-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GCFZq1mrASWLa/4U+n/i2qHSeTyrg+Gb5qGk5F4wN2Xgz1/ACWhWxhvpTwTVQNkh s9Ugu/YCOltNSJreoOIWOw== 0001123309-06-000017.txt : 20060317 0001123309-06-000017.hdr.sgml : 20060317 20060317165604 ACCESSION NUMBER: 0001123309-06-000017 CONFORMED SUBMISSION TYPE: SB-2/A PUBLIC DOCUMENT COUNT: 19 FILED AS OF DATE: 20060317 DATE AS OF CHANGE: 20060317 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CANCER THERAPEUTICS INC CENTRAL INDEX KEY: 0000876367 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HEALTH SERVICES [8000] IRS NUMBER: 201499421 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: SB-2/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-119915 FILM NUMBER: 06696568 BUSINESS ADDRESS: STREET 1: 210 WEST HANSELL ST. CITY: THOMASVILLE STATE: GA ZIP: 31792 BUSINESS PHONE: 229-403-1282 MAIL ADDRESS: STREET 1: 210 WEST HANSELL ST. CITY: THOMASVILLE STATE: GA ZIP: 31792 SB-2/A 1 sb2a11ctiredline.txt SB-2/A-11 CANCER THERAPEUTICS REDLINE Registration No. 333-119915 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Amendment No. 11 to FORM SB-2 Registration Statement Under the Securities Act of 1933 CANCER THERAPEUTICS, INC. (Name of Small Business Issuer in Its Charter) Delaware 8000 20-1499421 ------------------------------- ------------------------------------ ------------------------------- (State or other Jurisdiction (Primary Standard Industrial (IRS Employer of Organization) Classification Code Number) Identification No.)
210 West Hansell Street, Thomasville, GA 31792 (229) 403-1282 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Robert K. Oldham, M.D. 210 West Hansell Street, Thomasville, GA 31792 (229) 403-1282 (Name, address, including zip code, and telephone number including area code, of agent for service) WITH COPIES TO: Kenneth I. Denos, Esq. 11585 South State Street, Suite 102 Draper, Utah 84020 (801) 816-2511 FAX (801) 816-2599 APPROXOMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as possible after the registration statement becomes effective. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. o If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o
CALCULATION OF REGISTRATION FEE - ------------------------ --------------------- ----------------------- ---------------------- ---------------------- Title of Securities Amount Proposed Maximum Proposed Maximum Amount of to be to be Offering Price Aggregate Registration Registered Registered Per Share(1) Offering Price Fee - ------------------------ --------------------- ----------------------- ---------------------- ---------------------- Common Stock 1,000,000 $0.50 $500,000 $58.85 - ------------------------ --------------------- ----------------------- ---------------------- ---------------------- (1) Estimated solely for purposes of computing the registration fee pursuant to Rule 457 of the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED March 17, 2006 1,000,000 SHARES CANCER THERAPEUTICS, INC. ------------------ COMMON STOCK ------------------ We are offering, on a "best efforts, minimum-maximum" basis, up to 1,000,000 shares of Cancer Therapeutics, Inc. common stock, to the public at a price of $0.50 per share. The minimum purchase requirement for each investor is $1,000.00. Prior to this offering, there has been no public market for our shares. The shares of Cancer Therapeutics will not be listed on an exchange or quoted on the NASDAQ system upon completion of this offering and we cannot assure you that a market will develop or, if a market should develop, that it will continue. The public offering price has been arbitrarily determined by us and bears no relationship to assets, shareholders equity, or any other recognized criteria of value. ----------------- OUR BUSINESS IS SUBJECT TO MANY RISKS AND AN INVESTMENT IN THE SHARES OF CANCER THERAPEUTICS WILL ALSO INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD NOT PURCHASE SHARES OF CANCER THERAPEUTICS UNLESS YOU CAN AFFORD TO RISK THE LOSS OF YOUR ENTIRE INVESTMENT. SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS WHICH YOU SHOULD CONSIDER BEFORE PURCHASING SHARES OF CANCER THERAPEUTICS. - -------------------------------------------------------------------------------- NEITHER THE SUCURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED ON THE ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
=========================================== =================== =================== ================================ Discounts and Price to Public Commissions Proceeds to us (2) (1) - ------------------------------------------- ------------------- ------------------- -------------------------------- Per Share................................. $0.50 $0.00 $0.50 - ------------------------------------------- ------------------- ------------------- -------------------------------- Total Minimum............................. $100,000 $0.00 $100,000 - ------------------------------------------- ------------------- ------------------- -------------------------------- Total Maximum............................. $500,000 $0.00 $500,000 =========================================== =================== =================== ================================
(1) The offering price is payable in cash to Cancer Therapeutics upon subscription. We will manage the offering and the shares offered hereby will be sold by our officers and directors, without any discounts or other commissions. (2) We will deposit the proceeds of this offering into an escrow account with our attorneys, Kenneth I. Denos, P.C. If we do not receive subscriptions for a minimum of $100,000 within 120 days from the date of this prospectus (unless extended by us for up to 30 additional days), all proceeds will be promptly refunded to subscribers without interest thereon or deduction therefrom. If you subscribe for shares in this offering, you will have no right to return or use of your funds during the offering period, which may last up to 150 days. The termination date for the maximum offering is 150 days from the first date of this prospectus. Offering expenses for this offering equal $68,559. In the event that we receive subscriptions for the minimum of $100,000 our net offering proceeds will be $31,441. In the event that we receive subscriptions for the maximum of $500,000 our net offering proceeds will be $431,441. Total offering expenses paid to date equal $108,559. $40,000 was paid with shares of common stock to our securities counsel, Kenneth I Denos. The information in this prospectus is not complete and may be changed. We may not sell or offer these securities until this registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. TABLE OF CONTENTS PAGE NUMBER ------ PROSPECTUS SUMMARY.............................................................2 RISK FACTORS...................................................................4 SECURITIES AND EXCHANGE COMMISSION'S PUBLIC REFERENCE..........................7 USE OF PROCEEDS................................................................7 DETERMINATION OF OFFERING PRICE................................................9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION....................9 BUSINESS......................................................................12 DESCRIPTION OF PROPERTY.......................................................21 DIRECTORS, EXECUTIVE OFFICERS, AND CONTROL PERSONS............................22 EXECUTIVE COMPENSATION........................................................23 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................................24 DIVIDEND POLICY...............................................................25 MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS......................25 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................26 DESCRIPTION OF SECURITIES.....................................................27 PLAN OF DISTRIBUTION..........................................................28 INTEREST OF NAMED EXPERTS AND COUNSEL.........................................28 LEGAL PROCEEDINGS.............................................................29 ORGANIZATION WITHIN THE LAST FIVE YEARS.......................................30 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.................................30 REPORTS TO SECURITY HOLDERS...................................................30 FINANCIAL STATEMENTS..........................................................31 1 PROSPECTUS SUMMARY OUR BUSINESS Cancer Therapeutics, Inc., was incorporated under the laws of the State of Tennessee on May 1, 1991. On September 7, 2004 we reincorporated Cancer Therapeutics in the state of Delaware. We are a producer and provider of treatments for cancer, commonly grouped under the category of "biotherapy." "Biotherapy" is the use of the body's immune system, either directly or indirectly, to fight cancer or to lessen side effects that may be caused by some cancer treatments. These biotherapy services include, tumor specimen storage, cellular therapies and patient -specific vaccines for patients diagnosed with a malignant type of cancer. Biotherapy is complimentary to conventional cancer treatment modalities, and is not usually used as an independent treatment for cancer. We intend to market our services to regionally-based cancer treatment markets, build a strong physician referral source, and thereby become a significant biotherapy provider in the regional markets we serve. You can learn more about our business from our website at www.cancer-therapeutics.com. Our website and the information contained therein, however, does not constitute a part of this prospectus. We have not received FDA approval as it relates to any facet of our business and/or operations and, as a result, our treatments, products, and/or services have not been deemed safe or effective in any way. Our mailing address and the telephone number of our principal executive offices are 210 West Hansell Street, Thomasville, GA 31792, (229) 403-1282. NUMBER OF SHARES BEING OFFERED This prospectus covers the offering of up to 1,000,000 shares of our common stock. We are offering to sell these shares to the public for $0.50 per share. We will manage the offering and the shares will be offered and sold by our officers and directors. The proceeds of this offering will be escrowed by our attorneys pending completion or termination of this offering. The offering will terminate 120 days from the date hereof (or 150 days if extended by us for an additional 30 days), and funds held in escrow will be promptly returned to subscribers, without interest or deduction, unless the offering is completed on or before the date upon receipt of subscription for at least the minimum offering amount of $100,000. Please see the "Plan of Distribution" section on page 29 of this prospectus for a detailed explanation of how our shares of common stock are intended to be sold. NUMBER OF SHARES OUTSTANDING Cancer Therapeutics had 4,097,688 shares of common stock outstanding as at May 31, 2005. Cancer Therapeutics has no other shares of capital stock outstanding at the present time. We are authorized to issue up to 100,000,000 shares of common stock and 10,000,000 shares of preferred stock. Upon completion of this offering, if the maximum number of shares available for sale are sold, there will be 5,097,688 shares issued and outstanding. We have not issued any shares of preferred stock. We are authorized to issue shares of preferred stock in one or more series with such rights and preferences as our board of directors may decide. Our board of directors has not designated any such series and no shares of preferred stock are presently issued and outstanding. GOING CONCERN As detailed in our audited financial statements for the year ended May 31, 2005, we have an accumulated deficit of $2,988,328. We have negative working capital, negative cash flows from operations, minimal revenues and recurring operating losses. USE OF PROCEEDS After making deductions for offering expenses, we intend to use the proceeds of this offering for marketing, business development, operating expenses, and interest payments to a creditor of Cancer Therapeutics. The amounts we allocate to each of these categories is dependent upon whether we raise the minimum or the maximum amount contemplated in this offering. We have provided details concerning the allocation of proceeds under "Use of Proceeds" on page 7 of this prospectus. 2 SUMMARY OF FINANCIAL DATA The summarized financial data presented below is derived from and should be read in conjunction with our audited financial statements for the years ended May 31, 2005 and 2004, including the notes to those financial statements which are included elsewhere in this prospectus along with the section entitled Management's Discussion and Analysis of Financial Condition and Results of Operations beginning on page 10 of this prospectus.
