================================================================================
                                  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, 1997

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
                        For the transition period from to

                       Commission file number 33-33042-NY

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

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

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

                    Issuer's telephone number (602) 837-6810

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

      Title of each class              Name of each exchange on which registered

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

                                (Title of Class)

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

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

                            CORONADO INDUSTRIES, INC.

                                   FORM 10-KSB

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997

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

           Item 2.   Description of Property .............................  6

           Item 3.   Legal Proceedings ...................................  6

           Item 4.   Submission of Matters to a Vote of Security Holders..  6

PART II
           Item 5.   Market for Registrant's Common Equity and Related
                         Stockholders Matters.............................  7

           Item 6.   Management's Discussion and Analysis or
                         Plan of Operation................................  8

           Item 7.   Financial Statements.................................  9

           Item 8.   Changes In and Disagreement with Accountants on
                         Accounting and Financial disclosure .............  9
PART III
           Item 9.   Directors, Executive Officers, Promoters and
                       Control Persons' Compliance with Section 16(a)
                       of the Exchange Act................................  10

           Item 10.  Executive Compensation ..............................  11

           Item 11.  Security Ownership of Certain Beneficial Owners
                       and Management.....................................  12

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

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

SIGNATURES................................................................  14

SUPPLEMENTAL INFORMATION AND EXHIBITS.....................................  15
<PAGE>

                                     PART I

                   SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

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

ITEM 1(a). BUSINESS DEVELOPMENT.

INITIAL PUBLIC OFFERING

     The Registrant was incorporated  under the 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  Registrant  offered 5,000 common  shares,  par value $.001
each, at $4.50 per Share and 5,000 Warrant Units each Warrant Unit consisting of
8 redeemable  common share  purchase "A" warrants,  16  redeemable  common share
purchase "B" warrants and 16  redeemable  common share  purchase "C" warrants at
$.50 per  Warrant  Unit.5,000  Shares and 5,000  Warrant  Units were sold in the
offering  yielding  gross  proceeds of $25,000 and net proceeds of $15,000 after
payment of offering expenses of $10,000.  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.

GENERAL DESCRIPTION OF INITIAL BUSINESS

     The Registrant was organized under the name, First Lloyd Funding, Inc. as a
blank check company. The Registrant was not engaged in any business prior to its
initial public offering. It was formed to invest in, merge, or otherwise combine
with or acquire another company or other companies.

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

     After a series of  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,  including

                                       1
<PAGE>

340,000  shares  to  Edward A.  Barth  (then  President  and a  Director  of the
Registrant) and Barth Construction Co., Inc., 5,000 shares to Richard Campanalie
(then a  Registrant  Director)  and  20,000  shares to  Richard  Hooper  (then a
Registrant   Director).   See  "ITEM  12.  CERTAIN   RELATIONSHIPS  AND  RELATED
TRANSACTIONS."

     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.  However,  a provision in the Asset Purchase Agreement allowed OI
to rescind the transaction  and receive the patent rights and other  proprietary
rights back from the Registrant in the event OI discovered within one year after
the date of the Asset Purchase Agreement that the Registrant breached one of its
representations  or  warranties  in that  agreement.  OI  waived  this  right of
rescission in July 1997.

ITEM 1(b). BUSINESS OF ISSUER

OVERVIEW

     The  Registrant  is a  holding  company  and all  business  operations  are
conducted through its two wholly-owned subsidiaries. The Registrant, through its
Ophthalmic International,  Inc. subsidiary, will manufacture and market a vacuum
fixation device with a patented designed suction ring that treats Open Angle and
Pigmentary  glaucoma.  American Glaucoma,  Inc. ("AGI"),  the Registrant's other
subsidiary,  operates a glaucoma  treatment  center in  Scottsdale,  Arizona and
intends to open up to 40 similar treatment centers in the United States.

     In the United  States,  glaucoma is the second  leading  cause of blindness
affecting  approximately  7,500,000 persons.  Of those, about 60,000 are legally
blind.  Glaucoma affects  approximately three percent of the world's population,
with certain ethnic populations having a higher occurrence rate. 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 is not a single disease but rather a group of diseases that effect
the eye. This group of diseases has a single feature in that 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.
                                       2
<PAGE>

THE VACUUM 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  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 following patent entitled "Open Angle Glaucoma Treatment Apparatus
and Method" has been approved and is believed to allow the Registrant to achieve
a significant market advantage over competitors.

     The Registrant's treatment is a "Non-Invasive Procedure" and the Registrant
believes the procedure has no harmful side effects,  like those  associated with
eye drops.  The test results  thus far have  indicated an average drop of I.O.P.
per  procedure  was 6 mm Hg and 73% of all eyes  treated  maintained  an  I.O.P.
lowering effect (without additional traditional treatment) after 8 months.

     Dr.  John  LiVecchi,  a  Registrant  Director,   and  Dr.  Leo  Bores,  the
Registrant's  Medical Director,  have been asked to address to different medical
conventions of  ophthalmologists  in March and April 1998 concerning the results
of the studies of Registrant's  procedure and equipment.  These presentations to
the ultimate  end-users of  Registrant's  products serve to educate the industry
about the Registrant's products and their efficacy.

     Registrant's  subsidiary,   Ophthalmic  International,   Inc.,  intends  to
manufacture and sell the vacuum equipment, the patented rings and the process in
the  United  States  and  abroad,  primarily  through  distributors  who will be
assigned  specific  geographical  territories,  on the  basis of  continents  or
countries.  Ophthalmic  International  entered into a confidentiality  agreement
with  Alcon Co. in March,  1997 as the first  step in  negotiating  for Alcon to
become a distributor.  The Registrant expects Ophthalmic  International to enter
into   confidentiality   agreements  with  one  or  more  additional   potential
distributors and to commence  negotiations for exclusive worldwide  distribution
rights  within the next 30 days.  These  negotiations  may not be completed  and
definitive  agreements  executed  until  one or  more  independent  studies  are
completed.

