  paid  $17,800 to its auditor for  auditing
services;  $22,600 for audit-related  services;  and $4,100 for tax services. In
the 2002  fiscal  year the Company  paid  $23,100 to its  auditor  for  auditing
services; $17,300 for audit-related services; and $2,200 for tax services.


                                       19
<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 29, 2004 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.

         Name                          Title                          Date
         ----                          -----                          ----

/s/ G. Richard Smith          Chairman (Chief Executive          March 29, 2004
-------------------------     Officer), Secretary and
G. Richard Smith              Director

/s/ Gary R. Smith             President, Treasurer               March 29, 2004
-------------------------     (Chief Accounting Officer),
Gary R. Smith                 Director

/s/ Mark A. Smith             Director                           March 29, 2004
-------------------------
Mark A. Smith


-------------------------     Director
John LiVecchi


                                       20
<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, 2003. 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.


                                       21
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Stockholders and Board of Directors of
Coronado Industries, Inc. and Subsidaries

We have  audited  the  accompanying  consolidated  balance  sheets  of  Coronado
Industries,  Inc. and  Subsidiaries  as of December  31, 2003 and 2002,  and the
related consolidated  statements of operations,  changes in stockholders' equity
(deficit), and cash flows for the years then ended. 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 auditing standards generally accepted
in the  United  States of  America.  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. and  Subsidiaries  as of December 31, 2003 and 2002, and the results of its
operations,  changes in stockholders'  equity (deficit),  and its cash flows for
the years then ended in conformity with accounting principles generally accepted
in the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 9 to the
consolidated  financial  statements,  the Company's significant operating losses
and  negative  working  capital  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.

/s/ Semple & Cooper, LLP
Certified Public Accountants

Phoenix, Arizona
March 15, 2004


                                      F-1
<PAGE>
                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                           DECEMBER 31, 2003 AND 2002
<TABLE>
<CAPTION>
                                     ASSETS

                                                                              2003            2002
                                                                         ------------    ------------
<S>                                                                      <C>             <C>
CURRENT ASSETS

   Cash and cash equivalents                                             $     10,724    $      2,239
   Prepaid expenses                                                            51,662              --
   Deferred compensation                                                       50,000              --
                                                                         ------------    ------------
Total Current Assets                                                          112,386           2,239

Property and equipment, net                                                    18,152          14,231

OTHER ASSETS

Inventory                                                                      24,299          23,985
Deferred Compensation                                                          20,833              --
                                                                         ------------    ------------

TOTAL ASSETS                                                             $    175,670    $     40,455
                                                                         ============    ============

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

Notes payable - related parties                                          $    549,000    $    480,900
Notes payable                                                                  83,616              --
Accounts payable                                                              126,613         155,609
Accrued salaries                                                              313,317         125,000
Accrued interest                                                               19,510          24,003
Accrued taxes                                                                  83,760          47,883
                                                                         ------------    ------------
TOTAL LIABILITIES                                                           1,175,816         833,395
                                                                         ------------    ------------

COMMITMENTS                                                                        --              --

STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock - $.0001 par value; 3,000,000 shares
  authorized, none issued or outstanding                                           --              --
Common Stock - $.001 par value; 400,000,000 and 100,000,000 shares
  authorized; 160,502,022 and 81,236,063 shares issued and outstanding
  at December 31, 2003 and 2002, respectively                                 160,502          81,236
Additional paid-in capital                                                 10,693,968       9,656,112
Accumulated deficit                                                       (11,854,616)    (10,530,288)
                                                                         ------------    ------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                       (1,000,146)       (792,940)
                                                                         ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                     $    175,670    $     40,455
                                                                         ============    ============
</TABLE>

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


                                       F-2
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
<TABLE>
<CAPTION>
                                                                  2003              2002
                                                              -------------    -------------
<S>                                                           <C>              <C>
PRODUCT REVENUES                                              $          --    $          --

Cost of Product Revenues                                                 --               --
                                                              -------------    -------------
                                                                         --               --
                                                              -------------    -------------
GENERAL & ADMINISTRATIVE EXPENSES

Salaries, wages, and other payroll related expenses                 800,038          751,868
Public relations                                                     83,321           33,700
Legal and professional fees                                         206,129          252,732
FDA expense                                                          21,800          180,104
Rent expense                                                         33,363           28,132
Miscellaneous expense                                               114,859          188,935
                                                              -------------    -------------
TOTAL GENERAL & ADMINISTRATIVE EXPENSES                           1,259,510        1,435,471
                                                              -------------    -------------