------------------------------------------- ----------------------- --------------------- ---------------------- For the six months For the year ended For the year ended ended May 31, 2005 May 31, 2004 November 30, 2005 ------------------------------------------- ----------------------- --------------------- ---------------------- Revenue $25,338 $44,858 $36,104 ------------------------------------------- ----------------------- --------------------- ---------------------- Net Loss for the Period ($31,707) ($264,757) ($171,298) ------------------------------------------- ----------------------- --------------------- ---------------------- Loss Per Share - basic and diluted ($0.01) (1) ($0.08) (1) ($0.37) (1) ------------------------------------------- ----------------------- --------------------- ---------------------- ------------------------------------------- ----------------------- --------------------- ---------------------- Working Capital (Deficit) ($525,015) ($493,308) ($566,051) ------------------------------------------- ----------------------- --------------------- ---------------------- Total Assets $431 $16,814 $77,997 ------------------------------------------- ----------------------- --------------------- ---------------------- Total Number of Issued Shares of Common 4,097,688 (1) 4,097,688 (1) 1,947,688 (1) Stock ------------------------------------------- ----------------------- --------------------- ---------------------- Accumulated Deficit ($3,017,035) ($2,985,328) ($2,720,571) ------------------------------------------- ----------------------- --------------------- ---------------------- Total Stockholders' Deficit ($525,015) ($493,308) ($566,051) ------------------------------------------- ----------------------- --------------------- ----------------------
(1) Adjusted to reflect the reincorporation of Cancer Therapeutics from Tennessee to Delaware, in which each five (5) shares of Cancer Therapeutics (TN) were exchanged for one share of Cancer Therapeutics (DE). 3 RISK FACTORS OPERATING RISKS WE MAY BE SUBJECT TO LIABILITY FOR A VIOLATION OF THE SECURITIES ACT OF 1933. Some of our shareholders received their shares as a result of the liquidation of Immune Complex Corporation on June 8, 2000. The shares received were not registered under the Securities Act and did not qualify for an exemption therefrom. Consequently, we may be liable to each of our shareholders who received shares of Cancer Therapeutics in connection with this liquidation. We may be required to rescind the transaction in which the shares of Cancer Therapeutics were distributed to our shareholders, and may also be required to compensate these shareholders. Our management has estimated the potential liability of Cancer Thereapeutics in this respect at $.03 to $.05 per share at the time of distribution which equates to a potential liability of $13,431 to $22,384. We have noted this estimated potential liability in the notes to our financial statements. WE HAVE DEFAULTED LOAN OBLIGATIONS. We received loans to continue operations as detailed in our financial statements. These loans are in default or may be in default upon demand by the creditors. As a result of our default position, these creditors may obtain judgment or other lawful remedies to collect on the debts now or in the future. We will still need to raise additional capital or increase our business profits to satisfy these creditors. We cannot assure you that we will be successful in repaying any or all of these creditors. As of August 31, 2005, the total amount due on these loans was $390,683.31 which consists of $289,943.60 of principal and $100,739.71 of interest. THE INTERNAL REVENUE SERVICE HAS PLACED A TAX LIEN ON OUR ASSETS. The IRS tax lien covers property of Cancer Therapeutics including the Cryobank, equipment, inventory and all of our other assets. This lien gives the IRS priority over other creditors in the event we experience bankruptcy or dissolution. The settlement amount calls for a payment of $1,000 per month until the settlement amount is paid in full, although the IRS may require us to increase our monthly payments if our financial condition improves. As of August 31, 2005, the total amount owing to the IRS, including penalties and interest, was $23,080. We are current with our payments, but may not be able to make future payments. We may have all or some of our assets seized if we do not comply with our payment schedule. OUR TREATMENTS ARE EXPERIMENTAL AND HAVE NOT BEEN DECLARED SAFE AND EFFECTIVE. We have not received FDA approval as it relates to any facet of our business and/or operations and, as a result, our treatments, products, and/or services have not been deemed safe or effective in any way. Consequently, our efforts to commercialize our services may fail. WE HAVE CONSISTENTLY OPERATED AT A LOSS. Cancer Therapeutics was organized in 1991 and has consistently operated at a loss, and we cannot assure you that we will be able to operate Cancer Therapeutics profitably. In the event we are unsuccessful at operating our business profitably, we cannot assure you that Cancer Therapeutics could successfully become involved in any other business venture due to the fact that our personnel are trained only in biotherapy and not in other services. We presently have no plans, commitment, or arrangements with respect to any other potential business venture. WE NEED SUBSTANTIAL FUNDING TO CONTINUE OPERATIONS AND DEVELOP OUR THERAPIES. We are dependent upon raising additional funds to continue to operate our Cryobank and to develop our vaccine and T-cell therapies. We may not be able to raise any funds for operations or for research and development. It will take at least 5 years to develop the T-cell and vaccine therapies, and even if we develop these therapies fully they may not be safe and effective even after investing in the research and development. We anticipate the cost if successful to be at least 5-10 million dollars to complete the research and development to produce safe and effective T-cell and vaccine therapies as a part of the practice of medicine. WE HAVE NO OPERATING CAPITAL, AND WE MUST RAISE ADDITIONAL CAPITAL TO REMAIN IN BUSINESS. We presently have no operating capital and are dependent upon future fundraising efforts to provide the minimum capital necessary to continue our business. Such fundraising efforts may include the sale of additional shares of Cancer Therapeutics such as is contemplated in this offering or will involve commercial borrowing. Although we believe that our status as a publicly-traded company will enhance our ability to raise additional capital, our financial condition is dire and we are currently operating with no or very little working capital, several loan obligations, and a lien against our assets by the Internal Revenue Service. We cannot assure you that such our shares will ever be publicly traded and capital will be available to meet the costs of our operations, or that it will be available on 4 acceptable terms. Even if we raise the maximum amount of fundraising, we will still need to raise additional capital to operate our company. Presently, our current offering is our sole source of potential funding and we have no commitments or arrangements from commercial lenders or other sources. WE ARE TOTALLY DEPENDENT UPON OUR CHIEF EXECUTIVE WHO HAS BUSINESS AND TIME CONFLICTS. We are totally dependent upon the knowledge, skills, and experience of Robert K. Oldham, M.D. our President, CEO, Medical Director and Chairman. As compared to many other companies, we do not have a depth of managerial and technical personnel. Accordingly, there is a greater likelihood that loss of the services of Mr. Oldham would would force us to discontinue our business. We presently have no employment contract with or key man life insurance upon Mr. Oldham. Furthermore, Mr. Oldham will not be employed full-time, at least initially, and is involved with other businesses and has other interests which could give rise to conflicts of interest with respect to the business of and amount of time devoted to Cancer Therapeutics. We cannot assure you that such conflicts will be resolved favorably to Cancer Therapeutics. INSURANCE AND OTHER THIRD PARTY REIMBURSEMENT FOR OUR SERVICES IS LIMITED. With respect to the services we offer, insurance reimbursement or other third-party reimbursement is only available with respect to certain patient types. Moreover, our services are not covered or reimbursed under the Medicare program. Consequently, most patients will be required to pay for such services, wholly or in part, with their own funds. We cannot assure you that significant insurance reimbursement or other third-party reimbursement for our services will be available in the future. Without this reimbursement, we will not be able to offer our services to many patients and physicians. WE HAVE NOT RECEIVED FDA APPROVAL AS IT RELATES TO ANY FACET OF OUR BUSINESS AND/OR OPERATIONS AND, AS A RESULT, OUR TREATMENTS, PRODUCTS, AND/OR SERVICES HAVE NOT BEEN DEEMED SAFE OR EFFECTIVE IN ANY WAY. Prior to being licensed for sale, our services are subject to rigorous approval processes by the Food and Drug Administration and similar health authorities in foreign countries. The precise nature of the regulatory approvals which we may be required to obtain are not clear at this point. Obtaining FDA and corresponding foreign approvals for technology, processes, or products we have developed is likely to be costly and time consuming and will, in our opinion, require several years. The length of such time period, however, will depend upon the use for which approval is sought and the results of clinical testing with respect to such use. We cannot assure you that such approval will be granted. Further, we cannot assure you that subsequent adoption or amendment of laws or interpretation of existing laws will not prohibit or render impractical our business plan and disable us from providing any services, treatments or products. If we are unable to get FDA approval, our business will most likely fail. Our T-cell and vaccine therapies have not received FDA approval. Our Cryobank service does not require FDA approval. We have not received FDA approval as it relates to any facet of our business and/or operations and, as a result, our treatments, products, and/or services have not been deemed safe or effective in any way. OUR OPERATING COSTS WILL MOST LIKELY INCREASE. Our income could be seriously affected by rising operating expenses such as: research and development; electricity; insurance and administrative costs, security, patent registration expenses, building repairs and maintenance, and regulatory compliance. If we cannot control operating costs or adequately cover them, our cash flow will deteriorate and we will have to raise capital or discontinue our business. WE DO NOT HAVE ANY PATENT PROTECTION FOR OUR TECHNOLOGY. We expect to own and rely upon certain trade secrets and know-how but we have not yet sought patent protection for our technology. It may not be possible for us to obtain patent protection for many aspects of our technology. We cannot assure you that others will not independently develop substantially equivalent information and techniques or otherwise gain access to our technology. We believe that, in general, it is unlikely that true proprietary protection will be available to companies such as Cancer Therapeutics which develop biologicals for commercial use. NO UNDERWRITER IS PARTICIPATING IN THIS OFFERING. Because we have not engaged the services of an underwriter with respect to this offering, the independent due diligence review of Cancer Therapeutics, its affairs and financial condition, which would ordinarily be performed by an underwriter and its legal counsel, has not been performed and you will not have the benefit of an underwriter's independent due diligence review. 5 INVESTMENT RISKS THERE HAS NEVER BEEN A PUBLIC MARKET FOR OUR SHARES. Prior to this registration statement, there has been no public market for the common stock of Cancer Therapeutics. If a public market for the common stock does develop at a future time, sales of shares by shareholders of substantial amounts of common stock of Cancer Therapeutics in the public market could adversely affect the prevailing market price and could impair our future ability to raise capital through the sale of our equity securities. WE HAVE NEVER ISSUED A DIVIDEND AND DON'T ANTICIPATE ANY DIVIDENDS IN THE FUTURE. Cancer Therapeutics has never issued a dividend and we do not anticipate paying dividends on our common stock in the foreseeable future. Furthermore, we may also be restricted from paying dividends in the future pursuant to subsequent financing arrangements or pursuant to Delaware law. YOU COULD BE DILUTED FROM THE ISSUANCE OF ADDITIONAL COMMON AND PREFERRED STOCK. Cancer Therapeutics is authorized to issue up to 100,000,000 shares of common stock and 10,000,000 shares of preferred stock. To the extent of such authorization, our board of directors will have the ability, without seeking shareholder approval, to issue additional shares of common stock in the future for such consideration as the board may consider sufficient. The issuance of additional common stock in the future may reduce your proportionate ownership and voting power. IT IS LIKELY THAT YOU WILL BE DILUTED BY THE EXERCISE OF WARRANTS. Cancer Therapeutics has 4,097,688 shares of common stock outstanding held by 139 shareholders of record, and warrants outstanding to purchase 1,300,000 shares of common stock held by Healthcare Enterprise Group, Inc. The warrants became exercisable on January 1, 2005. We have agreed to register all shares of Cancer Therapeutics that are currently outstanding, and we are obligated in the future to register the shares that will be received from the exercise of the warrants held by Healthcare Enterprise Group. 6 SECURITIES AND EXCHANGE COMMISSION'S PUBLIC REFERENCE Any member of the public may read and copy any materials filed by us with the Securities and Exchange Commission at the Commission's Public Reference Room at 100 F Street, NE Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the Commission at 1-800-SEC-0330. The Commission maintains an Internet website (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission. USE OF PROCEEDS The net proceeds to Cancer Therapeutics from the sale of the 1,000,000 shares offered hereby will vary depending upon the total number of shares sold. The following table sets forth gross and net proceeds, and our present estimate of the allocation and prioritization of net proceeds expected to be received by us from this offering. As shown in the table, if less than the maximum amount is raised, we will give priority to debt interest service and payment to our auditors and attorneys assisting us with this registration statement.