     Until such time as Registrant executes an exclusive worldwide  distribution
agreement,   Registrant   expects  to  enter  into  one  or  more  non-exclusive
distribution  agreements with medical  equipment  dealers in the Far East and/or
Europe. These short-term  agreements will provide Registrant with test-marketing
results  for use in its  negotiations  for the  exclusive  worldwide  rights and
provide Registrant with interim cash flow.

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

                                       3
<PAGE>

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

THE TREATMENT CENTERS

     Registrant's subsidiary, American Glaucoma, Inc., opened its first glaucoma
treatment center in Scottsdale,  Arizona in September 1997. Registrant estimates
that there are approximately 62,000 glaucoma patients in the Phoenix area, based
upon a three percent general population occurrence of the condition.  Based upon
an estimated  start-up cost and first year budget of $600,000 for the Scottsdale
Center,  Registrant  estimates that it would have to treat  approximately  1,000
patients  for an annual  clinic  fee of $1,200 to  break-even  on these  initial
expenditures, assuming a 50% net income margin (of which there is no assurance).

     During  the  fourth  quarter  of 1997 the  Registrant's  Scottsdale  Center
generated  approximately $65,000 of gross revenues. The Registrant believes that
its advertising  campaign and the resulting  patient treatment at the Scottsdale
Center have  indicated  that the  Registrant's  products and glaucoma  treatment
centers  will be widely  accepted  by the  general  glaucoma  public in the near
future.

     The  Registrant is hopeful of opening two additional  treatment  centers in
during  1998,  subject to  adequate  funding.  These  initial  two  centers  are
currently  planned for the Sun Belt areas,  such as Florida.  The Registrant has
initiated discussions with certain practicing  ophthalmologists in these states,
concerning their possible  participation  in the  Registrant's  future treatment
centers.  On the basis of these discussions,  the Registrant believes it will be
able to recruit  practicing  ophthalmologists  as the medical  directors  of its
future  treatment  centers.  However,  the  Registrant  has not entered into any
agreement  or reached  any  arrangement  with any  physician  at this time.  The
Registrant  anticipates  that  its  advertising  and  telemarketing   techniques
initiated  and  refined at the  Registrant's  Scottsdale  Center will enable the
Registrant's  additional  treatment centers to reach  profitability in a shorter
time period than the Scottsdale Center.

     Dr.  Leo  Bores,   currently  the  Medical  Director  of  the  Registrant's
Scottsdale  Center,  will become the Supervising  Medical Director of all of the
Registrant's  future treatment centers at such time as the Registrant has opened
two or more additional centers.

PATENT

     On February 11, 1997 the U.S. Patents and Trademarks Office issued a patent
to Ophthalmic  International,  L.L.C., Patent Number 5,601,548, for the process,
equipment  and the  procedure  which has been  licensed to the  Registrant.  The
Registrant believes, without assurance, that this patent provides the Registrant
with a  substantial  competitive  advantage  over  current  and future  glaucoma
treatment  competitors.  The  Registrant  is not aware of any other patent being
granted for glaucoma treatment.
                                       4
<PAGE>

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

GOVERNMENTAL REGULATION

     Presently the  Registrant  believes it may sell and  distribute its "vacuum
fixation  device" in the Untied States pursuant to a Section 510(k) exemption of
the Untied  States Food and Drug  Administration  (the  "FDA").  The  Registrant
registered  with the FDA as a manufacturer  and  distributor of a Section 510(k)
product in April 1996. The Registrant  anticipates that it will apply to the FDA
to  change  the label on the  equipment  from a "vacuum  fixation  device"  to a
"glaucoma  treatment device." The first step in this FDA re-labeling  process is
the completion of independent  studies of the product's  performance and safety.
Registrant  is  currently in  discussion  with several  other  universities  and
medical study centers  concerning the commencement of additional  studies on the
Registrant's product and process under its 1994 investigational device exemption
study.  There is no assurance as to when any study will be completed or that the
results  of any  study  will be  beneficial  to the  Registrant's  FDA  process.
Likewise,  there can be no assurance when, if ever, the  Registrant's  equipment
will be re-labeled as a "glaucoma treatment device" by the FDA.

     In May 1996 the FDA advised eye care professionals that physician decisions
to conduct  procedures which are outside the FDA approved  labeling on equipment
are  considered  the  practice of medicine  and, as such,  are outside the FDA's
jurisdiction.  At the same  time the  United  States  Federal  Trade  Commission
advised that physicians should not advertise the possible use of medical devices
beyond the limits  approved by the FDA.  Presently the Registrant  does not, and
will not in the future until proper  approval is obtained,  advertise the use of
its equipment as a glaucoma treatment device.

                                       5
<PAGE>

     In July 1997 the Registrant's  Scottsdale  treatment center registered with
the State of Arizona  Department of Health  Services as a "health care treatment
institution" and the Registrant  anticipates  that all of its treatment  centers
will be  required  to  register  in the  various  states  in which  they will be
located.  The  Registrant  is unable to predict at this time the exact amount of
time and expense  which will be needed to register as a health care  provider in
each state in which the Registrant may wish to open a glaucoma treatment center.
There is no assurance that the  Registrant  will be able to register as a health
care provider in each state of the Registrant's choice.

