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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, 2002

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

            For the transition period from ___________ to ___________

                       Commission file number 33-33042-NY


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

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

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

                    Issuer's telephone number (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]

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. $1,815,587 as
of March 24, 2003

State the number of shares  outstanding  of issuer's  common  equity,  as of the
latest practicable date. 142,615,314 as of March 24, 2003

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<PAGE>
                            CORONADO INDUSTRIES, INC.

                                   FORM 10-KSB

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

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

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

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

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

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

        Item 6.  Management's Discussion and Analysis or Plan of
                  Operation...............................................   12

        Item 7.  Financial Statements.....................................   13

        Item 8.  Changes In and Disagreement with Accountants on
                  Accounting and Financial disclosure.....................   13

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

        Item 10. Executive Compensation...................................   15

        Item 11. Security Ownership of Certain Beneficial Owners
                  and Management..........................................   18

        Item 12. Certain Relationships and Related Transactions...........   19

        Item 13. Exhibits, Financial Statements, Schedules and Reports
                  on Form 8-K.............................................   19

        Item 14. Controls and Procedures .................................   19

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

SUPPLEMENTAL INFORMATION AND EXHIBITS.....................................   25

                                       1
<PAGE>
                                     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.

                                        2
<PAGE>
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 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.

                                       3
<PAGE>
     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 was
conducted by Dr. Leo Bores, the Medical Director of the Registrant's  Scottsdale
treatment center. This third study involved approximately 150 patients.

     The Registrant views the gross losses incurred at its Scottsdale  treatment
center from September 1997 through March 2, 1999 (approximately $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  has  commenced  discussions  with other  medical  companies  for the
distribution  rights  to the  PNT  product.  Registrant  is  hopeful  a  license
agreement will be executed with a distribution company in 2003; however, at this
time  there is no  assurance  any  definitive  license  agreement  will  ever be
executed by Registrant.

                                        4
<PAGE>
     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.

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

TREATMENT CENTERS

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

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.

                                       5
<PAGE>
     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
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.

                                       6
<PAGE>
     The  manufacturer  of a medical  device which is to be  distributed  in the
United  States must be  inspected  and  licensed by the FDA.  The company  which
currently  manufactures  the  Registrants's  suction ring and the company  which
sterilizes and packages this ring are licensed as medical  device  manufacturers
by the FDA. The Registrant's facility was inspected and licensed by the FDA as a
manufacturer of the  predecessor  fixation device product and the PNT product in
1996.

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

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.

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

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

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

EMPLOYEES

     In addition to its two officers  and Dr.  LiVecchi,  its Medical  Director,
during 2003 the Registrant will engage 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.

                                       8
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTY.

     During calendar year 2002, the  Registrant's  offices were located at 16929
E. Enterprise Drive,  Suite 202,  Fountain Hills, AZ 85268,  where Registrant is
currently  leasing  approximately  1,600 square feet of space from a third party
landlord.  Registrant  is  paying  approximately  $1,000  per  month,  including
utilities,  in rent for this  space on a  five-year  lease.  In June  1998,  the
Registrant  entered into a  month-to-month  lease for 1,800 square feet of space
adjacent to its original space in Fountain  Hills,  Arizona,  for  approximately
$1,400 per month rent, including utilities. This combined space will be adequate
for the Registrant's  needs throughout its initial  manufacturing  stages,  when
commenced.

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  2002 no  matters  were  submitted  to a vote of the
Registrant's security holders.

                                       9
<PAGE>
                                     PART II

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

     MARKET  INFORMATION  The principal  U.S.  market in which the  Registrant's
common shares (all of which are one class,  $.001 par value) were traded was the
over-the-counter  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 2001, by fiscal quarter, and through March 25, 2003.

                                                    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, 2001 - March 31, 2001          $0.171            $0.201
         April 1, 2001 - June 30, 2001             $0.19             $0.39
         July 1, 2001 - September 30, 2001         $0.095            $0.33
         October 1, 2001 - December 31, 2001       $0.17             $0.50

         January 1, 2003 - March 25, 2003          $.008             $0.04

     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.  In September  2002, the Registrant
issued a total of  4,500,000  shares to its three  Directors  in  conversion  of
$375,000 of accrued salaries and other  obligations.  Registrant  believes these
transactions  were exempt from  registration  pursuant to Section 4(2) under the
Securities Act of 1933. All other  securities sold by Registrant were registered
on Form S-8 or were reported previously in a quarterly filing by Registrant.

     HOLDERS.  The  Registrant has  approximately  712  stockholders  of record,
including nominee firms for securities dealers.

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

COMMON STOCK

     During 2002 the  authorized  capital  stock of the  Registrant  consists of
100,000,000 shares of common stock, par value $0.001 per share. In January 2003,
Registrant's Articles of Incorporation were amended to increase the Registrant's
authorized capital stock to 400,000,000 shares of common stock, par value $0.001
per share. As of March 24, 2003, there were  142,615,314  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.

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

     The transfer agent for the Registrant's common stock is Olde Monmouth Stock
Transfer Co., Inc., 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.

                                       11
<PAGE>
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
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, 2002

OPERATIONS.  For the year ending December 31, 2002 Registrant  experienced a net
loss  of  $1,481,121,   which  was  comprised   primarily  of  its  general  and
administrative  expenses incurred of $1,435,471 and interest expense of $43,157.
The Registrant had a net loss from  operations of $1,435,471 for the year ending
December 31, 2002. 84.9% of Registrant's  2002 corporate  expenses  consisted of
salaries and wages of $601,868  (41.9%),  stock bonus  compensation  of $150,000
(10.4%),  professional expenses of $432,836 (30.2%) and shareholder services and
media  promotion of $33,700 (2.3%).  In comparison,  during the 2001 fiscal year
91.0% of Registrant's  corporate expense of $1,625,447 consisted of salaries and
wages of  $703,108  (43.3%),  stock  bonus  compensation  of  $181,966  (11.2%),
professional  expenses of $391,322 (21.1%),  and shareholder  services and media
promotion of $200,815 (12.4%).  The decrease in salaries and wages for 2002 over
2001  occurred  primarily  as a result of using less  consultants  in 2002.  The
decrease in stock  option  compensation  for 2002 over 2001  resulted  from less
rewards  for  management  granted  for  performance  in 2002.  The  increase  in
professional  expenses  in 2002  over  2001  occurred  as a  result  of more FDA
expenses in the first half of 2002.  The  decrease in  shareholder  services and
media  promotion in 2002 over 2001  resulted  from little  shareholder  relation
expenses  being  incurred  in the  second  half of  2002.  Approximately  90% 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 2003 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 2003 when  significant  events  occur.
Registrant expects its professional  expenses in 2003 to decrease as a result of
no longer using one consultant on a full time basis. As Registrant continues its
foreign  marketing  efforts  in  2003,  its  promotional  expenses  will  likely
increase.

                                       12
<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   $1,500,000  per  year,  the
Registrant  suffered from a liquidity shortage during 2002. Through February 19,
2003  Registrant  was  required  to  borrow a total of  $357,400  from its three
Directors,  which were repaid with  restricted  common  stock in February  2003.
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 2003;  however,  there is no assurance  Registrant  will be able to
obtain any financing in the future.

     On May 4, 1999  Registrant  obtained a loan of $270,000 from a third party,
bearing an annual  interest rate of 18% and secured by  Registrant's  equipment,
inventory and accounts  receivable,  a security deposit of $40,000 from the loan
proceeds and the personal guaranty of Registrant's  Chairman,  G. Richard Smith.
This loan was repaid in January  2002,  from a  $240,000  one-year  loan from G.
Richard  Smith.  Mr.  Smith's loan bears  interest at the rate of 10% per annum,
paid monthly.

     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.

                                       13
<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 March 25, 2003
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 54, 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 58, has been a Director of the Registrant since November
5, 1996, and President and Treasurer of the  Registrant  since November 5, 1996.
From July, 1995 to November 5, 1996 Gary R. Smith was a joint venture partner in
American Glaucoma,  the company that developed the concept of glaucoma treatment
centers throughout the U.S which was sold to the Registrant.  From July, 1995 to
November  5,  1996 Gary R.  Smith was a member  and Vice  President  of  Product
Development and Manufacturing of Ophthalmic  International,  L.L.C., the company
that  developed  and  patented  the  glaucoma  treatment  which  was sold to the
Registrant.  From  1987 to  June,  1995  Gary R.  Smith  was  co-owner  and Vice
President of Product  Development  and  Manufacturing  for  Southern  California
Medical  Distributors,  Ltd.  ("SCMD"),  where he  developed  a turbine  powered
keratome for eye surgery. Gary R. Smith attended Detroit Institute of Technology
in Detroit, Michigan from 1961 through 1963.

