FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS
ISSUERS PURSUANT TO SECTION 12(b) OR 12(g)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CancerOption.com, Inc.
----------------------
(Exact name of registrant as specified in its charter)
FLORIDA 65-0744370
------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8300 North Hayden Road, Suite A203, Scottsdale, Arizona 85258
-------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (480) 778-1618
-------------
Securities to be registered pursuant to Section 12(b) of the Act: None
Securities to be registered pursuant to Section 12(g) of the Act:
100,000,000 Shares of Common Stock
<PAGE>
TABLE OF CONTENTS
Page
COVER PAGE 1
TABLE OF CONTENTS 2
PART I
Item 1. DESCRIPTION OF BUSINESS 3
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 5
Item 3. DESCRIPTION OF PROPERTY 6
Item 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERSHIP AND MANAGEMENT 6
Item 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS 7
Item 6. EXECUTIVE COMPENSATION 7
Item 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 8
Item 8. DESCRIPTION OF SECURITIES 8
PART II
Item 1. MARKET PRICE OF AND DIVIDENDS OF THE REGISTRANT'S
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS 9
Item 2. LEGAL PROCEEDINGS 9
Item 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS 9
Item 4. RECENT SALES OF UNREGISTERED SECURITIES 9
Item 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS 11
PART F/S - FINANCIAL STATEMENTS 11
PART III
Item 1. INDEX TO EXHIBITS 11
SIGNATURES 12
<PAGE>
PART I
The issuer has elected to follow Form 10-SB, Disclosure Alternative 2.
ITEM 1. DESCRIPTION OF BUSINESS
CancerOption.com, Inc. ("CancerOption.com," the "Company") is a
cancer-specific health care company that sells nutritional supplements and
offers complementary cancer education to physicians, health care practitioners
and cancer clinics. The Company was incorporated in Florida on April 17, 1997
under the name Pantheon Technologies, Inc. with an authorized capital of
100,000,000 shares of common stock at a par value of $0.001 per share and
1,000,000 shares of preferred stock at a par value of $0.0001 per share. The
Company's name was changed to CancerOption.com, Inc. at a special shareholders'
meeting on April 23, 1999. CancerOption.com is a development stage company.
CancerOption.com also offers the educational web site's, www.canceroption.com
and www.breastcanceroption.com, which provide current cancer related
information, interactive tools, clinic directory listing, support group
directory and e-commerce.
Products
--------
The Company's products are distributed from its principal place of
business in Scottsdale, Arizona. The Company does not manufacture any products.
It acts only as a reseller. The following is a list of the Company's products:
Product Description
-------------------
AngioSharkOption(TM) -- Pure liquid shark cartilage extract, a liquid dietary
supplement. AngioSharkOption(TM)is 100% shark cartilage extracted using natural
patented technology and placed in an oral system of liposomes.
BetaGlucanCAOP(TM)-- BetaGlucanCAOP(TM) is a particulate poly-glucose derived
from the cell wall of Saccharomyces cerevisiae.
EncymeOption(TM) -- An enzyme supplement derived from porcine pancreatic
concentrate.
FloraPlusOption(TM) -- FloraPlusOption(TM)with FOS contains nine combined
strains of friendly intestinal bacteria, in a matrix of FOS
(FructoOligoSaccharides), which aids in the restoration of friendly bacteria in
the intestine and colon to fight parasitic fungus.
ImmuneEssentialCAOP(TM) -- ImmuneEssentialCAOP(TM) is derived from ozonated
geranium flower oil, a non-toxic herbal extract.
ImmuneEssential CAOP (Topical)(TM) -- A topical version of
ImmuneEssentialCAOP(TM).
ImmuneOption(TM) -- ImmuneOption(TM)is a specially formulated,
multi-nutraceutical, high potency nutritional support for the immune system.
ImmuneOption(TM)contains over fifty (50) herbs and nutritional supplements to
promote liver detoxification, modulate the immune system, and support the
digestive system.
ImuPlus -- ImuPlus is a pre-digested protein.
ModifiedCitrusOption(TM) -- ModifiedCitrusOption(TM)powder is a complex
polysaccharide rich in galactosyl and other carbohydrate varieties. It is
derived from pectin from apples and other fruits.
MultiOption(TM) -- A hypo-allergenic, complete vitamin/mineral formula.
OliveLeafOption(TM) -- OliveLeafOption(TM)is a natural food supplement obtained
from selected extracts of the olive plant leave (Oleaeuopa), fortified with
traces of Selenium.
PC Spes(TM) -- A mixture of 8 herbs used in Chinese medicine that aid in the
support of the prostate.
ProstCareOption(TM) -- ProstCareOption(TM)is a formulation of unique
standardized plant extracts, including saw palmetto and zinc.
SoyOption(TM) -- SoyOption(TM)is a traditional Chinese herbal combination
derived from soybeans, containing concentrated genistein and isoflavones.
Super-C Option(TM)1000 -- An exclusive, patented formula designed to provide
high levels of Vitamin C.
ThymusOption(TM) -- ThymusOption(TM)is an organic glandular processed by
lyophilization of glands derived from government-inspected, range-fed animals,
raised in New Zealand or Australia without hormones or antibiotics.
Vita-C Option(TM) -- Vita-C Option(TM)is a non-corn derived vitamin C with
calcium, magnesium, and potassium and a near neutral pH of 6.8.
BeTaC(TM) -- High purity, beet-derived liquid L-Ascorbic acid.
All products are available through the Company's principal place of
business, with a partial list of products available through the Company's web
site, www.canceroption.com.
The Company acquires its nutritional supplements through Immune
Nutraceuticals, Inc. of Reno, Nevada. Immune Nutraceuticals, Inc. purchases
products from a variety of manufacturers. There is no contract between the
Company and Immune Nutraceuticals, Inc.
Intellectual Property
---------------------
In July 1999, the Company applied with the Patent and Trademark Office
to register and trademark its name and logo, as well as the names of the
Company's nutritional supplements. The Company's name has been approved by an
examiner, as have ImmuneOption(TM), ModifiedCitrusOption(TM), and
OliveLeafOption(TM). All other applications are pending. To protect the
Company's online content, it also filed an application under the "Digital
Millennium Copyright Act" in January 2000. This application process is still
pending.
Governmental Compliance
-----------------------
The Company does not require any governmental approval for the
education and research information carried on the Company's web site. The
Company is not subject to any type of compliance as set out by the U.S. Food and
Drug Administration (FDA) under the Dietary Supplement Health and Education Act
(DSHEA) to sell its nutritional supplements. The Company, in compliance with the
FDA, is required to note regarding these oral dietary supplements:
Information and statements regarding dietary supplements have not been
evaluated by the Food and Drug Administration and are not intended to diagnose,
treat, cure, or prevent any disease.
The Company's business model does not face any type of environmental
issue at the federal, state, or local level.
Competition
-----------
The Company currently competes with many nutritional supplement
wholesalers. Major competitors of the Company include Metagenics, Inc., Thorne
Research, Inc., Standard Process, Inc., Allergy Research Group, and Lane
Laboratories. All of these companies sell Neutraceuticals to cancer clinics,
physicians, and health care practitioners.
Most of the Company's existing competitors have longer operating
histories and greater name recognition, and some have significantly greater
financial, technical, and marketing resources. This may allow some of the
Company's competitors to devote greater resources than the Company to the
development and promotion of their products. Some of the Company's competitors
may also engage in more extensive marketing and advertising efforts and adopt
more aggressive pricing policies.
In addition, the Company competes with a number of Internet web sites
that sell nutritional supplements online. The competition for e-commerce sales
in the nutrition category is highly competitive and discount health web sites
have emerged that focus on providing a large selection of nutritional
supplements at discount prices.
A partial list of the Company's online competitors for product sales
follows:
1. Mother Nature.com (http://www.mothernature.com)
2. Drugstore.com (http://www.drugstore.com)
3. Vitamin Shoppe (http://www.vitaminshoppe.com)
4. PlanetRx.com (http://www.planetrx.com)
5. eNutrition (http://www.enutrition.com)
The following sites have cancer-specific information:
1. Cancer Facts (http://www.cancerfacts.com)
2. OncoLink ((http://www.oncolink.com)
3. Cancer.org (http://www.cancer.org)
4. Asco.org (http://www.asco.org)
5. National Institute of Health (http://www.nih.gov)
6. Cancer Guide (http://www.cancerguide.org)
7. Cancer Education (http://www.cancereducation.com)
8. 911 Cancer (http://www.911cancer.com)
These sites have been in existence for some time and have been branding their
names on the World Wide Web.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CancerOption.com has generated revenues from operations beginning
February 1, 2000. The Company's present efforts are to: (1) obtain sufficient
capital to continue and grow operations; (2) develop and increase its market
share; and (3) educate physicians and the public on the benefits of nutritional
supplementation.
In the last two fiscal years, the Company's cost of research and
development of its business has been $528,000. All of these expenses have been
borne by the Company through its shareholders, who provided the funding for
equity. The Company has sufficient capital to enable it to operate at its normal
capacity for the next four-and-a-half (4-1/2) months, including cash, accounts
receivable, and projected revenues based on the Company's current 29% profit
margin of current sales, averaging $65,610 per month. The Company expects to
raise an additional $1,000,000 through the sale of equity, which will provide
sufficient capital for the next twenty months.
CancerOption.com currently has nine (9) full-time employees. The
Company plans to subcontract out its marketing and investor relations and will
hire staff for outside sales, warehousing, and related functions. The Company
may require additional space for warehousing and offices as the sale of products
increases.
ITEM 3. DESCRIPTION OF PROPERTY
The Company's principal place of business is at 8300 North Hayden Road,
Suite A-203, Scottsdale, Arizona, 85258, with a sub-lease agreement for
additional office space at 7332 East Butherus Drive, Suite 101, Scottsdale,
Arizona, 85260.