Minimum Mid-Range Maximum Offering Offering Offering -------- -------- -------- Gross Proceeds $100,000 $ 250,000 $ 500,000 Legal, Auditing Fees and Related Offering Costs $ 68,559 $ 68,559 $ 68,559 and Fees(1) Net Offering Proceeds $ 31,441 $ 181,441 $ 431,441 Marketing (2) $ 8,000 $ 35,000 $ 69,000 Business Development (3) $ 2,000 $25,000 $ 53,000 Operating Expenses (4) $ 15,935 $ 115,935 $ 303,935 Debt Interest Service(5) $ 5,506 $ 5,506 $ 5,506 - -------- ------- ------- TOTAL $ 100,000 $ 250,000 $ 500,000 ========= ========= =========
(1) We have already paid our securities counsel and auditors $25,000 and $16,372, respectively, out of cash reserves. We have already issued our securities counsel 400,000 shares of our common stock, at $.10 per share, the cost of which has not been deducted from the offering proceeds. Our first priority is to pay for our legal, auditing and other fees and costs out of our gross proceeds from the offering. Offering costs and fees includes costs of printing, transfer agent fees, SEC Registration Fee and other miscellaneous expenses. (2) We intend to use this portion of net proceeds to create and publish new marketing material to distribute to physicians and potential patients who want to learn more about our services. Our fourth priority is to pay for marketing out of our net offering proceeds. (3) We plan on using this portion of net proceeds to try to form strategic partnerships with other clinics that perform cancer treatment. Our fifth priority is to pay for business development out of our net offering proceeds. (4) We intend to use this portion of the net proceeds to cover rent and other operating expenses and provide working capital for the operation of our business. If the maximum amount is raised, we intend to hire additional personnel. Our third priority is to pay for operating expenses out of our net offering proceeds. (5) We have negotiated a renewal of a bank note payable to Commercial Bank in Thomasville, Georgia that became due on August 1, 2003. The interest rate on the bank note is 4.5%. We have paid $5,200 out of cash reserves to pay for all of the interest owing on the bank note thru December 31, 2004. We initially borrowed $50,000 from the bank to update our lab equipment and to use for operating expenses. Our second priority is to pay for the debt interest service out of our net offering proceeds. 7 DILUTION COMPARISON OF OFFERINGN PROCE TO PRIOR ISSUANCES OF SHARES Compared to the offering price of $0.50 per share, the following officers, directors, promoters and affiliated persons received shares from Cancer Therapeutics during the past five years in the manner described below. Our estimates of the value of the shares issued for services are based upon our perceived value of the services provided and bear no relationship to assets, shareholder's equity, or any other criteria of value. o We issued 1,300,000 shares of our common stock in connection with the engagement of our corporate legal counsel on May 10, 2004. We estimated the value of the services provided to be worth $65,000, or $0.05 per share. The value of the shares issued was determined to be $0.375 per share as disclosed in the financial statements. o We issued 200,000 shares of our common stock for $0.375 per share to Healthcare Enterprise Group, Inc. in exchange for $75,000 cash, on May 28, 2004. In connection with this transaction, we also issued Healthcare Enterprise Group, Inc. a warrant to acquire 1,300,000 additional shares at an exercise price of $0.0192 per share. Assuming that the warrant is exercised, the average cost of the shares acquired by Healthcare Enterprise Group, Inc. is $0.067 per share. o We issued 400,000 shares of our common stock in connection with the engagement of our securities counsel on September 10, 2004. We estimated the value of the services provided to be worth $90,000. Of the $90,000 in services, we agreed to pay $50,000 in cash and $40,000 in shares which we valued at $0.10 per share. The value of the shares issued was determined to be $0.375 per share as disclosed in the financial statements. o We issued 400,000 shares of our common stock to our Chief Executive Officer in connection with the conversion of a promissory note on September 15, 2004 for $125,000 in loans made by him to Cancer Therapeutics in 2001. The value of our shares for purposes of this conversion was $0.313 per share. o We issued 1,000,000 shares of our common stock in conversion of $50,000 owed to our Chief Financial Officer on September 20, 2004. The value of our shares for purposes of this conversion was $0.05 per share. The value of the shares issued was determined to be $0.375 per share as disclosed in the financial statements. o We issued 200,000 shares of our common stock on September 20, 2004 in settlement of deferred consulting fees for healthcare advisory services provided in 2001. We estimated the value of these services to be worth $75,000, or $0.375 per share. o We issued 150,000 shares of our common stock on September 20, 2004 in connection with the engagement of a United Kingdom-based advisory firm. We estimated the value of these services to be worth $37,500, or $0.25 per share. The value of the shares issued was determined to be $0.375 per share as disclosed in the financial statements. NET TANGIBLE BOOK VALUE Dilution is the difference between the public offering price of $0.50 per share for our common stock, and the net tangible book value per share of our common stock immediately after its purchase. Our net tangible book value per share is calculated by subtracting our total liabilities from our total assets less any intangible assets, and then dividing by the number of shares then outstanding. The net tangible book value of Cancer Therapeutics prior to the offering, based upon our May 31, 2005 audited financial statements, was ($493,308), or ($0.12) per common share. Prior to selling any shares in this Offering, we have 4,097,688 shares outstanding. If we are able to sell the maximum number of shares in this offering, we will have 5,097,688 shares outstanding. Our estimated post-offering net tangible book value, which gives effect to receipt of the estimated net proceeds from the offering and issuance of the additional shares of common stock in the offering, but does not take into consideration any other changes in the net tangible book value of Cancer Therapeutics, will be ($61,688) or approximately ($0.01) per share. This would result in complete dilution to all investors in this offering at the public offering price of $0.50 per share, immediately after their investment. 8 If a mid-range number of 500,000 shares are sold, we will have 4,597,688 shares outstanding upon completion of the offering. The post-offering pro forma net tangible book value of Cancer Therapeutics would be ($311,866), or approximately ($0.068) per share. This would also result in complete dilution to all investors in this offering at the public offering price of $0.50 per share, immediately after their investment If only the minimum number of shares are sold, we will have 4,297,688 shares outstanding upon completion of the offering. The post-offering pro forma net tangible book value of Cancer Therapeutics would be ($461,866), or approximately ($0.107) per share. This would also result in complete dilution to all investors in this offering at the public offering price of $0.50 per share, immediately after their investment. The following table sets forth the estimated net tangible book value per share after the offering and the dilution to persons purchasing shares based on the foregoing minimum and maximum offering assumptions (negative numbers are expressed in parentheses).
Minimum Mid-Range Maximum ------- --------- ------- Public offering price per share $0.50 $0.50 $0.50 Net tangible book value per share prior to offering ($0.12) ($0.12) ($0.12) Increase per share attributable to new investors $0.013 $0.052 $0.11 Post-offering net tangible book value per share ($0.107) ($0.068) ($0.01) Dilution to new investors in this offering $0.50 $0.50 $0.50
DETERMINATION OF OFFERING PRICE Because the shares of Cancer Therapeutics common stock are not traded on any exchange or quotation medium, we have made an estimate of the offering price at which we will initially offer our shares, but such offering price bears no relationship to assets, shareholders equity, or any other recognized criteria of value. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion of our financial condition and results of operations in conjunction with the audited financial statements and related notes included in this registration statement. This discussion may contain forward-looking statements, including, without limitation, statements regarding our expectations, beliefs, intentions, or future strategies that are signified by the words, "expects," "anticipates," "intends," "believes," or similar language. Actual results could differ materially than from those projected in the forward looking statements. You should carefully consider the information set forth above under the caption "Risk Factors" in addition to the other information set forth in this registration statement. We caution you that Cancer Therapeutics' business and financial performance is subject to substantial risks and uncertainties. OVERVIEW We are a research-stage business that endeavors to become a U.S. producer and provider of treatments for cancer, commonly grouped under the category of "biotherapy." We provide biotherapy services to patients on a fee-basis (50 percent to 70 percent currently reimbursed through private insurance). These services begin when a patient is diagnosed with a malignancy and continue to provide a biotherapy while a patient is receiving conventional cancer treatment: chemotherapy, radiation, and surgery. You can learn more about our business at our website located at www.cancer-therapeutics.com. Our website and the information contained therein, however, does not constitute a part of this prospectus. The treatment of cancer is a significant portion of the healthcare economy. According to the American Cancer Society's CANCER STATISTICS 2004, cancer continues to be the second leading cause of death in the U.S., claiming almost 554,000 lives during 1991 (one in four deaths) In addition, incidence rates have showed overall increases from 1975 to 2000, where now 1.4 million Americans will be diagnosed with cancer this year. It is estimated that 1 of 2 males and 1 of 3 females in the U.S. will develop cancer during their lifetimes. Although survival rates continue to climb (from 50% in 1975 to a current 63%), the overall death rate from Cancer has remained relatively flat since the 1950s (as cited by the American Cancer Society website at WWW.CANCER.ORG "2004 DATA AND STATISTICS," which is available to the public on the internet for no charge). 9 As such, with increasing survival, coupled with higher incidence, the number of cancer survivors has concurrently increased - according to the National Cancer Institute, as of January 2001, it is estimated that there are 9.8 million cancer survivors in the US, representing approximately 3.5% of the population ( as cited by the National Institute of Cancer website at WWW.CANCER CONTROL.CANCER.GOV, which is available to the public for no charge). The increasing number of cancer patients and survivors support the business model of Cancer Therapeutics. Over the past two decades, the acceptance of biotherapy treatment among oncologists and cancer patients has increased (as explained by Klaus Schindhelm, Ex Vivo Cell Therapy, May 1999) (This book is available to the public in a medical library for no charge). The Company earns its revenue from providing clinical services to cancer patients in the following areas: CRYOBANK. In this process, a patient's surgically removed tumor tissue is shipped to us, specially processed, preserved and stored in a living condition in liquid nitrogen for future use. Typical charge is around $1,250. TUMOR DERIVED ACTIVATED CELLS. In this process, a patient's tumor is shipped to our laboratory by overnight delivery. Using a number of specialized proprietary processes, technicians separate and recover the cancer-fighting white blood cells that a patient's immune system has produced to attack that specific cancer. VACCINES. In this process, a patient's own (autologous) cancer cells can be grown in the laboratory, produced in mass quantities, and used to develop a patient-specific vaccine. The target market for our services is composed of two different groups: o Individuals who have undergone conventional treatment for a newly diagnosed cancer with an uncertain cure rate, but are ultimately cured (candidates for our cryopreservation service); and o Individuals with cancers incurable through ordinary therapies (candidates for our cryopreservation, patient-specific vaccines, and autologous T-cell therapy services). One of our biggest challenges is educating physicians and patients of the benefits of biotherapy. Many people understand the need for tumor storage for later use, but it has been a smaller group of patients and physicians that use our vaccine and T-cell therapy services. The requirement for FDA approval decreases our ability to sell our services. T-cell and vaccines require either FDA approval or Investigational New Drug ("IND") authorization to be used on patients. We only have an IND for the T-cell treatment, and as a result, we are not able to offer the vaccine as a treatment. We also experience the risk that the FDA will suspend our ability to use these "Investigational New Drugs" as experimental treatments. If we were prohibited from offering vaccine and T-cell therapy permanently then we would lose two of the three products we can potentially offer, and would therefore only be able to offer tumor storage in our Cryobank. RESULTS OF OPERATIONS Following is our discussion of the relevant items affecting results of operations for the years ended May 31, 2005 and 2004 and the six months ended November 30, 2005 and 2004. REVENUES. Cancer Therapeutics generated net revenues of $44,858 during the fiscal year ended May 31, 2005 compared to $36,104 in net revenues for the twelve months ended May 31, 2004. For the six months ended November 30, 2005, net revenues were $25,338 compared to $9,848 in net revenues during the six months ended November 30, 2004. No major change in revenues was expected and we anticipate this level of revenues for the foreseeable future. Revenues received consist mainly of fees from cryos, which are the storage and maintenance of malignancy tumors. Additional revenues were generated from the T-cell program and hospital support. POTENTIAL LIABILITY FOR A VIOLATION OF THE SECURITIES ACT OF 1933. Some of our shareholders received their shares as a result of the liquidation of Immune Complex Corporation. The shares received were not registered under the Securities Act and did not qualify for an exemption therefrom. 