<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
-----------
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (Fee Required)
For the quarterly period ended March 31, 2000
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (No Fee Required)
For the transition period from ______________ to _________________
Commission file number 0-15179
NEUROTECH DEVELOPMENT CORPORATION
-----------------------------------------------------
(Name if small business issuer in its charter)
DELAWARE 06-1100063
- --------------------------- ------------------------
(State of incorporation (I.R.S. Employer
or organization) Identification No.)
45 ORCHARD STREET, MANHASSET, NEW YORK 11030
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (516) 869-9663
- --------------------------------------------------------------------------------
(former name, former address and former fiscal year if changed
since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 of 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such repots), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [_]
48,627,132 shares of issuer's Common Stock were issued at May 11, 2000.
<PAGE>
NEUROTECH DEVELOPMENT CORPORATION
AND SUBSIDIARIES
INDEX
MARCH 31, 2000
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
March 31, 2000 and June 30, 1999........................... 3
Consolidated Statements of Operations
Three months ended March 31, 2000 and 1999
Nine months ended March 31, 2000 and 1999.................. 4
Consolidated Statements of Cash Flows
Nine months ended March 31, 2000 and 1999.................. 5
Notes to Consolidated Financial Statements................... 6
2
<PAGE>
NEUROTECH DEVELOPMENT CORPORATION
AND SUBSIDIARIES
(formerly Neurotech Corporation)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, June 30,
2000 1999
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ -- $ 335
Accounts receivable - related parties 55,248 20,299
------------- ------------
Total current assets 55,248 20,634
INVESTMENT IN AIM, at cost 1,320,000 --
------------- ------------
TOTAL ASSETS $ 1,375,248 $ 20,634
============= ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Convertible debenture 100,000 100,000
Accounts payable and accrued expenses 859,593 710,200
Accounts payable - related parties 131,550 140,981
Net liabilities of discontinued operations 1,359,195 1,359,195
------------- ------------
Total current liabilities 2,450,338 2,310,376
STOCKHOLDERS' DEFICIT
Common stock; par value $0.01 per share;
authorized 100,000,000 shares
issued 48,627,132 and 33,917,244 shares,
respectively 486,275 339,173
Additional paid-in capital 23,852,206 5,467,123
Retained deficit (15,274,138) (7,946,038)
------------- ------------
9,064,343 (2,139,742)
Deferred consulting (7,673,900) --
Less 4,374,829 and 100,000 shares of
Treasury stock, at cost (2,465,533) (150,000)
------------- ------------
Total stockholders' deficit (1,075,090) (2,289,742)
------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,375,248 $ 20,634
============= ============
The Notes to Consolidated Financial Statements are an integral part of these statements.
</TABLE>
3
<PAGE>
NEUROTECH DEVELOPMENT CORPORATION
AND SUBSIDIARIES
(formerly Neurotech Corporation)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
---------------------------------- ---------------------------------
2000 1999 2000 1999
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
REVENUE $ -- $ -- $ -- $ --
COSTS AND EXPENSES
Administrative (3,609,639) (222,968) (7,312,758) (710,576)
Interest (3,646) -- (15,342) --
-------------- ------------- -------------- -------------
(3,613,285) (222,968) (7,328,100) (710,576)
Income tax benefit -- 79,131 -- --
-------------- ------------- -------------- -------------
Loss from
continuing operations (3,613,285) (143,837) (7,328,100) (710,576)
DISCONTINUED OPERATIONS
Income (loss) from operations -- 153,606 -- (561,699)
Gain (loss) on disposal -- (94,805) -- 63,360
-------------- ------------- -------------- -------------
Income (loss) from
discontinued operations -- 58,801 -- (498,339)
-------------- ------------- -------------- -------------
Net loss $ (3,613,285) $ (85,036) $ (7,328,100) $ (1,208,915)
============== ============= ============== =============
Basic loss per share
Continuing operations $ (0.09) $ (0.00) $ (0.20) $ (0.02)
Discontinued operations 0.00 0.00 0.00 (0.22)
-------------- ------------- -------------- -------------
Net loss per share $ (0.09) $ (0.00) $ (0.20) $ (0.04)
============== ============= ============== =============
Weighted average number of
common shares outstanding 42,156,126 32,593,322 37,105,739 28,946,039
============== ============= ============== =============
The Notes to Consolidated Financial Statements are an integral part of these statements.