The principal offices consist of approximately 749 square feet leased
at $1,292.30 per month. The current lease expires January 1, 2001, with an
option to renew for an additional three years. The office is in excellent
condition and there are no plans for renovation or improvement.
The Butherus office is approximately 1,500 square feet at a rental rate
of $2,690 per month, with an escalation clause each year. The Company is
currently subleasing this space from private parties for three years, expiring
April 1, 2001. The Company has an option to renew this lease for three
additional years. The office is eight years old and in excellent condition.
There are no plans for renovation or improvement.
CancerOption.com does not own any property and there are no mortgages
or loans outstanding. The Company carries adequate insurance coverage for both
offices' content and equipment. CancerOption.com has no policies in place
regarding investments made by the Company, but may elect to adopt such policies
in the future.
ITEM 4. SECURITY OWNERSHIP AND CERTAIN BENEFICIAL OWNERSHIP AND MANAGEMENT
The following table sets forth, as of October 17, 2000, the beneficial
ownership of the Company's common stock by each person known by the Company to
own beneficially more than five percent (5%) of the Company's common stock
outstanding as of such date and by the officers and directors of the Company as
a group. Except as otherwise indicated, all shares are owned directly.
<PAGE>
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Title of Class Name and Address of Amount and Nature Percent
Of Beneficial Owner of Ownership of Class
------------------- ------------ --------
<S> <C> <C> <C>
Common Arnold Takemoto 3,000,000 46%
8300 N. Hayden Rd, Suite A203
Scottsdale, Arizona 85260
Common Douglas Brodie 100,000 .02%
601 West Moana Lane, Suite 3
Reno, Nevada 89509
Directors and Officers as a 3,100,000 47%
Group (2 person)
</TABLE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
The following information sets forth the names of the officers and
directors of the Company, their present positions with the Company and
biographical information. There are no relations between the directors and
officers of the Company.
ARNOLD TAKEMOTO (Age 56) President, Chief Executive Officer and Director. Mr.
Takemoto has been President, Chief Executive Officer, and Director since March
22, 1999. He will remain as Chief Executive Officer at the discretion of the
Board of Directors. Mr. Takemoto has been involved in his own private consulting
business specializing in immunological disorders from 1992 to the present. He
developed the proprietary, complementary cancer protocols and education material
for physicians, health care practitioners, and cancer clinics.
DOUGLAS BRODIE, MD. (Age 76). Director. Dr. Brodie has been a Director since
April 6, 1999. Dr. Brodie has had his own practice in Reno, Nevada, since 1982,
providing cancer patients with alternative methods of supporting the immune
system, along with traditional protocols. Dr. Brodie authored the book Cancer
and Common Sense - Combining Science and Nature to Control Cancer, which is a
guide to alternative treatment of cancer and degenerative diseases. Dr. Brodie
also co-authored a portion of the book An Alternative Medicine Definitive Guide
to Cancer by Burton Goldberg.
ITEM 6. EXECUTIVE COMPENSATION
Summary Compensation Table
--------------------------
The following table describes the compensation of the Company's
officers and directors:
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Other Restricted Options/ LTIP Other
Name & Title Year Salary Bonus Annual Comp Stock Award(s) SARs (#) Pay-Outs Comp
------------ ---- ------ ----- ----------- -------------- ------- -------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Arnold Takemoto 1998 0 0 0 0 0 0 0
President, CEO, 1999 0 0 $25,769.10* 3,000,000 0 0 0
& Director 2000 60,000 0 0 0 0 0 0
Dr. Douglas 1998 0 0 0 0 0 0 0
Brodie, Director 1999 0 0 0 50,000 0 0 0
2000 0 0 0 50,000 0 0 0
</TABLE>
*Lease payments for vehicle paid in full from April 1999 to April 2001.
In fiscal 1999, the aggregate amount of compensation paid to all
executive officers and directors as a group for services in all capacities was
approximately $25,769.10. No additional monies were paid to directors and
officers in 1999. In fiscal 2000, the aggregate amount of compensation paid to
all executive officers and directors as a group for services in all capacities
will be approximately $60,000. No additional monies are expected to be paid to
directors and officers in 2000.
Employment Contracts and Termination of Employment and Change in Control
------------------------------------------------------------------------
Arrangements
------------
In March 1999, CancerOption.com entered into an employment contract
with Roger Wist for the position of Vice President of Sales and Marketing and
Director of the Company. Under the terms of this contract, Mr. Wist received
2,000,000 shares of common stock. On August 2, 1999, Mr. Wist resigned as Vice
President of Sales and Marketing and Director for personal reasons. The
2,000,000 restricted shares held by Mr. Wist were transferred to Arnold
Takemoto, the President, CEO, and Director of the Company, who at that time
accepted the responsibility for Vice President of Sales and Marketing. On April
18, 2000, Mr. Takemoto relinquished the responsibilities of Vice President of
Sales and Marketing and returned these shares to the corporate treasury.
On May 10, 1999, CancerOption.com appointed Michael Quel, CPA, as Chief
Financial Officer. Mr. Quel received 100,000 stock options at a strike price of
$5.00, under the 1999 Stock Option Plan, for his services. On March 1, 2000, Mr.
Quel resigned for personal reasons and all stock options under the 1999 Stock
Option Plan were terminated.
On January 3, 2000, the Company appointed Dr. Darryl See as Chief Medical
Officer and as a Director. For his services, the Company issued 100,000 shares
of common stock to Dr. See. On August 28, 2000, Dr. See resigned as Chief
Medical Officer and Director for health reasons. On August 28, 2000, Dr. See
returned 100,000 shares of restricted common stock to the corporate treasury.
On April 14, 2000, the Company appointed Dr. Garth Nicolson, Ph.D., as
Chairman of the Company's Scientific Advisory Board. The Company issued Dr.
Nicolson 50,000 shares of common stock for his services. On August 26, 2000, Dr.
Nicolson resigned from his position for personal reasons.
On November 11, 1999, CancerOption.com appointed Larry Jordan as a
Director of the Company. Mr. Jordan received 50,000 stock options at a strike
price of $5.00 under the Company's 1999 Stock Option Plan for his services. Mr.
Jordan tendered his resignation as Director effective August 10, 2000. All stock
options under the 1999 Stock Option Plan were terminated.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No officer or director of the Company has had an interest in any
corporate transaction.
ITEM 8. DESCRIPTION OF SECURITIES
Common Stock
------------
The Company has 100,000,000 common shares authorized at $0.001 par
value per share. Holders of the Common Stock are entitled to one vote for each
share held by them of record on the books of the Company in all matters to be
voted on by the stockholders. Holders of Common Stock are entitled to receive
such dividends as may be declared from time to time by the Board of Directors
out of funds legally available, and in the event of liquidation, dissolution or
winding up of the Company, to share ratably in all assets remaining after
payment of liabilities. Declaration of dividends on Common Stock is subject to
the discretion of the Board of Directors and will depend upon a number of
factors, including the future earnings, capital requirements and financial
condition of the Company.
The Company has not declared dividends on its Common Stock in the past
and the management currently anticipates that retained earnings, if any, in the
future will be applied to the expansion and development of the Company rather
than the payment of dividends.
The holders of Common Stock have no preemptive or conversion rights and
are not subject to further calls or assessments by the Company. There are no
redemption or sinking fund provisions applicable to the Common Stock. The Common
Stock currently outstanding is, and the Common Stock offered by the Company
hereby will, when issued, be validly issued, fully paid and non-assessable.
Stock Options
-------------
The Company has approved 1,000,000 shares under its 1999 Stock Option
Plan. All stock options that were previously issued under the 1999 Stock Option
Plan were cancelled. No stock options are currently issued.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER STOCKHOLDER MATTERS
The shares of the Company's stock are traded on the National Quotation
Bureau's Pink Sheets under the symbol CAOP. The Company's common stock began
trading on the OTC Bulletin Board on Sept 9, 1998 under the symbol PTTK. On May
10, 1999 the Company issued a name change and the common stock symbol changed to
CAOP. The Company's stock was listed on the National Quotation Bureau's Pink
Sheets on April 18, 2000. The following have been the high and low prices for
the times indicated:
<TABLE>
<CAPTION>
Date High Low
<S> <C> <C>
July - September 2000 $1.12 $0.03
April - June 2000 $1.87 $0.12
January - March 2000 $3.84 $1.50
October - December 1999 $5.12 $1.50
August - September 1999 $4.24 $3.24
April - June 1999 $3.75 $1.75
January - March 1999 $2.37 $0.37
October - December 1998 $0.50 $0.28
</TABLE>
There are 2,000,000 share purchase warrants exercisable at $0.05 per
share until September 18, 2001, and 166,000 share purchase warrants exercisable
at $0.65 per share until March 1, 2003. There are no other convertible
securities outstanding.
As of October 12, 2000, there are thirty-eight (38) registered
shareholders of the Company and 6,558,113 shares outstanding. Cede and Company
is one of the registered shareholders and is holding shares on behalf of other
shareholders in nominee form.
There are no dividend restrictions on the Company. Market makers who have
posted bids or offers during the period April 1996 to April 2000 are as follows:
Knight Securities, Inc., Herzong Heine Geduld, Inc., and Sharpe Capital Inc.
As of October 17, 2000, the Company had 6,558,113 shares of common
stock issued and outstanding, of which 3,100,000 are owned by officers and
directors of the Company.
There have been no cash dividends declared in the past two fiscal
years.
ITEM 2. LEGAL PROCEEDINGS
There are no legal proceedings pending or threatened against the
Corporation.