447,688 shares were received by 132 shareholders as a result of the liquidation of Immune Complex Corporation. Consequently, we may be liable to each of our shareholders who received shares of Cancer Therapeutics in connection with this liquidation. We may be required to rescind the transaction in which the shares of Cancer Therapeutics were distributed to our shareholders, and may also be required to 10 compensate these shareholders. Our management has estimated the potential liability of Cancer Therapeutics in this respect at $.03 to $.05 per share at the time of distribution which equates to a potential liability of $13,431 to $22,384. This was the estimated value of Cancer Therapeutics at the time of distribution as determined by our board of directors. The shareholders who received shares did not pay any consideration for their shares. We have noted this estimated potential liability in the notes to our financial statements. GENERAL AND ADMINISTRATIVE EXPENSES. Our general and administrative expenses have been comprised of administrative wages and benefits; contract labor; occupancy and office expenses; travel and other miscellaneous office and administrative expenses. General and administrative expenses for the fiscal year ended May 31, 2005 was $177,090 a 204% increase from $58,229 during the twelve months ended May 31, 2004. For the six months ended November 30, 2005, general and administrative expenses were $33,558 compared to $143,679 during the six months ended November 30, 2004. The decrease during the fiscal year ended May 31, 2004 was primarily due to the efforts of management in keeping costs to a minimum. The largest expenses during the year ended May 31, 2004 were contract labor in the amount of $16,040. During the fiscal year ended May 31, 2005, 350,000 shares of common stock were issued to two companies in exchange for advisory services amounting to an increased expense of $112,500. Without these expenses, total general and administrative expenses for the year ended May 31, 2005 would have been $64,589. Our payroll expense accounted for approximately $53,822 of general and administrative expenses during the fiscal year ended May 31, 2005, as compared to $17,939 during the fiscal year ended May 31, 2004. PROFESSIONAL FEES. Our professional fees include outside legal, accounting and other professional fees. Professional fees for the fiscal year ended May 31, 2005 were $105,497, a decrease of 8% from $115,000 during the twelve months ended May 31, 2004. For the six months ended November 30, 2005, professional fees were $13,016 compared to $98,031 for the six months ended November 30, 2004. No major changes were anticipated in professional fees for the fiscal year ended May 31, 2005 as accounting services are continually provided to the company in conjunction with the audits and preparation of the financial statements. Further contributing to this category of expenses were legal fees associated with the preparation of this registration statement. OTHER INCOME (EXPENSE). We incurred net other expense of $27,028 for the year ended May 31, 2005 compared to $34,173 for the year ended May 31, 2004. For the six months ended November 30, 2005, net other expenses were $10,471 compared to $15,235 during the three months ended November 30, 2004. Expenses incurred in this category were comprised primarily of interest expense associated with promissory notes issued by the Company. OFF-BALANCE SHEET ARRANGEMENTS. Cancer Therapeutics is not subject to any off-balance sheet arrangements. PERSONNEL Cancer Therapeutics has 1 full-time employee, 2 part-time employees, and other project-based contract personnel that we utilize to carry out our business. These project-based contract personnel are temporary engagements used to assist us with laboratory experiments and research. When we have needed assistance with the processing of tumors for our Cryobank, we have utilized additional personnel to assist with our record keeping and storage procedures. We expect to hire additional personnel as we continue to execute our business plan. LIQUIDITY AND CAPITAL RESOURCES Since inception, we have financed our operations from a combination of loans from our Chief Executive Officer and from business revenues. As of November 30, 2005, our primary source of liquidity consisted of $431 in cash and cash equivalents. Cancer Therapeutics has sustained significant net losses which have resulted in an accumulated deficit at May 31, 2005 and November 30, 2005 of $2,985,328 and $3,017,035, restpectively. Our losses raise doubts about our ability to continue the business of Cancer Therapeutics as a going concern. Our current financial condition is dire. We have defaulted on several loans, and are currently in settlement with the Internal Revenue Service for unpaid taxes. Consequently, we anticipate that we will require additional cash inflows from increased revenues or sales of debt or equity capital to maintain operations and/or finance substantial business initiatives that may arise. We anticipate another net loss for the year ending May 31, 2006, and with the expected cash requirements for the coming months, without additional cash inflows from an increase in revenues and from the sale of shares pursuant to this offering, we have substantial doubt as to our ability to continue to operate. In addition to these capital needs, we must raise money for research and development. We estimate that IND 8725 will cost $500,000 to $1,000,000 in research costs to receive a status of current with the FDA. We estimate that after receiving the funding, that the research and application process will take at least a year to activate IND 8725. INDs 6533 and 2792 are active INDs, which means that we are able to continue the research and development. We anticipate that it will cost at least 5-10 million dollars to obtain FDA approval for our T-cell and vaccine therapies if the FDA allows us to perform the therapies as a practice of medicine. We still may not get FDA approval even if we are able to raise funds for research and development. Our therapies may 11 never be deemed safe and effective. We believe our present capital resources are insufficient for ongoing operation. We cannot assure you that we will be able to raise sufficient funds to further develop and market our services. Our lack of funds will materially affect Cancer Therapeutics, and may cause us to cease operations. Consequently, you could incur a loss of your entire investment in Cancer Therapeutics. The Company has the following loans and accrued expenses in default as of November 30, 2005: Creditor Principal Due Interest Due -------- ------------- ------------ Robert Oldham $104,944 $48,527 Immune Complex Corporation $110,000 $29,212 Commercial Bank $50,000 $2,372 William Blalock $25,000 $25,514 Internal Revenue Service $13,720 $7,826 BUSINESS CORPORATE ORGANIZATION Cancer Therapeutics, Inc. was originally incorporated on May 1, 1991 in the state of Tennessee under the name "Cancer Therapeutics Incorporated." On September 7, 2004, we reincorporated Cancer Therapeutics in the state of Delaware under its present name. Cancer Therapeutics was acquired by Immune Complex Corporation on September 15, 1998 and subsequently Immune Complex Corporation liquidated its assets (which assets included all of the then-issued shares of Cancer Therapeutics) on June 8, 2000. The shareholders of Immune Complex Corporation were issued shares of Cancer Therapeutics Incorporated on a pro rata basis. As a predecessor to Cancer Therapeutics, Immune Complex Corporation was incorporated in 1994, and was formed to develop vaccines for diseases including, malaria, influenza and hepatitis B. During the years that Cancer Therapeutics operated as a subsidiary of Immune Complex Corporation, the management of Cancer Therapeutics remained constant, with Robert K. Oldham acting as Chief Executive Officer. Immune Complex Corporation added Robert K. Oldham as a member of its board of directors, effective September 15, 1998. Mr. Oldham resigned from his position with Immune Complex Corporation effective June 8, 2000. THE BUSINESS OF CANCER THERAPEUTICS MISSION AND VISION Our mission is to commercialize innovative biotherapy approaches for the treatment of cancer that will enhance the quality and length of life for cancer patients. "Biotherapy" is the use of the body's immune system, either directly or indirectly, to fight cancer or to lessen side effects that may be caused by some cancer treatments. To accomplish our mission, we offer oncologists access to our technologies and service, which we expect to increase our patient referrals. Our vision is to become a provider within the cancer treatment industry by offering advanced services to cancer patients to be used in conjunction with conventional treatment modalities. To accomplish our vision, we intend to market our services to regionally based cancer treatment markets, build a strong physician referral source, and thereby become a significant biotherapy provider in the regional markets that we serve. You can learn more about our business at www.cancer-therapeutics.com. Our website and the information contained therein, however, does not constitute a part of this prospectus. OVERVIEW We are a research-stage business that endeavors to become a U.S. producer and provider of treatments for cancer, commonly grouped under the category of "biotherapy." Based in Thomasville, Georgia, we are led by our founder and Chief Executive Officer, Dr. Robert K. Oldham, who is developing both the research and practical implementation of cellular biotherapy. We are researching and developing biotherapy services - tumor specimen storage and cellular therapies and will attempt to get approval for patient-specific vaccines - on a fee-basis to patients who have been diagnosed with a malignancy. We have not received FDA approval as it relates to any facet of our business and/or operations and, as a result, our treatments, products, and/or services have not been deemed safe or effective in any way. Our therapies may never be deemed safe and effective by the FDA. "Over the past two decades, the acceptance of biotherapy treatment among oncologists and cancer patients has dramatically increased." Klaus Schindhelm & Robert Nordon, EX VIVO CELL THERAPY p.55 (1999) (available to the public 12 for purchase, and available to be viewed at a medical library for no charge). Biotherapy seeks to treat this life-altering disease by using the body's own natural defense system and is used to as a complementary treatment to conventional cancer treatment modalities. While undergoing other treatment options, principally chemotherapy, radiation, or surgery, a patient can simultaneously pursue biotherapy treatment at an affordable price (50 percent to 70 percent is currently reimbursed through private insurance). THE BUSINESS MODEL AND VALUE PROPOSITION We provide limited biotherapy services to patients on a fee-for-service basis. These services begin when a patient is diagnosed with a malignancy and continue to provide a biotherapy while a patient is receiving conventional cancer treatment: chemotherapy, radiation, and surgery. Over the next few years, we intend to create a marketing presence among oncologists and patients in the Southeast region, and continue to expand to regionally based markets throughout the U.S. TECHNOLOGY The three most standard modes of cancer treatment include: chemotherapy, radiation therapy, and surgery. Each of these treatments, however, has significant limitations and can cause toxicities in fighting cancer. Since 1980, a fourth modality, biotherapy, has been used in conjunction with traditional treatments. Robert K. Oldham, FUNDAMENTALLY DIFFERENT, Cancer Biotherapy & Radiopharmaceuticals Vol. 14 No. 6 pp. 57-59 (1999) (available in medical libraries to the public for no charge). We believe that biotherapy offers an opportunity for truly specific and effective cancer treatments. Certain activated cells play a major role in the battle against cancer and methodologies are being developed to activate and expand a patient's own immune cells outside of the body and return them safely as a therapeutic cellular product. See Walter M. Lewko, Peggy B. Hall & Robert K. Oldham, CANCER BIOTHERAPY & RADIOPHARMACEUTICALS Growth of Tumor-Derived Activated T Cells for the Treatment of Advanced Cancer, Vol. 15 No. 4 pp. 60-69 (2000)(available to the public in medical libraries for no charge). The technologies we are developing seek to emphasize the enhancement of the body's natural defense system. T-cells regulate the immune response and the expansion and infusion of activated T-cells can both activate and expand the patient's immune cells. This allows the body to create a stronger defense against cancer and its effects. Regulatory T-cells when reinfused into the body can change the way the immune system works and add to the defense system of the body See Walter M. Lewko, Peggy B. Hall & Robert K. Oldham, CANCER BIOTHERAPY & RADIOPHARMACEUTICALS Growth of Tumor-Derived Activated T Cells for the Treatment of Advanced Cancer, Vol. 15 No. 4 pp. 60-69 (2000)(available to the public in medical libraries for no charge); See also Robert K. Oldham, M.D PRINCIPLES OF CANCER BIOTHERAPY 4TH EDITION, (2004) (available to the public in medical libraries for no additional charge). SERVICES We are developing clinical services for cancer patients as well as continuous research in the biotherapy treatment of cancer pursuant to the following services: CRYOBANK. In this process, a patient's surgically removed tumor tissue is shipped to us, specially processed, preserved and stored in a living condition in liquid nitrogen for future use. This process of cryopreservation is very important to biotherapy in that it provides options for additional treatments such as Tumor Derived Activated Cells (described below), vaccines or other treatments that may be developed by other companies, should standard therapy fail or cancers recur. Our Cryobank service is a marketed service we provide to our patients and others who need to store tumors. Cryobank is not a developmental stage service, but is a tumor storage service that has continually been effective in preserving tumors as explained below. Our Cryobank service creates the largest percentage of revenue for Cancer Therapeutics and is the principal service that patients seek from us. Upon providing this service to patients, we are able to tell them of the potential benefits of our other services we are developing including Tumor Derived Activated Cells treatment and the vaccines described below. We started our Cryobank in 1991. We have cryopreserved (frozen in a living state) tumor biopsies, tumor cell lines (grown in vitro from original biopsy) and lymphocytes grown in vitro, in the laboratory, from the original tumor biopsy. This procedure has demonstrated that cryopreserved tumor biopsies contain similar quantities of living cells upon thawing the specimen up to 14 years later. Likewise tumor cell lines and lymphocytes can be thawed and contain similar quantities of living cells as were found before freezing. We have also been able to grow billions of cells from specimens thawed from our Cryobank. Thus, the cells are both alive and can proliferate (grow) after cryopreservation. This data on hundreds of specimens are on file with Cancer Therapeutics. We therefore believe that our Cryobank has been effective in preserving human tissue. TUMOR DERIVED ACTIVATED CELLS. In this process, a patient's tumor is shipped to our laboratory by overnight delivery. Using a number of specialized proprietary processes, technicians separate and recover the cancer-fighting white blood cells that a patient's immune system has produced to attack that specific cancer. 