</TABLE>
4
<PAGE>
NEUROTECH DEVELOPMENT CORPORATION
AND SUBSIDIARIES
(formerly Neurotech Corporation)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
March 31, March 31,
2000 1999
-------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (7,328,100) $ (1,208,915)
Adjustments to reconcile net loss to
net cash used in operating activities
Gain on disposal -- 63,360
Depreciation and amortization -- 59,013
Stock issued for services 7,098,162 1,066,702
Provision for bad debt 100,000 --
Changes in assets and liabilities
Accounts receivable - related party (34,949) --
Accounts payable and accrued expenses 149,393 (571,128)
Accounts payable - related party (9,431) (54,391)
Net liabilites of discontinued operations -- 383,305
-------------- ------------
Net cash used in operating activities (24,925) (262,054)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for investment (1,320,000) --
Loans made (100,000) --
-------------- ------------
Net cash used in investing activities (1,420,000) --
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowing 1,070,000 --
Sale of common stock 374,590 242,681
-------------- ------------
Net cash provided by financing activities 1,444,590 242,681
-------------- ------------
Net decrease in cash (335) (19,373)
CASH, BEGINNING 335 38,825
-------------- ------------
CASH, ENDING $ -- $ 19,452
============== ============
The Notes to Consolidated Financial Statements are an integral part of these statements.
</TABLE>
5
<PAGE>
NEUROTECH DEVELOPMENT CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and the instructions to Form 10-QSB.
Accordingly, they do not include all information and footnotes required by
generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments considered necessary for a fair
presentation have been included. Operating results for the three and nine
month periods ended March 31, 2000 are not necessarily indicative of results
that may be expected for the year ending June 30, 2000. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-KSB for the year
ended June 30, 1999.
NOTE 2. ORGANIZATION AND NATURE OF OPERATIONS
The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles, which contemplates
continuation of the Company as a going concern. However, the Company has
incurred significant losses since inception resulting in a shareholders'
deficit of $1,075,090 and working capital deficit of $2,395,090 at March 31,
2000. Effective October 17, 1998, the Company has discontinued all of its
previous operations. The Company's subsidiary, Global, has defaulted on its
obligations and Global's secured creditors have take substantially all of
Global's assets. These factors raise substantial doubt about the Company's
ability to continue as a going concern. The accompanying financial statements
do not include any adjustments relating to the recoverability and
classification of recorded assets, or the amounts and classification of
liabilities that might be necessary in the event the Company cannot continue
in existence.
In view of these matters, the continued existence of the Company is dependent
upon its ability to meet its financing requirements and, ultimately, the
success of its planned future operations. Management believes that actions
presently being taken to acquire an operating business and to develop a new
line of business constructing prefabricated hospitals in third world countries
provide the Company the opportunity to continue as a going concern.
6
<PAGE>
NEUROTECH DEVELOPMENT CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 3. DISCONTINUED OPERATIONS
Effective July 1, 1998, the Company discontinued and sold its home health care
business and incurred a loss on disposal of approximately $115,550. Effective
October 17, 1998, the Company discontinued and closed its hospital operations.
In connection with the closing of the hospital, the Company's secured
creditors assumed substantially all assets of Global, the Company's wholly-
owned subsidiary.
Net liabilities of discontinued operations consist of the following:
Notes payable $ (385,747)
Accounts payable and accrued expenses (973,448)
------------
Net liabilities of discontinued operations $ (1,359,195)
============
The results of operations of the discontinued business for the period ended
March 31, 1999 have been classified as loss from discontinued operations as
follows:
Revenues $ 1,180,421
Costs and expenses (1,742,120)
------------
Loss before income tax benefit (561,699)
Income tax benefit (--)
------------
Loss from discontinued operations $ (561,699)
============
NOTE 4. CONVERTIBLE DEBENTURE
At March 31, 2000, the Company had outstanding a $100,000 convertible
debenture which bears interest at 10%. The debenture is convertible into
1,000,000 shares of common stock of the Company. In July 1999, the holder of
the debenture requested conversion. The shares have not been issued.
7
<PAGE>
NEUROTECH DEVELOPMENT CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 5. STOCKHOLDERS' DEFICIT
In January 2000, the Company issued 8,393,042 shares of restricted common
stock for 6,994,203 shares of unrestricted common stock to be held in the
treasury. The Company then issued 3,188,184 of the treasury shares to pay for
services, future consulting services and to liquidate liabilities. The
remaining 3,806,019 shares are held in the treasury. In addition, the Company
issued 5,323,275 shares of restricted common stock as compensation for
services, to liquidate liabilities and to acquire 468,810 shares of
unrestricted common stock that is held in the treasury. The shares issued were
valued at the closing market price on the day of the transaction.
In connection with a consulting agreement entered into in January 2000, the
Company granted to a consulting firm options to purchase 10,000,000 shares of
common stock of the Company at an exercise price of $.01 per share. The fair
value of the options granted was recorded as deferred consulting costs and is
being amortized to expense over the period services are to be performed. At
March 31, 2000, no options had been exercised. In April 2000, 3,000,000
options were exercised and the Company reissued 3,000,000 shares from the
treasury. The remaining options to purchase 7,000,000 shares of common stock
are exercisable upon the earlier to occur of (i) the listing of the Company on
the NASDAQ Small Cap Market or (ii) one year from the date of the consulting
agreement (January 27, 2001).