     John T.  LiVecchi,  age 54, 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  opthalmology  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 32, 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.

                                       14
<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, 2002.
<TABLE>
<CAPTION>
                                                                               Long Term Compensation
                                     Annual Compensation               ---------------------------------------
                           -----------------------------------------                  Securities      Awards        Payouts
Name and                                                 Other         Restricted     Underlying    ----------   ---------------
Principal                                                Annual          Stock         Options/       LTIP         All Other
Position            Year   Salary($)     Bonus($)    Compensation($)    Awards($)       SARS(#)     Payouts($)   Compensation($)
--------            ----   ---------     --------    ---------------   ----------       -------     ----------   ---------------
<S>                 <C>    <C>          <C>            <C>                <C>         <C>             <C>            <C>
G. Richard Smith,   2002   $100,000(1)   $ 80,000(2)     $      0                    30,000,000(3)      --             --
Chairman            2001   $ 80,000(4)   $101,198(5)     $      0          --         1,054,500(6)      --             --
                    2000   $      0(7)   $ 99,000(8)     $      0          --         2,933,333(9)      --             --
                    1999   $      0(7)         --        $      0          --           500,000(10)     --             --
                    1998   $      0            --        $125,000(11)      --           400,000(12)     --             --

Gary R. Smith,      2002   $100,000(1)   $ 80,000(2)     $      0                    30,000,000(3)      --             --
President           2001   $ 80,000(4)   $ 81,859(5)     $      0          --         1,054,500(6)      --             --
                    2000   $      0(7)   $ 99,000(8)     $      0          --         2,933,333(9)      --             --
                    1999   $      0(7)         --        $      0          --           500,000(10)     --             --
                    1998   $      0            --        $125,000(11)      --           400,000(12)     --             --
</TABLE>

----------
(1)  $150,000 of annual salary was accrued for each 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.
(2)  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.
(3)  All of these  options were  awarded in January  2003.  25,000,000  of these
     options  have a ten-year  term,  are  immediately  exercisable  and have an
     exercise  price of $.01  per  share.  5,000,000  of  these  options  have a
     five-year  term,  may not be  exercised  until  January  2004  and  have an
     exercise price of $.02 per share.
(4)  $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.
(5)  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.
(6)  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.
(7)  An annual  salary of $150,000 was accrued but not paid to G. Richard  Smith
     and Gary R. Smith during 1999 and 2000, but paid in restricted common stock
     in August 2001.
(8)  This bonus was paid in common  stock  upon  issuance  of 500,000  shares in
     January 2001.
(9)  All of these  options  were  awarded in January  2001.  2,600,000  of these
     options  have a ten-year  term,  are  immediately  exercisable  and have an
     exercise  price  of $.135  per  share.  333,333  of  these  options  have a
     five-year  term,  may not be  exercised  until  January  2002  and  have an
     exercise price of $.30 per share.
(10) These options were awarded in November 1999, have a five-year term, may not
     be exercised  until  November 2000 and have an exercised  price of $.20 per
     share.
(11) $100,000 of accrued salary for 1998 and $20,000 of salary accrued from 1997
     was  paid to each G.  Richard  Smith  and  Gary  R.  Smith  in the  form of
     restricted common stock at the rate of $.03 per share on December 21, 1998,
     which was the same rate offered to all employees for accrued  salaries.  G.
     Richard  Smith and Gary R. Smith also  received  $5,000 cash as interest on
     their accrued salaries in October 1996.
(12) These  options were awarded in December  1998,  have a ten-year term and an
     exercise price of $.05 per share.

     The following  table sets forth certain  information  concerning  the stock
options (with stock  appreciation  rights) granted during the fiscal year to the
Copmany'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       5,000,000            3.8%               $.02         January 12, 2008
                      25,000,000           18.9%               $.01         January 12, 2013

Gary R. Smith          5,000,000            3.8%               $.02         January 12, 2008
                      25,000,000           18.9%               $.01         January 12, 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, 2002 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         --                  --               29,887,833/5,000,000               $0/0(1)

Gary R. Smith            --                  --               29,887,833/5,000,000               $0/0(1)
</TABLE>

----------
(1)  Based on a year-end price of $.01 per share,  none of the officers' options
     were in the money.

STOCK OPTION PLANS

     In December  1998,  the  Registrant's  Board of Directors  adopted The 1998
Stock Option Plan (the "1998 Option  Plan") and  1,550,000  shares were reserved
for issuance  thereunder.  On December 21, 1998, the Registrant  granted options
for a total of 1,550,000 shares of Registrant's common stock. These options have
ten-year  terms  and may be  exercised  within 3  months  after  termination  of
employment,  except if the  optionee  dies  while  employed,  the  option may be
exercised  by  the  optionee's  beneficiary.   All  options  issued  have  stock
appreciation  rights  whereby  the  option may be  exercised  by  redeeming  the
appreciated  value of the option and  without  cash being paid by the  optionee,
except the  Registrant's  officers must wait one year after the date of grant to
exercise stock appreciation  rights. The following  individuals received options
for the following  number of shares at the indicated  exercise price: G. Richard
Smith 400,000 shares at $.05; Gary R. Smith 400,000 shares at $.05; and Dr. John
T. LiVecchi  400,000 shares at $.05.  Since these options were granted on a date
when  the  average  market  price  for the  Registrant's  stock  was  $.10,  the
Registrant  accounted  for the  granting  of these  options  as an  expense  and
increase to  stockholder's  equity of $186,235 in 1998.  In February  2000,  Dr.
Bores exercised all of his options.

     In November  1999,  the  Registrant's  Board of Directors  adopted The 1999
Employee Stock Option Plan (the "1999 Employee  Option Plan") and 575,000 shares
were  reserved  for issuance  thereunder.  On November 3, 1999,  the  Registrant
granted options for a total of 575,000 shares of Registrant's common stock at an
exercise  price of $.20.  These options have ten-year terms and may be exercised
at any time  after  one  year  from  the  date of  grant  until 3  months  after
termination  of  employment,  except if the optionee  dies while  employed,  the
option may be exercised by the optionee's beneficiary.  These options may not be
exercised until November 3, 2000.

     In November  1999,  the  Registrant's  Board of Directors  adopted The 1999
Management Stock Option Plan (the "1999  Management  Option Plan") and 1,400,000
shares  were  reserved  for  issuance  thereunder.  On  November  3,  1999,  the
Registrant  granted  options  for a total of  1,400,000  shares of  Registrant's
common stock. These options have ten-year terms (except for 10% shareholders who
only have five-year  terms) and may be exercised at any time after one year from
the date of grant until 3 months after termination of employment,  except if the
optionee  dies while  employed,  the option may be exercised  by the  optionee's
beneficiary.  All options  issued  have stock  appreciation  rights  whereby the

                                       16
<PAGE>
option may be  exercised by redeeming  the  appreciated  value of the option and
without cash being paid by the  optionee.  The  following  individuals  received
options for the following  number of shares at the indicated  exercise price: G.
Richard Smith, 500,000 shares at $.20; Gary R. Smith, 500,000 shares at $.20 and
Dr. John T. LiVecchi, 400,000 shares at $.20. These options may not be exercised
until November 3, 2000.

     In  January  2001 the  Registrant's  Board of  Directors  adopted  the 2000
Management Bonus Stock Option Plan (the "2000 Bonus Option Plan") and on January
2,  2001 the  Registrant  granted  options  for a total of  6,000,000  shares of
Registrant's  common stock to be issued under the 2000 Bonus Option Plan.  These
options  have a ten-year  term and may be exercised at any time from the date of
grant  until 3 months  after  termination,  except if the  optionee  dies  while
employed  the option may be exercised by the  optionee's  beneficiary.  The 2000
Bonus  Option Plan does not provide for stock  appreciation  rights  whereby the
option may be  exercised by redeeming  the  appreciated  value of the option and
without cash being paid by the  optionee.  The  following  individuals  received
options for the following  number of shares at the indicated  exercise price: G.
Richard Smith,  2,000,000  shares at $.135;  Gary R. Smith,  2,000,000 shares at
$.135; and Dr. John T. LiVecchi, 2,000,000 shares at $.135.