LOSS FROM OPERATIONS                                              1,259,510        1,435,471
                                                              -------------    -------------
OTHER INCOME (EXPENSES)

Interest income                                                          --            4,840
Interest expense                                                    (64,818)         (43,157)
Deferred loan expense                                                    --           (7,333)
                                                              -------------    -------------
TOTAL OTHER INCOME (EXPENSES)                                       (64,818)         (45,650)
                                                              -------------    -------------

NET LOSS                                                      $  (1,324,328)   $  (1,481,121)
                                                              =============    =============

Loss per Share  - basic and diluted                           $       (0.01)   $       (0.02)
                                                              =============    =============

Weighted Average Shares Outstanding - basic and diluted         136,506,457       71,730,602
                                                              =============    =============
</TABLE>


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

                                       F-3
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
<TABLE>
<CAPTION>
                                                       Common Stock           Additional                         Total
                                                --------------------------     Paid-in       Accumulated      Stockholders'
                                                   Shares       Par Value      Capital         Deficit      Equity (Deficit)
                                                -----------   ------------   ------------   ------------    ----------------
<S>                                              <C>          <C>            <C>            <C>             <C>
BALANCE AT DECEMBER 31, 2001                     67,836,909   $     67,837   $  8,803,599   $ (9,049,167)   $       (177,731)

Stock issued for services                         2,284,221          2,284        301,947             --             304,231

Stock issued for salaries                        11,114,933         11,115        550,566             --             561,681

Net loss                                                 --             --             --     (1,481,121)         (1,481,121)
                                                -----------   ------------   ------------   ------------    ----------------

BALANCE AT DECEMBER 31, 2002                     81,236,063         81,236      9,656,112    (10,530,288)           (792,940)

Stock issued for services                         5,420,570          5,421        194,576             --             199,997

Stock issued for salaries, debt and interest     71,745,389         71,745        824,380             --             896,125

Stock options exercised                           2,100,000          2,100         18,900             --              21,000

Net Loss                                                 --             --             --     (1,324,328)         (1,324,328)
                                                -----------   ------------   ------------   ------------    ----------------
BALANCE AT DECEMBER 31, 2003                    160,502,022   $    160,502   $ 10,693,968   $(11,854,616)   $     (1,000,146)
                                                ===========   ============   ============   ============    ================
</TABLE>


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


                                       F-4
<PAGE>
                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
<TABLE>
<CAPTION>
                                                              2003            2002
                                                           -----------    -----------
<S>                                                        <C>            <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS:

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss                                                   $(1,324,328)   $(1,481,121)
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
   Depreciation                                                  9,664          9,978
   Amortization                                                     --         21,607
   Stock issued for services                                   199,997        304,231
   Stock issued for salaries and interest                      633,725        561,681
   Prepaid expenses financed through debt                       50,424             --

Changes in Assets and Liabilities:
   Prepaid expenses                                            (51,662)            --
   Inventory                                                      (314)            --
   Deferred loan expense                                            --          3,333
   Deferred compensation                                       (70,833)            --
   Accounts payable                                            (28,996)       117,206
   Accrued salaries                                            188,317        125,000
   Accrued interest                                             (4,493)        19,953
   Accrued taxes                                                35,877         47,883
                                                           -----------    -----------
NET CASH USED IN OPERATING ACTIVITIES                      $  (362,622)   $  (270,249)
                                                           -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment                          (13,585)            --
                                                           -----------    -----------
NET CASH USED IN INVESTING ACTIVITIES                      $   (13,585)   $        --
                                                           -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of Notes Payable - related parties                    (2,000)            --
Proceeds from borrowings - related parties                     332,500        250,900
Proceeds from borrowings                                        50,000             --
Repayment of notes payable                                     (16,808)            --
Proceeds from exercise of options                               21,000             --
                                                           -----------    -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES                  $   384,692    $   250,900
                                                           -----------    -----------
NET CHANGE IN CASH & CASH EQUIVALENTS                            8,485        (19,349)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                   2,239         21,588
                                                           -----------    -----------
CASH AND CASH EQUIVALENTS AT END OF YEAR                   $    10,724    $     2,239
                                                           ===========    ===========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
   Interest                                                $    36,200             --
                                                           ===========    ===========
Non-cash transactions:
   Issuance of common stock for salaries and bonuses       $   609,200    $   561,681
   Issuance of common stock for services                   $   199,997    $   304,231
   Issuance of common stock for debt                       $   262,400    $        --
   Issuance of common stock for interest                   $    24,525    $        --
   Refinancing of debt                                     $   240,000    $   230,000
   Prepaid expenses financed through debt                  $    50,424    $        --
</TABLE>
               The Accompanying Notes are an Integral Part of the
                       Consolidated Financial Statements

                                      F-5
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 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, Inc.