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
Certain statements contained herein are not based on historical facts, but
are forward-looking statements that are based upon numerous assumptions about
future conditions that could prove not to be accurate. Actual events,
transactions and results may materially differ from the anticipated events,
transactions or results described in such statements. The Company's ability to
consummate such transactions and achieve such events or results is subject to
certain risks and uncertainties. Such risks and uncertainties include, but are
not limited to, the existence of demand for and acceptance of the Company's
products and services, regulatory approvals and developments, economic
conditions, the impact of competition and pricing results of financing efforts
and other factors affecting the Company's business that are beyond the Company's
control. The Company undertakes no obligation and does not intend to update,
revise or otherwise publicly release the result of any revision to these
forward-looking statements that may be made to reflect future events or
circumstances.
Results of Operation
The Company has not had revenues from continuing operations for several
years. Management, including certain key advisors, has been exploring new lines
of business utilizing their international marketing expertise as well as
acquisitions and strategic alliances.
Management continues to expend significant time and effort in implementing
and exploring future lines of business. Administrative expenses were $7,312,758
for the nine months ended March 31, 2000 as compared with $710,576 for the nine
months ended March 31, 1999. The Company's comparative quarterly administrative
expenses were $3,609,639 for the quarter ended March 31, 2000 as compared with
$222,968 for the quarter ended March 31, 1999. Because of lack of revenues,
stock of the Company has been utilized where possible and practical as payment
for expenses of the Company. The valuation of stock issuances has resulted in a
significant increase in recognized expenses.
Liquidity and Capital Resources
The Company has incurred significant losses since inception resulting in a
shareholders' deficit and working capital deficit at March 31, 2000. Unless the
Company's revenue increases there is substantial doubt about the Company's
ability to continue as a going concern.
In view of these matters, the continued existence of the Company is
dependent upon its ability to meet its financing requirements and, ultimately,
the success of its planned future operations. Management believes that actions
presently being taken to acquire an operating business and to develop a new line
of business constructing prefabricated hospitals in third world countries
provide the Company the opportunity to continue as a going concern.
The Company has recently received engineering approvals for 5 of the
proposed hospital sites in Indonesia, and is in the process of rescheduling the
groundbreaking date for the first Indonesian hospital. The Company anticipates
that it will complete the balance of its contracts in Indonesia over the 2 years
following the initial groundbreaking date.
The Company has entered into a memorandum of understanding with China Chen
South America Construction Contracting Co. Ltd. ("CCS"), Beijing, China, one of
the leading construction companies in China, with significant international
experience in project construction and management in Neurotech's target markets
in the developing world. CCS will construct both
9
<PAGE>
Neurotech turnkey modular hospitals as well as its turnkey tertiary hospitals,
nursing home facilities, and university hospitals. The companies are jointly
working on the development of railsided hospitals to be deployed in the
developing world where CCS is constructing railroads, as well as locations where
rails already exist or are operated by CCS. CCS has already assumed an active
role in many of Neurotech's new projects.
The Company expects to begin construction of its first facilities in China
in the fall of 2000. The Company has entered into a series of additional new
agreements in China. Such agreements call for the construction of a 90 acre
senior citizen community which includes a geriatric hospital, and 2200 beds of
assisted living and nursing home, and recreational facilities. This project is
still subject to final budgetary approvals, and all relevant permitting and
licensing. The Company has also entered into an agreement to build a cancer
treatment hospital and research centre, in Jiangsu Province. The Company has
additional agreements, and other projects in various stages, including a large
medical university hospital in Shanghai, and other facilities. Management feels
that with its recent expansion of activities in China and its new strategic
alliances that it has the ability to fulfill all of its contractual
requirements.
The Company will be paid incrementally for each phase of the hospital and
related medical construction projects and does not anticipate the need to raise
capital for these operations. The Company has contacted major vendors for the
supply of equipment, pharmaceuticals, computers, medical disposables, training
and education, as well as the buildings to be erected.
The Company has invested $1,320,000 to date and expects to pay $2,850,000
additionally plus 10 million shares of Common Stock to complete a 100%
acquisition of American International Medical Resources Inc. American
International Resources Inc. has an agreement in place to acquire 100% of
Residential Health Care, Inc. The Company expects that American International
Medical Resources Inc., through its acquisition of Residential Health Care,
Inc., should provide a source of revenue for the Company in the year 2000.
The Company has launched its subsidiary Doctors4Doctors.com, Inc.
("Doctors4Doctors"). Doctors4Doctors will host a secured internet site for
licensed doctors only. Doctors4Doctors is working on its subscriber base and
plans to have the site operational by September 2000. "Doctors4Doctors.net" and
"Doctors4Doctors.org" are registered domain names belonging to the Company.
The Company maintains a system of ongoing research in the areas of hospital
operating systems, patient management, software, purchasing, and construction
methods and standards.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
No new material legal proceedings were commenced and no material
developments occurred in existing legal proceedings during the Company's fiscal
quarter ended March 31, 2000. For information on the Company's ongoing
reportable litigation, please refer to the Company's 10-KSB for the fiscal year
ended June 30, 1999, and its 10-QSB for the fiscal quarter ended September 30,
1999.
