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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 August 31, 2000
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from to .
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Commission file number 1-11062
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CANCER TREATMENT HOLDINGS, INC.
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(Exact name of Small Business Issuer as Specified in Its Charter)
Nevada 87-0410907
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(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 October 2, 2000 was 3,336,476.
Transitional Small Business Disclosure Format
(Check One): Yes [ ] No [X]
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CANCER TREATMENT HOLDINGS, INC.
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets as of August 31,
2000 and May 31, 2000 3
Consolidated Statements of Operations for the
Three Months Ended August 31, 2000 and 1999 4
Consolidated Statements of Cash Flows for the
Three Months Ended August 31, 2000 and 1999 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Consolidated Financial Condition and Results
of Operations 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 8
SIGNATURES 8
2
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CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
August 31, May 31,
2000 2000
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CURRENT ASSETS:
Cash and cash equivalents $ 1,512,444 $ 1,611,903
Other receivables 158,016 139,416
Prepaid amounts 21,841 29,144
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TOTAL CURRENT ASSETS 1,692,301 1,780,463
Property and equipment, net 178,044 179,157
Intangibles, net 124,891 98,870
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TOTAL ASSETS $ 1,995,235 $ 2,058,490
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable & accrued liabilities $ 114,547 $ 90,599
Minority interest obligations 49,676 37,465
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TOTAL CURRENT LIABILITIES 164,223 128,064
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STOCKHOLDERS' EQUITY:
Common stock, $ .003 par value,
50,000,000 shares authorized,
3,495,760 issued and outstanding 10,487 10,487
Paid in capital 5,163,105 5,163,105
Accumulated deficit (3,062,498) (2,963,084)
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2,111,094 2,210,508
Treasury stock : 159,284 shares,
at cost (280,081) (280,081)
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TOTAL STOCKHOLDERS' EQUITY 1,831,013 1,930,427
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TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 1,995,235 $ 2,058,490
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3
See notes to consolidated financial statements.
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CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended August 31, 2000 and 1999
2000 1999
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Revenue:
Consulting fees & rental income $ 18,600 $ 58,027
Interest income 6,652 -
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Total revenue 25,252 58,027
Operating expenses:
General and administrative 110,967 78,969
Depreciation and amortization 1,488 1,113
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Total operating expenses 112,455 80,082
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Operating loss (87,203) (22,055)
Equity in loss of partnerships (12,211) (14,826)
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Loss before income taxes (99,414) (36,881)
Provision for income taxes - (8,956)
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Net loss $ (99,414) $ (45,837)
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Per share data:
Net loss per share $ (0.03) $ (0.01)
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Weighted average number of shares outstanding 3,336,476 3,336,476
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4
See notes to consolidated financial statements.
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CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the three months ended August 31, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
Cash flows from operating activities:
Net loss $ (99,414) $ (45,837)
Adjustments to reconcile net loss to cash
used in operating activities:
Depreciation and amortization 1,488 1,113
Equity in loss of unconsolidated partnerships 12,211 14,826
Change in operating assets and liabilities:
Other receivables (18,600) (18,600)
Prepaid amounts 7,303 -
Other current assets - 32,452
Accounts payable, accrued payroll and related benefits 23,948 (114,253)
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Net cash used by operating activities (73,064) (130,299)
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Cash flows from investing activities:
Purchase of intangibles (26,396) -
Investments in and advances to partnerships and ventures - (14,826)
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Net cash used by investing activities (26,396) (14,826)
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Cash flows from financing activities: - -
Net decrease in cash and cash equivalents (99,460) (145,125)
Cash and cash equivalents at beginning of period 1,611,903 2,042,810
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Cash and cash equivalents at end of period $ 1,512,444 $ 1,897,685
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</TABLE>
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See notes to consolidated 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,
2000. 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
three months ended August 31, 2000 are not necessarily indicative of
the results which may be expected for the entire fiscal year. The May
31, 2000 consolidated balance sheet was derived from audited
financial statements but does not include all disclosures required by
generally accepted accounting principles.
2. Contingencies
CTI of West Virginia, Inc. is a wholly-owned subsidiary of the
Company. CTI of West Virginia, Inc. owns 51% of the equity of Logan
Radiation Therapy, Inc., a Delaware corporation ("LRT") . The other
49% is owned by Hospital Diagnostic Equipment Corp. LRT is a 50.5%
partner with the Logan Medical Foundation (a not-for-profit hospital;
the "Hospital"). The partners have been attempting to establish a
radiation therapy center for the treatment of cancer in Logan, West
Virginia ("Logan") over the past several years.
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,
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
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("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. 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.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
1. Results of Operations
During fiscal 2000, the Company's future business direction was
established. At August 31, 2000, the Company's business consisted of: (I) an
interest in MedClixx, Inc., which will provide IT Enabled Services, (2) Water
Treatment Technologies, Inc. and Global Patent Development Corp., which will
market a proprietary invention related to the on-site production of chlorine gas
and related compounds, (3) an interest in a radiation therapy center under
development located in Logan, West Virginia, (4) a subsidiary (CTI Management
Corp.) through which the Company's president provides management services, and
(5) an office condominium located in Hollywood, Florida which was under contract
for sale.
In connection with its proposed business in the field of IT-Enabled
Services, the Company has positioned itself to be able to offer high quality
medical transcription, billing and collecting and claims processing services by
affiliating with a well-established, Indian-based provider of IT-Enabled
Services. As a result, the start-up costs associated with this type of business
have been significantly minimized and the Company has initially capitalized the
enterprise with $500,000.
After spending approximately $127,000 towards the acquisition of the
on-site chlorine gas generation invention, the Company capitalized this segment
of its business with $750,000. The Company has accrued additional expenses of
approximately $85,000 related to this segment of its business which have not
been capitalized. The Company expects to initially market the invention to the
water treatment industry through worldwide marketing agents, and has been
exploring possible marketing alliances throughout the last two fiscal quarters
of 2000 and the first fiscal quarter of 2001.
The Company did not conduct business operations which were revenue
producing during either of its last two fiscal years. The Company does not
expect material revenues from business operations, which have been under
development since fiscal 2000, until fiscal 2002.
In the past, the Company has received payments for consulting
services rendered by its President. The payors for such services have been in
default with respect to the payments since February 1999. The Company is
pursuing recourse against property which collateralizes the payment obligation.
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The Company will report revenues from the sale of its commercial
condominium in Hollywood, Florida during the second quarter of fiscal 2001. The
adjusted sales price was $245,120, and net proceeds to the Company were
$227,568.39.
Liquidity and Capital Resources
The cash received by the Company associated with consummation of its
fiscal 1998 sale transaction has substantially been invested in its two new
business ventures. These ventures are in development, but the working capital
committed to the ventures is expected to be supplemented by alliances
established by the Company during fiscal 2001 and to satisfy all of their
working capital needs until they become revenue producing in fiscal 2002.
The Company has guaranteed certain liabilities of the Logan
partnership amounting to $677,000 at August 31, 2000.
Except for those items discussed above and in the Company's latest
Form 10-KSB for the year ended May 31, 2000, 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 2, 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
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Carol Befanis O'Donnell
Secretary
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