13 These cells are known as "Tumor Derived Activated Cells" or "Tumor Infiltrating Lymphocytes." FDA-approved biological drugs, such as Interleukin-2, are used to stimulate or activate the cells' cancer-fighting functions. Using a device called a "bioreactor," the cells are grown and multiplied for therapy. At regular intervals over the course of a two-month period, the anti-cancer cells are harvested, and shipped by overnight courier to the patient's physician for infusion into the patient. The reinfusion of these activated cells can influence the status of the immune system in a positive way and help eradicate the disease. See Walter M. Lewko, Peggy B. Hall & Robert K. Oldham, CANCER BIOTHERAPY & RADIOPHARMACEUTICALS Growth of Tumor-Derived Activated T Cells for the Treatment of Advanced Cancer, Vol. 15 No. 4 pp. 60-69 (2000)(available to the public in medical libraries for no charge). We are in the developmental stage of advancing this service. We have not received FDA approval as it relates to any facet of our business and/or operations and, as a result, our treatments, products, and/or services have not been deemed safe or effective in any way We are registered and authorized to proceed with research relating to T-cell therapy pursuant to IND 2792, and IND 6533. The Food and Drug Administration's Investigational New Drug (IND) program is the means by which a company obtains permission to ship an experimental drug across state lines (usually to clinical investigators) before a marketing application for the drug has been approved. The FDA reviews the IND for safety to assure that research subjects will not be subjected to unreasonable risk. The IND application must contain information in three broad areas: o Animal Pharmacology and Toxicology Studies - Preclinical data to permit an assessment as to whether the product is reasonably safe for initial testing in humans. Also included are any previous experience with the drug in humans (often foreign use). o Manufacturing Information - Information pertaining to the composition, manufacturer, stability, and controls used for manufacturing the drug substance and the drug product. This information is assessed to ensure that the company can adequately produce and supply consistent batches of the drug. o Clinical Protocols and Investigator Information - Detailed protocols for proposed clinical studies to assess whether the initial-phase trials will expose subjects to unnecessary risks. Also, information on the qualifications of clinical investigators--professionals (generally physicians) who oversee the administration of the experimental compound--to assess whether they are qualified to fulfill their clinical trial duties. Finally, commitments to obtain informed consent from the research subjects, to obtain review of the study by an institutional review board (IRB), and to adhere to the investigational new drug regulations. See http://www.fda.gov/cder/regulatory/applications/ind_page_1. htm. A more complete disclosure of our Investigational New Drug authorization from the FDA may be found in the Government Regulation section of this prospectus. We have not been able to commercialize this treatment because we have not received FDA approval. We anticipate that we will be in a developmental stage for at least five (5) more years. We anticipate that the following lifecycle will take place in the developmental process of Tumor Derived Activated Cells for biotherapy: Treatments using single, moderate doses of Tumor Derived Activated Cells and Tumor Infiltrating Lymphocytes cells derived from the patient's tumor: o Treatments using single, moderate doses of Tumor Derived Activated Cells and Tumor Infiltrating Lymphocytes cells derived from the patient's tumor; o Protocols employing a series of four to six moderate size doses of Tumor Derived Activated Cells and Tumor Infiltrating Lymphocytes cells derived from a patient's tumor; o Protocols exploring cell dose, schedule, and selection in cellular therapy; o Therapies using "designer T-cells" where a patient is infused with Tumor Derived Activated Cells and Tumor Infiltrating Lymphocytes cells that have been selected or genetically modified to be cytotoxic to cancer or produce large quantities of lymphokines or cytokines to destroy the tumors; and o Treatments that combine activated cell therapies with other agents and compounds to enhance overall efficacy. We anticipate that the following time frame for the lifecycle for the developmental process of Tumor Derived Activated cells: o Tumor biopsy specimen received via overnight carrier and into the Cryobank; 14 o Within 4 to 6 weeks cells can be cultured and expanded to demonstrate the feasibility of producing an autologous T-cell preparation; o The autologous vaccine can be cryopreserved (frozen) and used any time in the coming several years when a patient might have a need for these cells; o With the activated T-cells, they could be grown (cultured) repetitively and administered at 2-3 week intervals as they are grown in the laboratory. Our standard protocol includes four infusions of these cells giving a life cycle of 6 to 15 weeks for the culture expansion and administration of T-cells; o The T-cells life cycle can be arrested and cryopreserved at any stage. These cells have been removed from our Cryobank as long as 10 years later and are still alive and active in cancer treatment; VACCINES. In this process, a patient's own (autologous) cancer cells can be grown in the laboratory, produced in mass quantities, and used to develop a patient-specific vaccine. More specifically, the cancer cells are cultured to develop a tumor cell line, the cells are irradiated to prevent growth, and the vials of cells are cryopreserved and shipped on dry ice back to the oncologist for patient treatment. We are in the developmental stage of advancing this process. We anticipate that we will be in a developmental stage for at least another five (5) years We have not received FDA approval as it relates to any facet of our business and/or operations and, as a result, our treatments, products, and/or services have not been deemed safe or effective in any way. We currently do not administer vaccines. IND 8725 ,which is our application for registration and authorization to research and develop the vaccine, is currently on "clinical hold" with the FDA which means that the vaccine cannot be administrated even for research and development until the FDA lifts the clinical hold. A more complete disclosure of our Investigational New Drug authorization from the FDA may be found in the Government Regulation section of this prospectus PROPRIETARY PROCESSES We have proprietary processes or methods of growing and activating cells. The proprietary nature of these rest in the techniques developed by Walter Lewko, Ph.D. and Robert K. Oldham, M.D., our principal scientists over the past twenty-three years. Our principal scientists have published many articles and a textbook revealing their techniques and the results of their research. We have been able to develop protocols and procedures at our laboratory that allow for optimal conditions for successful storage in our Cryobank, t-cell harvesting and vaccine growth. Our procedures and processes have only come from many years of practice. We are able to foster conditions within the laboratory that allows for more successful t-cell harvesting, vaccine growth and Cryobank storage of tumors. We have not been able to apply for certain process patents because of a lack of capital, but our principal scientists have specialized knowledge concerning the culture and activation of T-cells and the preparation of vaccines. This proprietary expertise is described within our written standard operating procedures and our research database. OUTLOOK Because many patients seeking new therapy modalities have little hope of survival, it is not surprising that these treatments have, in some cases, proven to be disappointments with only a limited percentage of patients responding to cellular therapy such as that which is provided by Cancer Therapeutics. Moreover, cellular technologies have excelled where chemotherapy, surgery, and radiation therapies have traditionally had limited success, and certain types of skin cancer and advanced kidney cancer cannot be eliminated through traditional methods. See Robert K. Oldham, M.D Principles of CANCER BIOTHERAPY 4TH EDITION, pp.1-15 (2004)(available to the public in medical libraries for no charge). RESEARCH AND DEVELOPMENT We are continually researching and developing our procedures we offer to the public. We spent approximately 15-20 hours per week during the last two fiscal years on research and development. We spent approximately $23,000 per year on research and development over the past two fiscal years. The costs of research and development have been borne by us directly, and the costs of research and development are priced into the services we offer to our patients. THE MARKET 15 CONVENTIONAL CANCER TREATMENT MODALITIES The following points briefly describe the three most common modes of cancer treatment modalities in the marketplace (as cited by the Cancer Resource Center at www.choosehope.com) (available to the public for no charge on the internet for no charge): SURGERY. Surgery is typically the first treatment choice and is used to remove localized cancerous tumors and surrounding cancerous tissues. Approximately 60 percent of cancer patients undergo this type of treatment. Surgical success, however, is dependent on whether the tumor has spread. Although surgery can be used in conjunction with other treatment modalities, approximately 30 - 40 percent of cancer patients are cured by surgery alone. CHEMOTHERAPY. Chemotherapy is used to treat cancerous cells that have spread or metastasized to other parts of the body. The treatment procedure involves either intravenously injecting or orally taking powerful anti-cancer drugs, which are administered at intermittent intervals over the course of approximately six months. The most common side effects associated with chemotherapy are nausea, vomiting, hair loss, and fatigue. RADIATION. Radiation therapy treats localized cancers by using high-energy particles or waves, such as x-rays or gamma rays, to destroy cancerous cells so that they will not continue multiplying. Over half of cancer patients undergo radiation therapy at some point in their treatment process. Like surgery, radiation therapy can be used in conjunction with other treatment modalities. The common side effects associated with radiation include fatigue, skin changes, and loss of appetite. Research has shown that cancer is a highly individualized disease. Treatments such as surgery, chemotherapy, and radiation work well for some patients, but may not be effective for others. Therefore, we believe biotherapy is an alternative treatment for cancer and is often times used in conjunction with the above modalities. BIOTHERAPY TREATMENT There are several reasons for the biotherapy treatment modality's increasing opportunity in the marketplace. INCREASING INCIDENCE OF CANCER. Despite the recent advancements in the diagnosis and treatment of cancer, cancer rates and the number of deaths from cancer continue to increase. According to the National Institute of Cancer, approximately 9.8 million cancer survivors were diagnosed over 20 years ago (as cited by the National Institute of Cancer website at WWW.CANCER CONTROL.CANCER.GOV) (available for no charge on the internet). In addition, over 1.36 million new cancer cases develop each year, and the incidence of the disease continues to grow at three percent to four percent per year. (as cited by the American Cancer Society website at www.cancer.org "2004 DATA AND STATISTICS") (available for no charge on the internet). Despite improvements in drug, surgical, and radiation therapies, the five-year relative survival rate for people who are living five years after diagnosis, whether in remission, disease-free, or under treatment is only 63 percent. About 563,700 Americans are expected to die of cancer every year, more than 1,500 people per day (as cited by the American Cancer Society website at WWW.CANCER.ORG "2004 DATA AND STATISTICS" (available for no charge on the internet).. Cancer is the second leading cause of death in the United States, occurring in one out of every four deaths. (as cited by the American Cancer Society website at www.cancer.org) (available for no charge on the internet). According to experts, the incidence of cancer is likely to grow in the future in response to two significant trends: o THE GRADUAL AGING OF THE U.S. POPULATION - About one in every eight, or 12.7 percent, of the population is an older adult. The older population in the United States is projected to more than double to about 70 million by the year 2030. Although cancer develops in people of all ages, it most often occurs in the middle aged and elderly. (as cited by the American Cancer Society website at WWW.CANCER.ORG) (available for no charge on the internet). o EXPOSURE OF THE PUBLIC TO CANCER CAUSING AGENTS AND FACTORS - In all actuality, lifestyle choices are the cause of most cancers. Tobacco and diet (and/or lack of exercise) accounts for 60 percent of cancer related deaths. (as cited by the American Cancer Society website at WWW.CANCER.ORG) (available for no charge on the internet). Within this large number of patients, the use of activated cell therapy is believed to be effective for selected solid tumors. Melanoma and kidney cancer are the primary cancers currently treated with activated 16 cell therapy. Cellular treatment is also appropriate for patients with lung, breast, gastrointestinal, and gynecological tumors, as well. The projected growth in the incidence of cancer may contribute to the need for continued cancer research and development