     In  January  2001 the  Registrant's  Board of  Directors  adopted  the 2000
Management Stock Option Plan (the "2000 Management  Option Plan") and on January
2,  2001 the  Registrant  granted  options  for a total of  2,599,999  shares of
Registrant's  common stock to be issued under the 2000  Management  Option Plan.
1,933,333 of these options have a ten-year term (666,666 have a five-year  term)
and may be exercised at any time from the date of grant (except  666,666 may not
be exercised until January 2, 2002) until 3 months after termination,  except if
the optionee dies while  employed the option may be exercised by the  optionee's
beneficiary.  The 2000  Management  Option  Plan  does  not  provide  for  stock
appreciation  rights  whereby  the  option may be  exercised  by  redeeming  the
appreciated value of the option and without cash being paid by the optionee. The
following individuals received options for the following number of shares at the
indicated exercise price: G. Richard Smith,  600,000 shares at $.135 and 333,333
shares at $.30;  Gary R. Smith,  600,000  shares at $.135 and 333,333  shares at
$.30;  and Dr. John T.  LiVecchi,  400,000 shares at $.135 and 333,333 shares at
$.30.

     In  January  2001 the  Registrant's  Board of  Directors  adopted  the 2000
Employee Stock Option Plan (the "2000  Employee  Option Plan") and on January 2,
2001  the  Registrant   granted  options  for  a  total  of  625,000  shares  of
Registrant's common stock to be issued under the 2000 Employee Option Plan at an
exercise price of $.27.  These options have a ten-year term and may be exercised
at any time from the date of grant until 3 months after  termination,  except if
the optionee dies while  employed the option may be exercised by the  optionee's
beneficiary.

     In  December  2001 the  Registrant's  Board of  Directors  adopted the 2001
Management Stock Option Plan (the "2001 Management Option Plan") and on December
26,  2001 the  Registrant  granted  options for a total of  2,963,500  shares of
Registrant's  common stock to be issued under the 2001  Management  Option Plan.
2,054,500 of these options have a ten-year term (909,000 have a five-year  term)
and may be exercised at any time from the date of grant (except  909,000 may not
be exercised until December 25, 2002) until 3 months after  termination,  except
if  the  optionee  dies  while  employed  the  option  may be  exercised  by the
optionee's beneficiary.  No options issued under the 2001 Management Option Plan
have stock appreciation  rights whereby the option may be exercised by redeeming
the appreciated value of the option and without cash being paid by the optionee.
The following individuals received options for the following number of shares at
the indicated  exercise  price:  G. Richard  Smith,  600,000  shares at $.10 and
454,500 shares at $.22; Gary R. Smith, 600,000 shares at $.10 and 454,500 shares
at $.22; and Dr. John T. LiVecchi,  400,000 shares at $.10 and 454,500 shares at
$.22.

     In  December  2001 the  Registrant's  Board of  Directors  adopted the 2001
Employee Stock Option Plan (the "2001 Employee Option Plan") and on December 26,
2001  the  Registrant   granted  options  for  a  total  of  750,000  shares  of
Registrant's common stock to be issued under the 2001 Employee Option Plan at an
exercise price of $.20.  These options have a ten-year term and may be exercised
at any time after December 25, 2002 until 3 months after termination,  except if
the optionee dies while  employed the option may be exercised by the  optionee's
beneficiary.

     In  January  2003 the  Registrant's  Board of  Directors  adopted  the 2002
Management Stock Option Plan (the "2002 Management  Option Plan") and on January
13, 2003 the  Registrant  granted  options for a total of  90,000,000  shares of
Registrant's  common stock to be issued under the 2002  Management  Option Plan.
75,000,000 of these options have a ten-year  term  (15,000,000  have a five-year
term) and may be exercised at any time from the date of grant (except 15,000,000
may not be exercised  until January 13, 2004) until 3 months after  termination,
except if the  optionee  dies while  employed the option may be exercised by the
optionee's beneficiary.  No options issued under the 2002 Management Option Plan
have stock appreciation  rights whereby the option may be exercised by redeeming
the appreciated value of the option and without cash being paid by the optionee.
The following individuals received options for the following number of shares at
the indicated  exercise price: G. Richard Smith,  25,000,000  shares at $.01 and
5,000,000 shares at $.02; Gary R. Smith, 25,000,000 shares at $.01 and 5,000,000
shares  at  $.02;  and Dr.  John T.  LiVecchi,  25,000,000  shares  at $.01  and
5,000,000 shares at $.02.

     In  January  2003 the  Registrant's  Board of  Directors  adopted  the 2002
Employee Stock Option Plan (the "2002 Employee  Option Plan") and on January 13,
2003  the  Registrant  granted  options  for a total  of  42,000,000  shares  of
Registrant's common stock to be issued under the 2002 Employee Option Plan at an
exercise price of $.01.  These options have a ten-year term and may be exercised
at any time after January 13, 2003 until 3 months after  termination,  except if
the optionee dies while  employed the option may be exercised by the  optionee's
beneficiary.

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

                                       17
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     As of  March  24,  2003  there  were 142,615,314  outstanding  shares.  The
following  table sets  forth the name,  address,  number of shares  beneficially
owned, and the percentage of the  Registrant's  total  outstanding  common stock
shares owned by: (i) each of the Registrant's  Officers and Directors;  (ii) the
Registrant's  Officers and Directors as a group; and (iii) other shareholders of
5% or more of the Registrant's total outstanding common stock shares.

                    Name and Address            Amount and Nature of     Percent
Title of Class      Beneficial Owner            Beneficial Ownership    of Class
--------------      ----------------            --------------------    --------
Common Stock   Gary R. Smith                        32,544,580             22.8%
               16929 E. Enterprise Drive Suite 202
               Fountain Hills, AZ 85268

Common Stock   G. Richard Smith                     41,060,125(2)          28.8%
               16929 E. Enterprise Drive Suite 202
               Fountain Hills, AZ 85268

Common Stock   John T. LiVecchi                     23,320,934(3)          16.4%
               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         97,225,639(4)          68.2%
                  Group (4 People)

----------
(1)  Does not include 64,887,833  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  47.0%  of  the
     Registrant's total outstanding shares. This number does not include 300,000
     shares  owned by a  charitable  foundation  of which Mr.  Smith is the sole
     officer and director.
(2)  Does not include 64,887,833  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  51.1%  of  the
     Registrant's total outstanding shares. This number does not include 300,000
     shares  owned by a  charitable  foundation  of which Mr.  Smith is the sole
     officer and director.
(3)  Does not include 49,387,833  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 25.7% of the
     Registrant's total outstanding shares.
(4)  Does not  include  a total of  179,163,499  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 78.6% of the Registrant's total outstanding shares.

                                       18
<PAGE>
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.

     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. Mr. Smith's loan is outstanding at
March 25, 2003 and is accruing interest at 15% per annum.

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

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

         Exhibits   10.1   2002 Management Stock Option Plan

                    10.2   2002 Employee Stock Option Plan

                    10.3   Form of 2002 Management Stock Option Agreement

                    10.4   Form of 2002 Employee Stock Option Agreement

         Financial Statements -- F-1

ITEM 14. 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.

                                       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 April 7, 2003 by the undersigned, thereunto authorized.

                                        CORONADO INDUSTRIES, INC.


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


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


/s/ G. Richard Smith        Chairman (Chief Executive       Dated: April 7, 2003
-------------------------   Officer), Secretary and
    G. Richard Smith        Director



/s/ Gary R. Smith           President, Treasurer            Dated: April 7, 2003
-------------------------   (Chief Accounting Officer),
    Gary R. Smith           Director



/s/ Mark A. Smith           Director                        Dated: April 7, 2003
-------------------------
    Mark A. Smith



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

                                       20
<PAGE>
                 Certificate of the Principal Executive Officer
                     Pursuant to 15 U.S.C. 78m(a) or 78o(d)
                 (Section 302 of the Sarbanes-Oxley Act of 2002)

I, G.  Richard  Smith,  Chairman of the Board of Directors  and Chief  Executive
Officer of Coronado Industries, Inc. (the "Company"), hereby certify that:

     (1)  I have reviewed this annual report on Form 10-KSB of the Company;

     (2)  Based on my knowledge,  this annual report does not contain any untrue
          statement  of a  material  fact  or  omit to  state  a  material  fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this annual report;

     (3)  Based on my knowledge,  the financial statements,  and other financial
          information  included in this  annual  report,  fairly  present in all
          material respects the financial  condition,  results of operations and
          cash flows of the  Company as of, and for,  the periods  presented  in
          this annual report;

     (4)  The Company's  other  certifying  officers and I are  responsible  for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange  Act Rules  13a-14 and 15d-14) for the Company and
          we have:

          (a)  designed such  disclosure  controls and procedures to ensure that
               material  information  relating  to the  Company,  including  its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               annual report is being prepared;

          (b)  evaluated the effectiveness of the Company's  disclosure controls
               and  procedures  as of a date  within 90 days prior to the filing
               date of this annual report (the "Evaluation Date"); and

          (c)  presented  in  this  annual  report  our  conclusions  about  the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

     (5)  The Company's other certifying officers and I have disclosed, based on
          our most recent  evaluation,  to the Company's  auditors and the audit
          committee of Company's  board of directors (or persons  performing the
          equivalent function):

          (a)  all  significant  deficiencies  in the  design  or  operation  of
               internal  controls  which could  adversely  affect the  Company's
               ability to record,  process,  summarize and report financial data
               and have  identified  for the  Company's  auditors  any  material
               weaknesses in internal controls; and

          (b)  any fraud,  whether or not material,  that involves management or
               other  employees  who have a  significant  role in the  Company's
               internal controls; and

     (6)  The Company's other  certifying  officers and I have indicated in this
          annual  report  whether  or not there were  significant  changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.