EMPLOYEES

     In  addition  to its  two  officers,  the  Registrant  employs  one  person
full-time at the corporate  headquarters.  The Registrant  presently employs its
Medical Director,  Dr. Leo Bores, and 4 full-time medical and clerical personnel
at its Scottsdale  glaucoma treatment center. The Registrant  anticipates hiring
additional administrative and marketing personnel upon the opening of additional
treatment centers, in addition to medical personnel at the centers.

ITEM 2. DESCRIPTION OF PROPERTY.

     During calendar year 1997, 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.  Registrant  presently
believes this space is adequate to satisfy Registrant's current needs.  However,
Registrant  will need to  obtain  additional  space in order to hire  additional
people at the corporate level.

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

ITEM 3. LEGAL PROCEEDINGS.

     There  were no  legal  proceedings  involving  the  Registrant  pending  or
threatened at December 31, 1997.

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

     During  calendar  year  1997 no  matters  were  submitted  to a vote of the
Registrant's security holders.

                                       6
<PAGE>
                                     PART II

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

     Market  Information.  The principal U.S.  market in which the  Registrant's
common shares (all of which are one class,  $.001 par value) were traded was the
over-the-counter  market.  The aforesaid  securities are not traded or quoted on
any automated quotation system. Such over-the-counter  market quotations reflect
inter-dealer  prices without  retail markup,  markdown or commission and may not
necessarily represent actual transactions. The following table shows the low and
the high bid reported by the NASDAQ  Bulletin  Board System in 1996 and 1997, by
fiscal quarter, and for the first quarter of 1998.
                                                              Low         High
                                                              ---         ----
January 1, 1996 -- March 31, 1996                                0            0
April 1, 1996 -- June 30, 1996 (reflecting 5:1 reverse split)    0            0
July 1, 1996 -- September 30, 1996                               0            0
October 1, 1996 -- December 31, 1996                         $1.50        $9.75
January 1, 1997 -- March 31, 1997                            $3.00        $6.75
April 1, 1997 - June 30, 1997                                $2.50        $5.94
July 1, 1997 - September 30, 1997                            $1.94        $4.38
October 1, 1997 - December 31, 1997                          $1.00        $2.75
January 1, 1998 - March 27, 1998                             $0.63        $3.09

     Holders.  The  Registrant  has  approximately  310  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.

     Warrants.  During  calendar  year  1997  the  Registrant  issued a total of
568,400  common stock purchase  warrants to the  underwriter of its 1997 private
placement and its representatives. Through March 20, 1998, Registrant had issued
a total of 819,824 warrants to the underwriter of its 1998 private placement and
its  representatives.  All of these  warrants  have the  same  following  terms:
exercise  price of $2.00 per share through  December 31, 1998 and then $2.50 per
share  through  December  31,  2000  when  they  expire.  These  warrants  enjoy
"piggy-back"  registration  rights with respect to certain  future  registration
statements of  Registrant  and "demand"  registration  rights one year after the
final  offering  closing  dates  which  occurred  in  February  and March  1998,
respectively.
                                       7
<PAGE>

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

     Operations. Registrant was a development stage company at year-end December
31, 1996,  with no revenues  having been generated  during the year.  Therefore,
there is no  comparable  prior  year's  operations  to which to compare the 1997
annual operating results.

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

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

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

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

                                       8
<PAGE>

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

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

ITEM 7. FINANCIAL STATEMENTS.

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

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

     On March 21, 1996,  Registrant's prior certifying accountant,  Hobe & Lucas
of  Independence,   Ohio,  issued  an  opinion  on  the  consolidated  financial
statements  of  Logical  Computer  Services  of  New  York,  Ltd.,  a  New  York
corporation and a predecessor  corporation,  in conjunction with the issuance of
the Registrant's annual report on Form 10-KSB for the fiscal year ended December
31,  1995.  The opinion  stated  that the  accompanying  consolidated  financial
statements  for the fiscal years ended  December 31, 1995 and 1994 were prepared
assuming  that the  Registrant  would  continue as a going  concern.  The letter
referred  to  disclosures  in  Note  8 of  the  financial  statements  that  the
Registrant  had incurred net losses during the years ended December 31, 1995 and
1994, respectively, which, along with other conditions, raised substantial doubt
about the  Registrant's  ability to  continue  as a going  concern.  The opinion
additionally   stated  that  the  financial   statements  did  not  include  any
adjustments that might result from the outcome of these uncertainties. Note 8 to
those  financial  statements  disclosed  that in order to meet the  Registrant's
current debt,  additional  working  capital would be required and that as of the
date of the report the  Registrant had not raised  sufficient  funds to meet its
needs. Registrant is unaware of any disagreements with Hobe & Lucas that existed
at any time.

     On  January  17,  1997  Hobe & Lucas  resigned  from  its  engagement  with
Registrant as a result of Registrant's move of its offices to Arizona.

     On March 13, 1997 Arthur  Andersen LLP ("Arthur  Andersen")  was engaged by
Registrant to audit its financial  statements for the fiscal year ended December
31, 1996. Registrant was not provided with any advice as to accounting, auditing
or financial  reporting issues arising from any discussion with Arthur Andersen.
On March 28, 1997,  Arthur  Andersen  resigned as the certifying  accountant for
Registrant.  Arthur  Andersen  had  not  issued  any  report  on  the  financial
statements of Registrant.  Registrant is aware of no disagreements or reportable
events with respect to its relationship with Arthur Andersen.