of innovative cancer therapies as well as a possible increase in the sales and manufacturing of new cancer products. The increasing prevalence of cancer and the growth in the cell therapy market may offer a great opportunity for immunotherapeutic approaches to the treatment of cancer. THE TARGET MARKET The target market for our services is composed of two different groups: o Individuals who have undergone conventional treatment for a newly diagnosed cancer with an uncertain cure rate, but are ultimately cured (candidates for our cryopreservation service); and o Individuals with cancers incurable through ordinary therapies (candidates for our cryopreservation, patient-specific vaccines, and autologous T-cell therapy services). ANNUAL TARGET MARKET Of the 1.36 million new cancer patients per year, approximately 63 percent are cured by current procedures. (as cited by the American Cancer Society website at www.cancer.org "2004 DATA AND STATISTICS") (available for no charge on the internet). We estimate that at least 50 percent of these cured patients, however, will have tumors where the cure rate is uncertain and, as a result, they may need therapeutic alternatives. By placing tumor specimens in cryopreservation, the tumors can be accessed for future therapeutic needs should the cancer recur, thereby creating a cryopreservation market that we estimate to be 300,000 patients per year. The second group of patients is derived from the 46 percent of the 1.36 million new cancer patients with incurable cancers, 70 percent of which are estimated to choose to access therapeutic opportunities. Many of these patients may have a need for cryopreservation services, yielding 300,000+ potential patients. This group of patients may also have some need for the patient-specific vaccine and autologous T-cell therapies. We estimate that 20 percent of this market, exceeding 50,000 patients, could require those services. Although these projections are based on national statistical information, it is important to note that healthcare services are generally provided at the local level, and the treatment of cancer is considered to be more regionally based, with diagnosis and treatment controlled by oncologists practicing in the local area. As such, our marketing strategy focuses on expanding through regional markets. STRATEGY We communicate with cancer specialists and with patients in search of new forms of therapy. As cancer specialists see the need to store tumor tissue for future use to benefit their patients, they have used our Cryobank for tumor storage. Patients searching the internet or discussing therapeutic options with other patients or physicians often contact us and use our Cryobank service. We have in the past and plan to continue to network opportunities to offer our other services to the users of our Cryobank. If incidence rates and the number of cancer deaths continue to increase then more individuals may seek biotherapy treatment to compliment conventional cancer treatments. This environment creates an opportunity for a biotherapy provider such as Cancer Therapeutics to offer cellular therapy technologies and tumor storage services to cancer patients who have encountered limited success using standard treatment modalities. Over time, we plan to market our services to other regionally based markets throughout the United States These regional markets will be expected to serve a similar sized community as the service area in Thomasville Georgia. We intend to expand contiguously in each region gradually increasing our market penetration, allowing us to meet any growing demand for biotherapy services. Our revenue model is aimed at utilizing the cellular therapies and patient-specific vaccines to recoup significant up-front costs, while the Cryobank services are used to generate continuous revenue for Cancer Therapeutics. Our marketing efforts will be directed at expanding awareness of our services to potential patients and providers. This increased marketing effort should alert more cancer specialists to the potential benefits of biotherapy. Biotherapy is relatively new to the healthcare marketplace. One of our obstacles to growth is to educate cancer specialists to the potential benefits their patients may receive from our services. A variety of sources may be used to stimulate customer demand in the services provided such as research publications, televised educational programs, advertisements in medical journals and patient publications, as well as lectures given by Dr. Oldham. 17 COMPETITION Our primary competition is other biotechnology companies and universities pursuing research and development, manufacturing, and sales in the areas of cryopreservation, activated cell therapy, and patient-specific vaccines. We plan to differentiate Cancer Therapeutics from our competitors through our strategic location, regional marketing approach, and our ability to provide clinical services that efficiently serve a specific cancer patient population, while continuing to research and develop cellular therapy technologies. We believe our location is strategic because most of the clinics we service, as well as our laboratory, are located in Thomasville, Georgia. In addition, Dr. Oldham has relationships with physicians in the southeast United States that use our services. By providing a complementary and reasonably priced treatment for patients who are not responding successfully to standard treatment modalities, we are positioned to fill a market need. Through our regional marketing approach, we plan to convert our financial performance into a high growth company. Building additional marketing networks should enable us to develop a marketing presence among oncologists' niches and patient communities in other regions of the country. As a result, we hope to establish a consistent flow of referrals and expand the business. Ultimately, cancer patients throughout the country will have access to our services and will have the opportunity to benefit from the biotherapy treatments we offer. We plan to reach patients nationwide by marketing through print, television and internet. A portion of the proceeds of this offering is intended to be used for this purpose. We have been limited by lack of capital for nationwide marketing in the past. We believe that increased advertising will increase the amount of physicians and patients using our services. We compete with a number of competing biotechnology companies located throughout the United States. Our competitors are focused principally on the research and development of products. We anticipate an ability to attract oncologists and patients seeking biotherapy clinical services - both for storage and therapeutic purposes. Several of our cryopreservation competitors store and preserve tumor tissues. Unlike Cancer Therapeutics, however, these companies ship the tumor tissue to other biotech companies for cellular activation and patient-specific vaccines because such services are not available at the facility. We believe that Cancer Therapeutics maintains a competitive advantage in the area of cryopreservation through our integrated approach, providing storage services and also producing cellular activation therapy for cancer treatment. By providing this continuum of services, we ensure the safety of the tissue specimen as well as save time for the patient. Finally, our business approach which includes a marketing strategy that is expected to increase the number of patient referrals by honing in on regionally based oncology markets is unique to Cancer Therapeutics. Through this regional approach, we anticipate that we will meet the increasing demand for biotherapy services in the marketplace. TUMOR DERIVED ACTIVATED CELLS COMPETITOR: XCYTE THERAPIES, INC., Seattle, Washington - Xcyte Therapies is a biotechnology company that develops and commercializes cell-based therapeutic products that attempt to harness the power of the immune system to treat cancer, infectious disease and autoimmune disease. Xcyte's website is located at WWW.XCYTE.COM and available to the public for no charge. PATIENT-SPECIFIC VACCINE COMPETITORS: ANTIGENICS, INC. New York - Antigenics, Inc. is a public biotechnology company that is developing patient-specific (autologous) cancer vaccines by extracting selected "heat shock" proteins from cell surface of patient's own tumor tissue. More information about Antigenics, Inc. can be found on their website at WWW.ANTIGENICS.COM and available to the public for no charge. AVAX TECHNOLOGIES INC. Kansas City, Missouri - AVAX Technologies is a public company that produces a patient-specific (autologous) cancer vaccine by treating a patient's own tumor cell with dinitrophenyl (DNP), a chemical that they claim helps trigger immune responses. More information about AVAX Technologies Inc. can be found on their website at HTTP://WWW.SIERRAHOTELPRODUCTIONS.COM/AVAX and available to the public for no charge. INTRACEL CORPORATION. Rockville, Maryland - Intracel Corporation is a private biopharmaceutical company headquartered in the Netherlands and operating in the United States that develops and commercializes vaccines and immunotherapeutic products for cancer. More information about Intracel Corporation can be found on their website at WWW.INTRACEL.COM and available to the public for no charge. CRYOPRESERVATION COMPETITOR: CRYOMA LABORATORIES, INC., Cleveland, Ohio - Cryoma Laboratories is a private company that offers tumor cell banking services and informational services for cancer patients. They identify patients that might benefit from new treatment therapy and ship the tumor tissue to another biotech company for patient-specific 18 vaccines and gene therapy. More information about Cryoma Laboratories, Inc. may be found on their website at WWW.CRYOMA.COM and available to the public for no charge. Cryoma Laboratories is closing down its tumor bank, and we have agreed to receive their tumors in our Cryobank for storage. We anticipate that this will increase our cryobank business over the next year. We received information about our competitors from their websites. GOVERNMENTAL APPROVAL Our Cryobank function is a storage facility for tumors that does not require FDA approval. Cryobank is the storage of body tissue and fluids at very low temperatures to preserve them for later use by physicians. Because the use of the tumors is regulated by the FDA not the storage process, we have never been regulated by the FDA for our storage process. We are able to provide this service to patients and physicians without governmental approval. We have been providing Cryobank services since 1991 to physicians and patients. It is not unlikely that a governmental regulation will be imposed specific to Cryobank requiring registration and an application process in the future. No such governmental regulation exists, however, for tumor storage currently. To continue to research and develop the T-cell and vaccine treatments we need permission from the Food and Drug Administration. We have made Investigational New Drug Applications with the Food and Drug Administration for these treatments. We are authorized and registered pursuant to IND 2792, and IND 6533 to research and develop the T-cell therapy. We have not had the proper funding to sufficiently research and develop IND 2792 and IND 6533. As a result of this limited funding we have no activity using IND 6533 in 2004, and only one instance in 2004 using IND 2792. We do not have permission to research and develop our Vaccine treatment because our once approved IND 8725 is on clinical hold by the Food and Drug Association. It is on hold with the FDA because we did not have enough funding to pursue its approval. The IND 8725 clinical hold has had little effect upon our business because we have never had the funding to pursue the research and development necessary to develop this treatment anyway. The FOOD AND DRUG ADMINISTRATION'S Investigational New Drug (IND) program is the means by which a company obtains permission to ship an experimental drug across state lines (usually to clinical investigators) before a marketing application for the drug has been approved. The FDA reviews the IND for safety to assure that research subjects will not be subjected to unreasonable risk. The IND application must contain information in three broad areas: o Animal Pharmacology and Toxicology Studies - Preclinical data to permit an assessment as to whether the product is reasonably safe for initial testing in humans. Also included are any previous experience with the drug in humans (often foreign use). o Manufacturing Information - Information pertaining to the composition, manufacturer, stability, and controls used for manufacturing the drug substance and the drug product. This information is assessed to ensure that the company can adequately produce and supply consistent batches of the drug. o Clinical Protocols and Investigator Information - Detailed protocols for proposed clinical studies to assess whether the initial-phase trials will expose subjects to unnecessary risks. Also, information on the qualifications of clinical investigators--professionals (generally physicians) who oversee the administration of the experimental compound--to assess whether they are qualified to fulfill their clinical trial duties. Finally, commitments to obtain informed consent from the research subjects, to obtain review of the study by an institutional review board (IRB), and to adhere to the investigational new drug regulations. See HTTP://WWW.FDA.GOV/CDER/REGULATORY/APPLICATIONS/IND_PAGE_1.HTM While an Investigational New Drug is current with the Food and Drug Administration, we can only use the drug for research. Accordingly, each of our patient agreements are premised on a research basis for that patient. We received a warning letter from the FDA on November 18, 2003. We were warned in the letter that our website revealed serious regulatory problems involving representations made about the autologous vaccine and the T-cell treatment as being safe and effective treatments. The FDA stated in the letter that the claims classify our treatments as "drugs" as defined by the FDA, and that this was a violation of law. We were admonished to correct these violations. Failure to correct these violations may result in regulatory action such as seizure and /or injunction without further notice. We made the necessary changes and responded to the FDA that we had complied with its warning letter. We were inspected by the FDA in May of 2004 and did not receive any further comments relating to the warning letter. Due to this warning letter we limited our representation on our website. We have continued to represent that no such statement was made, and that the treatments provided by Cancer Therapeutics are experimental. Since the visit to our facilities, we have not received any