<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[ X ] Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended August 31, 1999
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from to .
----------- ----------
Commission file number 1-11062
CANCER TREATMENT HOLDINGS, INC.
-------------------------------
(Exact name of Small Business Issuer as Specified in Its Charter)
Nevada 87--410907
- --------------------------------- -------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
c/o Carol O'Donnell, Esq., 540 Joan Drive, Fairfield, CT 06430-2207
-------------------------------------------------------------------
(Address of principal executive offices)
(212) 221-1340
---------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ].
The number of shares outstanding of each of the issuer's classes of
common equity, as of October 7, 1999 was 3,336,476.
Transitional Small Business Disclosure Format
(Check One): Yes [ ] No [ X ]
<PAGE>
CANCER TREATMENT HOLDINGS, INC.
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets as of August 31,
1999 and May 31, 1999 2
Consolidated Statements of Discontinued Operations for the
Three Months Ended August 31, 1999 and 1998 3
Consolidated Statements of Cash Flows for the
Three Months Ended August 31, 1999 and 1998 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of
Consolidated Financial Condition and Results
of Discontinued Operations 6
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 7
SIGNATURES 7
1
<PAGE>
CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
August 31, May 31,
1999 1999
----------- ---------
(Unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 1,897,685 $ 2,042,810
Other receivables 68,600 50,000
Prepaid amounts 28,718 47,927
Assets held for sale, net (1,584) 13,242
----------- -----------
Total current assets 1,993,418 2,153,979
Property and equipment, net 184,724 185,837
----------- -----------
Total assets $ 2,178,142 $ 2,339,816
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 32,433 $ 147,398
Payroll taxes payable 197 1,069
Tenant security deposit 3,800 3,800
----------- -----------
Total liabilities 36,430 152,267
----------- -----------
Stockholders' equity:
Common stock, $.003 par value, 50,000,000
shares authorized, 3,495,760 shares issued 10,487 10,487
Capital in excess of par value 5,163,105 5,163,105
Accumulated deficit (2,751,799) (2,705,962)
----------- -----------
2,421,793 2,467,630
Treasury stock: 159,284 shares, at cost (280,081) (280,081)
----------- -----------
Total stockholders' equity 2,141,712 2,187,549
----------- -----------
Total liabilities and stockholders' equity $ 2,178,142 $ 2,339,816
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF DISCONTINUED OPERATIONS
FOR THE THREE MONTHS ENDED AUGUST 31, 1999 AND 1998
(UNAUDITED)
August 31, August 31,
1998 1998
---------- ----------
Other revenues $ 58,027 $ 75,390
Operating expenses:
General and administrative 78,969 154,876
Depreciation and amortization 1,113 1,113
---------- ----------
Total operating expenses 80,082 155,989
---------- ----------
Operating loss (22,055) (80,599)
Equity in loss of partnerships (14,826) (12,408)
---------- ----------
Loss before taxes (36,881) (93,007)
Provision for income taxes (8,956) -
---------- ----------
Net loss $ (45,837) $ (93,007)
========== ==========
Per share data:
Net loss per share $ (0.01) $ (0.03)
========== ==========
Weighted average number of shares outstanding 3,336,476 3,336,476
========== ==========
See accompanying notes to consolidated financial statements.
3
<PAGE>
CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED AUGUST 31, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
August 31, August 31,
1999 1998
---------- ----------
<S> <C> <C>
Cash flows from operating activities
Net loss $ (45,837) $ (93,007)
Adjustments to reconcile net loss to cash provided by
(used in) operating activities:
Depreciation and amortization 1,113 1,113
Equity in loss of unconsolidated partnerships 14,826 12,408
Change in operating assets and liabilities:
Accounts receivable - 2,160,000
Other receivable (18,600) -
Other current and non-current assets 32,452 (7,600)
Accounts payable, accrued payroll and related benefits (114,253) (190,863)
----------- -----------
Net cash provided (used) by operating entities (130,299) 1,882,051
Cash flows from investing activities:
Investments in and advances to partnerships and ventures (14,826) (11,857)
----------- -----------
Net cash used in investing activities (14,826) (11,857)
Net increase (decrease) in cash and cash equivalents (145,125) 1,870,194
Cash and cash equivalents at beginning of period 2,042,810 150,516
----------- -----------
Cash and cash equivalents at end of period $ 1,897,685 $ 2,020,710
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Item 1. FINANCIAL STATEMENTS
1. Preparation of Financial Statements
The accompanying unaudited consolidated financial statements for Cancer
Treatment Holdings, Inc. and its subsidiaries (the "Company") have been
prepared in accordance with the instructions of SEC Form 10-QSB and
therefore do not include all information and footnotes necessary for a
fair presentation of financial position, results of discontinued
operations, and cash flows in conformity with generally accepted
accounting principles. The financial statements should be read in
conjunction with the financial statements and notes thereto included in
the Company's latest SEC Form 10-KSB for the year ended May 31, 1999.