     On  May 8,  1997,  Registrant  engaged  Semple  &  Cooper,  L.L.P.,  as its
principal accountant to audit Registrant's financial statement,  commencing with
the  year-ended  December 31, 1996.  Prior to its  engagement of Semple & Cooper
L.L.P.,  the Registrant had not contacted Semple & Cooper L.L.P. with respect to
any  accounting  matter  or the  subject  of any  disagreement  with a  previous
accounting firm.

                                       9
<PAGE>

                                    PART III

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

     The directors and executive  officers of the  Registrant as of December 31,
1997 were as follows:

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

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

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

     The Registrant presently has two vacancies on its Board of Directors.

     Gary R. Smith, age 54, has been a Director of the Registrant since November
5, 1996, and President and Treasurer of the  Registrant  since November 5, 1996.
From  July,  1995 to  November  5,  1996  Gary R.  Smith  was a 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
conditionally  transferred 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.

     G.  Richard  Smith,  age 50, has been a Director  of the  Registrant  since
November 5, 1996 and  Secretary of the  Registrant  since  November 5, 1996.  He
became  Chairman in March, 1998. From  July, 1995 to November 5, 1996 G. Richard
Smith was a member  and  President  of  Ophthalmic  International,  L.L.C.,  the
company  that   developed  and  patented  the  glaucoma   treatment   which  was
conditionally transferred 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.

     John T.  LiVecchi,  age 50, has been a  Director  of the  Registrant  since
December 16, 1996.  Dr.  LiVecchi  received his medical  degree in 1977 from the
University of Rome, Italy. From 1983 to present Dr. LiVecchi has been in private
medical  practice in the field of  ophthalmology  in the Scranton,  Pennsylvania
area. Dr. LiVecchi has been on the staff of several  hospitals and universities.
Dr.  LiVecchi  is  licensed  to  practice  medicine  in the  States of New York,
Michigan and  Pennsylvania.  Dr.  LiVecchi has  authored  numerous  articles and
presentations.  In  1994  Dr.  LiVecchi  undertook  the  project  of  developing
equipment  and  procedures  for  treating  open angle  glaucoma,  along with the
Registrant's other Directors.

                                       10
<PAGE>

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

KEY EMPLOYEE

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

ITEM 10. EXECUTIVE COMPENSATION.

     As of December 31, 1997,  there are no  outstanding  employment  contracts.
However,  in December 1996 the Registrant's  Board of Directors  approved annual
salaries of $100,000 for the  Registrant's  two  Officers,  Gary R. Smith and G.
Richard Smith.  During 1997 each of these officers  received  $37,500 of salary,
with  $62,500  accruing  to each.  As the  Registrant's  revenues  and  earnings
increase in the future, the salaries of these officers may increase.

     On July 18, 1997, the Registrant executed a two-year agreement with Dr. Leo
Bores,  pursuant to which Dr.  Bores will be paid a salary of  $150,000  for the
first year and $200,000 for the second year. In addition to his base salary, Dr.
Bores  shall  receive an annual  bonus  equal to 5% of the net  income  from the
Scottsdale  treatment center. It is presently  expected that the Registrant will
execute an agreement with Dr. Bores as the Supervising Medical Director over all
the Registrant's future glaucoma treatment centers.

STOCK OPTION PLAN

     The  Registrant's  Board of Directors is considering the adoption of a 1997
Stock  Option Plan for the Company  (the "Option  Plan") and  anticipates  up to
2,000,000  shares will be reserved for issuance  thereunder.  The Option Plan is
structured to allow the Board of Directors  and a future Stock Option  Committee
of the Boards  discretion  in creating  equity  incentives  to  management,  key
employees  and  professional  consultants  for  the  purpose  of  assisting  the
Registrant in motivating and retaining  appropriate  talent. To date, the Option
Plan has not been adopted and the  Registrant  has not granted any options under
the Option Plan;  however,  it is anticipated  that Dr. Bores will be granted an
option for a significant number of Registrant shares.

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

                                       11
<PAGE>

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

     As of  March  23,  1998  there  were  20,563,421  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(1)   of Class
--------------      ----------------          -----------------------   --------
Common Stock  Gary R. Smith                            6,238,512         30.3%
              16929 E.  Enterprise Drive Suite 202
              Fountain Hills, AZ 85268

Common Stock  G. Richard Smith                         6,622,112         32.2%
              16929 E.  Enterprise Drive Suite 202
              Fountain Hills, AZ 85268

Common Stock  John T. LiVecchi                         2,000,000          9.7%
              16929 E.  Enterprise Drive Suite 202
              Fountain Hills, AZ 85268

Common Stock  Officers and Directors, As a             14,860,624        72.3%
              Group (3 People)


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     On  November  5,  1996,  the  Registrant  entered  into the Asset  Purchase
Agreement with Ophthalmic International,  L.L.C., and American Glaucoma, whereby
6,796,112  restricted shares of Registrant's common stock were issued to each of
Gary R. Smith and G. Richard Smith, and 2,000,000  restricted shares were issued
to John T. LiVecchi.  Messrs.  Smith, Smith and LiVecchi became the Registrant's
sole Directors as a result of this transaction. For accounting purposes, Messrs.
Smith,  Smith and LiVecchi are deemed to have no cost in the assets  transferred
to the Registrant.  Ophthalmic  International,  L.L.C., has the right to rescind
the  transaction  and  receive  the return of the  patent and other  proprietary
assets it transferred to Registrant,  if it discovers that  Registrant  breached
any of its  warranties  or  representations  contained  in  the  Asset  Purchase
Agreement.