IN WITNESS  WHEREOF,  the undersigned  have executed this certificate on the 7th
day of April, 2003.


/s/ G. Richard Smith
-------------------------------------
G. Richard Smith
Chairman and Chief Executive Officer

                                       21
<PAGE>
                 Certificate of the Principal Financial Officer
                     Pursuant to 15 U.S.C. 78m(a) or 78o(d)
                 (Section 302 of the Sarbanes-Oxley Act of 2002)

I,  G.  Richard  Smith,  Treasurer  and  Chief  Financial  Officer  of  Coronado
Industries, Inc. (the "Company"), hereby certify that:

     (1)  I have reviewed this annual report on Form 10-KSB of the Company;

     (2)  Based on my  knowledge,  this  annual  report  does not contain any
          untrue  statement of a material  fact or omit to state a material fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this annual report;

     (3)  Based on my knowledge,  the financial statements,  and other financial
          information  included in this annual report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the  Company as of, and for,  the periods  presented  in
          this annual report;

     (4)  The Company's  other  certifying  officers and I are  responsible  for
          establishing  and maintaining  disclosure  controls and procedures (as
          defined in Exchange  Act Rules  13a-14 and 15d-14) for the Company and
          we have:

          (a)  designed such  disclosure  controls and procedures to ensure that
               material  information  relating  to the  Company,  including  its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               annual report is being prepared;

          (b)  evaluated the effectiveness of the Company's  disclosure controls
               and  procedures  as of a date  within 90 days prior to the filing
               date of this annual report (the "Evaluation Date"); and

          (c)  presented  in this  annual  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

     (5)  The Company's other certifying officers and I have disclosed, based on
          our most recent  evaluation,  to the Company's  auditors and the audit
          committee of Company's  board of directors (or persons  performing the
          equivalent function):

          (a)  all  significant  deficiencies  in the  design  or  operation  of
               internal  controls  which could  adversely  affect the  Company's
               ability to record,  process,  summarize and report financial data
               and have  identified  for the  Company's  auditors  any  material
               weaknesses in internal controls; and

          (b)  any fraud,  whether or not material,  that involves management or
               other  employees  who have a  significant  role in the  Company's
               internal controls; and

     (6)  The Company's other  certifying  officers and I have indicated in this
          annual  report  whether  or not there were  significant  changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation,   including   any   corrective   actions  with  regard  to
          significant deficiencies and material weaknesses.

IN WITNESS  WHEREOF,  the undersigned  have executed this certificate on the 7th
day of April, 2003


/s/ Gary R. Smith
-------------------------------------
Gary R. Smith
Treasurer and Chief Financial Officer

                                       22
<PAGE>
                     CERTIFICATE OF CHIEF EXECUTIVE OFFICER
   PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. 1350)

I, G. Richard Smith, Chairman of the Board of Directors and Chief Executive
Officer of Coronado Industries, Inc. (the "Company"), have executed this
certification in connection with the filing with the Securities and Exchange
Commission of the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2002 (the "Report"). The undersigned hereby certifies that:

     1.   The Report fully complies with the requirements of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     2.   The information contained in the Report fairly presents, in all
          material respects, the financial condition and results of operations
          of the Company.

IN WITNESS  WHEREOF,  the undersigned  have executed this  certificate as of the
7th day of April, 2003.


/s/ G. Richard Smith
-------------------------------------
G. Richard Smith
Chairman of the Board of Directors
and Chief Executive Officer

                                       23
<PAGE>
                     CERTIFICATE OF CHIEF FINANCIAL OFFICER
   PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. 1350)

I, Gary R. Smith, Treasurer and Chief Financial Officer of Coronado Industries,
Inc. (the "Company"), have executed this certification in connection with the
filing with the Securities and Exchange Commission of the Company's Annual
Report on Form 10-KSB for the year ended December 31, 2002 (the "Report"). The
undersigned hereby certifies that:

     1.   The Report fully complies with the requirements of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     2.   The information contained in the Report fairly presents, in all
          material respects, the financial condition and results of operations
          of the Company.

IN WITNESS  WHEREOF,  the undersigned  have executed this  certificate as of the
7th day of April, 2003.


/s/ Gary R. Smith
-------------------------------------
Gary R. Smith
Treasurer and Chief Financial Officer

                                       24
<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,  2002.  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.

                                       25
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

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

We have  audited  the  accompanying  consolidated  balance  sheets  of  Coronado
Industries,  Inc.  and  Subsidiary  as of December  31,  2002 and 2001,  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  Subsidiary  as of December  31, 2002 and 2001,  and the results of its
operations, changes in stockholders' equity (deficit), and it 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 10 to
the  consolidated  financial  statements,  the Company's  significant  operating
losses raise substantial doubt about its ability to continue as a going concern.
The consolidated  financial statements do not include any adjustments that might
result from the outcome of this uncertainty.


Certified Public Accountants

Phoenix, Arizona
March 25, 2003

                                       F-1
<PAGE>
                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2002 AND 2001

                                     ASSETS

                                                             December 31,
                                                       ------------------------
                                                         2002          2001
                                                       ----------    ----------
Current Assets:
  Cash (Note 1)                                        $    2,239    $   21,588
                                                       ----------    ----------
      Total Current Assets                                  2,239        21,588
                                                       ----------    ----------

Property and equipment, net (Notes 1, 2 and 9)             14,231        24,209

Other Assets:
  Inventory (Notes 1 and 9)                                23,985        23,985
  Intangible assets, net (Notes 1 and 3)                       --        21,607
  Deferred loan expense                                        --         3,333
                                                       ----------    ----------
      Total Assets                                     $   40,455    $   94,722
                                                       ==========    ==========

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

                                       F-2
<PAGE>
                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2002 AND 2001

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                                                            December 31,
                                                                     ----------------------------
                                                                         2002            2001
                                                                     ------------    ------------
<S>                                                                  <C>             <C>
Current Liabilities:
  Notes payable to related parties - current portion (Note 4)        $    480,900    $         --
  Accounts payable                                                        155,609          38,403
  Accrued salaries                                                        125,000              --
  Accrued interest                                                         24,003           4,050
  Accrued taxes                                                            47,883              --
                                                                     ------------    ------------
      Total Current Liabilities                                           833,395          42,453

Long-Term Liabilities
  Note payable (Note 9)                                                        --         230,000
                                                                     ------------    ------------
      Total Liabilities                                                   833,395         272,453
                                                                     ------------    ------------
Commitments: (Note 7)                                                          --              --
Stockholders' Equity (Deficit): (Note 5)
  Preferred Stock - $.0001 par value; 3,000,000 shares
      authorized, none issued or outstanding                                   --              --
  Common Stock - $.001 par value; 100,000,000 shares authorized,
      81,236,063 and 67,836,909 shares outstanding at December 31,
      2002 and 2001, respectively                                          81,236          67,837
  Additional paid-in capital                                            9,656,112       8,803,599
  Accumulated deficit                                                 (10,530,288)     (9,049,167)
                                                                     ------------    ------------
      Total Stockholder's Equity (Deficit)                               (792,940)       (177,731)
                                                                     ------------    ------------
      Total Liabilities and Stockholder's Equity (Deficit)           $     40,455    $     94,722
                                                                     ============    ============
</TABLE>

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

                                       F-3
<PAGE>
                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

                                                 For the Year Ended December 31,
                                                 -------------------------------
                                                      2002             2001
                                                  ------------     ------------
Product Revenues                                  $         --     $         --