The  stockholders  of American  Glaucoma,  Inc.  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
acquirer. 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,  Inc. in November,  1996 through
September,  1997. In September,  1997, American Glaucoma,  Inc. opened its 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.

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 Ophthalmic International, LLC.
All significant  inter-company  accounts and transactions  have been eliminated.
All of the above  subsidiaries  were  inactive for the years ended  December 31,
2003 and 2002.

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.

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.


                                      F-6
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


INVENTORIES

Inventories consist primarily of materials and parts 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 the  straight  line method over the
following useful lives:

               Office Furniture & Equipment      5 - 7  Years
               Machinery                         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 carry forwards 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  loss to
common  stockholders by the weighted average number of common shares outstanding
for the period.  Assumed exercise of the outstanding  stock options and warrants
at December 31, 2003 and 2002 of 75,582,499 and 148,163,499,  respectively, have
been excluded from the  calculation  of basic net loss per common share as their
effect is  anti-dilutive  (decreases  the loss per share).  In addition,  as the
Company  has a net loss  available  to common  stockholders  for the years ended
December 31, 2003 and 2002 the diluted EPS  calculation  has been  excluded from
the financial statements.

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.


                                      F-7
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


REVENUE RECOGNITION

The Company  recognizes  revenues on the accrual  basis,  when the  equipment is
delivered.

STOCK BASED COMPENSATION

In December  2002,  the  Financial  Accounting  Standards  Board  "FASB"  issued
Statement of Financial  Accounting  Standards  "SFAS" No. 148,  "Accounting  for
Stock-Based  Compensation  -  Transition  and  Disclosure - an amendment of FASB
Statement No. 123." This statement  provides  alternative  methods of transition
for a voluntary  change to the fair value method of accounting  for  stock-based
compensation. The statement amends the disclosure requirements of FASB Statement
No. 123 (SFAS No. 123)  to  require  prominent  disclosure  in  both  annual and
interim  financial  statements  about the method of accounting  for  stock-based
compensation and the effect of the method used on reported results.  The Company
accounts  for  stock-based  compensation  arrangements  in  accordance  with the
provisions of Accounting  Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees,"  and complies with the  disclosure  provisions of SFAS No.
123.  The  transition  provisions  are  effective  for fiscal years ending after
December 15, 2002. The disclosure  provisions are effective for interim  periods
beginning  after  December  15,  2002.  The  Company  implemented  the  required
disclosure  provisions in the year ended December 31, 2002. The adoption of this
statement did not have a material impact on the Company's consolidated financial
position,  results of operations or cash flows.  The Company does not anticipate
making  the  voluntary  change  to the  fair  value  method  of  accounting  for
stock-based compensation.

The Company has adopted SFAS No. 123, "Accounting for Stock-Based Compensation."
Under SFAS No. 123,  companies  can, but are not required to, elect to recognize
compensation  expense for all stock-based awards using a fair value methodology.
The Company has adopted the disclosure-only provisions, as permitted by SFAS No.
123.  The Company  applies APB  Opinion  No. 25 and related  interpretations  in
accounting  for  its  stock-based  plans.  Accordingly,   there  is  no  related
compensation  expense  recorded in the Company's  financial  statements  for the
periods  presented.  Had  compensation  cost for stock-based  compensation  been
determined  based on the fair value of the options at the grant dates consistent
with the method of SFAS No. 123, the  Company's  net loss and loss per share for
the year ended  December  31,  2003 and 2002 would have been  reduced to the pro
forma amounts presented below:


                                      F-8
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


                                                        2003            2002
                                                     -----------    -----------
Net loss:
As Reported                                          $(1,324,328)   $(1,481,121)
Add: Stock-based employee compensation expense
   included in reported net income, net of
   related tax effects                                        --             --
Deduct: Total stock based employee compensation
   expense determined under fair value based
   method for all awards, net of related tax
   effects                                            (1,493,536)    (3,810,000)
                                                     -----------    -----------

Pro forma net loss                                   $(2,817,864)   $(5,291,121)
                                                     ===========    ===========
Loss per share:
As reported                                          $     (0.01)   $     (0.02)
Pro forma                                            $     (0.02)   $     (0.07)