Preceding Issues
----------------
In January 2000, the Securities and Exchange Commission (the "SEC")
began a non-public fact-finding inquiry investigating the Company's business
dealings. On September 6, 2000, the SEC instituted a public cease and desist
order against the Company and its President, Arnold Takemoto, pursuant to
Section 21C of the Securities Exchange Act of 1934 (the "Exchange Act"). This
has been published as Administrative Proceeding File No. 3-10275. An offer of
settlement was accepted by the SEC wherein the Company and Mr. Takemoto neither
admitted nor denied guilt. The Company and Mr. Takemoto were ordered to cease
and desist from committing or causing any violations and any future violations
of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. No fine or other
penalty was ordered. The Company continues to do business in the ordinary course
and feels this order will have no materially negative effect on its business.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
At the Company's 1999 Annual General Meeting held June 4, 1999, the
Board of Directors approved and the shareholders voted to change the auditors
from Clancy & Co. to Berenfeld, Spritzer, Shechter & Sheer, an auditor who is
familiar with Internet-related start-up businesses. The new auditors were
appointed on July 13, 1999 for the fiscal year ending December 1999, the 2000
quarterly requirements, and the 2000 fiscal year ending December 31, 2000. There
had been no disagreements with the previous auditor and the change was made only
for convenience's sake.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
On June 1, 1997, the Company, in connection with a Rule 504, Regulation
D offering, issued 200,000 shares of its common stock for cash at $0.25 per
share or $50,000, less expenses of the offering of $5,500, for net proceeds of
$44,500. These shares were issued to 104 unaccredited investors. The proceeds of
this offering were used for the initial development of the Company's products
and services.
In September 1998, the Company, in connection with a Rule 504,
Regulation D offering, issued 2,000,000 shares of common stock at $0.05 per
share for a total offering of $100,000, less expenses of $3,500, for net
proceeds of $96,500. This offering included a warrant exercisable into common
stock at $0.05 per share expiring September 18, 2001. These shares were sold to
sixteen unaccredited investors. The proceeds from the offering were used for
exploration and development of the Company's products and services. As of this
date, 360,000 warrants have been exercised and 1,640,000 warrants are
outstanding from the offering.
On October 13, 1998, the Company entered into a Public Relations
agreement with Thor Equity Group, L.L.C. and issued 100,000 shares of common
stock for services. On March 23, 2000, the Company discontinued its public
relations contract with Thor Equity Group. Thor Equity Group returned 100,000
shares of common stock to the corporate treasury on October 17, 2000.
On March 1, 1999, the Company, in connection with a Rule 504,
Regulation D offering, issued 166,600 shares of common stock at $0.60 per share
for cash of $100,000, less expenses of the offering of $3,500, for net proceeds
of $96,500. This offering included a warrant exercisable for common stock at
$0.65 per share until March 1, 2003. These shares were sold to one unaccredited
investor. The proceeds from this offering were used for the development of the
Company's Internet web site and for working capital. As of this date, no
warrants have been exercised and 166,600 warrants are outstanding from this
offering.
In March 1999, the Company issued 3,000,000 shares of restricted common
stock at $0.001 per share for services to Arnold Takemoto, President, CEO, and
Director of the Company.
Also in March 1999, the Company issued 2,000,000 shares of restricted
common stock at $0.001 per share for services to Roger Wist, former Vice
President of Sales and Marketing and Director of the Company. On August 2, 1999,
Roger Wist resigned as Vice President of Sales and Marketing and from the Board
of Directors, for personal reasons. The 2,000,000 restricted shares held by Mr.
Wist were transferred to Mr. Arnold Takemoto, the President, CEO and Director of
the Company. On April 18, 2000, Mr. Arnold Takemoto, President, CEO and Director
of the Company returned 2,000,000 shares of restricted common stock to the
corporate treasury.
On August 18, 1999, the Company, in connection with a Rule 504,
Regulation D offering, authorized the sale of 128,000 restricted shares at $2.50
per share for a total of $320,000, less expenses of the offering of $5,000, for
net proceeds of $315,000. Each share carried a warrant at a conversion price of
$2.35 per share expiring August 18, 2002. All shares were sold to two accredited
investors. The proceeds from this offering were used for development of the
Company's products and services. As of this date, no warrants have been
exercised and 128,000 warrants are outstanding from the offering.
On September 14, 1999, the Company issued 1,000 shares of common stock
to Mr. Akitsugu Moriyama, Scientific Advisory Board Member, for services
rendered.
In December, 1999, 360,000 warrants were exercised and converted into
common shares at $0.05 per share, resulting in net proceeds to the Company of
$18,000 which were used for development of the Company's products and services.
On January 3, 2000, the Company issued 100,000 shares of common stock to
Dr. Darryl See, M.D., former Chief Medical Officer, for services rendered. On
August 28, 2000, Dr. See returned 100,000 shares of restricted common stock to
the corporate treasury.
On April 14, 2000, the Company issued 50,000 shares of common stock to Dr.
Garth Nicolson, Ph.D., former Chairman of the Scientific Advisory Board. On
August 26, 2000, Dr. Nicolson resigned as Chairman of the Advisory Board.
On June 6, 2000, the Company issued 386 shares of common stock to
Mitchell R. Fielder for web site placement services rendered March 1, 2000
through May 31, 2000. Also on this date, the Company issued 18,343 shares of its
common stock to Michael Guthrie for editorial services rendered from January 15,
2000 through July 31, 2000 and 100,000 shares of common stock were issued to
Kaufman & Associates for services rendered from June 1, 2000 through December 1,
2000.
On October 11, 2000, the Company issued 133,784 shares of restricted
stock to Rory Boyes-Varley in exchange for $49,500 at $0.37 per share for
financing to the Company. Also on October 11, 2000, the Company issued 100,000
shares to Dr. Douglas Brodie, Director of the Company, in exchange for his
services on the Board of Directors during 1999 and 2000.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Directors and Officers, their heirs, executors, and administrators,
of the Company are indemnified as provided under the Florida Statutes and
pursuant to the Bylaws of the Company. This indemnification, as described in
Article VII, Section I of the Bylaws, includes "as authorized by current and
future legislation or judicial or administrative decision against all fines,
liabilities, costs, and expenses, including attorneys' fees."
PART F/S
FINANCIAL STATEMENTS
CANCEROPTION.COM INC.
BALANCE SHEET
(Unaudited)
As of June 30, 2000
<TABLE>
<CAPTION>
June 30, 2000
-------------
<S> <C>
ASSETS
Current Assets
Checking/Savings
Cash -- Bank of America 44,676.63
Cash -- Bank of America Merchant 6,634.36
Cash -- Canadian Funds 2,678.10
Cash -- Wells Fargo 1,340.66
----------
Total Checking/Savings 55,329.75
Accounts Receivable
Accounts Receivable 117,923.80
----------
Total Accounts Receivable 117,923.80
Other Current Assets
Due From Shareholder 19,414.36
Employee Advances 2,000.00
Inventory -- Supplements 66,954.07
Inventory -- Supplies 168.39
------
Total Other Current Assets 88,536.82
---------
Total Current Assets 261,790.37
Fixed Assets
Computer Software 7,301.91
Equipment 31,125.45
Equipment -- Canada 3,293.75
Furniture and Displays 33,756.47
Less Accum Depr (11,718.00)
---------
Total Fixed Assets 63,759.58
Other Assets
Accumulated Amortization (200.00)
Prepaid Expense -- Labels 10,241.40
Prepaid Expense 6,302.02
Prepaid Vehicle Lease 10,737.04
Trademarks 12,648.00
Trademarks -- Amortization (402.00)
-------
Total Other Assets 39,326.46
---------
TOTAL ASSETS 364,876.41
==========
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable
Accounts Payable 54,897.85
---------
Total Accounts Payable 54,897.85
Other Current Liabilities
Accrued Expense 8,736.39
Withheld and Accrued P/R Taxes
Canadian Taxes Withheld 6.48
FUTA Tax Payable 96.00
-----
Total Withheld & Accrued P/R Taxes 102.48
------
Total Other Current Liabilities 8,838.87
--------
Total Current Liabilities 63,736.72
---------
Total Liabilities 63,736.72
Equity
Common Stock 6,305.60
Paid-in Capital 1,236,244.41
Retained Earnings (569,881.00)
Net Income (371,529.32)
-----------
Total Equity 301,139.69
----------
TOTAL LIABILITIES & EQUITY 364,876.41
==========
</TABLE>
<PAGE>
CANCEROPTION.COM, INC.