Cost of Product Revenues                                    --               --
                                                  ------------     ------------
Gross Profit                                                --               --
                                                  ------------     ------------

General and Administrative Expenses
  Salaries and wages                                   751,868          885,074
  Public relations                                      33,700          200,815
  Legal and professional fees                          252,732          108,928
  FDA expense                                          180,104          282,394
  Rent expense                                          28,132           27,000
  Miscellaneous expense                                188,935          121,236
                                                  ------------     ------------
      Total general and administrative expenses      1,435,471        1,625,447
                                                  ------------     ------------
Loss from Operations                                (1,435,471)      (1,625,447)
                                                  ------------     ------------
Other Income/(Expense):
  Interest income                                        4,840               --
  Interest expense                                     (43,157)        (106,393)
  Loss on sale of assets                                    --          (38,747)
  Deferred loan expense                                 (7,333)         (10,000)
  Other income                                              --              800
                                                  ------------     ------------
      Total Other Income (Expense)                     (45,650)        (154,340)
                                                  ------------     ------------
Net Loss                                          $ (1,481,121)    $ (1,779,787)
                                                  ============     ============
Basic Loss per Share (Note 1)                     $      (0.02)    $      (0.04)
                                                  ============     ============
Weighted Average Shares Outstanding                 71,730,602       46,173,592
                                                  ============     ============

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

                                       F-4
<PAGE>
                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
       CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

<TABLE>
<CAPTION>
                                                 Common Stock              Additional      Retained      Stockholders'
                                          ----------------------------      Paid-in        Earnings         Equity
                                             Shares        Par Value        Capital        (Deficit)       (Deficit)
                                          ------------    ------------    ------------    ------------    ------------
<S>                                       <C>             <C>             <C>             <C>             <C>
Balance at December 31, 2000                38,115,096    $     38,115    $  6,133,665    $ (7,269,380)   $ (1,097,600)

Stock issued for services                    3,014,667           3,015         635,814              --         638,829
Stock issued for salaries                   18,250,183          18,250       1,309,137              --       1,327,387
Stock issued for related party debt          7,003,583           7,004         462,237              --         469,241
Stock issued for related party interest      1,353,380           1,353          89,323              --          90,676
Stock options issued for salaries                   --              --         160,000              --         160,000
Stock options exercised                        100,000             100          13,423              --          13,523
Net loss                                            --              --              --      (1,779,787)     (1,779,787)
                                          ------------    ------------    ------------    ------------    ------------
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)
                                          ============    ============    ============    ============    ============
</TABLE>

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

                                       F-5
<PAGE>
                   CORONADO INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

<TABLE>
<CAPTION>
                                                     For the Year Ended December 31,
                                                     -------------------------------
                                                          2002             2001
                                                      ------------     ------------
<S>                                                   <C>              <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS:
  CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Loss                                            $ (1,481,121)    $ (1,779,787)
  Adjustments to reconcile net income to net
    cash provided (used) by operating activities:
      Depreciation                                           9,978           11,641
      Amortization                                          21,607            3,471
      Stock issued for services                            304,231          638,829
      Stock issued for salaries                            561,681        1,327,387
      Stock issued for related party interest                   --           90,676
      Stock options issued for salaries                         --          160,000
      Loss on sale of fixed assets                              --           38,747

  Changes in Assets and Liabilities:
      Deferred loan expense                                  3,333           10,000
      Accounts payable                                     117,206           10,640
      Accrued salaries                                     125,000         (616,250)
      Accrued interest                                      19,953               --
      Accrued  taxes and other                              47,883         (146,993)
                                                      ------------     ------------
      NET CASH USED IN OPERATING ACTIVITIES               (270,249)        (251,639)
                                                      ------------     ------------
  CASH FLOWS FROM INVESTING ACTIVITIES:
      Acquisition of property and equipment                     --             (532)
      Sale of property and equipment                            --           22,000
                                                      ------------     ------------
      NET CASH PROVIDED BY INVESTING ACTIVITIES                 --           21,468
                                                      ------------     ------------
  CASH FLOWS FROM FINANCING ACTIVITIES:
      Proceeds from borrowings                                  --          237,041
      Proceeds from borrowings - related party             250,900               --
      Cash received from exercise of options                    --           13,523
                                                      ------------     ------------
      NET CASH PROVIDED BY FINANCING ACTIVITIES            250,900          250,564
                                                      ------------     ------------

Net change in cash and cash equivalents                    (19,349)          20,393

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD            21,588            1,195
                                                      ------------     ------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD            $      2,239     $     21,588
                                                      ============     ============

Supplemental disclosure of cash flow information:
  Cash paid during the year for:
    Interest                                          $         --     $     48,600
                                                      ============     ============
    Taxes                                             $         --     $         --
                                                      ============     ============
</TABLE>

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

                                       F-6
<PAGE>
                            CORONADO INDUSTRIES, INC.
                   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

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

The Company was in the  development  stage from its  acquisition  of  Ophthalmic
International, L.L.C. and American Glaucoma in November, 1996 through September,
1997. In September,  1997, American Glaucoma opened 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 intercompany accounts and transactions have been eliminated. All
of the above  subsidiaries  were inactive for the years ended  December 31, 2002
and 2001.

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.

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.

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

--------------------------------------------------------------------------------
                                     NOTE 1
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NATURE OF OPERATIONS
                        AND USE OF ESTIMATES (CONTINUED)
--------------------------------------------------------------------------------

PROPERTY AND EQUIPMENT

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

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

DEFERRED INCOME TAXES

Deferred  income taxes are provided on an asset and  liability  method,  whereby
deferred tax assets are  recognized  for deductible  temporary  differences  and
operating loss and tax credit  carryforwards  and deferred tax  liabilities  are
recognized for taxable  temporary  differences.  Temporary  differences  are the
differences between the reported amounts of assets and liabilities and their tax
basis.  Deferred  tax assets are  reduced by a valuation  allowance  when in the
opinion of  management,  it is more likely than not that some  portion or all of
the  deferred  tax  assets  will  not  be  realized.  Deferred  tax  assets  and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment.

LOSS PER SHARE

Basic loss per share  includes no dilution  and is computed by dividing  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, 2002 and 2001 of 148,163,499 and 16,263,499,  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, 2002 and 2001 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.

ADVERTISING

Advertising costs are charged to operations when incurred. Advertising costs for
the years ended December 31, 2002 and 2001 were $0 and $495 respectively.

REVENUE RECOGNITION

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

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

--------------------------------------------------------------------------------
                                     NOTE 1
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NATURE OF OPERATIONS
                        AND USE OF ESTIMATES (CONTINUED)
--------------------------------------------------------------------------------

STOCK BASED COMPENSATION

The Company has elected to follow  Accounting  Principles  Board Opinion No. 25,
Accounting  for  Stock  Issued  to  Employees  (APB  No.  25)  and  the  related
interpretations in accounting for its employee stock options.  Under APB Opinion
No. 25, if the exercise  price of employee  stock options  equals or exceeds the
market  price of the  underlying  stock on the date of  grant,  no  compensation
expense is recorded.  The Company has adopted the disclosure-only  provisions of
Statements of Financial  Accounting  Standards Nos. 123 and 148,  Accounting for
Stock-based  Compensation  when the exercise  price equals or exceeds the market
price on the date of grant.

<TABLE>
<CAPTION>
                                                                       2002            2001
                                                                   ------------    ------------
<S>                                                                <C>             <C>
Net loss:
  As reported                                                      $ (1,481,121)   $ (1,779,787)
    Add: Stock-based employee compensation expense included
        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                                   (3,810,000)       (203,625)
                                                                   ------------    ------------

  Pro forma net loss                                               $ (5,291,121)   $ (1,983,412)
                                                                   ============    ============
Loss per share:
  As reported                                                      $      (0.02)   $      (0.04)
  Pro forma                                                        $      (0.07)   $      (0.04)
</TABLE>

--------------------------------------------------------------------------------
                                     NOTE 2
                             PROPERTY AND EQUIPMENT
--------------------------------------------------------------------------------

At December 31, 2002 and 2001, property and equipment consists of the following:

                                                          2002          2001
                                                       ----------    ----------
Office furniture and equipment                         $   58,433    $   58,433
Machinery and equipment                                    10,563        10,563
Leasehold improvements                                         --            --
                                                       ----------    ----------
                                                           68,996        68,996
Less: accumulated depreciation                            (54,765)      (44,787)
                                                       ----------    ----------

Net property and equipment                             $   14,231    $   24,209
                                                       ==========    ==========

Depreciation  expense was $9,978 and $11,641,  for the years ended  December 31,
2002 and 2001, respectively.