RECENTLY ADOPTED ACCOUNTING STANDARDS

In May 2003,  the FASB issued  Statement of Financial  Accounting  Standards No.
150, "Accounting for Certain Financial  Instruments with Characteristics of both
Liabilities   and  Equity"   (SFAS  No.  150).   This   statement   affects  the
classification,  measurement and disclosure  requirements of the following three
types of freestanding  financial  instruments:  1) mandatory  redeemable shares,
which the issuing company is obligated to buy back with cash or other assets; 2)
instruments  that do or may require the issuer to buy back some of its shares in
exchange  for cash or other  assets,  which  includes  put  options  and forward
purchase  contracts;  and 3)  obligations  that can be settled with shares,  the
monetary  value of which is fixed,  tied solely or  predominantly  to a variable
such as a market  index,  or varies  inversely  with the  value of the  issuers'
shares.  In general,  SFAS No. 150 is effective  for all  financial  instruments
entered into or modified  after May 31, 2003,  and otherwise is effective at the
beginning  of the first  interim  period  beginning  after  June 15,  2003.  The
adoption  of SFAS  150 did not  have an  impact  on the  Company's  consolidated
financial position or disclosures.

NOTE 2. PROPERTY AND EQUIPMENT

At December 31, 2003 and 2002, property and equipment consists of the following:



                                      F-9
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


                                                             2003        2002
                                                           --------    --------

Office furniture and equipment                             $ 58,433    $ 58,433
Machinery and equipment                                      24,148      10,563
                                                           --------    --------
                                                             82,581      68,996
Less: accumulated depreciation                              (64,429)    (54,765)
                                                           --------    --------
Net property and equipment                                 $ 18,152    $ 14,231
                                                           ========    ========

Depreciation  expense was $9,664 and $9,978,  for the years ended  December  31,
2003 and 2002, respectively.

NOTE 3. INTANGIBLE ASSETS

Intangible  assets  consisted  of legal costs  incurred to secure  patents.  The
patents were being amortized ratably over their estimated useful lives.

At December 31, 2002, intangible assets consisted of the following:

Due to the Company's  continued operating losses, the effective life was reduced
to zero in the year ended December 31, 2002.

                                                                         2002
                                                                       --------
Intangibles subject to amortization:
   Patents                                                             $ 30,684

Less: accumulated amortization                                          (30,684)
                                                                       --------
Net Intangible Assets                                                  $     --
                                                                       ========

Amortization  expense charged to operations for the year ended December 31, 2002
was $ 21,607.

NOTE 4.  RELATED PARTY TRANSACTIONS

As of December 31, 2003 and 2002,  notes payable to related  parties  consist of
the following:


                                      F-10
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


                                                          2003          2002
                                                       ----------    ----------
16% per annum note payable to stockholder,
principal and interest due March, 2004                 $  300,000    $  480,900

15% per annum notes payable to stockholders,
principal and interest due at various times               239,000            --

18% per annum note payable to a stockholder,
principal and interest due on demand; unsecured            10,000            --

Less: current portion                                    (549,000)     (480,900)
                                                       ----------    ----------
                                                       $       --    $       --
                                                       ==========    ==========

NOTE 5.  SHAREHOLDERS' EQUITY

On  September  19,  2003  the  Board of  Directors  approved  the 2003  Coronado
Industries, Inc. Executive Stock Option Plan. The Plan authorizes the Company to
grant  stock  options to key  employees  of the  Company.  Under the above Plan,
50,000,000 shares of common stock were reserved for issuance.

A summary of the activity of plan is as follows:

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

Outstanding at December 31, 2002                    --   $           --
Granted                                     50,894,000            0.033
                                            ----------   --------------
Outstanding at December 31, 2003            50,894,000   $        0.033
                                            ==========   ==============

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2003:

<TABLE>
<CAPTION>
                                Options Outstanding              Options Exercisable
                         -----------------------------------    ----------------------
                                    Weighted
                                     Average        Weighted                  Weighted
                                    Remaining       Average                   Average
    Exercise        Number of      Contractual      Exercise    Number of     Exercise
     Price           Shares      Life (In Years)     Price        Shares       Price
---------------    ----------    ---------------    --------    ----------    --------
<C>                <C>           <C>                <C>         <C>           <C>
$ 0.011 - 0.077    50,894,000         8.97          $  0.033    47,000,000    $  0.030
</TABLE>


                                      F-11
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


On  September  30,  2003  the  Board of  Directors  approved  the 2003  Coronado
Industries,  Inc. Employee Stock Option Plan. The Plan authorizes the Company to
grant  stock  options to key  employees  of the  Company.  Under the above Plan,
2,100,000 shares of common stock were reserved for issuance.