Item 2. Changes in Securities
10
<PAGE>
(a) No modifications during this fiscal quarter.
(b) None
(c) The Company has not had revenues from continuing operations for several
years. Because of lack of revenues, stock of the Company has been utilized
where possible and practical as payment for expenses of the Company, including
salaries.
On January 3, 2000, the Board of Directors agreed to issue Common Stock to
the following individuals in lieu of salary.
Number of Shares
Name of Common Stock
---- ----------------
Bernard Artz 267,857
Steven A. Massey 267,857
Lawrence Artz 267,857
Leonard Markman 89,286
The closing market price of the stock on January 3, 2000 was $.56.
On January 14, 2000, the Board of Directors agreed to issue the following
shares as repayment for shares pledged by certain shareholders to secure a
Company loan that was foreclosed upon in October of 1999.
Number of Shares
Name of Common Stock
---- ----------------
Steven A. Massey 1,596,418
Bernard Artz 1,320,000
Lawrence Artz 1,464,000
The consideration for these shares was the shareholders' pledged securities.
The Company reissued 120% of the lost share amount to the individuals.
On February 7, 2000 the Board of Directors approved a private placement of
8,393,042 shares of Common Stock to sixteen individuals who were long-time
shareholders or insiders of the Company. Cash of $176,636 from this offering
was used by the Company to settle outstanding obligations. In addition, some
shareholders paid contractual commitments of the Company with their own stock
and received restricted stock from the offering in return.
Under a Consulting Agreement with Wellington Capital Corporation
("Wellington") the Company has granted an option to Wellington to purchase
10,000,000 shares of Common Stock at $.01 per share. Wellington, to date, has
purchased 3,000,000 shares under the option for a total consideration of
$30,000.
For all of the above transactions the Company relied upon the private
placement exemption under Section 4(2) of the Securities Act of 1933, and the
safe harbour of Regulation D promulgated thereunder.
(d) Not applicable
11
<PAGE>
Item 3. Defaults upon Senior Securities
On August 25, 1999, the Company entered into a financing agreement with
Avalon Financial Services, LLC (Avalon) for financing of up to $6,000,000
secured by 3.3 million shares of Common Stock of the Company owned by officers
and/or directors and a consultant. As consideration for arranging the loans,
the agreement also granted Avalon warrants to purchase 500,000 shares of Common
Stock of the Company exercisable at $0.55 per share. Due to several issues with
respect to Avalon's performance under the terms of the financing commitment, the
Company disputes its obligation to issue the warrants. As draws were made, the
Company entered into a series of 30-day renewable promissory notes bearing
interest at 10%. The Company had drawn $1.1 million under this financing
agreement before it was terminated. The funds were used to fund a potential
acquisition and for working capital.
In connection with the August 25, 1999 financing agreement with Avalon,
3.3 million shares of Company Common Stock owned by three individuals (officers
and/or directors and a consultant of the Company) were pledged as collateral. In
October 1999, Avalon foreclosed on $1.1 million of the 30-day notes plus accrued
interest and assumed 1,856,190 of the shares pledged as collateral in payment.
In consideration for the risk assumed by these three individuals to their
personal holdings of the Company Common Stock, and for the tax consequences that
would ensue, the Company agreed to issue 1.2 times the number of shares lost in
the foreclosure back to the individuals. In October 1999, the Company agreed to
issue 4,380,415 shares of Common Stock to the three individuals as compensation
for the shares lost in the foreclosure. The shares have recently been issued.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.34 Turnkey Hospital Purchase Agreement dated April 14, 2000 among
Neurotech Development Corporation and the No. 4 People's
Hospital in Tai-Xing City, Ren`ai Tumours Therapeutic Centre
and Jiangsu Development Authority.
10.35 Turnkey Hospital Purchase Agreement between Neurotech
Development Corporation dated April 16, 2000 and Shanghai
Dadran Biological Technology Development Co. Ltd.
27.0 Financial Data Schedule
(b) Reports on Form 8-K
None
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NEUROTECH DEVELOPMENT CORPORATION
Date: May 19, 2000 By: /s/ Bernard Artz
------------------------------------------
Bernard Artz, Chairman,
Chief Financial Officer
13
<PAGE>
EXHIBIT 10.34
TURNKEY HOSPITAL PURCHASE AGREEMENT
1. SELLER
NEUROTECH DEVELOPMENT CORPORATION, LOCATED AT 45 ORCHARD STREET, MANHASSET, NEW
YORK, 11030, USA, A REGISTERED DELAWARE CORPORATION HEREBY REFERRED TO AS THE
SELLER.
2. PURCHASOR
THE No. 4 People's Hospital in Tai-Xing City, Jiangsu Province and Ren'ai
Tumours Therapeutic Centre and Jiangsu Development Authority. HEREINAFTER
REFERRED TO AS THE PURCHASOR. THAT THE PURCHASOR WILL BE THE OPERATOR OF THE
HOSPITAL(S), THE PURCHASOR IS ENTERING INTO THIS AGREEMENT WITH FULL CORPORATE
INTENT AND LEGAL RESPONSIBILITY IN ACCORDANCE WITH THE GOVERNING LAWS OF THE
PEOPLES REPUBLIC OF CHINA.