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

--------------------------------------------------------------------------------
                                     NOTE 3
                                INTANGIBLE ASSETS
--------------------------------------------------------------------------------

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

At December 31, 2002 and 2001, intangible assets consists of the following:

                                                          2002          2001
                                                       ----------    ----------
Intangibles subject to amortization:
  Patents                                              $   30,684    $   30,684
  Less: accumulated amortization                          (30,684)       (9,077)
                                                       ----------    ----------

  Net Intangible assets                                $       --    $   21,607
                                                       ==========    ==========

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

Amortization expense charged to operations for the years ended December 31, 2002
and 2001 was $21,607 and $3,471, respectively.

--------------------------------------------------------------------------------
                                     NOTE 4
                           RELATED PARTY TRANSACTIONS
--------------------------------------------------------------------------------

As of December 31, 2002 and 2001,  notes payable to related  parties  consist of
the following:

                                                           2002         2001
                                                         ---------    ---------
15% per annum notes payable to stockholders, principal
  and interest payable on demand, through March, 2003    $ 480,900    $      --

Less: current portion                                     (480,900)          --
                                                         ---------    ---------

                                                         $      --    $      --
                                                         =========    =========

--------------------------------------------------------------------------------
                                     NOTE 5
                         STOCKHOLDERS' EQUITY (DEFICIT)
--------------------------------------------------------------------------------

EMPLOYEE STOCK OPTIONS AND STOCK PLANS:

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.

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

--------------------------------------------------------------------------------
                                     NOTE 5
                         STOCKHOLDERS' EQUITY (DEFICIT)
--------------------------------------------------------------------------------

Employee Stock Options and Stock Plans (Continued):

A summary of the activity of the Plan follows:

                                                       Number        Average
                                                     of Options   Exercise Price
                                                     ----------   --------------
Outstanding at December 31, 2001                             --     $       --

Granted                                              90,000,000           0.01
                                                     ----------     ----------

Outstanding at December 31, 2002                     90,000,000     $     0.01
                                                     ==========     ==========

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2002:

<TABLE>
<CAPTION>
          Options Outstanding                             Options Exercisable
----------------------------------------   ------------------------------------------------
                        Weighted Average
                            Remaining      Weighted Average                Weighted Average
Exercise   Number of       Contractual         Exercise         No. of         Exercise
 Price       Shares      Life (In Years)        Price           Shares           Price
 -----       ------      ---------------        -----           ------           -----
<S>        <C>                <C>               <C>           <C>                <C>
 $0.01     90,000,000         9.43              $0.01         90,000,000         $0.01
</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 the Plan 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
                                                     ==========     ==========

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

--------------------------------------------------------------------------------
                                     NOTE 5
                   STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
--------------------------------------------------------------------------------

Employee Stock Options and Stock Plans (Continued):

Additional information about outstanding options to purchase the Company's
common stock as of December 31, 2002:

<TABLE>
<CAPTION>
          Options Outstanding                             Options Exercisable
----------------------------------------   ------------------------------------------------
                        Weighted Average
                            Remaining      Weighted Average                Weighted Average
Exercise   Number of       Contractual         Exercise         No. of         Exercise
 Price       Shares      Life (In Years)        Price           Shares           Price
 -----       ------      ---------------        -----           ------           -----
<S>        <C>                <C>               <C>           <C>                <C>
 $0.01     42,000,000         10.00             $0.01         42,000,000         $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 the Plan follows:

                                                       Number        Average
                                                     of Options   Exercise Price
                                                     ----------   --------------
Outstanding at December 31, 2000                             --     $       --

Granted                                               2,963,500           0.16
                                                     ----------     ----------

Outstanding at December 31, 2001                      2,963,500           0.16

Exercised                                                    --             --
                                                     ----------     ----------

Outstanding at December 31, 2002                      2,963,500     $     0.16
                                                     ==========     ==========

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2002:

<TABLE>
<CAPTION>
          Options Outstanding                             Options Exercisable
----------------------------------------   ------------------------------------------------
                        Weighted Average
                            Remaining      Weighted Average                Weighted Average
Exercise   Number of       Contractual         Exercise         No. of         Exercise
 Price       Shares      Life (In Years)        Price           Shares           Price
 -----       ------      ---------------        -----           ------           -----
<S>        <C>                <C>               <C>           <C>                <C>
 $0.16     2,963,500          7.47              $0.16         62,963,500         $0.16
</TABLE>

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.

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

--------------------------------------------------------------------------------
                                     NOTE 5
                   STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
--------------------------------------------------------------------------------

Employee Stock Options and Stock Plans (Continued):

A summary of the activity of the Plan follows:

                                                                    Weighted
                                                       Number        Average
                                                     of Options   Exercise Price
                                                     ----------   --------------
Outstanding at December 31, 2000                             --     $       --

Granted                                                 750,000           0.20
                                                     ----------     ----------

Outstanding at December 31, 2001                        750,000           0.20

Exercised                                                    --             --
                                                     ----------     ----------

Outstanding at December 31, 2002                        750,000     $     0.20
                                                     ==========     ==========

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2002:

<TABLE>
<CAPTION>
          Options Outstanding                             Options Exercisable
----------------------------------------   ------------------------------------------------
                        Weighted Average
                            Remaining      Weighted Average                Weighted Average
Exercise   Number of       Contractual         Exercise         No. of         Exercise
 Price       Shares      Life (In Years)        Price           Shares           Price
 -----       ------      ---------------        -----           ------           -----
<S>        <C>                <C>               <C>           <C>                <C>
 $0.20      750,000           9.00              $0.20           750,000          $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 the Plan follows:

                                                                    Weighted
                                                      Number         Average
                                                    of Options    Exercise Price
                                                    ----------    --------------
Outstanding at December 31, 2000                     6,000,000      $    0.135

Exercised                                                   --              --
                                                    ----------      ----------

Outstanding at December 31, 2001                     6,000,000           0.135

Exercised                                                   --              --
                                                    ----------      ----------

Outstanding at December 31, 2002                     6,000,000      $    0.135
                                                    ==========      ==========

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

--------------------------------------------------------------------------------
                                     NOTE 5
                   STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
--------------------------------------------------------------------------------

Employee Stock Options and Stock Plans (Continued):

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2002:

<TABLE>
<CAPTION>
          Options Outstanding                             Options Exercisable
----------------------------------------   ------------------------------------------------
                        Weighted Average
                            Remaining      Weighted Average                Weighted Average
Exercise   Number of       Contractual         Exercise         No. of         Exercise
 Price       Shares      Life (In Years)        Price           Shares           Price
 -----       ------      ---------------        -----           ------           -----
<S>        <C>                <C>               <C>           <C>                <C>
 $0.135    6,000,000          8.00              $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 the Plan follows:

                                                                    Weighted
                                                      Number         Average
                                                    of Options    Exercise Price
                                                    ----------    --------------
Outstanding at December 31, 2000                     2,599,999      $    0.211

Exercised                                                   --              --
                                                    ----------      ----------

Outstanding at December 31, 2001                     2,599,999           0.211

Exercised                                                   --              --
                                                    ----------      ----------

Outstanding at December 31, 2002                     2,599,999      $    0.211
                                                    ==========      ==========

<TABLE>
<CAPTION>
          Options Outstanding                             Options Exercisable
----------------------------------------   ------------------------------------------------
                        Weighted Average
                            Remaining      Weighted Average                Weighted Average
Exercise   Number of       Contractual         Exercise         No. of         Exercise
 Price       Shares      Life (In Years)        Price           Shares           Price
 -----       ------      ---------------        -----           ------           -----
<S>        <C>                <C>               <C>           <C>                <C>
 $0.211    2,599,999          6.21              $0.211         2,599,999         $0.211
</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.

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

--------------------------------------------------------------------------------
                                     NOTE 5
                   STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
--------------------------------------------------------------------------------

Employee Stock Options and Stock Plans (Continued):

A summary of the activity of the Plan follows:

                                                       Number        Average
                                                     of Options   Exercise Price
                                                     ----------   --------------
Outstanding at December 31, 2000                        625,000     $    0.135

Exercised                                               100,000          0.135
                                                     ----------     ----------

Outstanding at December 31, 2001                        525,000          0.135

Exercised                                                    --             --
                                                     ----------     ----------

Outstanding at December 31, 2002                        525,000     $    0.135
                                                     ==========     ==========

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2002:

<TABLE>
<CAPTION>
          Options Outstanding                             Options Exercisable
----------------------------------------   ------------------------------------------------
                        Weighted Average
                            Remaining      Weighted Average                Weighted Average
Exercise   Number of       Contractual         Exercise         No. of         Exercise
 Price       Shares      Life (In Years)        Price           Shares           Price
 -----       ------      ---------------        -----           ------           -----
<S>        <C>                <C>               <C>           <C>                <C>
 $0.135     525,000           8.00              $0.135         525,000           $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 and consultants  for the Company.  Under
the above Plan, 575,000 shares of common stock were reserved for issuance.