     Edward A. Barth, Richard Companalie and Richard Hooper, former directors of
the  Registrant,  received  335,000,  5,000,  and 20,000  restricted  Registrant
shares,  respectively,  as a finder's fee in the Asset  Purchase  Agreement.  In
addition, Barth Construction Co., Edward Barth's construction company,  received
5,000 shares of Registrant  common stock as a finder's fee in the Asset Purchase
Agreement.  An additional 495,000 post-split shares was issued in November, 1996
by the  Registrant to former  officers of the  Registrant  and  shareholders  of
Android Corp. as finder's fees.

                                       12
<PAGE>

                                     PART IV

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

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


                           INDEX TO EXHIBITS PROVIDED

             Financial Statements -- F-1

             Exhibit 27 -- Financial Data Schedule


                                       13
<PAGE>

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf on March 26, 1998 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, Secretary, Director   Dated: March 26, 1998
-------------------------
G. Richard Smith


/s/ Gary R. Smith          President (Chief Executive      Dated: March 26, 1998
-------------------------  Officer), Treasurer (Chief
Gary R. Smith              Accounting Officer), Director



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




                                       14
<PAGE>


                      SUPPLEMENTAL INFORMATION AND EXHIBITS

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

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

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






                                       15
<PAGE>
                            CORONADO INDUSTRIES, INC.

                              FINANCIAL STATEMENTS

                               For The Years Ended
                           December 31, 1997 and 1996




                                      F-1
<PAGE>



                          INDEPENDENT AUDITORS' REPORT


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

We have audited the accompanying balance sheet of Coronado  Industries,  Inc. as
of December 31,  1997,  and the related  statements  of  operations,  changes in
stockholders' equity (deficit),  and cash flows for the years ended December 31,
1997  and  1996.  These  financial  statements  are  the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Coronado Industries, Inc. as of
December 31, 1997, and the results of its operations,  changes in  stockholders'
equity  (deficit),  and its cash flows for the years ended December 31, 1997 and
1996 in conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 8 to the
financial   statements,   the  Company's   significant  operating  losses  raise
substantial  doubt  about  its  ability  to  continue  as a going  concern.  The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

                                                            Semple & Cooper, LLP

Certified Public Accountants

Phoenix, Arizona
March 13, 1998


                                      F-2
<PAGE>
                            CORONADO INDUSTRIES, INC.
                                  BALANCE SHEET
                                December 31, 1997

                                     ASSETS

Current Assets:
   Cash                                                               $  65,631
   Accounts receivable, net (Notes 1 and 5)
     - trade                                                              7,809
     - other                                                              3,999
   Inventory (Note 1)                                                    43,031
   Prepaid expenses                                                     104,500
                                                                      ---------
        Total Current Assets                                            224,970

Property and Equipment, net (Notes 1 and 2)                             149,402

Other Assets:
   Intangible assets, net (Notes 1 and 3)                                36,345
                                                                      ---------
        Total Assets                                                  $ 410,717
                                                                      =========

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
   Notes payable (Note 4)                                             $ 224,631
   Note payable to related party - current
     portion (Note 5)                                                    39,375
   Accounts payable                                                      76,690
   Accrued salaries                                                     153,673
   Accrued payroll taxes and other                                       22,222
                                                                      ---------
        Total Current Liabilities                                       516,591

Note payable to related party - long-term
  portion (Note 5)                                                       39,375
                                                                      ---------
        Total Liabilities                                               555,966
                                                                      ---------
Commitments: (Notes 5 and 9)                                                 --

Stockholders' Equity (Deficit): (Note 6)
   Preferred stock - $.0001 par value; 3,000,000 shares
     authorized, none issued or outstanding                                  --
   Common stock - $.001 par value; 25,000,000 shares
     authorized, 18,962,653 shares issued and outstanding                18,962
   Additional paid-in capital                                           730,622
   Accumulated deficit                                                 (894,833)
                                                                      ---------
        Total Stockholders' Equity (Deficit)                           (145,249)
                                                                      ---------
        Total Liabilities and Stockholders' Equity (Deficit)          $ 410,717
                                                                      =========
                   The Accompanying Notes are an Integral Part
                           of the Financial Statements

                                      F-3
<PAGE>

                            CORONADO INDUSTRIES, INC.
                            STATEMENTS OF OPERATIONS
                 For The Years Ended December 31, 1997 and 1996


                                                     1997             1996
                                                     ----             ----

Patient Revenues, Net (Note 1)                   $    26,107      $        --

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

Gross Loss                                          (243,629)              --

General and Administrative Expenses                  567,177           64,042
                                                 -----------      -----------
Loss from Operations                                (810,806)         (64,042)

Interest Expense                                     (26,381)          (1,089)

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

Net Loss                                         $  (829,702)     $   (65,131)
                                                 ===========      ===========

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

Weighted Average Shares Outstanding               18,504,392       18,344,253
                                                 ===========      ===========



                   The Accompanying Notes are an Integral Part
                           of the Financial Statements



                                      F-4
<PAGE>
                            CORONADO INDUSTRIES, INC.
             STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                 For The Years Ended December 31, 1997 and 1996

                                                                        Total
                       Common Stock                                     Stock-
                 -------------------- Additional  Retained              Holders'
                    Shares              Paid-in   Earnings   Treasury   Equity
                 Outstanding  Amount    Capital   (Deficit)    Stock   (Deficit)
                 -----------  ------    -------   ---------    -----    -------
Balance at
  December
  31, 1995        1,885,573  $ 2,755  $ 253,737  $(298,854) $(9,425) $ (51,787)

Stock issued
  for
  services           40,000       40      1,160         --       --      1,200

One for five
  reverse
  stock
  split          (1,540,448)  (1,540)     1,540         --       --         --

Proceeds
  from sale
  of stock, net   1,511,904    1,512     74,885         --       --     76,397