3. QUALITY STANDARDS
THE PURCHASOR WILL MAINTAIN THE QUALITY STANDARDS SET FORTH BY THE SELLER IN THE
TRAINING PROGRAM OF THE HOSPITALS NAMED IN THIS AGREEMENT.
4. DESCRIPTION OF HOSPITALS
A 250 BED ACUTE CARE FACILITY, WITH SPECIALIZATION IN THE TREATMENT AND
DIAGNOSIS OF CANCER, WITH FULL OUTPATIENT DEPARTMENTS AND SERVICES AS WELL AS
EMERGENCY SERVICES, RESEARCH & EDUCATION CENTRE. THIS HOSPITAL WILL ALSO HAVE A
TRAUMA CENTRE, WITH HELIPAD.
SIZE: 150,000 SQ FEET
NUMBER OF BEDS: 250
STRUCTURE: PREFABRICATED CONCRETE
ALL ACUTE CARE DEPARTMENTS: RADIOLOGY
EMERGENCY
ONCOLOGY
NEUROLOGY
ORTHOPEDIC
OBSTETRIC
GYNECOLOGY
PEDIATRIC
SURGERY
UROLOGY
INTERNAL MEDICINE
CARDIOLOGY
LABORATORY
RESEARCH DEPARTMENT
OPERATING SYSTEMS: ACCOUNTING
PURCHASING
MEDICAL RECORDS
TELEMEDICINE
<PAGE>
EQUIPMENT & SUPPLIES: ALL DEPARTMENTAL EQUIPMENT
DIGITAL RADIOLOGY AND DIAGNOSTIC EQUIPMENT
OPERATING ROOM EQUIPMENT
EMERGENCY ROOM EQUIPMENT
PHARMACY EQUIPMENT
ALL PHARMACEUTICALS
ALL MEDICAL DISPOSABLES
COMPUTERIZED BILLING AND ACCOUNTING SYSTEMS
MEDICAL RECORDS SYSTEMS
ALL FURNISHINGS FIXTURES
FULL DIETARY FACILITY
WATER TREATMENT SYSTEM
MAINTENANCE AND REPAIR SHOP
CONSTRUCTION STANDARD: USA
PHARMACEUTICAL STANDARD: USA & CHINA
EQUIPMENT STANDARD : USA
HEALTH PRACTICE CODE : USA
5. SERVICES PROVIDED BY SELLER
ANCILLARY SERVICES: STAFF TRAINING IN USA
MEDICAL STAFF: FULL MEDICAL STAFF
LABORATORY STAFF
ADMINISTRATIVE STAFF
SUPPORT SERVICES ONLY: MAINTENANCE SUPERVISOR
HOUSEKEEPING
DIETARY SUPERVISORS
6. DEPOSIT
DEPOSIT WILL BE MADE BY THE ADMINISTRATIVE BANK UPON COMPLETION OF THIRD
PARTY FINANCE AGREEMENT.
7. NON EXCLUSIVITY
THE HOSPITALS ARE SOLD ON A NON EXCLUSIVE BASIS. THE NAMES "GLOBAL HEALTH"
AND "NEUROTECH CORPORATION" CANNOT BE USED IN THE OPERATING NAME OF THE
HOSPITAL.
8. CONTRACTUAL ORDER OF PROCEDURES
UPON EXECUTION OF THIS CONTRACT AND RECEIPT OF DEPOSIT, NEUROTECH
TECHNICAL TEAM WILL ARRIVE AT SITE, BEGIN PUBLIC HEALTH STUDY, OPERATING
STUDY, AND PREPARE FINAL REPORT AND FINAL BUDGETARY PROPOSAL.
THIS REPORT SHALL CONSIST OF RECOMMENDED FINAL CONFIGURATION AND DRAWINGS FOR
EACH HOSPITAL, DEPENDENT ON POPULATION, SERVICE AREA, PUBLIC HEALTH ETC.
<PAGE>
TECHNICAL STAFF ADMINISTRATOR, WILL REMAIN AND BEGIN INTERVIEWS AND
SELECTION OF HOSPITAL STAFF WITH PURCHASOR.
9. APPROVALS REQUIRED
PURCHASOR HAS CONFIRMED THAT ALL RELEVANT GOVERNMENT APPROVALS FOR THIS
PROJECT HAVE BEEN ISSUED.
10. PAYMENT
UPON PURCHASORS EXECUTION OF THIS AGREEMENT, PURCHASOR BANK WILL OPEN BANK
GUARANTY OR OTHER RELEVANT CONFIRMING DOCUMENTATION TO THE BANK OF CHINA,
HONG KONG FOR CONSTRUCTION OF THE PROPOSED HOSPITAL(S).