A summary of the activity of plan is as follows:

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

Outstanding at December 31, 2002                    --   $           --
Granted                                      2,100,000             0.07
                                            ----------   --------------
Outstanding at December 31, 2003             2,100,000   $         0.07
                                            ==========   ==============

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2003:

<TABLE>
<CAPTION>
                                Options Outstanding              Options Exercisable
                         -----------------------------------    ----------------------
                                    Weighted
                                     Average        Weighted                  Weighted
                                    Remaining       Average                   Average
    Exercise        Number of      Contractual      Exercise    Number of     Exercise
     Price           Shares      Life (In Years)     Price        Shares       Price
---------------    ----------    ---------------    --------    ----------    --------
<C>                <C>           <C>                <C>         <C>           <C>
    $   0.07        2,100,000         9.91          $   0.07     2,100,000    $   0.07
</TABLE>

On  January  13,  2003  the  Board  of  Directors  approved  the  2002  Coronado
Industries,  Inc. Management Stock Option Plan,  effective December 31, 2002 The
Plan  authorizes  the Company to grant  stock  options to key  employees  of the
Company.  Under the above Plan,  90,000,000 shares of common stock were reserved
for issuance.

A summary of the activity of plan is as follows:



                                      F-12
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


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

Outstanding at December 31, 2001                    --   $           --
Granted                                     90,000,000            0.012
                                           -----------   --------------
Outstanding at December 31, 2002            90,000,000   $        0.012
Exercised                                           --               --
Cancelled                                  (84,000,000)           0.012
                                           -----------   --------------
Outstanding at December 31, 2003             6,000,000   $        0.012
                                           ===========   ==============

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2003:

<TABLE>
<CAPTION>
                                Options Outstanding              Options Exercisable
                         -----------------------------------    ----------------------
                                    Weighted
                                     Average        Weighted                  Weighted
                                    Remaining       Average                   Average
    Exercise        Number of      Contractual      Exercise    Number of     Exercise
     Price           Shares      Life (In Years)     Price        Shares       Price
---------------    ----------    ---------------    --------    ----------    --------
<C>                <C>           <C>                <C>         <C>           <C>
 $ 0.01 - 0.02      6,000,000         7.16          $  0.012     6,000,000    $  0.012
</TABLE>

On  January  13,  2003  the  Board  of  Directors  approved  the  2002  Coronado
Industries,  Inc.  Employee Stock Option Plan,  effective  December 31, 2002 The
Plan  authorizes  the Company to grant  stock  options to key  employees  of the
Company.  Under the above Plan,  42,000,000 shares of common stock were reserved
for issuance.

A summary of the activity of plan is as follows:

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

Outstanding at December 31, 2001                    --   $           --
Granted                                     42,000,000             0.01
                                           -----------   --------------
Outstanding at December 31, 2002            42,000,000   $         0.01
                                           -----------   --------------
Exercised                                   (2,100,000)            0.01
Cancelled                                  (39,400,000)            0.01
                                           -----------   --------------
Outstanding at December 31, 2003               500,000   $         0.01
                                           ===========   ==============

                                      F-13
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2003:

<TABLE>
<CAPTION>
                                Options Outstanding              Options Exercisable
                         -----------------------------------    ----------------------
                                    Weighted
                                     Average        Weighted                  Weighted
                                    Remaining       Average                   Average
    Exercise        Number of      Contractual      Exercise    Number of     Exercise
     Price           Shares      Life (In Years)     Price        Shares       Price
---------------    ----------    ---------------    --------    ----------    --------
<C>                <C>           <C>                <C>         <C>           <C>
    $   0.01          500,000         8.04          $   0.01       500,000    $   0.01
</TABLE>

On  December  26,  2001  the  Board of  Directors  approved  the  2001  Coronado
Industries,  Inc.  Management Stock Option Plan. The Plan authorizes the Company
to grant stock  options to key  employees of the Company.  Under the above Plan,
2,963,500 shares of common stock were reserved for issuance.