Reverse merger
  with American
  Glaucoma and
  Ophthalmic     15,592,224   15,592   (293,313)   298,854       --     21,133

Retirement of
  treasury
  stock                  --     (870)    (8,555)        --    9,425         --

Stock issued
  for finders
  fee               855,000      855      7,695         --       --      8,550

Net loss                 --       --         --    (65,131)      --    (65,131)
                -----------  -------  ---------  ---------  -------  ---------
Balance at
  December
  31, 1996       18,344,253   18,344     37,149    (65,131)      --     (9,638)

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

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

Net loss                 --       --         --   (829,702)      --   (829,702)
                -----------  -------  ---------  ---------  -------  ---------
Balance at
  December
  31, 1997       18,962,653  $18,962  $ 730,622  $(894,833) $    --  $(145,249)
                ===========  =======  =========  =========  =======  =========
                   The Accompanying Notes are an Integral Part
                           of the Financial Statements

                                      F-5
<PAGE>

                            CORONADO INDUSTRIES, INC.
                            STATEMENTS OF CASH FLOWS
                 For The Years Ended December 31, 1997 and 1996


                                                           1997           1996
                                                           ----           ----
Cash Flows from Operating Activities:
   Cash received from customers                         $  25,783      $     --
   Cash paid to suppliers and employees                  (609,807)      (75,528)
   Interest paid                                               --        (1,089)
                                                        ---------      --------
        Net cash used by operating
          activities                                     (584,024)      (76,617)
                                                        ---------      --------
Cash Flows from Investing Activities:
   Purchase of fixed assets                               (92,935)           --
   Cash disbursements for patents                         (30,684)           --
                                                        ---------      --------
        Net cash used by investing
          activities                                     (123,619)           --
                                                        ---------      --------
Cash Flows from Financing Activities:
   Cash received from notes payable                       192,000        10,000
   Cash received from sale of stock                       574,091        76,397
   Repayment of notes payable to stockholders                  --        (4,000)
                                                        ---------      --------
        Net cash provided by financing
          activities                                      766,091        82,397
                                                        ---------      --------
Net increase in cash                                       58,448         5,780

Cash at beginning of year                                   7,183         1,403
                                                        ---------      --------
Cash at end of year                                     $  65,631      $  7,183
                                                        =========      ========


                   The Accompanying Notes are an Integral Part
                           of the Financial Statements

                                      F-6
<PAGE>

                            CORONADO INDUSTRIES, INC.
                      STATEMENTS OF CASH FLOWS (Continued)
                 For The Years Ended December 31, 1997 and 1996


                                                            1997        1996
                                                            ----        ----
Reconciliation of Net Loss to Net Cash Used
  by Operating Activities:
     Net loss                                            $(829,702)   $(65,131)
                                                         ---------    --------
Adjustments to reconcile net loss to net cash
  used by operating activities:
    Depreciation                                            27,332       1,766
    Amortization                                             2,605         285
    Stock issued for services                              120,000       1,200
    Interest added to principal of notes
      payable                                               26,381          --

Changes in Assets and Liabilities:
    Accounts receivable
      - trade                                               (7,809)         --
      - other                                               (3,999)         --
    Inventory                                              (32,464)         --
    Prepaid expenses                                      (104,500)         --
    Accounts payable                                        72,793     (44,265)
    Accrued salaries                                       123,117      30,556
    Accrued payroll taxes and other                         22,222      (1,028)
                                                         ---------    --------
                                                           245,678     (11,486)
                                                         ---------    --------
Net Cash Used by Operating Activities                    $(584,024)   $(76,617)
                                                         =========    ========




                   The Accompanying Notes are an Integral Part
                           of the Financial Statements

                                      F-7
<PAGE>

                            CORONADO INDUSTRIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NATURE OF OPERATIONS AND USE OF
     ESTIMATES:

     ORGANIZATION:

     Coronado Industries,  Inc. (the Company) was originally  incorporated under
     the laws of the State of New York in December 1989 as First Lloyd  Funding,
     Inc., which  subsequently  changed its name to Logical Computer Services of
     New York, Ltd. In September, 1996, the Company changed its name to Coronado
     Industries,  Inc. The Company had limited  activity  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.  Therefore, the transaction is accounted for as
     a reverse merger. The accompanying financial statements have been presented
     on a contiguous basis due to the inactivity of Logical Computer Services of
     New York, Ltd.

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

     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.

     INVENTORIES:

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

                                      F-8
<PAGE>

                            CORONADO INDUSTRIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (Continued)

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 and equipment                 5-7 years
     Leasehold improvements                 7-39 years

     DEFERRED INCOME TAXES:

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

     FAIR VALUE OF FINANCIAL INSTRUMENTS:

     The fair value of the  Company's  note  payable to related  party cannot be
     determined  due to its related  party  nature.  The  carrying  value of the
     Company's  notes  payable  approximates  fair  value  and is based on rates
     currently  available  to the  Company  for  debt  with  similar  terms  and
     maturities.

     LOSS PER SHARE:

     For the year ended  December  31,  1996,  the basic loss per share is based
     upon the weighted average number of shares outstanding from the time of the
     reverse merger, and giving  retroactive effect to the one-for-five  reverse
     stock split.  For the year ended  December  31, 1997,  basic loss per share
     include no dilution and is computed by dividing income  available to common
     stockholders  by the weighted  average number of common shares  outstanding
     for the period.  Diluted  earnings  per share are not  presented,  as their
     effect is anti-dilutive.  Subsequent to December 31, 1997, the Company sold
     1,580,768  additional  shares of common stock through a private  placement.
     The effect of these shares would also be  anti-dilutive on the earnings per
     share as of December 31, 1997.