11. DELIVERY TIME
THERE IS 1 ACUTE CARE HOSPITAL IN THIS CONTRACT WHICH WILL BE DELIVERED AND
OPENED IN ACCORDANCE WITH THE FINAL SCHEDULES SET FORTH BY MUTUAL AGREEMENT
BETWEEN THE PURCHASOR AND THE SELLER.
12. TRAINING
STAFF TRAINING SHALL COMMENCE AT THE MIDTERM OF THE CONSTRUCTION PROCESS.
EMPLOYEE SALARIES, MEALS, ARE THE RESPONSIBILITY OF THE PURCHASOR.
TRAINING SHALL TAKE PLACE AT THE UNIVERSITY OF TEXAS, AT HOUSTON, OR ANY
OTHER NEUROTECH AFFILIATED SCHOOL.
THERE WILL BE 3 CLASSES. EACH TIMED FOR THE DELIVERY OF THE HOSPITAL(S) FOR
THAT PERIOD.
13. ADMINISTRATOR
AN AMERICAN ADMINISTRATOR WILL REMAIN FOR THE FIRST 6 MONTHS OF OPERATION AT
THE EXPENSE OF THE SELLER.
14. FINANCING
FINANCING IS ARRANGED WITH THIRD PARTY PROVIDERS, THRU FINANCIAL
INSTITUTIONS, AS DESIGNATED BY THE WORLD COUNCIL OF PEOPLE'S FOR THE UNITED
NATIONS.
<PAGE>
15. PURCHASOR PROVIDES
LAND
ROAD
ELECTRICITY
FRESH WATER
SEWAGE
TELEPHONE LINES
16. PRICING
THE 250 BED ACUTE CARE FACILITY IS PRICED AT $40,000,000 USD.
PRICING MAY VARY IN ACCORDANCE WITH FINAL SPECIFICATIONS AND
RECOMMENDATIONS OF TECHNICAL COMMITTEE AND/OR PURCHASOR.
17. ENDORSEMENTS
THIS HOSPITAL PROJECT HAS BEEN SUBMITTED TO THE UNITED NATIONS WORLD COUNCIL
OF PEOPLES FOR APPROVAL AS A HUMANITARIAN PROJECT. THIS DESIGNATION MAY BE
USED WHEN SEEKING FINANCING, AND GOVERNMENTAL APPROVALS.
18. GOVERNING LAW
THIS CONTRACT SHALL BE DEEMED VALID AND SUBJECT TO THE LAWS OF PEOPLES
REPUBLIC OF CHINA.
19. LOCATIONS
THE HOSPITAL SHALL BE LOCATED IN THE AREA AS DIRECTED BY THE MUNICIPALITY OF
TAI-XING CITY, JIANGSU PROVINCE. MODIFICATIONS IN DESIGN REQUIRED BY
GEOGRAPHICAL LOCATION, WILL BE THE RESPONSIBILITY OF THE PURCHASOR.
SUCH SPECIAL CONDITIONS INCLUDE, CONSTANT POWER GENERATION, MEDICAL WASTE
DISPOSAL UNIT, FLOOD PLANE, EARTHQUAKE ETC.
A SEPARATE PUBLIC HEALTH ANALYSIS WILL BE DONE FOR EACH AREA.
20. RECOGNIZED AGENTS
THE FOLLOWING AGENTS ARE RECOGNIZED AS AGENTS FOR THE SELLER:
GRACE FAME INDUSTRIAL LTD.
ROOM 301 NO. 14 BLK 8
TIANLIN HUAYUAN, LANE 90 TIANLIN RD, XUHUI DISTRICT
SHANGHAI, PEOPLES REPUBLIC OF CHINA
SOPHIA YAU, PRESIDENT
<PAGE>
21. TERM OF PROJECT
THIS PROJECT IS ESTIMATED TO TAKE 3 YEARS TO COMPLETE FROM THE DATE OF
INITIAL CONTRACT PAYMENT.
SO WE HEREBY COMPLETE THIS AGREEMENT AND SET FORTH OUR SIGNATURES ON THIS
DATE.
AGREED
SELLER: /S/ LAWRENCE M. ARTZ DATE: APRIL 12, 2000
----------------------------------------- -------------------
NEUROTECH DEVELOPMENT CORPORATION
LAWRENCE M. ARTZ, VICE PRESIDENT
PURCHASOR: /s/ [SIGNATURE APPEARS HERE] DATE: [DATE APPEARS HERE]
----------------------------------------- -------------------
NO. 4 PEOPLES HOSPITAL TAI-XING CITY,
JIANGSU PROVINCE DEVELOPMENT AUTHORITY
, LEGAL REPRESENTATIVE
AGENT: /S/ SOPHIA YAO LIU DATE: APRIL 12, 2000
------------------------------------------ -------------------
GRACE FAME INDUSTRIAL LTD
SOPHIA YAO LIU, PRESIDENT
[SEAL OF GRACE FAME INDUSTRIAL LTD. APPEARS HERE]
<PAGE>
EXHIBIT 10.35
TURNKEY HOSPITAL PURCHASE AGREEMENT
1. SELLER
NEUROTECH CORPORATION, A DELAWARE CORPORATION, LOCATED AT 45 ORCHARD ST,
MANHASSET, NEW YORK, USA, HEREBY REFERRED TO AS THE SELLER.