A summary of the activity of plan is as follows:

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

Outstanding at December 31, 2001             2,963,500   $         0.16
Exercised                                           --               --
                                            ----------   --------------
Outstanding at December 31, 2002             2,963,500   $         0.16
Exercised                                           --               --
                                            ----------   --------------
Outstanding at December 31, 2003             2,963,500   $        $0.16
                                            ==========   ==============

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2003:

<TABLE>
<CAPTION>
                                Options Outstanding              Options Exercisable
                         -----------------------------------    ----------------------
                                    Weighted
                                     Average        Weighted                  Weighted
                                    Remaining       Average                   Average
    Exercise        Number of      Contractual      Exercise    Number of     Exercise
     Price           Shares      Life (In Years)     Price        Shares       Price
---------------    ----------    ---------------    --------    ----------    --------
<C>                <C>           <C>                <C>         <C>           <C>
 $ 0.10 - 0.22      2,963,500         5.68          $   0.16     2,963,500    $   0.16
</TABLE>

                                      F-14
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


On  December  26,  2001  the  Board of  Directors  approved  the  2001  Coronado
Industries,  Inc. Employee Stock Option Plan. The Plan authorizes the Company to
grant  stock  options to key  employees  of the  Company.  Under the above Plan,
750,000 shares of common stock were reserved for issuance.

A summary of the activity of plan is as follows:

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

Outstanding at December 31, 2001               750,000   $         0.20
Exercised                                           --               --
                                            ----------   --------------
Outstanding at December 31, 2002               750,000   $         0.20
Exercised                                           --               --
Cancelled                                      (25,000)            0.20
                                            ----------   --------------
Outstanding at December 31, 2003               725,000   $         0.20
                                            ==========   ==============

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2003:

<TABLE>
<CAPTION>
                                Options Outstanding              Options Exercisable
                         -----------------------------------    ----------------------
                                    Weighted
                                     Average        Weighted                  Weighted
                                    Remaining       Average                   Average
    Exercise        Number of      Contractual      Exercise    Number of     Exercise
     Price           Shares      Life (In Years)     Price        Shares       Price
---------------    ----------    ---------------    --------    ----------    --------
<C>                <C>           <C>                <C>         <C>           <C>
    $   0.20          725,000         7.99          $   0.20       725,000    $   0.20
</TABLE>

On January 2, 2001 the Board of Directors approved the 2000 Coronado Industries,
Inc.  Management  Bonus Stock Option Plan.  The Plan  authorizes  the Company to
grant  stock  options to key  employees  of the  Company.  Under the above Plan,
6,000,000 shares of common stock were reserved for issuance.

A summary of the activity of plan is as follows:



                                      F-15
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


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

Outstanding at December 31, 2001             6,000,000   $        0.135
Exercised                                           --               --
                                            ----------   --------------
Outstanding at December 31, 2002             6,000,000   $        0.135
Exercised                                           --               --
                                            ----------   --------------
Outstanding at December 31, 2003             6,000,000   $        0.135
                                            ==========   ==============

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2003:

<TABLE>
<CAPTION>
                                Options Outstanding              Options Exercisable
                         -----------------------------------    ----------------------
                                    Weighted
                                     Average        Weighted                  Weighted
                                    Remaining       Average                   Average
    Exercise        Number of      Contractual      Exercise    Number of     Exercise
     Price           Shares      Life (In Years)     Price        Shares       Price
---------------    ----------    ---------------    --------    ----------    --------
<C>                <C>           <C>                <C>         <C>           <C>
    $  0.135        6,000,000          7.01         $  0.135     6,000,000    $  0.135
</TABLE>

On January 2, 2001 the Board of Directors approved the 2000 Coronado Industries,
Inc.  Management  Stock Option Plan.  The Plan  authorizes  the Company to grant
stock options to key employees of the Company.  Under the above Plan,  2,599,999
shares of common stock were reserved for issuance.

A summary of the activity of plan is as follows:

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

Outstanding at December 31, 2001             2,599,999   $        0.198
Exercised                                           --               --
                                            ----------   --------------
Outstanding at December 31, 2002             2,599,999   $        0.198
Exercised                                           --               --
                                            ----------   --------------
Outstanding at December 31, 2003             2,599,999   $        0.198
                                            ==========   ==============



                                      F-16
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2003:

<TABLE>
<CAPTION>
                                Options Outstanding              Options Exercisable
                         -----------------------------------    ----------------------
                                    Weighted
                                     Average        Weighted                  Weighted
                                    Remaining       Average                   Average
    Exercise        Number of      Contractual      Exercise    Number of     Exercise
     Price           Shares      Life (In Years)     Price        Shares       Price
---------------    ----------    ---------------    --------    ----------    --------
<C>                <C>           <C>                <C>         <C>           <C>
  $0.135-0.3        2,599,999         5.72          $  0.198     2,599,999    $  0.198
</TABLE>

On January 2, 2001 the Board of Directors approved the 2000 Coronado Industries,
Inc.  Employee Stock Option Plan. The Plan authorizes the Company to grant stock
options to key employees of the Company. Under the above Plan, 625,000 shares of
common stock were reserved for issuance.