PROFIT & LOSS
(Unaudited)
April through June 2000
<TABLE>
<CAPTION>
Apr-June 2000 Jan-June 2000
------------ -------------
<S> <C> <C>
Ordinary Income/Expense
Income
Sales 182,196.06 291,196.06
---------- ----------
Total Income 182,196.06 291,196.06
Cost of Goods Sold
Cost of Products 128,910.00 194,615.98
Product Labels 1,315.30 1,315.30
-------- --------
Total COGS 130,255.30 195,931.28
---------- ----------
Gross Profit 51,970.76 95,264.78
Expense
Advertising 10,740.00 51,373.53
Amortization Expense 100.00 200.00
Automobile Expense 4,140.89 7,362.08
Bank Charge - Canada 130.46 339.02
Bank Service Charges 1,383.29 2,273.75
Conference & Seminars 33,410.07 39,335.07
Consulting Fees
Investor Relations 0.00 52,500.00
Other 35.00 2,000.17
Consulting Fees -- Other 855.00 1,415.00
------ --------
Total Consulting Fees 890.00 55,915.17
Depreciation Expense 3,000.00 6,000.00
Dues and Subscriptions 264.87 734.87
Education 63.75 63.75
Employee Leasing
Fees 15,784.07 17,539.56
Employee Leasing - 0ther 75,244.15 86,558.75
--------- ---------
Total Employee Leasing 91,028.22 104,098.31
Equipment Rental 0.00 374.32
Insurance
Automobile 0.00 508.10
------ ------
Total Insurance 0.00 508.10
Interest Expense 47.32 64.77
Licenses and Permits 50.00 657.75
Miscellaneous 853.58 853.58
Office Supplies 6,418.71 9,571.77
On-Line Service 59.85 144.60
Payroll Exp -- Canadian 2,833.32 11,953.96
Payroll Exp -- Medical Premiums 0.00 489.00
Payroll Exp -- Salaries 0.00 14,142.62
Payroll Taxes 0.00 1,398.57
Payroll Taxes -- Canada 194.32 810.17
Postage and Delivery 12,898.41 18,666.63
Postage and Delivery -- Canada 0.00 341.50
Press Releases
Business Wires 675.00 2,530.00
CNN 0.00 352.50
---- ------
Total Press Releases 675.00 2,530.00
Printing and Reproduction 1,803.73 13,775.00
Professional Fees
Accounting 9,300.00 13,775.00
Legal Fees 7,984.30 14,444.46
-------- ---------
Total Professional Fees 17,284.30 28,219.46
Promotion and Marketing 9,405.71 12,647.38
Rent 863.20 863.20
Telephone 5,596.84 12,366.28
Transfer Fees 54.00 474.00
Travel & Ent
Entertainment 221.36 221.36
Meals 4,636.54 5,538.81
Travel 8,821.41 18,767.52
Travel & Ent -- Other 4,259.53 4,259.53
-------- --------
Total Travel & Ent 17,938.84 28,787.22
Uncategorized Expenses 0.00 0.00
Web Design
Content Fees 12,500.00 21,175.00
Search Engine 6,270.00 7,215.00
Web Design -- Other 4,364.74 5,684.74
-------- --------
Total Web Design 23,134.74 34,074.74
--------- ---------
Total Expense 258,239.78 466,782.09
---------- ----------
Net Ordinary Income (206,269.02) (371,517.31)
Other Income/Expense
Other Income
Gain/Loss Currency Exchange (832.38) (3,421.99)
Interest Income 250.88 3,409.98
------ --------
Total Other Income (581.50) (12.01)
------
Net Other Income (581.50) (12.01)
------ -------
Net Income (206,850.52) (371,529.32)
============ ============
</TABLE>
<PAGE>
CANCEROPTION.COM INC.
BALANCE SHEET
(Unaudited)
As of March 31, 2000
<TABLE>
<CAPTION>
March 31, 2000
--------------
<S> <C>
ASSETS
Current Assets
Checking/Savings
Cash -- Bank of America 105,437.76
Cash -- Bank of America Merchant 8,627.03
Cash -- Canada -- US Funds 164,61.19
Cash -- Canadian Funds 119,203.50
Cash -- Wells Fargo 1,929.91
----------
Total Checking/Savings 399,811.39
Accounts Receivable
Accounts Receivable 76,340.25
---------
Total Accounts Receivable 76,340.25
Other Current Assets
Due From Shareholder 19,414.36
Inventory -- Supplements 24,750.58
Inventory -- Supplies 168.39
------
Total Other Current Assets 44,333.33
---------
Total Current Assets 520,484.97
Fixed Assets
Computer Software 4,494.00
Equipment 23,217.51
Equipment -- Canada 3,293.75
Less Accum Depr (8,718.00)
------
Total Fixed Assets 22,287.26
Other Assets
Accumulated Amortization (100)
Prepaid Expense -- Labels 11,241.40
Prepaid Expense 3,225.53
Prepaid Vehicle Lease 13,958.23
Trademarks 12,648.00
Trademarks -- Amortization (402)
----
Total Other Assets 40,571.16
---------
TOTAL ASSETS 583,343.39
==========
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable
Accounts Payable 67,750.92
---------
Total Accounts Payable 67,750.92
Other Current Liabilities
Accrued Expense
Accounting 5,700.00
--------
Total Accrued Expense 5,700.00
Withheld and Accrued P/R Taxes
AZ State Tax Withheld 176.40
AZ SUTA Payable 324.00
Canadian Taxes Withheld 6.48
Federal Tax Withheld 630.00
FICA & Medicare Taxes Withheld 669.38
FUTA Tax Payable 96.00
-----
Total Withheld & Accrued P/R Taxes 1,902.26
--------
Total Other Current Liabilities 7,602.26
--------
Total Current Liabilities 75,353.18
---------
Total Liabilities 75,353.18
Equity
Common Stock 6,306.60
Paid-in Capital 1,236,244.41
Retained Earnings (569,881.00)
Net Income (164,678.80)
-----------
Total Equity 583,343.39
----------
TOTAL LIABILITIES & EQUITY 583,343.39
==========
</TABLE>
<PAGE>
CANCEROPTION.COM, INC.
PROFIT & LOSS
(Unaudited)
January through March 2000
<TABLE>
<CAPTION>
Jan-Mar 2000
------------
<S> <C>
Ordinary Income/Expense
Income
Sales 109,000.00
----------
Total Income 109,000.00
Cost of Goods Sold
Cost of Products 65,705.98
---------
Total COGS 65,705.98
---------
Gross Profit 43,294.02
Expense
Advertising 40,633.53
Amortization Expense 100
Automobile Expense 3,221.19
Bank Charge - Canada 208.56
Bank Service Charges 890.46
Conference & Seminars 5,925.00
Consulting Fees
Investor Relations 52,500.00
Other 1,965.17
Consulting Fees -- Other 560.00
------
Total Consulting Fees 55,025.17
Depreciation Expense 3,000.00
Dues and Subscriptions 470.00
Employee Leasing
Fees 1,755.49
Employee Leasing - 0ther 11,314.60
---------
Total Employee Leasing 13,070.09
Equipment Rental 374.32
Insurance
Automobile 508.10
------
Total Insurance 508.10
Interest Expense 17.45
Licenses and Permits 607.75
Miscellaneous 0.00
Office Supplies 3,153.06
On-Line Service 84.75
Payroll Exp -- Canadian 9,120.64
Payroll Exp -- Medical Premiums 489.00
Payroll Exp -- Salaries 14,142.62
Payroll Taxes 1,398.57
Payroll Taxes -- Canada 615.85
Postage and Delivery 5,768.22
Postage and Delivery -- Canada 341.50
Press Releases
Business Wires 1,855.00
CNN 352.50
--------
Total Press Releases 2,207.50
Printing and Reproduction 137.39
Professional Fees
Accounting 4,475.00
Legal Fees 6,460.16
--------
Total Professional Fees 10,935.16
Promotion and Marketing 3,241.67
Rent 3,876.94
Telephone 6,769.44
Transfer Fees 420.00
Travel & Ent
Meals 902.27
Travel 9,946.11
--------
Total Travel & Ent 10,848.38
Web Design
Content Fees 8,675.00
Search Engine 945.00
Web Design -- Other 1,320.00
--------
Total Web Design 10,940.00
---------
Total Expense 208,542.31
----------
Net Ordinary Income (165,248.29)
Other Income/Expense
Other Income
Gain/Loss Currency Exchange (2,589.61)
Interest Income 3,159.10
--------
Total Other Income 569.49
------
Net Other Income 569.49
------
Net Income (164,678.80)
============
</TABLE>
<PAGE>
CANCEROPTION.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 1999
<PAGE>
CANCEROPTION.COM, INC.
TABLE OF CONTENTS
INDEPENDENT AUDITORS' REPORT ................................................. 1
BALANCE SHEETS ..............................................................2-3
STATEMENTS 0F OPERATIONS...................................................... 4
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY ...............................5-6
STATEMENTS OF CASH FLOWS ....................................................7-8
NOTES TO FINANCIAL STATEMENTS ..............................................9-21
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the stockholders and
Board of Directors
Canceroption.com, Inc.
(A Development Stage Company)
Scottsdale, Arizona
We have audited the accompanying balance sheet of CancerOption.com, Inc. (a
development stage company) as of December 31, 1999, and the related statemenof
operations, changes in stockholders' equity and cash flows for the year
then ended. 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 audit. The financial statements of CancerOption.com,
Inc. as of December 31, 1998, and for the year then ended and for the cumulative
period April 17, 1997, (inception) to December 31, 1998, were audited by other
auditors whose report dated April 30, 1999, .expressed an unqualified opinion on
those statements.
Ale conducted our audit in accordance with,generally accepted auditing.
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material. znisstatement.. 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 that our audit provides 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 Canoe rOption.com, Inc. as of,
December 31, 1999, and the results of its operations and its cash flows for the
year then ended, and for the cumulative period April 17, 1997(inception,) to
December 31, 1999. in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 3 to the financial
statements, the Company is a development stage company. The realization of major
portion of its assets is dependent upon its ability to meet its future;
financing requirements, and the success of future operations, These factors.
raise substantial doubt about the Company's ability to continue as a going
concern. The financial statements do not include any adjustments that might
result from is uncertainty.
/s/ Berenfeld, Spritzer, Shechter, and Sheer
--------------------------------------------
Berenfeld, Spritzer, Shechter, and Sheer
Miami, Florida
March 31, 2000
7700 North Kendall Drive, Penthouse Five, Miami, Florida 33156
Telephone: (305) 274-4600 Telefax: (305) 274-5139
E-Mail:cpamia(R)aol.como Website: http://www.bss-cpa.com
<PAGE>
CANCEROPTION.COM, INC.