2. PURCHASOR
SHANGHAI DADIAN BIOLOGICAL TECHNOLOGY DEVELOPMENT CO. LTD., WILL HEREBY BE
REFERRED TO AS THE PURCHASOR, THAT THE PURCHASOR WILL BE THE OPERATOR OF THE
HOSPITAL, AND SENIOR CARE FACILITIES.
THE PURCHASOR IS ENTERING INTO THIS AGREEMENT WITH FULL CORPORATE INTENT AND
LEGAL RESPONSIBILITY IN ACCORDANCE WITH THE GOVERNING LAWS OF THE PEOPLE'S
REPUBLIC OF CHINA.
3. QUALITY STANDARDS
THE PURCHASOR WILL MAINTAIN THE QUALITY STANDARDS SET FORTH BY THE SELLER IN THE
TRAINING PROGRAM OF THE HOSPITALS NAMED IN THIS AGREEMENT.
4. DESCRIPTION OF HOSPITAL
SIZE: HOSPITAL FACILITY 14,000 SQ FT, SET UP WITH MAX OCCUPANCY OF 50 BEDS WITH
EXTENDED OUTPATIENT FACILITY, DAY SURGERY.
HOSPITALS SHALL CONSIST OF: PREFABRICATED STEEL BUILDINGS
ALL DIAGNOSTIC AND LABORATORY EQUIPMENT (PER BOOK)
OPERATING ROOM EQUIPMENT
EMERGENCY ROOM EQUIPMENT
PHARMACY EQUIPMENT
ALL PHARMACEUTICALS
ALL MEDICAL DISPOSABLES
COMPUTERIZED BILLING AND ACCOUNTING SYSTEMS
MEDICAL RECORDS SYSTEMS
INTENSIVE CARE UNIT (ICU)
CARDIAC CARE UNIT (CCU)
CONSTRUCTION STANDARD : USA
PHARMACEUTICAL STANDARD : USA AND CHINA
EQUIPMENT STANDARD : USA
HEALTH PRACTICE CODE : USA
MANUALS : ENGLISH AND CHINESE
DESCRIPTION OF SENIOR RESIDENCE FACILITIES:
<PAGE>
DESCRIPTION OF THE SENIOR RESIDENCE FACILITIES
2000 BED SENIOR RESIDENCES CONSISTING OF 2 BEDS PER UNIT, HANDICAPPED ACCESS
FULLY FURNISHED.
200 BED SENIOR RESIDENCE FOR WELFARE AT 6 BEDS PER UNIT.
MAN MADE POND, FOUNTAINS, AND RECREATION FACILITIES, INCLUDING RESTAURANT AND
SHOPS.
5. SERVICES PROVIDED BY SELLER
ANCILLARY SERVICES: STAFF TRAINING IN USA
FOR FULL MEDICAL STAFF,
LABORATORY STAFF,
ADMIN STAFF
SUPPORT SERVICES ONLY: MAINTENANCE SUPERVISOR
HOUSEKEEPING
DIETARY SUPERVISORS
6. DEPOSIT
DEPOSIT REQUIREMENT IS HEREBY WAIVED
7. NON EXCLUSIVITY
THE HOSPITALS ARE SOLD ON A NON EXCLUSIVE BASIS. THE NAMES "GLOBAL HEALTH"
AND "NEUROTECH CORPORATION" CANNOT BE USED IN THE OPERATING NAME OF THE
HOSPITAL
8. CONTRACTUAL ORDER OF PROCEDURES
UPON EXECUTION OF THIS CONTRACT AND RECEIPT OF INITIAL PAYMENT, NEUROTECH
TECHNICAL TEAM WILL ARRIVE AT SITE, AND BEGIN PLANNING AND OPERATING
STUDY, AND PREPARE FINAL REPORT AND FINAL BUDGETARY PROPOSAL. THIS REPORT
SHALL CONSIST OF RECOMMENDED FINAL CONFIGURATION AND INTERIOR DRAWINGS FOR
THIS GERIATRIC HOSPITAL, AND SENIOR RESIDENCE AND RECREATION.
TECHNICAL STAFF ADMINISTRATOR, WILL REMAIN AND BEGIN INTERVIEWS AND
SELECTION OF HOSPITAL STAFF WITH PURCHASOR.
9. APPROVALS REQUIRED
PURCHASOR WILL PROVIDE BASIC PLAN, AND SELLER WILL PROVIDE FINAL DRAWINGS
ALL WHICH NEED TO BE FILED WITH LOCAL GOVERNMENT. SELLER'S LOCAL OFFICE
WILL PREPARE ALL FILING DOCUMENTS, TO BE FILED BY PURCHASOR WITH
GOVERNMENT.