A summary of the activity of the Plan follows:

                                                                     Weighted
                                                       Number         Average
                                                     of Options   Exercise Price
                                                     ----------   --------------
Outstanding at December 31, 2000                        575,000     $     0.20

Exercised                                                    --             --
                                                     ----------     ----------

Outstanding at December 31, 2001                        575,000           0.20

Exercised                                                    --             --
                                                     ----------     ----------

Outstanding at December 31, 2002                        575,000     $     0.20
                                                     ==========     ==========

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

--------------------------------------------------------------------------------
                                     NOTE 5
                   STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
--------------------------------------------------------------------------------

Employee Stock Options and Stock Plans (Continued):

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2002:

<TABLE>
<CAPTION>
          Options Outstanding                             Options Exercisable
----------------------------------------   ------------------------------------------------
                        Weighted Average
                            Remaining      Weighted Average                Weighted Average
Exercise   Number of       Contractual         Exercise         No. of         Exercise
 Price       Shares      Life (In Years)        Price           Shares           Price
 -----       ------      ---------------        -----           ------           -----
<S>        <C>                <C>               <C>           <C>                <C>
 $0.20       575,000          6.84              $0.20           575,000          $0.20
</TABLE>

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

A summary of the activity of the Plan follows:

                                                                    Weighted
                                                       Number        Average
                                                     of Options   Exercise Price
                                                     ----------   --------------
Outstanding at December 31, 2000                      1,400,000     $     0.20

Exercised                                                    --             --
                                                     ----------     ----------

Outstanding at December 31, 2001                      1,400,000           0.20

Exercised                                                    --             --
                                                     ----------     ----------

Outstanding at December 31, 2002                      1,400,000     $     0.20
                                                     ==========     ==========

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2002:

<TABLE>
<CAPTION>
          Options Outstanding                             Options Exercisable
----------------------------------------   ------------------------------------------------
                        Weighted Average
                            Remaining      Weighted Average                Weighted Average
Exercise   Number of       Contractual         Exercise         No. of         Exercise
 Price       Shares      Life (In Years)        Price           Shares           Price
 -----       ------      ---------------        -----           ------           -----
<S>        <C>                <C>               <C>           <C>                <C>
 $0.20     1,400,000          3.24              $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.

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

--------------------------------------------------------------------------------
                                     NOTE 5
                   STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
--------------------------------------------------------------------------------

Employee Stock Options and Stock Plans (Continued):

A summary of the activity of the Plan follows:

                                                                    Weighted
                                                       Number        Average
                                                     of Options   Exercise Price
                                                     ----------   --------------
Outstanding at December 31, 2000                      1,350,000     $    0.075

Exercised                                                    --             --
                                                     ----------     ----------

Outstanding at December 31, 2001                      1,350,000          0.075

Exercised                                                    --             --
                                                     ----------     ----------

Outstanding at December 31, 2002                      1,350,000     $    0.075
                                                     ==========     ==========

Additional  information  about  outstanding  options to purchase  the  Company's
common stock as of December 31, 2002:

<TABLE>
<CAPTION>
                        Weighted Average
                            Remaining      Weighted Average                Weighted Average
Exercise   Number of       Contractual         Exercise         No. of         Exercise
 Price       Shares      Life (In Years)        Price           Shares           Price
 -----       ------      ---------------        -----           ------           -----
<S>        <C>                <C>               <C>           <C>                <C>
 $0.075    1,350,000          5.84              $0.075         1,350,000         $0.075
</TABLE>

Consistent with accounting for options utilizing the intrinsic value method, any
options  granted during 2002 and 2001, in which the exercise price was less than
the fair market value of the Company's  common stock on the date of grant,  have
been reflected in compensation expense for the respective year of grant. Some of
the stock options  issued to employees  have an exercise price not less than the
fair  market  value of the  Company's  common  stock on the  date of  grant.  In
accordance  with  accounting  for such options  utilizing  the  intrinsic  value
method,  there is no related  compensation  expense  recorded  in the  Company's
financial  statements  for the years  ended  December  31,  2002 and  2001.  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 123,
the Company's net loss for the years ended December 31, 2002 and 2001 would have
been increased to the pro forma amounts presented below:

<TABLE>
<CAPTION>
                                                                     2002            2001
                                                                 ------------    ------------
<S>                                                              <C>             <C>
Net loss:
  As reported                                                    $ (1,481,121)   $ (1,779,787)
    Add: Stock-based employee compensation expense included
      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                                   (3,810,000)       (203,625)
                                                                 ------------    ------------

  Pro forma net loss                                             $ (5,291,121)   $ (1,983,412)
                                                                 ============    ============
Loss per share:
  As reported                                                    $      (0.02)   $      (0.04)
  Pro forma                                                      $      (0.07)   $      (0.04)
</TABLE>

                                      F-17
<PAGE>
                            CORONADO INDUSTRIES, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

--------------------------------------------------------------------------------
                                     NOTE 5
                   STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
--------------------------------------------------------------------------------

Employee Stock Options and Stock Plans (Continued):

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, 2002 and 2001 approximated $.03 and
$.14, respectively.

Common Stock and Common Stock Warrants:

100,000 common stock warrants valued at $2,830 were issued for financing fees in
1999, with an exercise price of $2.00 per share, exercisable through May 4,
2002. All 100,000 common stock warrants expired as of December 31, 2002.

--------------------------------------------------------------------------------
                                     NOTE 6
                                  INCOME TAXES
--------------------------------------------------------------------------------

As of December 31, 2002, the components of deferred income taxes are as follows:

     Long-term Deferred Tax Assets (Liabilities)
          Net operating loss carryforwards                    $  4,400,000
          Depreciation and amortization                             (4,000)
                                                              ------------
                                                                 4,396,000
     Less:  valuation allowance                                 (4,396,000)
                                                              ------------

     Net Long-term Deferred Tax Asset                         $         --
                                                              ============

The Company has provided a full valuation allowance on its deferred tax asset as
of December 31, 2002. The valuation allowance increased by approximately
$866,000 during the year ended December 31, 2002, due primarily to the increase
in the operating loss.

As of December 31, 2002, the Company has net operating loss carryforwards
available to offset future federal and state taxable income in the amounts of
approximately $10,935,000 and $10,833,000 respectively, and expiring as follows:

                   Net Loss Carryforward                  Year of
                      Amount Available                   Expiration
                ---------------------------      ---------------------------
     Year         Federal         State            Federal         State
     ----       ------------   ------------      ------------   ------------
     1993       $     37,000   $         --          2008            --
     1994             65,000             --          2009            --
     1995             97,000         97,000          2010            --
     1996             31,000         31,000          2011            --
     1997            674,000        674,000          2012            --
     1998          1,449,000      1,449,000          2018           2003
     1999          1,201,000      1,201,000          2019           2004
     2000          3,581,000      3,581,000          2020           2005
     2001          2,400,000      2,400,000          2021           2006
     2002          1,400,000      1,400,000          2022           2007
                ============   ============

                $ 10,935,000   $ 10,833,000
                ============   ============

                                      F-18
<PAGE>
                            CORONADO INDUSTRIES, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

--------------------------------------------------------------------------------
                                     NOTE 7
                                   COMMITMENTS
--------------------------------------------------------------------------------

The  Company  leased  office  space  in  Fountain   Hills,   Arizona,   under  a
non-cancellable   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  $2,500 per month.  For the years
ended  December 31, 2002 and 2001,  rent expense under the lease  agreements was
$28,000 and $27,000, respectively.

--------------------------------------------------------------------------------
                                     NOTE 8
                   NON-CASH INVESTING AND FINANCING ACTIVITIES
--------------------------------------------------------------------------------

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

For the year ended December 31, 2002, these non-cash activities are as follows:

     13,399,154  shares of common stock were issued for  services and  salaries,
     which were valued at $865,912.

     Refinancing of debt in the amount of $230,000.

For the year ended December 31, 2001, these non-cash activities are as follows:

     21,264,850  shares of common stock were issued for  services and  salaries,
     which were valued at $1,966,216.

     7,003,583  shares of common stock were issued for related party debt, which
     was valued at $469,241.