In the opinion of management, the unaudited consolidated financial
statements contain all adjustments which are of a normal, recurring
nature for a fair statement of the results of discontinued operations
for such interim periods presented. The results of operations for the
three months ended August 31, 1999 are not necessarily indicative of
the results which may be expected for the entire fiscal year. The May
31, 1999 consolidated balance sheet was derived from audited financial
statements but does not include all disclosures required by generally
accepted accounting principles.
2. Contingencies
As a principal of Logan Radiation Therapy, Inc. ("LRT"), a partner of
the Southern West Virginia Cancer Treatment Center ("Logan"), the
Company has guaranteed certain Copelco Capital, Inc. ("Copelco") lease
liabilities of Logan amounting to $613,832 as of August 31, 1999. Logan
General Hospital, Inc. (the "Hospital"), LRT's partner in the Logan
venture, has sought relief under Chapter 11 of the U.S. Bankruptcy laws
and has ceased making required capital contributions to Logan.
Accordingly, Logan's lease payments to Copelco are in default, but
Copelco has waived Logan's obligations to make all lease payments for
an indefinite period of time.
5
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
FINANCIAL CONDITION AND RESULTS OF DISCONTINUED OPERATIONS
1. Results of Operations
As a result of the sale of most of the Company's assets and liabilities
on May 29 and November 20, 1998, the Company consists of a corporate shell
with four assets:
1. Approximately $1.9 million in cash.
2. 50.5% interest in Logan Radiation Therapy, Inc. ("Logan"), which
has a 51% partnership interest in a radiation therapy center under
development located in Logan, West Virginia.
3. A subsidiary called CTI Management Corp. formed for the president
of the Company to provide billing and management services.
4. A 3,500 square foot office condominium located in Hollywood,
Florida. The office is vacant and listed for sale.
The Logan General Hospital, Inc. (the "Hospital"), LRT's partner in the
Logan venture, has sought relief under Chapter 11 of the U.S. Bankruptcy laws.
As a result of the bankruptcy, the Hospital is required to either reaffirm or
not reaffirm its contractual obligations. LRT and the Hospital have offered a
one-third interest in the Logan venture to St. Mary's Hospital of Huntington,
WV. If St. Mary's Hospital accepts the offer, the Hospital will reaffirm its
contractual obligation and development of the center will resume. If the
Hospital does not reaffirm its obligations, LRT intends to exercise its option
to acquire the Hospital's interest in the venture, which LRT may do on favorable
terms.
The Company, through a wholly-owned subsidiary, provides consulting
services rendered by its President for which it expects to receive $150,000
annually in fees over the subsequent six years.
The Company's Board of Directors intends to consider proposals
presented to the Company regarding the proceeds which it received from the 1998
sale of its assets. Such proposals may include future operations, liquidation
and distribution of such amounts received, and other proposals that may come
before it regarding the use of proceeds of the sale.
Liquidity and Capital Resources
As of August 31, 1999, the Company had cash of $1,897,685. The
Company's cash has been invested in the Nations Prime Money Market Fund
maintained at Nations Bank.
6
<PAGE>
The Company does not expect year 2000 issues to materially affect the
Company's business, results of operations or financial condition. None of the
Company's operations, which are minimal at this time, require the use of
computers. The Company's service providers have given assurances to the Company
that year 2000 issues will not materially affect the services provided by them
to the Company.
Except for those items discussed above and in the Company's latest Form
10-KSB for the year ended May 31, 1999, there are no existing material sources
of liquidity available to the Company or material commitments for capital
expenditures. There are no material trends, favorable or unfavorable, demands,
commitments, events or uncertainties that will result in or that are reasonably
likely to result in the Company's liquidity increasing or decreasing in any
material way.
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: 27. Financial Data Schedule (appears on page 8)
(b) Current Report on Form 8-K: None.
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.
CANCER TREATMENT HOLDINGS, INC.
October 14, 1999 By: /s/ Ullrich Klamm, Ph.D.
--------------------------
Ullrich Klamm, Ph.D.,
Chairman and Chief Executive Officer
By: /s/ Carol Befanis O'Donnell
---------------------------
Carol Befanis O'Donnell
Secretary
7
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-2000
<PERIOD-END> AUG-31-1999
<CASH> 1,897,685
<SECURITIES> 0
<RECEIVABLES> 68,600
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,993,418
<PP&E> 184,724
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,178,142
<CURRENT-LIABILITIES> 36,430
<BONDS> 0
0
0
<COMMON> 10,487
<OTHER-SE> 2,141,712
<TOTAL-LIABILITY-AND-EQUITY> 2,178,142
<SALES> 0
<TOTAL-REVENUES> 58,027
<CGS> 0
<TOTAL-COSTS> 80,082
<OTHER-EXPENSES> (14,826)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (36,881)
<INCOME-TAX> 8,956
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (45,837)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