<PAGE>
10. PAYMENT
PAYMENTS WILL PROCEED IN ACCORDANCE WITH THE FINANCING AGREEMENT. DURING INITIAL
PROGRAM STAGES FINAL ENGINEERING DRAWINGS WILL BE COMPLETED, AND SITE WORK WILL
COMMENCE. PAYMENTS WILL BE ON AN INSTALLMENT BASIS IN ACCORDANCE WITH THE
FINANCING AGREEMENT.
11. DELIVERY TIME
THERE ARE ONE (1) HOSPITALS IN THIS CONTRACT. ONE (1) HOSPITALS WILL BE
DELIVERED AND OPENED WITHIN 36 MONTHS FROM THE COMMENCEMENT DATE, OF THIS
CONTRACT.
THERE ARE 2000 SENIOR RESIDENCE BEDS CONSISTING OF 1000 UNITS, AND 200 SENIOR
WELFARE BEDS CONSISTING OF 34 UNITS. RECREATION FACILITY, POND AND SHOPS ALL TO
BE COMPLETED WITHIN 36 MONTHS OF INITIAL PAYMENT.
DELIVERY TIME IS GUARANTEED WITHIN THE ABOVE MENTIONED PERIODS.
12. TRAINING
STAFF TRAINING SHALL COMMENCE AT THE BEGINNING OF THE MID-CYCLE OF THE HOSPITAL
PRODUCTION PROCESS.
EMPLOYEE SALARIES, MEALS, ARE THE RESPONSIBILITY OF THE PURCHASOR.
TRAINING SHALL TAKE PLACE AT THE UNIVERSITY OF TEXAS, AT HOUSTON, AND OTHER
APPOINTED UNIVERSITIES AND HOSPITALS WITHIN NEUROTECHS AFFILIATIONS. THERE WILL
BE ONE CLASS.
13. ADMINISTRATOR
AN AMERICAN ADMINISTRATOR WILL REMAIN FOR THE FIRST 6 MONTHS OF OPERATION AT THE
EXPENSE OF THE SELLER.
14. FINANCING
FINANCING IS ARRANGED THROUGH THIRD PARTY PROVIDERS. PROGRAMS ARE INSTALLMENT
PROGRAMS PAID TO THE SELLER FOR THE TURNKEY COMPLETION OF THE PROPOSED
FACILITIES.
15. PURCHASOR REQUIREMENTS
PURCHASOR PROVIDES: LAND
SITE PREPARATION
WATER LINES
SEWERAGE LINES
ELECTRICITY
ROADS
<PAGE>
16. PRICING
THE GERIATRIC CARE HOSPITAL FACILITY IS PRICED AT $15,000,000 USD INCLUSIVE OF
DELIVERY AND INSTALLATION, SITE PREPARATION, AND CONSTRUCTION, MACHINERY AND
EQUIPMENT, MEDICAL STAFF TRAINING, PHARMACEUTICALS, MEDICAL DISPOSABLES, AND
ANCILLARY FIXTURES AND FURNISHINGS.
THE GERIATRIC CARE FACILITIES INCLUSIVE OF FURNISHINGS, RECREATION AREA, SHOPS
AND RESTAURANTS ARE PRICED $37,000,000 USD.
PRICING MAY VARY IN ACCORDANCE WITH FINAL SPECIFICATIONS AND RECOMMENDATIONS OF
TECHNICAL COMMITTEE AND/OR PURCHASOR.
ANY INFRASTRUCTURE, INCLUDING ROADS, SEWERAGE, SITE PREPARATION, MAY BE ADDED TO
THE COST OF THE HOSPITAL IF DONE BY THE SELLER.
17. ENDORSEMENTS & APPROVALS
THIS HOSPITAL PROJECT HAS BEEN SUBMITTED TO THE UNITED NATIONS WORLD COUNCIL OF
PEOPLES FOR APPROVAL AS A HUMANITARIAN PROJECT, AND AS SUCH MAY USE THIS
APPROVAL WHEN SEEKING FINANCING, AND GOVERNMENTAL APPROVAL.
18. GOVERNING LAW
THIS CONTRACT SHALL BE DEEMED VALID AND SUBJECT TO THE LAWS OF PEOPLES REPUBLIC
OF CHINA.
AGREED:
SELLER: /s/ LAWRENCE M. ARTZ DATE: April 16, 2000
-------------------------------- --------------------------
NEUROTECH CORPORATION
NEW YORK, USA
LAWRENCE M. ARTZ, VICE-PRESIDENT
PURCHASOR: /s/ [SIGNATURE APPEARS HERE] DATE:
----------------------------- --------------------------
SHANGHAI DADIAN BIOLOGICAL TECHNOLOGY DEVELOPMENT CO. LTD.
SHANGHAI, CHINA
DIRECTOR
AGENT: /s/ SOPHIA YAO DATE: April 16, 2000
----------------------------- --------------------------
GRACE FAME INDUSTRIAL LTD.
PRESIDENT: SOPHIA YAO [SEAL OF GRACE FAME INDUSTRIAL LTD.]
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