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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 February 29, 2000
[ ] 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.
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(Exact name of Small Business Issuer as Specified in Its Charter)
Nevada 87-0410907
(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
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(Address of principal executive offices)
(212) 221-1340
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(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 April 10, 2000 was 3,336,476.
Transitional Small Business Disclosure Format
(Check One): Yes [ ] No [ X ]
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CANCER TREATMENT HOLDINGS, INC.
INDEX
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<CAPTION>
Page
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets as of February 29,
2000 and May 31, 1999 2
Consolidated Statements of Operations for the Nine Months
Ended February 29, 2000 and February 28, 1999 3
Consolidated Statements of Cash Flows for the Nine Months
Ended February 29, 2000 and February 28, 1999 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Consolidated
Financial Condition and Results of Operations 5
PART II. OTHER INFORMATION
Item 5. Other Information 7
Item 6. Exhibits and Reports on Form 8-K 7
SIGNATURES 7
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CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
February 29, May 31,
2000 1999
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(Unaudited)
ASSETS
Cash and cash equivalents $ 1,606,179 $2,042,810
Other receivables 105,800 50,000
Prepaid amounts 22,578 47,927
Loans and exchanges 130,000 -
Assets held for sale, net (26,809) 13,242
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Total current assets 1,837,748 2,153,979
Patent acquisition costs 17,770 -
Property and equipment, net 182,497 185,837
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Total assets $ 2,038,015 $2,339,816
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 35,513 $ 147,398
Payroll taxes payable 197 1,069
Tenant security deposit - 3,800
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Total liabilities 35,710 152,267
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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 (2,891,206) (2,705,962)
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2,282,386 2,467,630
Treasury stock: 159,284 shares, at cost (280,081) (280,081)
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Total stockholders' equity 2,002,305 2,187,549
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Total liabilities and stockholders' equity $ 2,038,015 $2,339,816
=========== ==========
See accompanying notes to consolidated financial statements.
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CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED FEBRUARY 29, 2000 AND FEBRUARY 28, 1999
(UNAUDITED)
February 29, February 28,
2000 1999
------------ ------------
Other revenues
$ 143,529 $ 198,990
Operating expenses:
General and administrative 285,382 426,329
Depreciation and amortization 3,340 3,340
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Total operating expenses 288,722 429,669
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Operating loss (145,193) (230,679)
Equity in loss of partnerships (40,051) (31,530)
Gain on sale of assets - 250,000
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Net loss $ (185,244) $ (12,209)
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Per share data:
Net loss per share $ (0.06) $ (0.00)
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Weighted average number of shares
outstanding 3,336,476 3,336,476
=========== ==========
See accompanying notes to consolidated financial statements.
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CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED FEBRUARY 29, 2000 AND FEBRUARY 28, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
February 29, February 28,
2000 1999
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Cash flows from operating activities:
Net loss $ (185,244) $ (12,209)
Adjustments to reconcile net loss
to cash used in operating activities:
Depreciation and amortization 3,340 3,340
Gain on sale of assets - (250,000)
Equity in loss of unconsolidated partnerships 40,051 31,529
Change in operating assets and liabilities:
Other receivables (55,800) (37,500)
Other current and non-current assets (104,651) (22,276)
Accounts payable, accrued payroll and related
benefits (116,557) (163,754)
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Net cash used by operating entities (418,861) (450,870)
---------- ----------
Cash flows from investing activities:
Investment in patents (17,770) -
Cash received from sale of business - 2,410,000
Investments in and advances to partnerships and
ventures - (17,250)
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Net cash provided by investing activities (17,770) 2,392,750
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Net increase (decrease) in cash and cash equivalents (436,631) 1,941,880
Cash and cash equivalents at beginning of period 2,042,810 150,516
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Cash and cash equivalents at end of period $ 1,606,179 $2,092,396
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See accompanying notes to financial statements.
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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 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 operations for such interim periods
presented. The results of operations for the nine months ended February
29, 2000 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 $645,580 as of February 29, 2000.
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 not pursued Logan's obligations to make all lease
payments. (See also, Item 2. Section 1. - Results of Operations.)
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
1. Results of Operations
During the quarter ended February 29, 2000, the Company has pursued one
new business opportunity. On February 25, 2000, the Company (through Global
Patent Development Corporation, a newly formed subsidiary; "Global") has applied
for a patent
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in South Africa for an invention relating to a method and device for on-site
generation of chlorine and related gases. A prototype unit of the device is
currently being built and test results should become available before the end of
calendar year 2000.
Chlorine gas is considered a hazardous substance and its transport and
storage is strictly regulated to avoid accidental spills. The new device would
prevent this hazard by enabling users to manufacture chlorine on-site and when
needed at a competitive cost. The Company believes that there would be demand
for the new device from water utilities and industrial users of chlorine.
As previously reported, the Company sold substantially all of its
assets and liabilities on May 29, 1998 and November 20, 1998. As a result, the
Company currently has four additional assets:
1. Approximately $1.6 million in cash.
2. A 50.5% interest in Logan Radiation Therapy, Inc. ("LRT"), 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.
The Hospital has announced that its expects a reorganization plan to become
effective on or about June 30, 2000, in which event the Hospital will be
discharged from bankruptcy. The Hospital also announced that it plans to
affiliate with Genesis Affiliated Health Services, Inc., a West Virginia
hospital chain ("Genesis"). Following the Hospital's discharge from bankruptcy,
Genesis, the Hospital and LRT intend to form a new entity which will acquire
equal shares in Logan and the building which Logan currently occupies.
Subsequently, the Company intends to sell its share in LRT. As part of such
transaction, the Company would seek a release from its Copelco guarantee
obligations. Each of the contemplated events described in this paragraph are
subject to several contingencies, and there can be no assurance that any
transactions will take place as currently planned.
The Company, through a wholly-owned subsidiary, provides consulting
services rendered by its President for which it is due to be paid $150,000
annually in fees over the subsequent six years. The Company has not received any
payments since February 1999, but is pursuing recourse against a building and
other property which securitizes the payment obligation.
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
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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 February 29, 2000, the Company had cash of $1,606,179. The
Company's cash has been invested in the Nations Prime Money Market Fund
maintained at Nations Bank.
Year 2000 issues had no affect on the Company's business, results of
operations or financial condition.
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 5. OTHER INFORMATION: None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: 27. Financial Data Schedule (appears on page 8)
(b) No reports on Form 8-K were filed by the Company during the three
months ended February 29, 2000.
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.
April 14, 2000 By: /s/ Ullrich Klamm, Ph.D.
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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> 9-MOS
<FISCAL-YEAR-END> MAY-31-2000
<PERIOD-END> FEB-29-2000
<CASH> 1,606,179
<SECURITIES> 0
<RECEIVABLES> 105,800
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,837,748
<PP&E> 182,497
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,038,015
<CURRENT-LIABILITIES> 35,710
<BONDS> 0
0
0
<COMMON> 10,487
<OTHER-SE> 1,991,818
<TOTAL-LIABILITY-AND-EQUITY> 2,038,015
<SALES> 0
<TOTAL-REVENUES> 143,529
<CGS> 0
<TOTAL-COSTS> 288,722
<OTHER-EXPENSES> (40,051)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (185,244)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (185,244)
<EPS-BASIC> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>