A DEVELOPMENT STAGE COMPANY
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
December 31,
1999 2000
---- ----
<S> <C> <C>
CURRENT ASSETS:
Cash $ 609,519 $ 244
Inventories 28,205 0
Supplies 11,241
Prepaid expenses 20,405 0
Stock subscription receivable 0 50,500
- ------
Total Current Assets 669,370 50,744
------- ------
PROPERTY AND EQUIPMENT
Less accumulated depreciation of $5,718 23,415 0
------ -
OTHER ASSETS:
Trademarks, net of accumulated
amortization of $402 11,651 0
Loans and advances - shareholders 12,236 0
------ -
Total Other Assets 23,887 0
------ -
TOTAL ASSETS $ 716, 672 $ 50, 744
============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31,
1999 1998
---- ----
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 14,845 $ 750
Accrued expenses parable 26,500 0
Payroll taxes payable 2,158 0
----- -
Total Current Liabilities 43,503 750
Stockholders' Equity
Preferred stock: $0.0001 par value, 1,000,000 shares
authorized; 0 issued and outstanding 0 0
Common stock: $0.001 par value, 100,000,000 shares
authorized; 6, 305, 600 and 5, 200, 000 ,issued and
outstanding as of December 31, 1999 and 1998 6,306 5,200
respectively
Additional paid-in capital 1,236,244 147,800
Deficit accumulated during the
the development stage (569,381) (103,006)
-------- --------
Total Stockholders' Equity 673,169 49,994
------- ------
Total Liabilities and Stockholders' Equity $ 716,672 $ 50,744
============ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
CANCEROPTION.COM, INC.
A DEVELOPMENT STAGE COMPANY
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR APRIL 11, 1997
ENDED ENDED (INCEPTION)
DECEMBER 31, 1999 DECEMBER 31, 1998 TO DECEMBER 31, 1999
----------------- ----------------- --------------------
<S> <C> <C> <C>
DEVELOPMENT STAGE REVENUES $ 14,332 $ 3,500 $ 29,832
COST OF GOODS SOLD 11,049 0 11,049
------ - ------
GROSS PROFIT 3,282 3,500 18,783
----- ----- ------
GENERAL AND ADMINISTRATIVE EXPENSES:
Bad debt expense 0 12,000 12,000
Consulting fees 221,270 49,500 317,271
Payroll 31,766 0 31,766
professional fees 36,570 4,438 43,543
Travel and entertainment 47,250 0 47,250
Web design 48,659 0 48,659
Other 85,327 2,335 89,708
------ ----- ------
Total General and Administrative Expenses 470,842 68,273 590,797
------- ------ -------
DEVELOPMENT STAGE LOSS
BEFORE OTHER INCOME (467,560) (64,773) (571,414)
-------- ------- --------
OTHER INCOME:
Miscellaneous 108 0 108
Internet income 1,077 35 1,925
----- -- -----
Total Other Income 1,185 35 2,033
----- -- -----
NET DEVELOPMENT STAGE LOSS $ (466,375) $ (64,738) $ (569,381)
============= ============ ============
NET LOSS PER WEIGHTED SHARE OF
COMMON STOCK $ (0.086) $ (0.017) $ (0.158)
============= ============ ============
WEIGHTED SHARES OF COMMON STOCK AND
COMMON STOCK EQUIVALENTS OUTSTANDING:
BASIC 5,453,082 3,866,666 3,598,702
========= ========= =========
FULLY DILUTED N/A N/A N/A
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
CANCEROPTION.COM, INC.
A DEVELOPMENT STAGE COMPANY
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD APRIL 17, 1997 (INCEPTION) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID-IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
------ ------ ------- ----- -----
<S> <C> <C> <C> <C> <C>
Balance, April 17, 1997 (inception) 0 $ 0 $ 0 $ 0 $ 0
Restricted common stock issued to
founder for managerial services 3,000,000 3,000 0 0 3,000
Sale and issuance of common stock 200,000 200 49,800 0 50,000
Deficit accumulated during the
development stage for the
period April 17, 1997 (inception)
to December 31, 1997 0 0 0 (38,268) (38,268)
--- ---- - - - ------- -------
Balance, December 31, 1997 3,200,000 3,200 49,800 (38,268) 14,732
Sale and issuance of common stock
and warrants 2,000,000 2,000 98,000 0 100,000
Deficit accumulated during the
development stage for the year
ended December 31, 1998 0 0 0 (64,738) (64,738)
--- ---- - - - ------- -------
Balance, December 31, 1998 5,200,000 $ 5,200 $ 147,800 $ ( 103,006) $ 49,994
--- ---- --------- -------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
CANCEROPTION.COM, INC.
A DEVELOPMENT STAGE COMPANY
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD APRIL 17, 1997 (INCEPTION) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID-IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
------ ------ ------- ----- -----
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1998 5,200,000 $ 5,200 $ 147,800 $ ( 103,006) $ 49,994
Sale and issuance of common stock
and warrants 166,600 167 99,833 0 100,000
Sale and issuance of restricted common
stock and warrants 128,000 128 320,172 0 320,000
Restricted common stock issued for
consulting services 1,000 1 1,249 0 1,250
Restricted common stock issued for
consulting services to related
party 100,000 100 124,900 0 125,000
Sale and issuance of restricted
common stock and warrants 350,000 350 524,650 0 525,000
Common stock issued for warrants
exercised for common stock 360,000 360 17,640 0 18,000
Deficit accumulated during the
development stage for the year
ended December 31, 1999 0 0 0 (466,375) (466,375)
- - - -------- --------
Balance, December 31, 1999 6,305,600 6,306 1,236,244 (569,381) 673,169
========= ===== ========= ======== =======
</TABLE>
<PAGE>
CANCEROPTION.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH
<TABLE>
<CAPTION>
FOR THE PERIOD
APRIL 17, 1997
FOR THE YEARS ENDED DECEMBER 31, (INCEPTION)
1999 1998 TO DECEMBER 31, 1999
---- ---- --------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Deficit accumulated during the
development stage $ (466,375) $ (64,738) $ (569,381)
Adjustments to reconcile net loss to
net cash used by operations:
Amortization 402 0 402
Depreciation 5,718 0 5,718
Bad debt expense 0 12,000 0
Increase in inventories (28,205) 0 (28,205)
Common stock issued for management services 126,250 0 129,250
Increase in prepaid expenses (31,646) 0 (31,646)
(Increase) decrease in stock subscription receivable 50,500 (50,500) 0
Increase in accrued expenses 26,500 0 26,500
Increase in accounts payable 14,095 750 14,845
Increase in payroll taxes payable 2,158 0 2,158
----- - -----
Net Cash Used by
Operating Activities (300,603) (102,488) (450,359)
-------- -------- --------
INVESTING ACTIVITIES:
Acquisition of property and equipment (29,133) 0 (29,133)
Costs expended for trademarks (12,053) 0 (12,053)
------- - -------
Net Cash Used for
Investing Activities (41,106) 0 (41,188)
------- - -------
FINANCING ACTIVITIES:
Proceeds from the issuance of
common stock 963,300 100,000 1,113,300
Loans to shareholders (12,236) 0 (12,236)
------- - -------
Net cash provided by
Financing Activities 951,064 100,000 1,101,064
------- ------- ---------
NET INCREASE (DECREASE) IN CASH 609,275 (2,488) 609,519
CASH, BEGINNING OF PERIOD 244 2,732 0
--- ----- -
CASH, ENDING OF PERIOD $ 609,519 $ 244 $ 609,519
========== ========= ===========
</TABLE>
The accompanying notes are an integral pert of these financial statements.
<PAGE>
CANCEROPTION.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 AND FOR THE
----------------------------------------------------------
CUMULATIVE PERIOD MAY 5, 1997 (INCEPTION) TO DECEMBER 31, 1999
---------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
During the years ended December 31, 1999 and 1998, and for the cumulative
period April 17, 1997 (inception) to December 31, 1999, the Company did not pay
any interest.
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
The Company entered into the following non-cash transactions:
During the period April 17, 1997 (inception) through December 31., 1997 the
Company issued 3,000,000 restricted shares of common stock in consideration for
management services provided by the founders of the Company. These transactions
were valued at 93,000.
In August, 1999, the Company issued 1,000 shares of restricted common stock
to Dr. Akitsugu Moriyama in consideration for management services. This
transaction was valued at $1,250.
In October, 1999, the Company issued 100,000 shares of restricted common
stock in consideration for consulting and investor relation services to Thor
Equity Group, LLC, a related party. This transaction was valued at $125,000-
The accompanying notes are an integral pert of these financial statements.
<PAGE>
CANCEROPTION.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
CancerOption.com, Inc. ("the Company"), formerly Pantheon
Technologies, Inc., was incorporated on April 17, ,1997, under the
laws of the State of Florida. The Company's primary objective is to
position itself as an internet provider of educational and research
information for various types of cancers and cancer treatments. The
Company intends to sell nutritional supplements and other products to
doctors, hospitals, special clinics and healthcare facilities through
the internet.
INVENTORIES
Inventories, consisting of vitamins and supplements, are stated at the
lower of cost or market value. Cost is determined using the first-in
first-out method.
PROPERTY AND EQUIPMENT
Property and equipment is recorded at cost. Maintenance and repairs
are charged to operations as incurred. Depreciation is calculated on
an accelerated method over the assets' remaining useful lives.
ADVERTISING COSTS
Advertising and promotional costs are charged to operations as
incurred.
USE OF ESTIMATES
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 disclosures of contingent assets and liabilities as of
the date of the financial statements and reporting periods.
Accordingly, actual results could differ from those estimates.
<PAGE>
CANCEROPTION.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONT'D)
CASH AND CASH EQUIVALENTS
For purposes of reporting cash flows, the Company considers highly
liquid investments purchased with an original maturity of three months
or less to be cash equivalents.
CARRYING VALUES OF LONG-LIVED ASSETS
The Company reviews the carrying values of its long-lived and
identifiable intangible assets for possible impairment. Whenever
events or changes in circumstances indicate that the carrying values
of assets may not be recoverable, the Company will reduce such values
and charge operations in the period the impairment occurs.