     1,353,380  shares of common stock were issued for related  party  interest,
     which was valued at $90,676.

     1,600,000  stock options were issued to employees for services,  which were
     valued at $160,000.

--------------------------------------------------------------------------------
                                     NOTE 9
                                  NOTE PAYABLE
--------------------------------------------------------------------------------

At December 31, 2002 and 2001, note payable consists of the following:

                                                            2002         2001
                                                         ----------   ----------
Note payable to TLD Funding Group, with monthly
  interest payments of $4,050, with principal
  due on May 4, 2002, interest imputed at 18%
  per annum; secured by equipment and inventory          $       --   $  230,000

Less current portion                                             --           --
                                                         ----------   ----------

                                                         $       --   $  230,000
                                                         ==========   ==========

--------------------------------------------------------------------------------
                                     NOTE 10
                                  GOING CONCERN
--------------------------------------------------------------------------------

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

                                      F-19
<PAGE>
                            CORONADO INDUSTRIES, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

--------------------------------------------------------------------------------
                                     NOTE 10
                            GOING CONCERN (CONTINUED)
--------------------------------------------------------------------------------

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.

In addition, the Company has incurred net losses of $1,481,121 and $1,779,787 in
2002 and 2001,  respectively.  Unaudited information  subsequent to December 31,
2002, indicates that the losses are continuing.

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

--------------------------------------------------------------------------------
                                     NOTE 11
                      RECENTLY ADOPTED ACCOUNTING STANDARDS
--------------------------------------------------------------------------------

In June 2001, the Financial  Accounting Standards Board ("FASB") issued SFAS No.
141, "Business Combinations" (hereinafter "SFAS No. 141"). SFAS No. 141 mandates
the purchase method of accounting for all business combinations  initiated after
June 30, 2001. In addition, SFAS No. 141 addresses the accounting for intangible
assets and goodwill acquired in business  combinations  completed after June 30,
2001. The Company  adopted SFAS No. 141 on July 1, 2001 with no material  impact
on its financial statements.

In June 2001,  the FASB  issued  SFAS No. 142,  "Goodwill  and Other  Intangible
Assets" (hereinafter "SFAS No. 142"), which revises the accounting for purchased
goodwill and other  intangible  assets.  Under SFAS No. 142,  goodwill and other
intangible  assets  with  indefinite  lives  will no  longer  be  systematically
amortized into operating results.  Instead, each of these assets will be tested,
in the absence of an indicator of possible  impairment,  at least annually,  and
upon an indicator of possible impairment,  immediately. The Company adopted SFAS
No. 142 on January 1, 2002 with no material impact on its financial statements.

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal of Long-lived  Assets"  (hereinafter  "SFAS No. 144"). SFAS No. 144 was
issued to resolve certain  implementation  issues that had arisen under SFAS No.
121.  Under SFAS No. 144, a single  uniform  accounting  model is required to be
used for long-lived  assets to be disposed of by sale,  whether  previously held
and used or newly acquired, and certain additional disclosures are required. The
Company  adopted SFAS No. 144, as required,  on January 1, 2002 with no material
impact on its financial statements.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements Nos.
4, 44, and 64,  Amendment of FASB  Statement No. 13, and Technical  Corrections"
(hereinafter  "SFAS No. 145").  SFAS No. 145 updates,  clarifies and  simplifies
existing accounting pronouncements, by rescinding SFAS No. 4, which required all
gains and losses from  extinguishment of debt to be aggregated and, if material,
classified as an  extraordinary  item,  net of related  income tax effect.  As a
result,  the criteria in Accounting  Principles Board Opinion No. 30 will now be
used to classify those gains and losses. Additionally,  SFAS No. 145 amends SFAS
No. 13 to require that certain lease  modifications  that have economic  effects
similar to  sale-leaseback  transactions  be accounted for in the same manner as
sale-leaseback  transactions.   Finally,  SFAS  No.  145  also  makes  technical
corrections  to  existing  pronouncements.   While  those  corrections  are  not
substantive in nature, in some instances,  they may change accounting  practice.
The Company  adopted the provisions of SFAS No. 145 that amended SFAS No. 13, as
required,  on May 15, 2002 for  transactions  occurring  after such date with no
material impact on its financial statements.  The Company's management currently
does not expect that the adoption of the  remaining  provisions of SFAS No. 145,
as  required,  on January 1, 2003 will have a material  impact on its  financial
statements.

In  October  2002,  the FASB  issued  SFAS No.  147,  "Acquisitions  of  Certain
Financial Institutions"  (hereinafter "SFAS No.147"). SFAS No. 147 requires that
acquisitions of financial institutions be accounted in accordance with SFAS Nos.
141 and 142, and puts any intangible asset there from under the guidance of SFAS
No. 144. The Company adopted SFAS No. 147 in October 2002, with no impact on its
financial statements.

                                      F-20
<PAGE>
                            CORONADO INDUSTRIES, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

--------------------------------------------------------------------------------
                                     NOTE 11
                RECENTLY ADOPTED ACCOUNTING STANDARDS (CONTINUED)
--------------------------------------------------------------------------------

In December  2002,  the FASB issued  SFAS No. 148,  "Accounting  for Stock Based
Compensation-Transition  and Disclosure"  (hereinafter "SFAS No. 148"). SFAS No.
148 amends SFAS No. 123,  Accounting  for Stock Based  Compensation,  to provide
methods of transition  for a voluntary  change to the fair value based method of
accounting for stock-based employee compensation, as well as requiring prominent
disclosure   about  the  method  and  effect  of  accounting   for   stock-based
compensation.  The Company adopted the provisions of SFAS No. 145 as of December
31, 2002 with no material effect on its financial statements

RECENTLY ISSUED ACCOUNTING STANDARDS NOT YET ADOPTED

In August 2001, the FASB issued SFAS No. 143,  "Accounting for Asset  Retirement
Obligations"  (hereinafter  "SFAS No. 143").  SFAS No. 143 requires  entities to
record the fair value of a liability for an asset  retirement  obligation in the
period in which it is a cost by  increasing  the carrying  amount of the related
long-lived asset. Over time, the liability is accreted to its present value each
period,  and the  capitalized  cost is  depreciated  over the useful life of the
related  obligation  for its  recorded  amount  or  incurs  a gain or loss  upon
settlement. The Company's management currently does not expect that the adoption
of SFAS No. 143, as required,  on January 1, 2003 will have a material impact on
its financial statements.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal Activities" (hereinafter "SFAS No. 146"). SFAS No. 146 was
issued to address the financial  accounting  and reporting for costs  associated
with exit or disposal  activities,  unless specifically  excluded.  SFAS No. 146
requires that a liability for a cost  associated with a covered exit or disposal
activity be recognized and measured initially at its fair value in the period in
which the liability is incurred, except for a liability for one-time termination
benefits  that is incurred  over time.  If employees  are not required to render
service until they are  terminated in order to receive the one-time  termination
benefits  or if  employees  will not be retained  to render  service  beyond the
minimum  retention period (as dictated by existing law, statute or contract,  or
in the absence thereof, 60 days), a liability for the termination benefits shall
be  recognized  and  measured at its fair value at the  communication  date.  If
employees are required to render  service until they are  terminated in order to
receive the one-time termination benefits and will be retained to render service
beyond the minimum  retention  period, a liability for the termination  benefits
shall be measured initially at the communication date based on the fair value of
the liability as of the  termination  date.  The  liability  shall be recognized
ratably  over the  future  service  period.  SFAS No. 146 also  dictates  that a
liability for costs to terminate an operating lease or other contract before the
end of its term  shall be  recognized  and  measured  at its fair value when the
entity  terminates  the  contract  in  accordance  with the  contract  terms.  A
liability for costs that will  continue to be incurred  under a contract for its
remaining  term without  economic  benefit to the entity is to be recognized and
measured at its fair value when the entity  ceases  using the right  conveyed by
the contract.  SFAS No. 146 further  dictates that a liability for other covered
costs associated with an exit or disposal activity be recognized and measured at
its fair value in the period in which the  liability is incurred.  The Company's
management  currently  does not expect  that the  adoption  of SFAS No.  146, as
required,  on  January  1,  2003 will have a  material  impact on its  financial
statements.

--------------------------------------------------------------------------------
                                     NOTE 12
                                SUBSEQUENT EVENTS
--------------------------------------------------------------------------------

Subsequent to the balance sheet date, the  stockholders of the Company  approved
an amendment to the Articles of Incorporation  increasing the authorized  common
stock to 400,000,000 shares.

                                      F-21