                                      F-9
<PAGE>

                            CORONADO INDUSTRIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (Continued)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NATURE OF OPERATIONS AND USE OF
     ESTIMATES: (CONTINUED)

     INTANGIBLE ASSETS:

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

     ACCOUNTS RECEIVABLE - TRADE:

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

     The  Company  follows the  allowance  method of  recognizing  uncollectible
     accounts receivable.  The allowance method recognizes bad debt expense as a
     percentage of accounts  receivable based on a review of individual accounts
     outstanding.  At December 31,  1997,  no  allowance  has been  provided for
     potentially  uncollectible  accounts  receivable.  As of December 31, 1997,
     third  party  payors  would not  reimburse  the  Company  for its  patented
     procedure.  Subsequent to December 31, 1997,  the Company  began  receiving
     reimbursement for current procedures  performed.  In management's  opinion,
     they will not  receive  reimbursement  for  procedures  performed  prior to
     December 31, 1997,  and therefore an allowance in the amount of $39,155 has
     been accrued and offset against revenues.

     ADVERTISING:

     Advertising  costs are charged to  operations  when  incurred.  Advertising
     costs for the years  ended  December  31, 1997 and 1996 were  $124,857  and
     $285, respectively.

     NEW ACCOUNTING PRONOUNCEMENTS:

     During the year ended December 31, 1997, the Company  adopted  Statement of
     Financial  Accounting  Standards  No. 128,  "Earnings  per Share" (SFAS No.
     128).  This  pronouncement  provides  a  different  method  of  calculating
     earnings per share than  required by APB 15,  Earnings per Share.  SFAS No.
     128 provides for the  calculation of Basic and Diluted  earnings per share.
     Basic  earnings  per share  include no dilution and is computed by dividing
     income  available to common  stockholders by the weighted average number of
     common  shares  outstanding  for the  period.  Diluted  earnings  per share
     reflects  the  potential  dilution  of  securities  that could share in the
     earnings of an entity similar to fully diluted  earnings per share.  Due to
     the net  losses  for the years  ended  December  31,  1997 and  1996,  this
     statement has no effect on its reported loss per share.

                                      F-10
<PAGE>

                            CORONADO INDUSTRIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (Continued)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NATURE OF OPERATIONS AND USE OF
     ESTIMATES: (CONTINUED)

     NEW ACCOUNTING PRONOUNCEMENTS: (CONTINUED)

     During the year ended December 31, 1997, the Company  adopted  Statement of
     Financial  Accounting  Standards No. 129,  "Disclosure of Information about
     Capital  Structure"  (SFAS No. 129).  The new standard  reinstates  various
     securities  disclosure  requirements  previously in effect under Accounting
     Principles Board Opinion No. 15, which has been superseded by SFAS No. 128.
     For the years ended  December  31, 1997 and 1996,  the adoption of SFAS No.
     129 did not have a material effect on the Company's  financial  position or
     results of operations.

     Statement   of  Financial   Accounting   Standards   No.  130,   "Reporting
     Comprehensive  Income" (SFAS No. 130) is effective for financial statements
     with fiscal years beginning after December 15, 1997. Earlier application is
     permitted.  SFAS No. 130 establishes standards for reporting and display of
     comprehensive  income and its  components in a full set of  general-purpose
     financial statements.  The Company does not expect adoption of SFAS No. 130
     to have a material effect, if any, on its financial  position or results of
     operations.

     Statement of Financial  Accounting  Standards No. 131,  "Disclosures  about
     Segments  of an  Enterprise  and  Related  Information",  (SFAS No. 131) is
     effective  for  financial  statements  with fiscal  years  beginning  after
     December 15, 1997. Earlier application is permitted.  SFAS No. 131 requires
     that public companies report certain  information about operating segments,
     products,  services and geographical  areas in which they operate and their
     major  customers.  The Company does not expect  adoption of SFAS No. 131 to
     have a material  effect,  if any, on its  financial  position or results of
     operations.

2.   PROPERTY AND EQUIPMENT:

     At December 31, 1997, property and equipment consists of the following:

     Office furniture and equipment             $ 58,433
     Machinery and equipment                     114,605
     Leasehold improvements                        5,462
                                                --------
                                                 178,500
     Less: accumulated depreciation              (29,098)
                                                --------
     Net property and equipment                 $149,402
                                                ========

     Depreciation  expense was $27,332 and $1,766,  respectively,  for the years
     ended December 31, 1997 and 1996.

                                      F-11
<PAGE>

                            CORONADO INDUSTRIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (Continued)

3.   INTANGIBLE ASSETS:

     Intangible  assets consist of goodwill,  which represents the excess of the
     cost of the combined  companies  over the fair value of their net assets at
     the date of  combination,  and legal  costs  incurred  to  secure  patents.
     Goodwill and patents are being amortized  ratably over five (5) and fifteen
     (15) years,  respectively.  Amortization  expense charged to operations for
     the  years  ended   December  31,  1997  and  1996  was  $2,605  and  $285,
     respectively.

4.   NOTES PAYABLE:

     At December 31, 1997, notes payable consist of the following:

     Notes payable to Hayden Investment, with interest at 15%,
     due April 30, 1998 through July 20, 1998; unsecured.            $ 224,631

     Less: current portion                                            (224,631)
                                                                     ---------
                                                                     $      --
                                                                     =========
5.   RELATED PARTY TRANSACTIONS:

     ACCOUNTS RECEIVABLE - OTHER:

     Accounts   receivable   -  other   consists  of  advances  to  a  corporate
     shareholder.   The  advances  are   non-interest   bearing  and  considered
     short-term in nature.