INCOME TAXES
The Company utilizes Statement on Financial Accounting Standard
("SPAS") No. 109, "Accounting fox Income Taxes", which requires the
recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in financial
statements ox tax returns. Under this method, deferred income taxes
axe recognized for the tax consequences in future years of differences
between the tax bases of assets and liabilities and their financial
reporting amounts at each period end based on enacted tax laws and
statutory tax rates applicable to the periods in which the differences
are expected to affect taxable income. Valuation allowances are
established where necessary to reduce deferred tax assets to amounts
expected to be realized. The accompanying financial statements have no
provisions for deferred tax assets or liabilities because the deferred
tax allowance offsets deferred tax assets in their entirety.
<PAGE>
CANCEROPTION.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONT'D)
NET LOSS PER SHARE
The Company has adopted SFAS No. 128 "Earnings Per Share". Basic loss
per share is computed by dividing the loss available to common
shareholders by the weighted-average number of common shares
outstanding. Diluted loss per share is computed in a manner similar to
the basic loss per share, except that the weighted-average number of
shares outstanding is increased to include all common shares,
including those with the potential to be issued by virtue of warrants,
options, convertible debt and other such convertible instruments.
Diluted earnings per share contemplates a complete conversion to
common shares of all convertible instruments, only if they axe
dilutive in nature with regards to earnings per share. Since the
Company has incurred net losses for all periods, basic loss per share
and diluted loss per share are the same.
NOTE 2 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June, 1997, the Financial-Accounting Standards Board ("FASB")
issued SFAS No. 130, "Reporting Comprehensive Income". This statement
requires companies to classify items of other comprehensive income by
their nature in financial statements and to display the accumulated
balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of a
statement of financial position. SFAS No. 130 is effective for
financial statements issued for fiscal years beginning after December
15, 1997. Management believes that SEAS No. 130 has no material effect
on the Company's financial statements.
In June, 1997, the FASB issued SFAS No. 1,31, "Disclosure About
Segments of an Enterprise and Related Information". This statement
establishes additional standards for segment reporting in financial
statements and is effective for financial statements issued for fiscal
years beginning after. December 1,5, 1997. Management believes that
SFAS No. 131 does
<PAGE>
CANCEROPTION.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 2 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONT'D)
not have a material effect on the Company's financial statements.
In April, 1998, the American Institute of Certified Public Accountants
issued Statement of Position No. 98-5, "Reporting for Costs of
Start-Up Activities", ("SOP 98-5"). The Company is required to expense
all start-up costs related to new operations as incurred. In addition,
all start-up costs that were capitalized in the past must be written
off when SOP 98-5 is adopted. The Company's adoption did not have a
material impact on the Company's financial position or results of
operations.
SEAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities", is effective for financial statements issued for fiscal
years beginning after June 15, 1999. SFAS No. 133 establishes
accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts,
and for hedging activities. Management does not believe that SFAS No.
133 will have a material effect on its financial position or results
of operations.
SFAS No. 134, "Accounting for Mortgage-Backed Securities Retained
after the Securitization of Mortgage Loans Held for Sale by Mortgage
Banking Enterprises", is effective for financial statements issued in
the first fiscal quarter beginning after December 15, 1998. This
statement is not applicable to the Company.
SEAS No. 135, "Rescission of FASB Statement No. 75 and Technical
Corrections", is effective for financial statements issued for fiscal
years beginning in February, 1999. This statement is not applicable to
the Company.
<PAGE>
CANCEROPTION.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 3 - DEVELOPMENT STAGE OPERATIONS AND GOING CONCERN MATTERS
The Company's initial activities have been devoted to developing a
business plan, negotiating contracts and raising capital for future
operations and administrative functions.
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. As shown
in the financial statements, development stagy losses from April 17,
1997 (,inception) to December 31, 1999, were $569,381. The Company's
cash flow requirements have been met by contributions of capital and
accounts payable. The possibility exists that these sources of
financing will not continue to be available. If the Company is unable
to generate profits, or unable to obtain additional funds for its
working capital needs, it may have to cease operations.
The financial statements do not include any adjustments relating to
the recoverability and classification of liabilities that might be
necessary should the Company be unable to continae as a going concern.
The Company's continuation as a going concern is dependent upon its
ability to generate sufficient cash flow to meet its obligations on a
timely basis, to retain additional paid-in capital, and to ultimately
attain profitability.
The Company has formulated a new business model in order to emerge
from the development stage and become a viable selfsustaining
business. Management intends to attend various medical conferences to
raise awareness of its products and research studies. In February,
2000, the Company launched its internet portal in order to increase
product sales. The Company also intends to conduct cancer workshops to
teach doctors how to treat advanced Stage III and Stage IV cancers
using a non-toxic, non-invasive complementary nutraceutical approach
utilizing oral and IV techniques.
<PAGE>
CANCEROPTION.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 4 - INVENTORIES
Inventories as of December 31, 1999 and 1998, consisted of the
following:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Vitamins and supplements $ 28,037 $ 0
Other supplies 168 0
--- -
Total Inventories $ 28,205 $ 0
======== ===========
</TABLE>
NOTE 5 - PREPAID EXPENSE
Prepaid expenses as of December 31, 1999 and 1998, consisted of the
following:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Prepaid vehicle lease $ 17,180 $ 0
Prepaid travel 3,225 0
----- -
Total Prepaid Expenses $ 20,405 $ 0
=========== ===========
</TABLE>
NOTE 6 - PROPERTY AND EQUIPMENT
Property and equipment and related depreciation consisted of the
following as of December 31, 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Office furniture and equipment $ 24,639 $ 0
Computer software 4,494 0
----- -
Total Property and Equipment 29,133 0
Accumulated depreciation (5,718) 0
------ -
Net Property and Equipment $ 23,415 $ 0
========== ===========
Depreciation Expense $ 5,718 $ 0
========== ===========
</TABLE>
<PAGE>
CANCEROPTION.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 7 - DEFERRED IN-COME TAXES
The Company has a carryforward loss for income tax purposes of
$569,381 that may be offset against future taxable income. The
carry forward loss expires at various times through the year 2019. Due
to the uncertainty regarding the success of future operations,
management has valued the deferred tax asset allowance at 100 of the
related deferred tax asset. The deferred tax assets and valuation
allowances as of December 31, 1999 and 1998, consisted of the
following:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Deferred tax assets arising
from net operating losses $ 193,000 $ 35,022
Less valuation allowance (193,000) (35,022)
-------- -------
Net Deferred Tax Assets $ 0 $ 0
========= ========
</TABLE>
NOTE 8 - ACCRUED EXPENSES
Accrued expenses as of December 31, 1999 and 1998, consisted of the
following:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Accrued audit fees $ 20,500 $ 0
Accrued legal fees 6,000 0
----- -
Total Accrued Expenses $ 26,500 $ 0
======== ======
</TABLE>
NOTE 9 - CONCENTRATION OF CREDIT RISK ARISING FROM CASH DEPOSITS IN EXCESS OF
INSURED LIMITS
The Company maintains its cash balances at several financial
institutions located in the United States and Canada. The balances are
insured by the Federal Deposit Insurance Corporation up to $100,000
and the Canadian Deposit Insurance Corporation up to $60,000 Canadian
dollars. Uninsured balances as of December 31, 1999, were
approximately $478,048.
<PAGE>
CANCEROPTION.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 10 - REGULATORY INVESTIGATION
In January, 2000, the Securities and Exchange Commission ("SEC") began
a non-public, fact-finding inquiry investigating the Company's
business dealings. In April, 2000, the staff of. the Central Regional
Office of the SEC intended to recommend that an enforcement action be
brought against the Company and Arnold Takemoto (the President of the
Company) seeking an order requiring the Company and Mr. Takemoto cease
and desist and/or be enjoined from its unlawful conduct and, if
appropriate, to also seek the imposition of civil money penalties. The
Company and Mr. Takemoto intend to submit a written statement as
provided in Rule 5(c) of the Commission's Rules on informal and Other
Procedures, 17 C.F.R. sec. 202.5. Management believes this
investigation and subsequent recommendation will not have a material
negative impact on the business of the Company.
NOTE 11 - STOCKHOLDERS' EQUITY
In June, 1997, the Company issued 3,000,000 restricted shares of
common stock to its founder in exchange for consulting services. The
transaction was valued at $3,000.
In June, 1997, in connection with a Rule 504 Regulation D Offering,
the Company issued 200,000 shares of common stock for cash at $0.25
per share, or $50,000. After expenses of the offering of $5,500,
the'-net proceeds were $44,500. These shares were issued to one
hundred and four non-accredited investors. The proceeds of this
offering were used for the initial development of the Company's
internet website and related products and services.
In September, 1998, in connection with a Rule 504 Regulation D
Offering, the Company issued 2,000,000 shares at $0.05 per share, or
$100,000. After expenses of the offering of $3,500, the net proceeds
were $96,500. This offering included warrants convertible into common
stock at $0.05 per share, expiring September 18, 2001. These shares
were sold to sixteen non-accredited investors. The proceeds from this
offering were used for the development of internet products and
services. In December, 1999, 360,000 of the warrants were
<PAGE>
CANCEROPTION.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 11 - STOCKHOLDERS' EQUITY (CONT'D)
-----------------------------
converted to common stock at $0.05 per share. There are 1,640,000
warrants were outstanding from this issuance as of the date of these
financial, statements.
In March, 1999, in connection,with a Rule 504 Regulation D Offering,
the Company issued 166,600 shares of common stock at $0.60029 per
share for cash, or $100,000. After expenses of, the offering of
$3,500, the net proceeds were $96,500. This offering included warrants
convertible into common stock at $0.65 per share until March 'l, 2003.
These shares were sold to one non-accredited investor. The proceeds
from this offering were used for the development of the Company's
internet website and working capital. As of the date of the financial
statements none of the warrants have been converted.