further correspondence from the FDA. 19 It is difficult to estimate the costs and time frames associated with achieving FDA approval for INDs 2792, 6533 and 8725. IND 2792 is the closest to approval since there are many companies and clinics utilizing cellular therapy with activated T-cells. There are at least two possible scenarios : o The FDA could change its regulations to classify cellular therapies as the practice of medicine, similar to autologous bone marrow transplantation, then these cellular therapies could become available and more heavily utilized soon. The main hindrance to cellular therapy is the long, difficult and expensive process for achieving registration with the FDA for a biologic product. o If the FDA continues to regulate cellular therapies as if it is a new biologic product, it may take several years to gain approval for activated T-cells under this IND. With regard to the autologous vaccine therapy, we estimate that it may take 5-10 years to receive approval under IND 6533 and/or 8725. Failure to receive FDA approval will have a substantially detrimental effect upon our ability to grow and create additional revenue. We believe that, without FDA approval, Cancer Therapeutics will be unable to grow successfully and achieve economies of scale insofar as our operating costs are concerned. Consequently, we might have to discontinue our business. In the event that FDA approval is never granted, we will only be able to service patients who want to use our Cryobank for storage of their tumors . Our services we provide are experimental and we are unable to make claims concerning the effectiveness of the treatments. It is difficult to determine the efficacy of the treatments we provide because usually our patients are being treated by conventional medical treatments also. Our services are not the "cure" for cancer, but it is our goal to develop our services to enhance the body's ability to battle cancer. We attempt to measure the efficacy of our treatments by monitoring our patients' progress with and without our services. No progress has been made in furthering IND 2792, 6533 or 8725 towards FDA approval. It is difficult to determine the cost of developing these Investigational New Drugs because the cost is directly related to our ability show whether or not the T-cell and vaccine therapies are safe and effective treatments. We estimate that IND 8725 will cost $500,000 to $1,000,000 in research costs to receive a status of current with the FDA. We estimate that after receiving the funding, that the research and application process will take at least a year to activate IND 8725. INDs 6533 and 2792 are active INDs, which means that we are able to continue the research and development. We plan to conduct more research and attempt to show that the T-cell and Vaccine therapies are safe and effective. We do not have any plans to further develop the T-cell and vaccine therapies without funding. If we are able to prove that the therapies are safe and effective as a part of the practice of medicine we anticipate that the process to be fully FDA approved will take at least 5 years and 5 million to 10 million dollars for each IND for research and development. The following table sets forth the status, timeline, estimated costs and milestones specific to each IND:
IND 2972 IND 6533 IND 8725 ----------------------------------------------------------------------- IND Description Autologous T-Cell Autologous DNP Conjugated AUTOLOGOUS VACCINE Therapy for Cancer Vaccine for Melanoma - -------------------------- ------------------------ ------------------------------ ------------------------------ Steps Completed Phase I/II studies Phase I/II studies completed LABORATORY SOPS DONE completed and and published by others published, but the FDA using a similar DNP will need multiple Conjugated Vaccines. The FDA Phase II studies will need multiple Phase II completed and studies completed and published. published. - -------------------------- ------------------------ ------------------------------ ------------------------------ Current Status FDA registered and FDA registered and given CLINICAL HOLD PENDING given authorization to authorization to proceed RESOLUTION OF VACCINE proceed with this vaccine PREPARATION/QUALITY CONTROL preparation ISSUES WITH FDA - -------------------------- ------------------------ ------------------------------ ------------------------------ Next Steps Continued Phase II Determine feasibility of RESOLVE FDA ISSUES testing with testing this vaccine. If CTI refinements in proceeds, similar clinical protocol costs/timelines/ milestones as 8725 - -------------------------- ------------------------ ------------------------------ ------------------------------ Phase II Studies - -------------------------- ------------------------ ------------------------------ ------------------------------ o Timeline 1-2 years 1-2 years 1-2 YEARS - -------------------------- ------------------------ ------------------------------ ------------------------------ o Est. Costs $2-4 M (100 patients $1-2 M (100 patients at a $1-2 M (100 patients at a at a cost of cost of $10,000-$20,000 per cost of $10,000-$20,000 per 20 $10,000-$20,000 per patient) patient) patient) - -------------------------- ------------------------ ------------------------------ ------------------------------ o Milestones Proof of principle ( a Proof of principle ( a PROOF OF PRINCIPLE ( a complete and durable complete and durable complete and durable response, remission, response, remission, for response, remission, for for more than 5-10 more than 5-10 years)with more than 5-10 years) with years) with tumor evidence of immune/tumor evidence of immune/tumor responses responses responses - -------------------------- ------------------------ ------------------------------ ------------------------------ Phase III Studies - -------------------------- ------------------------ ------------------------------ ------------------------------ o Timeline 2-4 years 2-4 years 2-4 YEARS - -------------------------- ------------------------ ------------------------------ ------------------------------ o Est. Costs $5M - $10M $5M - $10M $5M - $10M - -------------------------- ------------------------ ------------------------------ ------------------------------ o Milestones EFFICACY DATA WITH EFFICACY DATA WITH LONGER EFFICACY DATA WITH LONGER LONGER TTP OR OS TTP or OS TTP OR OS - -------------------------- ------------------------ ------------------------------ ------------------------------ SOP = Standard Operating Procedures TTP=Time to Progression OS=Overall Survival
PRINCIPAL SUPPLIERS We receive laboratory and healthcare supplies from a variety of suppliers. We do not anticipate a shortage of materials necessary to operate our business. The following are the supplies we need on a regular basis and the suppliers we presently use: Baxter Healthcare- Cell culture supplies BEC Laboratories- Microbes for quality assurance testing BioWhittaker- Tissue culture media, endotoxin testing kit Daigger- Laboratory supplies Gibco/Invitrogen- Tissue culture media, reagents Holox/Linde Gas- Liquid nitrogen, carbon dioxide HyClone Laboratories- Culture media/serum Laboratory Supply Co.- Laboratory supplies Sigma Chemical Co.- Chemicals, tissue culture reagents ENVIRONMENTAL EFFECTS We have not incurred and do not anticipate incurring costs in complying with federal, state and local environmental laws because we use materials that are common in medicine and the procedures for handling and disposing of materials used is well established. We do not anticipate that our biotherapy will have any adverse effects on the environment because we dispose of all biological and medical materials in the same manner as other medical clinics. DESCRIPTION OF PROPERTY Cancer Therapeutics does not own any real property. We lease our building located at 210 West Hansell Street, Thomasville, GA from the hospital in Thomasville. There is approximately 1500 square feet on the premises. We use an estimated 1,000 square feet as a lab and about 500 square feet for offices. We store tumors on site. We have not yet adopted any policies regarding investment in real property, as we do not expect to make any real estate purchases in the foreseeable future. DESCRIPTION OF OPERATIONS Robert Oldham, M.D. and Walter Lewko Ph.D. serve as the primary operators of the core business of Cancer Therapeutics. Dr. Oldham handles all of the patient consulting and therapies. Mr. Lewko is responsible for operating the Cryobank and is responsible for the processing of incoming tumors and cultures. Both Dr. Oldham and Mr. Lewko participate in the research and development of vaccines and t-cell treatment. We have not received FDA approval as it relates to any facet of our business and/or operations and, as a result, our treatments, products, and/or services have not been deemed safe or effective in any way. New requests from patients and cancer specialists are processed by Mr. Lewko. Patients have traveled from all over the United States to consult with Dr. Oldham, to use our Cryobank and receive our and T-cell services. Most of our patients, however are based in and around southeast Georgia. Cancer specialists use the Cryobank, t-cell services provided by Cancer Therapeutics and administer to their own patients. We hope to provide vaccine services as soon as we can afford to attempt to get approval for our Investigational New Drug application relating to our vaccine therapy. 21 Our bookkeeping, financial reports, and related services are provided by Chene Gardner, our Chief Financial Officer on a day-to-day basis. DIRECTORS, EXECUTIVE OFFICERS, AND CONTROL PERSONS Directors and Executive Officers
Name Age Position(1) - ---- --- -------- Robert K. Oldham, M.D. 61 Chief Executive Officer and Director Michael Low 49 Secretary and Director Chene Gardner 40 Chief Financial Officer and Director
(1) Officers hold their position at the pleasure of the board of directors, absent any employment agreement. Robert K. Oldham, M.D., age 61, is the Chief Executive Officer of Cancer Therapeutics and is a member of the Cancer Therapeutics board of directors. Dr. Oldham has been the Chief Executive Officer of Cancer Therapeutics since 1991. He was appointed to the board of directors of Cancer Therapeutics since the inception of Cancer Therapeutics and currently serves on the board of directors for a one-year term expiring August, 2005. Prior to his association with Cancer Therapeutics, from 1975 to 1980, Dr. Oldham was a research-oriented medical oncoligist at Vanderbilt University and the National Cancer Institute. He has published a variety of papers on the use of activated cells and has extensive expertise in the development and use of monoclonal antibodies for cancer therapy. From June 2002 to December, 2002, Dr. Oldham was a scientific consultant to Xcyte Therapies, Inc., a biotechnology company which commercializes cancer therapeutic products. Until recently, from April, 2002 thru October, 2004, Dr. Oldham served as a scientific consultant to Cell Genesys Inc., (Foster City, California) a company that develops and commercializes biological therapies for cancer. Dr. Oldham currently serves as a scientific consultant to NycoMed-Amersham, a British health care company, and as Consulting Medical Director of CBA Pharma, (Lexington, Kentucky), a company that develops and distributes biopharmaceutical products. He also serves as Associate Medical Director of the Singletary Oncology Center, in Thomasville Georgia. Dr. Oldham is not a director of any other company filing reports pursuant to the Securities Exchange Act of 1934. Dr. Oldham spends approximately 35 business hours per month working for Cancer Therapeutics. Michael Low, age 49, is a member of the Cancer Therapeutics, Inc. board of directors and serves as corporate secretary. Mr. Low was appointed by the board of directors of Cancer Therapeutics in August, 2004 for a one-year term, expiring August, 2005. In addition to his association with Cancer Therapeutics, since March 2003, Mr. Low has been Chief Executive Officer for Advisory Services, founder and executive director of Healthcare Enterprise Group PLC, an international healthcare products distribution company, with a strategic focus on specialized, high-value products and markets. Based in London, Healthcare Enterprise Group PLC is listed on the Alternative Investment Market of the London Stock Exchange and is the parent corporation of Healthcare Enterprise Group, Inc., in which Mr. Low has served as the Chief Executive Officer since November 1998. Healthcare Enterprise Group, Inc. is a healthcare advisory company based in Los Angeles. Mr. Low holds a Masters degree in Public Administration from the University of Southern California. Mr. Low is not a director of any other company filing reports pursuant to the Securities Exchange Act of 1934. Mr. Low spends approximately 5 hours per month in his position and director and corporate secretary for Cancer Therapeutics. Chene Gardner, age 40, is the Chief Financial Officer of Cancer Therapeutics and a member of the Cancer Therapeutics board of directors. Mr. Gardner was appointed to the board of directors of Cancer Therapeutics in August, 2004 for a one-year term expiring August, 2005. Mr. Gardner has served as Chief Financial Officer to Cancer Therapeutics since May, 2004. Mr. Gardner also serves as the Chief Financial Officer of Synerteck Incorporated and as the Financial Controller of SportsNuts, Inc. He has served in these capacities for Synerteck and SportsNuts since March, 2001 and September, 1999, respectively. Synerteck is an information technology services company and SportsNuts, the parent corporation of Synerteck, is a sports management and marketing company. Prior to his association with SportsNuts, from January, 1997 to September, 1999, Mr. Gardner served as Financial Manager for Aluminum Builders, Inc., a producer of various home improvement items. Mr. Gardner also has five years of auditing and accounting experience with the firm of Deloitte & Touche LLP from June 1990 to August, 1995, serving clients in the banking, manufacturing, and retail industries. Mr. Gardner holds Bachelor and Master of Accounting degrees from Weber State University. Mr. Gardner is a director of Synerteck Incorporated, a company which files reports pursuant to the Securities Exchange Act of 1934. Mr. Gardner spends approximately 20 business hours per month in his position as Chief Financial Officer and director of Cancer Therapeutics. Other Key Personnel Walter Lewko, Ph.D., age 55, is the principal biochemist/immunologist of Cancer Therapeutics. Dr. 22 Lewko was retained by Cancer Therapeutics in September, 1992, and is responsible for laboratory research and production. Prior to his association with Cancer Therapeutics, from 1986 to 1989, Mr. Lewko