<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 November 30, 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.
-------------------------------
(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
-------------------------------------------------------------------
(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 January 15, 2001 was 3,336,476.
Transitional Small Business Disclosure Format
(Check One): Yes [ ] No [ X ]
1
<PAGE>
CANCER TREATMENT HOLDINGS, INC.
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets as of November 30,
2000 and May 31, 2000 3
Consolidated Statements of Operations for the
Six Months Ended November 30, 2000 and 1999 4
Consolidated Statements of Operations for the
Three Months Ended November 30, 2000 and 1999 5
Consolidated Statements of Cash Flows for the
Six Months Ended November 30, 2000 and 1999 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Consolidated Financial Condition and Results
of Operations 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
SIGNATURES 9
2
<PAGE>
CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
November 30, May 31,
2000 2000
---------------------- --------------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 1,674,609 $ 1,611,903
Other receivables 158,000 139,416
Prepaid amounts 3,921 29,144
---------------------- --------------------
TOTAL CURRENT ASSETS 1,836,530 1,780,463
Property and equipment, net - 179,157
Intangibles, net 147,069 98,870
---------------------- --------------------
TOTAL ASSETS $ 1,983,599 $ 2,058,490
====================== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable & accrued liabilities $ 112,698 $ 90,599
Minority interest obligations 59,776 37,465
---------------------- --------------------
TOTAL CURRENT LIABILITIES 172,474 128,064
---------------------- --------------------
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 (3,082,386) (2,963,084)
---------------------- --------------------
2,091,206 2,210,508
Treasury stock : 159,284 shares, at cost (280,081) (280,081)
---------------------- --------------------
TOTAL STOCKHOLDERS' EQUITY 1,811,125 1,930,427
---------------------- --------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,983,599 $ 2,058,490
====================== ====================
</TABLE>
3
See notes to consolidated financial statements.
<PAGE>
CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the six months ended November 30, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
----------------- ---------------
<S> <C> <C>
Revenue:
Consulting fees & rental income $ 18,600 $ 101,779
Sale of condo 50,728
Interest income 16,271 -
----------------- ---------------
Total revenue 85,599 101,779
Operating expenses:
General and administrative 177,954 178,874
Depreciation and amortization 4,620 2,226
----------------- ---------------
Total operating expenses 182,574 181,100
----------------- ---------------
Operating loss (96,975) (79,321)
Equity in loss of partnerships (22,327) (30,237)
----------------- ---------------
Loss before income taxes (119,302) (109,558)
Provision for income taxes - (8,956)
----------------- ---------------
Net loss $ (119,302) $ (118,514)
================= ===============
Per share data:
Net loss per share $ (0.04) $ (0.04)
================= ===============
Weighted average number of shares outstanding 3,336,476 3,336,476
================= ===============
</TABLE>
4
See notes to consolidated financial statements.
<PAGE>
CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended November 30, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
----------------- -----------------
<S> <C> <C>
Revenue:
Consulting fees & rental income $ - $ 43,752
Sale of condo 50,728
Interest income 9,619 -
----------------- -----------------
Total revenue 60,347 43,752
Operating expenses:
General and administrative 66,987 99,906
Depreciation and amortization 3,132 1,113
----------------- -----------------
Total operating expenses 70,119 101,019
----------------- -----------------
Operating loss (9,772) (57,267)
Equity in loss of partnerships (10,116) (15,410)
----------------- -----------------
Loss before income taxes (19,888) (72,677)
Provision for income taxes - -
----------------- -----------------
Net loss $ (19,888) $ (72,677)
================= =================
Per share data:
Net loss per share $ (0.01) $ (0.02)
================= =================
Weighted average number of shares outstanding 3,336,476 3,336,476
================= =================
</TABLE>
5
See notes to consolidated financial statements.
<PAGE>
CANCER TREATMENT HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended November 30, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
---------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (119,302) $ 59,006
Adjustments to reconcile net loss to cash
used in operating activities:
Depreciation and amortization 4,620 2,226
Equity in loss of unconsolidated partnerships 22,327 26,323
Change in operating assets and liabilities:
Other receivables (18,600) -
Prepaid amounts 25,223 -
Other current assets - (17,567)
Accounts payable, accrued payroll and related benefits 22,099 (167,180)
---------------- ----------------
Net cash used by operating activities (63,633) (97,192)
---------------- ----------------
Cash flows from investing activities:
Purchase of intangibles (52,819) -
Sale of assets 179,157 2,160,000
Investments in and advances to partnerships and ventures - (17,787)
---------------- ----------------
Net cash used by investing activities 126,338 2,142,213
---------------- ----------------
Cash flows from financing activities: - -
Net decrease in cash and cash equivalents 62,705 2,045,021
Cash and cash equivalents at beginning of period 1,611,903 150,516
---------------- ----------------
Cash and cash equivalents at end of period $ 1,674,609 $ 2,195,537
================ ================
</TABLE>
6
See notes to consolidated financial statements.
<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 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 six months ended November
30, 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
8
<PAGE>
("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.
3. Sale of Condominium
In September 2000, the Company sold its commercial condominium in
Florida, realizing a $50,628 profit on the sale.
4. Investments
In October 2000, the Company entered into a partnership agreement with
HDE Acquisition Corp. ("HDE"). The partnership was formed to engage in
the business of radiation therapy, diagnostic imaging and other
medical-related services. The Company and HDE are equal partners in the
venture. Ullrich Klamm, Ph.D., Chairman and President of the Company,
is also an officer as well as a director and stockholder of HDE.
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 November 30, 2000, the Company's business consisted of: (1) an
interest in MedClixx, Inc., which will provide information services enabled by
information technology ("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) a partnership interest in Advanced Medical Services, which will establish
and operate radiation therapy centers and provide diagnostic imaging and other
medical-related services.
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 capitalized the enterprise
with approximately $250,000.
9
<PAGE>
After spending approximately $151,000 towards the acquisition of the
on-site chlorine gas generation invention, the Company capitalized this segment
of its business with approximately $150,000. 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 past year.
The Company established its partnership with HDE to make use of their
joint expertise in the areas of radiation therapy, diagnostic imaging and other
medical-related services. The Company capitalized this segment of its business
with approximately $1,000,000. The Company and HDE are equal partners in the
venture. Ullrich Klamm, Ph.D., Chairman and President of the Company, is also an
officer as well as a director and stockholder of HDE.
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.
The Company has reported 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 three
business ventures: MedClixx, Inc., Water Treatment Technologies, Inc. and
Advanced Medical Services. 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 $694,000 at November 30, 2000. The Company and LRT have been sued
by Citicorp Vendor Finance, Inc. ("Citicorp") in the Superior Court of New
Jersey, which claims that there has been a default by the Logan partnership in
its obligations to Citicorp, the equipment lessor. The suit was commenced in
November 2001 and the Company has not yet asserted its defenses by answering the
complaint. The Company is exploring a third party action against the
administrator of the Hospital based upon fraud.
10
<PAGE>
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.
January 15, 2001 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
11