In August, 1999, in connection with a Rule 504 Regulation D Offering,
the Company authorized the sale of 128,000 restricted common shares
arid Warrants at $2.50 per unit totaling $320,000. The warrants are
convertible at $2.35 per share, expiring on August 18, 2002. All of
the units were sold to two accredited investors.
In August, 1999, the Company issued 1,000 restricted common shares in
connection with consulting services valued at $1,250.
In October, 1999, in connection with an Investor Relations Agreement
with Thor Equity Group, Inc. ("Thor") a related party, the Company
issued 100,000 shares of restricted common stock in consideration for
consulting services valued at $125,000.
In December, 1999, in connection with a Rule 504 Private Placement,
the Company authorized the sale of 350,000 restricted shares of common
stock at $1.50 per share. Each share included a warrant convertible
into common stock at $1.50 per share, expiring December 1, 2004.
<PAGE>
CANCEROPTION.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 11 - STOCKHOLDERS' EQUITY (CONT'D)
In December, 1999, 350,000 warrants were exercised and converted into
common shares at $0.05 per share, resulting in net proceeds to the
Company of $18,000.
NOTE 12 ~ OPERATING LEASES
In April, 1999, the Company leased an automobile for its President.
The lease agreement requires monthly payments of $1,075 over a period
of 24 months, totaling $25,769. The lease was prepaid and is being
amortized on a straight-line basis over its term.
NOTE 13 - RELATED PARTY TRANSACTIONS
During 1999, the Company advanced funds to and received repayments
from stockholders. The amount owed by stockholders as of December 31,
1999, was $12,236. The advances were non-interest bearing.
During 1999, the Company recognized development stage revenues
aggregating $19,332. These revenues were derived from sales to Mr.
Arnold Takemoto, its President, in connection with his consulting
practice. Prior to 1999, $15,500 of development. stage revenues. were
recognized from web design and other internet related consulting
services. These revenues were unrelated to the Company's current
business model. During 1998, the Company wrote off as bad debts
$12,000 of accounts receivable applicable to these revenues, which
were also from related parties.
In April, 1999, the Company entered into an agreement with Thor. The
original agreement required payments of $5,000 per month for various
consulting. and investor relation services. In August, 1999, the
agreement was modified and the payments were increased to $15,000 per
month. The fee was allocable as follows:
<PAGE>
<PAGE>
CANCEROPTION.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 14 - AGREEMENTS (CONT'D)
-------------------
Company will pay Centerwatch $500 for the first four months of the
initial term, $750 per month during the following four months, and
$1,000 per month during the last four months of the initial term.
In October, 1999, the Company entered into an agreement with
PlanetRx.cam, Inc. ("PlanetRx") to provide promotional services on the
CancerOption.com portal. The agreement calls for monthly payments of
$1,039 from the Company to PlanetRx for a one year period. The
agreement can be terminated by either party upon 30 days written
notice.
In November, 1999, the Company entered into a 30 day agreement with
Online Health Site Springboard Inc. ("Springboard'"). Springboard is a
natural health products company that offers.specific products that
restore balance to various body systems. Springboard will offer its
audience a targeted line of nutritional supplements on the Company's
portal. The agreement can be terminated by either party upon 30 days
written notice.
NOTE 15 - SUBSEQUENT EVENTS
In January, 2000, the Company issued 100,000 shares of restricted
common stock in consideration for consulting services to Dr. Darryl
See, Chief Medical Officer and a Director of the Company.
in January, 2000, the Company entered into an agreement with Michael
Guthrie who will provide articles related to the Company's business
objectives. Mr. Guthrie will be compensated at a rate of $1.000 per
week, of which $500 will be in the form of restricted common stock.
The term of the agreement is month-to-month and can be terminated by
either party upon 30 days written notice.
In January, 2000, the Company entered into an agreement with Aerial
Dynamics Inc., who will register the Company to search engines, run
search engine visibility reports, perform analysis, and communicate
the repoxt to the Company and the
<PAGE>
CANCEROPTION.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 15 - SUBSEQUENT EVENTS (CONT' D)
---------------------------
web developer for corrections for a fee of $450 per month. The term of
the contract is month-to-month and can be terminated by either party
upon 30 days written notice.
In February, 2000, the Company entered into an agreement with Mark &
Associates Consulting Limited ("Mark") to provide sponsorship
advertisers on the Company's website. Mark will be compensated by a
15% commission based upon advertising revenues it generates. The
agreement is on a month-to-month basis and can be terminated by either
party by upon 30 days written notice.
In February, 2000, the Company entered into an agreement with . CapMed
Corporation ("CapMed") whereby CapMed will permanently place the
CancerOption.com logo on Personal Health Records ("PHR") software for
a one time fee of $500. The agreement is on a month-to-month basis and
can be terminated by either party upon 30 days written notice.
In March, 2000, the Company terminated its agreement with Thor (Note
13). The Company intends to hire all of Thor's employees.
Subsequent to year-end, certain restricted common stock and stock
options previously issued in lieu of compensation were rescinded. The
effects of the rescission has been retroactively applied to
the~.financial statements as if the transactions had never occurred.
Subsequent to December 31, 1999, the Company agreed in principle to a
compensation agreement with its President. The term of the agreement
is fox~one year, automatically renewable for a period of one year each
consecutive year thereafter, unless prior notice is given by either
party. Initial compensation will be at an annual rate of approximately
$60,000, commencing March 15, 2000. 'the board of directors has agreed
to issue restricted common shares to the President as additional
compensation and incentives. The amounts to be issued will be based
upon the fair market value of the shares, less discounts for
restrictions and lack of marketability.
<PAGE>
PANTHEON TECHNOLOGIES, INC.
Scottsdale, Arizona
AUDIT REPORT
DECEMBER 31,1998 AND 1997
<PAGE>
CONTENTS
Independent Auditors' Report 1
Balance Sheet at December 31, 1998 and 1997 2
Statement of Operations For The Year Ended December 31, 1998, For The
Period From Inception (April 17, 1997) To December 31, 1997, and For
The Period From Inception (April 17, 1997) To December 31, 1998 3
Statement of Stockholders' Equity From Inception (April 17, 1997) To
December 31, 1998 4
Statement of Cash Flows For The Year Ended December 31, 1998, For The
Period From Inception (April 17, 1997) To December 31, 1997, and For
The Period From Inception (April 17, 1997) To December 31, 1998 5-6
Notes to the Financial Statements 7-10
All schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
<PAGE>
CLANCY AND CO., P.L.L.C.
CERTIFIED PUBLIC ACCOUNTANTS
26TH PLACE PHONE: (602) 266-2646
2601 E. THOMAS RD. FAX: (602) 224-9496
SUITE 110 EMAIL: [email protected]
PHOENIX, AZ 85016
INDEPENDENT AUDITORS'REPORT
Board of Directors
Pantheon Technologies, Inc.
Scottsdale, Arizona 85260
We have audited the accompanying balance sheet of Pantheon Technologies, Inc. (A
Development Stage Company), (the Company), as of December 31, 1998 and 1997 and
the related statements of operations, stockholders' equity and cash flows for
the year ended December 31, 1998, for the period from Inception (April 17, 1997)
to December 31, 1997, and for the period from Inception (April 17,.1997) to
December 31, 1998. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the 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 that our audit of the financial statements provides a reasonable
basis for our opinion.
In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Company at December 31, 1998 and 1997
and the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note I to the financial
statements, the Company is a development stage Company since its inception April
17, 1997. Realization of a major portion of the assets is dependent upon the
Company's ability to meet its future financing requirements, and the success of
future operations. These factors 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.
Clancy and Co., P.L.L.C.
Phoenix, Arizona
April 30, 1999
<PAGE>
PANTHEON TECHNOLOGIES, INC.