A summary of the activity of plan is as follows:

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

Outstanding at December 31, 2001               525,000   $        0.135
Exercised                                           --               --
                                            ----------   --------------
Outstanding at December 31, 2002               525,000   $        0.135
Exercised                                           --               --
Cancelled                                      (25,000)           0.135
                                            ----------   --------------
Outstanding at December 31, 2003               500,000   $        0.135
                                            ==========   ==============

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2003:


                                      F-17
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


<TABLE>
<CAPTION>
                                Options Outstanding              Options Exercisable
                         -----------------------------------    ----------------------
                                    Weighted
                                     Average        Weighted                  Weighted
                                    Remaining       Average                   Average
    Exercise        Number of      Contractual      Exercise    Number of     Exercise
     Price           Shares      Life (In Years)     Price        Shares       Price
---------------    ----------    ---------------    --------    ----------    --------
<C>                <C>           <C>                <C>         <C>           <C>
    $  0.135          500,000         7.01          $  0.135       500,000    $  0.135
</TABLE>

On  November  3,  1999  the  Board  of  Directors  approved  the  1999  Coronado
Industries,  Inc. Employee Stock Option Plan. The Plan authorizes the Company to
grant  stock  options to key  employees  of the  Company.  Under the above Plan,
575,000 shares of common stock were reserved for issuance.

A summary of the activity of plan is as follows:

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

Outstanding at December 31, 2001               575,000   $         0.20
Exercised                                           --               --
                                            ----------   --------------
Outstanding at December 31, 2002               575,000   $         0.20
Exercised                                           --               --
Cancelled                                      (25,000)            0.20
                                            ----------   --------------
Outstanding at December 31, 2003               550,000   $         0.20
                                            ==========   ===============

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2003:

<TABLE>
<CAPTION>
                                Options Outstanding              Options Exercisable
                         -----------------------------------    ----------------------
                                    Weighted
                                     Average        Weighted                  Weighted
                                    Remaining       Average                   Average
    Exercise        Number of      Contractual      Exercise    Number of     Exercise
     Price           Shares      Life (In Years)     Price        Shares       Price
---------------    ----------    ---------------    --------    ----------    --------
<C>                <C>           <C>                <C>         <C>           <C>
    $   0.20          550,000         5.84          $   0.20       550,000    $   0.20
</TABLE>


                                      F-18
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


On  November  3,  1999  the  Board  of  Directors  approved  the  1999  Coronado
Industries,  Inc. Management Stock Option Plan,  effective December 31, 2002 The
Plan  authorizes  the Company to grant  stock  options to key  employees  of the
Company.  Under the above Plan,  1,400,000  shares of common stock were reserved
for issuance.

A summary of the activity of plan is as follows:

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

Outstanding at December 31, 2001             1,400,000   $         0.20
Exercised                                           --               --
                                            ----------   --------------
Outstanding at December 31, 2002             1,400,000   $         0.20
Exercised                                           --               --
                                            ----------   --------------
Outstanding at December 31, 2003             1,400,000   $       $ 0.20
                                            ==========   ==============

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2003:

<TABLE>
<CAPTION>
                                Options Outstanding              Options Exercisable
                         -----------------------------------    ----------------------
                                    Weighted
                                     Average        Weighted                  Weighted
                                    Remaining       Average                   Average
    Exercise        Number of      Contractual      Exercise    Number of     Exercise
     Price           Shares      Life (In Years)     Price        Shares       Price
---------------    ----------    ---------------    --------    ----------    --------
<C>                <C>           <C>                <C>         <C>           <C>
    $   0.20        1,400,000         5.84          $   0.20     1,400,000    $   0.20
</TABLE>

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 were reserved for issuance.