     NOTE PAYABLE TO RELATED PARTY:

     Note payable to Dr. Leo Bores, with interest at the
     rate of 10% per annum in two annual installments,
     due July 18, 1999; unsecured.                                   $ 78,750

     Less: current portion                                            (39,375)
                                                                     --------
                                                                     $ 39,375
                                                                     ========

     Future  minimum  principal  payments due on the above note payable,  are as
     follows:

            Year Ending
            December 31,            Amount
            ------------            ------
                1998               $39,375
                1999                39,375
                                   -------
                                   $78,750
                                   =======


                                      F-12
<PAGE>

                            CORONADO INDUSTRIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (Continued)

5.   RELATED PARTY TRANSACTIONS: (CONTINUED)

     COMMITMENTS:

     The Company currently leases office space for its glaucoma treatment center
     in  Scottsdale,  Arizona  from a  related  party  under  a  non-cancellable
     operating lease agreement,  which expires in July, 1999. Under the terms of
     the lease, the Company pays monthly rent of $3,500.  The Company  subleases
     space to lessor  for one day a week at $700 per month  under a  cancellable
     sublease agreement. For the year ended December 31, 1997, rent expense, net
     of  sublease,  under the  aforementioned  non-cancellable  operating  lease
     agreement was $14,000.

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

            Year Ending
            December 31,           Amount
            ------------           ------
                1998              $42,000
                1999               24,500
                                  -------
                                  $66,500
                                  =======

     Total minimum  future  payments have not been reduced by payments which may
     be received under a cancellable sublease.

6.   STOCKHOLDERS' EQUITY (DEFICIT):

     COMMON STOCK AND COMMON STOCK WARRANTS:

     The Company  issued  568,400  shares of common stock for  $574,091,  net of
     costs of $138,659,  through  private  offerings  throughout  the year ended
     December 31, 1997.  In relation to those  offerings,  the Company  issued a
     total  of  568,400  common  stock  warrants  to  the  underwriter  and  its
     representatives.  The  warrants  have an exercise  price of $2.00 per share
     through  December 31, 1998,  and then $2.50 per share through  December 31,
     2000, when they expire.

7.   INCOME TAXES:

     The net operating  losses of the Company  prior to the reverse  merger have
     been substantially  eliminated due to the change in ownership.  As such, as
     of December 31, 1997, the Company has a net operating loss  carryforward in
     the approximate  amount of $730,000,  available to offset federal and state
     taxable income primarily through December 31, 2012.

     Differences  between  financial  reporting  and  income  tax losses to date
     relates  primarily to the  Company's net operating  loss  carryforwards  at
     December  31, 1997.  SFAS No. 109  requires  the  reduction of deferred tax
     assets  by a  valuation  allowance,  if based on the  weight  of  available
     evidence,  it is more  likely  than not  that  some  portion  or all of the
     deferred tax assets will not be realized.  Based on the weight of available
     evidence,  the  Company  has  provided a full  valuation  allowance  on its
     deferred  tax  asset at  December  31,  1997 in the  approximate  amount of
     $280,000.
                                      F-13
<PAGE>

                            CORONADO INDUSTRIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (Continued)

8.   GOING CONCERN:

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

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

     As shown in the  accompanying  statement  of  operations,  the  Company has
     incurred net losses of $829,702 and $65,131 in 1997 and 1996, respectively.
     Unaudited  information  subsequent to December 31, 1997, indicates that the
     losses are continuing.  As of December 31, 1997, the  accompanying  balance
     sheet reflects $145,249 in net stockholders' deficit.

     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.

     Management has secured additional funding through the sale of common stock,
     and is currently negotiating the marketing,  distribution and manufacturing
     of the Company's patented treatment with potential customers.

9.   COMMITMENTS:

     The Company currently leases office space in Fountain Hills,  Arizona under
     a non-  cancellable  operating lease agreement which expires in June, 2001.
     Under the terms of the lease,  the Company  pays monthly rent in the amount
     of $972.  For the year ended  December  31, 1997,  rent  expense  under the
     aforementioned non-cancellable operating lease agreement was $10,411.

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

                Year Ending
                December 31,            Amount
                ------------            ------
                    1998               $11,667
                    1999                11,667
                    2000                11,667
                    2001                 5,833
                                       -------
                                       $40,834
                                       =======


                                      F-14
<PAGE>

                            CORONADO INDUSTRIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (Continued)

10.  NON-CASH INVESTING AND FINANCING ACTIVITIES:

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

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

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

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

     For the year ended  December 31, 1996,  these non-cash  activities  were as
     follows:

          Interest in the amount of $26,381 was added to the  principal
          balance of the outstanding notes.

          The Company merged with Ophthalmic International,  L.L.C. and
          American Glaucoma.  In this merger,  the Company  received
          inventory  totaling $10,567,  office  furniture  and  equipment
          of $10,300,  machinery and equipment of $265 and patents valued
          at $1 in exchange for 15,592,224 shares of common stock.

          Retired 869,977 shares of treasury stock recorded at a cost of
          $9,425, reducing  additional  paid-in  capital by $8,555, and
          common stock by $870.

          Issuance  of  40,000  shares of common  stock for  services
          valued at $1,200.

          Issuance of 855,000 shares of common stock for a finders fee
          valued at $8,550.

11.  SUBSEQUENT EVENT:

     Subsequent to December 31, 1997,  the Company issued  additional  shares of
     common stock for $701,888,  net of costs.  In addition,  the Company issued
     819,824 warrants to the offerings underwriter and its representatives.

                                      F-15