(A Development Stage Company)
BALANCE SHEET
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
ASSETS
Current Assets
Cash $ 244 $ 2,732
Accounts Receivable 0 12,000
Stock Subscription Receivable (Note 3) 50,500 0
Total Current Assets 50,744 14,732
Total Assets $ 50,744 $ 14,732
LIABILITIES AND STOCKHOLDERS'EQUITY
Current Liabilities Accrued Expenses $ 75O $ None
Stockholders' Equity
Common Stock: $0.001 Par Value, 100,000,000 Shares
Authorized; Issued and Outstanding, 5,200,000 and
3,200,000 Shares at December 31, 1998 and 1997 5,200 3,200
Additional Paid In Capital 147,800 49,800
Loss Accumulated During The Development Stage (103,006) (38,268)
Total Stockholders' Equity 49,994 14,732
Total Liabilities and Stockholders' Equity $ 50,744 $ 14,732
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
PANTHEON TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31,1998, FOR THE PERIOD
FROM INCEPTION (APRIL 17,1997) TO DECEMBER 31,1997, AND FOR THE
PERIOD FROM INCEPTION (APRIL 17,1997) TO DECEMBER 31,1998
<TABLE>
<CAPTION>
For The Period For The Period
From Inception From Inception
For The Year (April 17, (April 17,
Ended 1997) To 1997) To
December 31, December 31, December 31,
1998 1997 1998
<S> <C> <C> <C>
Revenues $ 3,500 $ 12,000 $ 15,500
Expenses
General and Administrative 68,273 51,081 119,354
Operating Loss (64,773) (39,081) (103,854)
Other Income
Interest Income 35 813 848
-- --- ---
Net Loss $ (64,738) (38,268) (103,006)
Net Loss Per Weighted Share of
Common Stock $ (0.02) $ (0.02) $ (0.03)
Weighted Shares of Common Stock and
Common Stock Equivalents Outstanding 3,866,666 2,350,000 3,866,666
--------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
PANTHEON TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS'EQUITY
FOR THE PERIOD FROM INCEPTION (APRIL 17,1997)
TO DECEMBER 31, 1998
<TABLE>
<CAPTION>
Loss
Accumulated
Additional During the
Common Stock Paid In Development
Shares Amount Capital Stage Total
<S> <C> <C> <C> <C> <C>
Issuance of Common Stock For Services
Rendered at $.001 per Share as of
April 17, 1997 3,000,000 $ 3,000 $ $ $ 3,000
Issuance of Common Stock For Cash at
$.25 Per Share 200,000 200 49,800 50,000
Loss From Inception (April 17, 1997)
To December 31, 1997 (38,268) (38,268)
Balance, December 31, 1997 3,200,000 3,200 49,800 (38,268) 14,732
Issuance of Common Stock For Cash at
$.05 Per Share 2,000,000 2,000 98,000 100,000
Loss, Year Ended December 31, 1998 (64,738) (64,738)
Balance, December 31, 1998 5,200,000 5,200 147,800 (103,006) 49,994
--------- ----- ------- --------- ------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
PANTHEON TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31,1998, FOR THE PERIOD
FROM INCEPTION (APRIL 17,1997) TO DECEMBER 31,1997, AND FOR THE
PERIOD FROM INCEPTION (APRIL 17,1997) TO DECEMBER 31,1998
<TABLE>
<CAPTION>
For The Period For The Period
From Inception From Inception
-------------- --------------
For The Year (April 17, (April 17,
Ended 1997) To 1997) To
December 31, December 31, December 31,
1998 1997 1998
---- ---- ----
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net Loss $ (64,738) $ (38,268) $ (103,006)
Adjustments to Reconcile Net Loss to Net
Cash Used In Operating Activities
Common Stock Issued for Services 0 3,000 3,000
Write-off of Bad Debt Expense 12,000 0 12,000
Changes in Assets and Liabilities
(Increase) Decrease in Accounts Receivable 0 (12,000) (12,000)
(Increase) Decrease in Stock Subscription
Receivable (50,500) 0 (50,500)
Increase (Decrease) in Accrued Expenses 750 0 750
--- - ---
Total Adjustments (37,750) (9,000) (46,750)
Net Cash Used In Operating Activities (102,488) (47,268) (149,756)
Cash Flows From Investing Activities 0 0 0
Net Cash Flows From Investing Activities 0 0 0
Cash Flows From Financing Activities
Proceeds From Sale of Common Stock 100,000 50,000 150,000
Net Cash Provided By Financing Activities 100,000 50,000 150,000
Increase (Decrease) In Cash and Cash Equivalents (2,488) 2,732 244
Cash and Cash Equivalents, Beginning of Year 2,732 0 0
Cash and Cash Equivalents, End of Year $ 244 $ 2,732 $ 244
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
PANTHEON TECHNOLOGIES, INC.
(A Development Stage Company)
STATEM[ENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31,1998, FOR THE PERIOD
FROM INCEPTION (APRIL 17,1997) TO DECEMBER 31,1997, AND FOR THE
PERIOD FROM INCEPTION (APRIL 17,1997) TO DECEMBER 31,1998
<TABLE>
<CAPTION>
For The Period For The Period
From Inception From Inception
-------------- --------------
For The Year (April 17, (April 17,
Ended 1997) To 1997) To
December 31, December 31, December 31,
1998 1997 1998
---- ---- ----
<S> <C> <C> <C>
Supplemental Information:
Cash Paid For:
Interest $ 0 $ 0 $ 0
Income taxes $ 0 $ 0 $ 0
Noncash Financing Activities:
Common Stock Issued For Services $ 0 $ 3,000 $ 3,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
PANTHEON TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31,1998 AND 1997
NOTE 1 - ORGANIZATION
---------------------
Pantheon Technologies, Inc. (the Company) was incorporated under the laws of the
State of Florida on April 17, 1997, with an authorized capital of 100,000,000
shares of common stock with a par value of one mil ($0.001) per share. The
Company is engaged in the development of Internet related products and services.
On April 17, 1997, the Company issued 3,000,000 shares of common stock for
services rendered at $0.001, or $3,000.
On July 31, 1997, the Company completed an Offering Memorandum for 200,000
shares of common stock for cash at $0.25 per share, or $50,000.
On September 21, 1998, the Company completed an Offering Memorandum for
2,000,000 shares of common stock for cash at $.05 per share, or $100,000. Each
share has a warrant attached entitling the holder to acquire additional common
stop at $0.05 per share until September 18, 2001.
The financial statements have been prepared on the basis of accounting
principles applicable to a going concern. Accordingly, they do not purport to
give effect to adjustments, if any, that may be necessary should the Company be
unable to continue as a going concern. The continuation of the Company as a
going concern, is dependent upon the Company's ability to establish itself as a
profitable business. The Company's ability to achieve these objectives cannot be
determined at this time. It is the Company's belief that it will continue to
incur losses for at least the next 12 months, and as a result will require
additional funds to be obtained from private or public equity investments to
meet such needs.
NOTE 2- SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------
A. Accounting Method
--------------------
The Company's financial statements are prepared using the accrual method of
accounting.
B. Revenue Recognition
----------------------
Revenues are primarily recognized as products are shipped and services rendered.
Accounts receivable are shown net of allowance for doubtful accounts, which are
estimated as a percent of accounts receivable and sales, respectively, based on
prior years experience.
<PAGE>
PANTHEON TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31,1998 AND 1997
NOTE 2- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
---------------------------------------------------
C.Cash and Cash Equivalents
---------------------------
The Company considers all highly liquid debt instruments with a maturity of
three months or less to be cash and cash equivalents.
D. Use of Estimates
-------------------
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were assumed in
preparing the financial statements.
E. Income Taxes
---------------
The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes."
Under SFAS No. 109, deferred tax liabilities and assets are determined based on
the difference between the financial statement and tax bases of assets and
liabilities, using enacted tax rates in effect for the year in which the
differences are expected to reverse. See Note 4.
F. Earnings or Loss Per Share
-----------------------------
Basic earnings or loss per share has been computed based on the weighted average
number of common shares and common share equivalents outstanding. All earnings
or loss per share amounts in the financial statements are basic earnings or loss
per share, as defined by SFAS No. 128, "Earnings Per Share." Diluted earnings or
loss per share does not differ materially from basic earnings or loss per share
for all periods presented. The number of shares used in computing earnings
(loss) per common share at December 3 1, 1998 and 1997 was 3,3 00,000 and 3,
100,000, respectively.
G. Business Segment Information
-------------------------------
The Company implemented SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," on January 1, 1998. The Company operates in
one industry segment, that being the development of Internet related products
and services. There were no material amounts of sales or transfers among
geographic areas or major customers within the United States.
<PAGE>
PANTHEON TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 2- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
---------------------------------------------------
H. Pending Accounting Pronouncements
------------------------------------
It is anticipated that current pending accounting pronouncements will not have
an adverse impact on the financial statements of the Company.
NOTE 3 -STOCK SUBSCRIPTION RECEIVABLE
--------------------------------------
Stock Subscription Receivable at December 31, 1998, of $50,500 represents the
balance of funds due for a 504 Offering Memorandum completed on September 21,
1998. The entire balance was collected during 1999, prior to the date of
issuance of the financial statements.
NOTE 4 - INCOME TAXES
---------------------
There is no current or deferred tax expense for the years ended December 31,
1998 and 1997, due to the Company's loss position. The benefits of timing
differences have not been previously recorded.
The deferred tax consequences of temporary differences in reporting items for
financial statement and income tax purposes are recognized, as appropriate.
Realization of the future tax benefits related to the deferred tax assets is
dependent on many factors, including the Company's ability to generate taxable
income within the net operating loss carryforward period. Management has
considered these factors in reaching its conclusion as to the valuation
allowance for financial reporting purposes. The income tax effect of temporary
differences comprising the deferred tax assets and deferred tax liabilities on
the accompanying balance sheet is a result of the following:
<TABLE>
<CAPTION>
Deferred Taxes 1998 1997
-------------- ---- ----
<S> <C> <C>
NOL Carryforwards $ (35,022) $ (5,740)
Total (35,022) (5,740)
Valuation Allowance 35,022 5,740
Net Deferred Tax Assets $ 0 $ 0
</TABLE>
A reconciliation between the statutory federal income tax rate (34%) and the
effective rate of income tax expense for each of the years during the period
ended December 31 follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Statutory Federal Income Tax Rate (34.0%) (15.0%)
Increase in Valuation Allowance 34.0 15.0
Effective Income Tax Rate 0.0% 0.0%
</TABLE>
<PAGE>
PANTHEON TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 4 - INCOME TAXES (CONTINUED)
---------------------------------
The Company has available net operating loss carryforwards of approximately
$103,000 for tax purposes to offset future taxable income, and expire
principally in the year 2012,
NOTE 5 - STOCK OPTIONS
----------------------
The Company has authorized the 1998 Employee Stock Option Plan that provides for
the granting of stock options to officers and key employees. The objecti " ves
of this plan include attracting and retaining the best personnel, providing for
additional performance incentives, and promoting the success of the Company by
providing employees the opportunity to acquire common stock. The plan authorizes
the Company to grant up to 1,000,000 shares. No shares have been granted as of
April 30, 1999.
NOTE 6 - SUBSEQUENT EVENTS
--------------------------
On April 15, 1999, the Company changed its name to CancerOption.com, Inc.
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS
Exhibit 3
(i) Articles of Incorporation and Amendments
(ii) Bylaws
Exhibit 16 Letter on Change in Certifying Accountant
Exhibit 27 Financial Data Schedule
Exhibit 99
(i) Written Profile of New Auditors
(ii) Car Lease Agreement
(iii) Sub-Lease for Office
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, who is duly authorized.
Registrant: CANCEROPTION.COM, INC.
Date: October 23, 2000
By /s/ Arnold Takemoto
----------------------
Arnold Takemoto, President, CEO and Director
By /s/ Douglas Brodie
----------------------
Douglas Brodie, MD, Director
<PAGE>