A summary of the activity of plan is as follows:



                                      F-19
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


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

Outstanding at December 31, 2001             1,350,000   $        0.053
Exercised                                           --               --
                                            ----------    -------------
Outstanding at December 31, 2002             1,350,000            0.053
Exercised                                           --               --
                                            ----------    -------------
Outstanding at December 31, 2003             1,350,000    $       0.053
                                            ==========    =============

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2003:

<TABLE>
<CAPTION>
                                Options Outstanding              Options Exercisable
                         -----------------------------------    ----------------------
                                    Weighted
                                     Average        Weighted                  Weighted
                                    Remaining       Average                   Average
    Exercise        Number of      Contractual      Exercise    Number of     Exercise
     Price           Shares      Life (In Years)     Price        Shares       Price
---------------    ----------    ---------------    --------    ----------    --------
<C>                <C>           <C>                <C>         <C>           <C>
  $0.05- 0.075      1,350,000         4.97          $  0.053     1,350,000    $  0.053
</TABLE>

The fair value of option  grants is estimated as of the date of grant  utilizing
the  Black-Scholes  option-pricing  model with the  following  weighted  average
assumptions  for all  grants,  expected  life of options of five (5) to ten (10)
years,  risk-free  interest  rates of five percent (5%), and a zero percent (0%)
dividend  yield.  The  weighted  average fair value at date of grant for options
granted during the years ended December 31, 2003 and 2002  approximated  $0.01 -
0.09 and $0.02-0.03, respectively.

NOTE 6. INCOME TAXES

As of December 31, 2003, the components of deferred income taxes are as follows:

Long-term Deferred Tax Assets (Liabilities)
     Net operating loss carryforwards                              $  4,700,000
     Depreciation and amortization                                           --
                                                                   ------------
                                                                      4,700,000
Less: valuation allowance                                            (4,700,000)
                                                                   ------------
Net Long-term Deferred Tax Asset                                   $         --
                                                                   ============



                                      F-20
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


The Company has provided a full valuation allowance on its deferred tax asset as
of December 31, 2003.  The  valuation  allowance  increased by  approximately  $
322,500 during the year ended  December 31, 2003,  primarily due to the increase
in the net operating loss.

As of  December  31,  2003,  the Company has net  operating  loss  carryforwards
available to offset future  federal and state  taxable  income in the amounts of
approximately $11,992,000 and $9,165,000, respectively, and expiring as follows:

                       Net Loss Carryforward               Year of
                         Amount Available                 Expiration
                   -----------------------------       -----------------
     Year            Federal           State           Federal     State
     ----          ------------     ------------       -------     -----
     1993          $    137,000     $         --         2008        --
     1994                65,000               --         2009        --
     1995                97,000               --         2010        --
     1996                31,000               --         2011        --
     1997               561,000               --         2012        --
     1998             1,820,000               --         2018        --
     1999             1,040,000          929,000         2019       2004
     2000             3,206,000        3,206,000         2020       2005
     2001             2,400,000        2,400,000         2021       2006
     2002             1,315,000        1,400,000         2022       2007
     2003             1,320,000        1,320,000         2023       2008
                   ------------     ------------
                   $ 11,992,000     $  9,165,000
                   ============     ============

NOTE 7. COMMITMENTS

The  Company  leased  office  space  in  Fountain   Hills,   Arizona,   under  a
non-cancelable operating lease agreement, which expired in June 2001. Subsequent
to  the  expiration,  the  Company  has  continued  to  lease  the  space  on  a
month-to-month basis. The rent is currently  approximately $2,780 per month. For
the years  ended  December  31,  2003 and  2002,  rent  expense  under the lease
agreements was $ 33,363 and $28,000, respectively.

NOTE 8. NOTES PAYABLE

As of December 31, 2003, notes payable consist of the following:



                                      F-21
<PAGE>

                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


                                                                        2003
                                                                      ---------
15% per annum convertible note payable to Robert Suliot,
principal and interest payable on demand, through March, 2004
and convertible into 300,000 shares of common stock at maturity       $  25,000

15% per annum note payable to Julius Gelber, principal
and interest payable on demand, through March, 2004                      25,000

6.5% per annum note payable to Premium Financing Specialists,
Inc. with principal and interest payments of $5,756 through
June, 2004; uncollateralized                                             33,616
                                                                      ---------
                                                                         83,616
Less: current portion                                                   (83,616)
                                                                      ---------
                                                                      $      --
                                                                      =========

NOTE 9. GOING CONCERN

The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company has a stockholders'
deficit at December 31, 2003, in the amount of $1,000,146  and negative  working
capital in the amount $1,063,430.

The  primary  business of the  Company is to  manufacture  and market a patented
treatment device for Open Angle Glaucoma,  and was 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 March
2, 1999.

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.

NOTE 10. SUBSEQUENT EVENTS

During February 2004 the Board of Directors authorized the issuance of 5,224,300
shares of common stock for payment of certain  related  party debt in the amount
of $296,000 and accrued interest related thereto in the amount of $17,458.


                                      F-22