was the Section Head of Tumor Cell Biology at Biotherapeutics, Inc., a cancer therapy company developing cellular treatments for cancer. Mr. Lewko was responsible for growth of tumor cell lines fortherapeutic programs. These responsibilities included the large-scale generation of seed-stock cells for bioreactors. Prior to Biotherapeutics, Dr. Lewko held various university and government research positions. Mr. Lewko is not a director of any company which files reports pursuant to the Securities Exchange Act of 1934. John D. Thomas, J.D., age 32, is general legal counsel for Cancer Therapeutics. Mr. Thomas was retained by Cancer Therapeutics in May, 2004, and is responsible for all general legal matters of Cancer Therapeutics. Prior to his association with Cancer Therapeutics, Mr. Thomas practiced general corporate law for various small clients as a sole practitioner from June, 2003 until the present. Mr. Thomas practiced law as a litigator for the Law Offices of Kirk A. Cullimore from September, 2002 until April, 2003. Mr. Thomas was general counsel for LIFE International LLC, an international corporate services firm specializing in estate planning and international corporate law, from September, 2000 until September, 2002. Mr. Thomas practiced general corporate law as a sole practitioner from November, 1999 until September, 2000. Mr. Thomas holds a Juris Doctor degree from Texas Tech University School of Law and is licensed to practice law in Texas and Utah. Mr. Thomas is not a director of any company which files reports pursuant to the Securities Exchange Act of 1934. Board of Directors Meetings and Committees BOARD OF DIRECTORS. Although various items were reviewed and approved by unanimous written consent of the board of directors during the fiscal year ended May 31, 2004, the board held no physical meetings during such fiscal year. AUDIT COMMITTEE. Cancer Therapeutics has recently created an Audit Committee of the board of directors. The Audit Committee is responsible for determining the application of financial reporting and internal control principles, as well as reviewing the effectiveness of our financial reporting, internal control and risk management procedures, and the scope, quality, and results of our external audit. Our Audit Committee consists of Michael Low and Chene Gardner. The Audit Committee has reviewed and approved our audited financial statements included in this prospectus. Chene Gardner serves as our Audit Committee Financial Expert for purposes of Item 401 of Regulation S-B of the Securities Act of 1933 and the Securities Exchange Act of 1934. Mr. Gardner is not independent because he is an officer and principal shareholder of Cancer Therapeutics. EXECUTIVE COMPENSATION The following table sets forth certain information regarding the annual and long-term compensation for services rendered in all capacities during the fiscal years ended May 31, 2005, 2004, 2003, and 2002 of Robert K. Oldham, M.D., our Chief Executive Officer, and John D. Thomas, our Corporate Counsel. No other executive officers of Cancer Therapeutics received more than $100,000 in total salary and bonus during these periods. Although Cancer Therapeutics may, in the future, adopt a stock option plan or a stock bonus plan, no such plans exist. We did not issue any shares, options, units, or other rights to any of our executive officers during the fiscal year ended May 31, 2005. SUMMARY COMPENSATION TABLE
Long-Term Compensation ------------ Annual Compensation Awards Payouts ---------------------------------- Securities Name and Other Annual Restricted Underlying LTIP All Other Principal Position Year Salary Bonus Compensation Stock Awards Options Payouts Compensation ------------------ ---- ------ ----- ------------ ------------ ------- ------- ------------ Robert K. Oldham, 2005 $ 0 $ 0 $ 0 $ 0 0 0 $ 0 M.D. 2004 0 0 0 0 0 0 0 CEO 2003 0 0 0 0 0 0 0 2002 0 0 0 0 0 0 0 23 John D. Thomas(1) 2005 $ 0 $ 0 $ 0 $ 0 0 0 $ 0 Corporate Counsel 0 0 0 0 0 0 $ 0 2004 0 0 487,500 0 0 0 0 2003 0 0 0 0 0 0 0 2002 0 0 0 0 0 0 0
(1) On May 10, 2004, we issued 1,300,000 shares of our common stock to John D. Thomas J.D., as compensation for various corporate and commercial legal services provided during the spring and summer of 2004. The value of the shares at the date of issuance was $0.375 per share or $487,500. EMPLOYMENT AGREEMENTS On May 15, 2004, we concluded an agreement with Chene Gardner, our Chief Financial Officer, to receive accounting and financial services. The agreement originally called for an engagement fee of $50,000, but has subsequently been amended to provide instead for the payment of one million shares of Cancer Therapeutics Stock and a cash payment of $2,000. The shares are non-refundable and, although we may execute a subsequent employment agreement with Mr. Gardner, the agreement provides for no other payments in the future. None of our other executive officers is subject to an employment agreement with Cancer Therapeutics. COMPENSATION OF DIRECTORS Although we anticipate compensating the members of the Cancer Therapeutics board of directors in the future at industry levels, the current members are not paid cash compensation for their service as directors. Each director may be reimbursed for certain expenses incurred in attending board of directors and committee meetings. We are contemplating the issuance of stock or stock options to our directors for their service on the Cancer Therapeutics board of directors. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS On May 28, 2004, we issued and sold 200,000 shares of our common stock, together with a warrant to acquire 1,300,000 shares of our common stock at an aggregate purchase price of $25,000, to Healthcare Enterprise Group, Inc., in exchange for $75,000 in cash proceeds. Healthcare Enterprise Group is a principal shareholder of Cancer Therapeutics and Michael Low, a director and Secretary of Cancer Therapeutics, is the Chief Executive Officer of Healthcare Enterprise Group. Assuming the warrant is exercised, the average purchase price of the shares acquired was $0.067 per share. On September 10, 2004, we issued 400,000 shares of our common stock in satisfaction of $50,000 owed to Kenneth I. Denos, P.C., a professional corporation, in connection with an engagement dated July 20, 2004. The value of our shares for purposes of satisfying this obligation was determined to be $0.375 per share. Kenneth I. Denos is the sole shareholder and President of Kenneth I. Denos, P.C. On September 10, 2004, we issued 1,000,000 shares of our common stock in satisfaction of $50,000 owed to our Chief Financial Officer in connection with an engagement for accounting services dated May 15, 2004. The value of our shares for purposes of satisfying this obligation was determined to be $0.375 per share. This satisfied the original obligation of $50,000 and caused an additional expense of $50,000 to be incurred. On September 15, 2004, we issued 400,000 shares of our common stock pursuant to the conversion of a promissory note for $125,000 issued by Cancer Therapeutics in 2001 to Robert K. Oldham, M.D., our Chief Executive Officer. The value of our shares for purposes of this conversion was $0.313 per share. After the conversion of this promissory note, notes payable to related parties was reduced from $364,944 to $239,944. There are no obligations in default of these notes payable to related parties. We are currently in negotiations to extend the terms of these notes payable. On September 20, 2004, we issued 200,000 shares of our common stock in satisfaction of $75,000 owed to Healthcare Enterprise Group, Inc. for healthcare advisory services rendered to Cancer Therapeutics pursuant an advisory agreement dated January 8, 2001. The value of our shares for purposes of this debt conversion was $0.375 per share. Healthcare Enterprise Group is a principal shareholder of Cancer Therapeutics and Michael Low, a director and Secretary of Cancer Therapeutics, is the Chief Executive Officer of Healthcare Enterprise Group. On September 20, 2004, we issued 150,000 shares of our common stock in connection with the execution of a financial advisory agreement with Industrial Management & Equity Limited, which is owned and controlled by Lyndon Gaborit. As part of the engagement, Industrial Management & Equity Limited undertakes to assist Cancer Therapeutics 24 in expanding its business in Europe, including advice regarding joint ventures, agreements, or business combination transactions with other European companies as approved by our management. We estimate that the value of the services provided by Industrial Management & Equity Limited was $56,250 or $0.375 per share. Mr. Gaborit is a member of the board of directors of Healthcare Enterprise Group, Inc., a principal shareholder of Cancer Therapeutics. Although we continue to seek opportunities for our business in North America and Europe, we have had no contact, discussions, proposals, arrangements, or understandings with any other business regarding the possibility of an acquisition or merger. Cancer Therapeutics owes $110,000 as of May 31, 2005, in the form of an unsecured promissory note due to Immune Complex Corporation, a company which our CEO, Robert K. Oldham is a minority shareholder. Mr. Oldham holds an estimated 4% of Immune Complex Corporation. Immune Complex Corporation has no operations or revenue and is being dissolved by the majority shareholders currently. The note carries an interest rate of 8% and was due May 1, 2004. This unsecured promissory note is in default. The accrued interest balance due on this note at May 31, 2005 and August 31, 2005 was $24,800 and $27,018, respectively. We have issued an unsecured promissory note payable to our CEO, Robert K. Oldham. As of May 31, 2005, the balance owing was $104,944 with an interest rate of 6% per year. The accrued interest balance due on this note at May 31, 2005 and August 31, 2005 was $45,370 and $46,957, respectively. We have issued an unsecured promissory note payable to William Blaylock, a significant shareholder and past member of our board of directors. As of May 31, 2005, the balance owing Mr. Blaylock was $25,000 with an interest rate of 9% per year. The accrued interest balance due on this note at May 31, 2005 and August 31, 2005 was $24,386 and $24,953, respectively. The transactions described above were, in each case, independently negotiated and approved by a majority of our disinterested directors. The valuations of our shares in each issuance during 2004 were determined by our board of directors, taking into account the perceived tangible and intangible benefits of the services provided, debt forgiven, and association with Cancer Therapeutics, including the fact that Cancer Therapeutics was, at the time of issuance, a privately-held company with minimal revenues, assets, and significant negative shareholder equity. We recorded the expenses related to the issuance of shares for services during the periods incurred. This disclosure of certain relationships and related transactions is complete and updated through July 23, 2005. DIVIDEND POLICY We have not declared or paid any cash dividends since inception. We intend to retain future earnings, if any, for use in the operation and expansion of our business and do not intend to pay any cash dividends in the foreseeable future. Although there are no restrictions that limit our ability to pay dividends on our common stock, we intend to retain our future retained earnings for use in our operations and the expansion of our business. Further, our subsequent financing arrangements may prohibit our ability to pay dividends in the future. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Our shares are not presently traded on any exchange or quotation medium and have never been traded publicly. We also intend to seek a NASD-registered broker dealer to submit an application for our shares to trade on the OTC Electronic Bulletin Board. Although we will seek to obtain a market for the resale of our shares, we cannot guarantee that our shares will trade on the OTC Electronic Bulletin Board or any other exchange or quotation medium. Cancer Therapeutics has 4,097,688 shares of common stock outstanding held by 139 shareholders of record, and warrants outstanding to purchase 1,300,000 shares of common stock held by Healthcare Enterprise Group, Inc. The warrants will become exercisable on January 1, 2005. We have agreed to register all shares of Cancer Therapeutics that are currently outstanding, and we are obligated in the future to register the shares that will be received from the exercise of the warrants held by Healthcare Enterprise Group. Although we are not restricted or limited by contract from paying dividends, certain provisions of Delaware law may prohibit the payment of dividends unless such dividends are made from surplus or net earnings. We have never issued a dividend in the history Cancer Therapeutics and do not intend to issue dividends in the future. We have not authorized any issuances of our securities pursuant to an equity compensation plan. We have issued shares of our common stock to the following service providers pursuant to individual agreements as described below: 25 o JOHN THOMAS. On May 10, 2004, we agreed to issue 1,300,000 shares of our common stock to our corporate counsel for various corporate and commercial legal services provided during the spring and summer of 2004. o CHENE GARDNER. On September 10, 2004, we agreed to convert a preexisting obligation to pay $50,000 to our Chief Financial Officer into 1,000,000 shares of our common stock and $2,000 in cash. o KENNETH I. DENOS, P.C. On September 10, 2004, we agreed to convert a preexisting obligation to pay $100,000 to our securities counsel into 400,000 shares of our common stock and $50,000 in cash. o HEALTHCARE ENTERPRISE GROUP, INC. On September 20, 2004, we agreed to issue 200,000 shares of our common stock to Healthcare Enterprise Group, Inc. in exchange for satisfaction of preexisting obligations of Cancer Therapeutics pursuant to a healthcare advisory services agreement entered into with Healthcare Enterprise Group on January 8, 2001. o INDUSTRIAL MANAGEMENT & EQUITY LIMITED. On September 20, 2004, we agreed to issue 150,000 shares of our common stock in connection with a financial advisory services agreement concerning business and financial opportunities of Cancer Therapeutics in the United Kingdom and continental Europe SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information regarding beneficial ownership of Cancer Therapeutics' common stock as of February 6, 2006, by (i) each person (or group of affiliated persons) who is known by us to beneficially own more that 5% of the outstanding shares of our common stock, (ii) each director and executive officer of Cancer Therapeutics, and (iii) all executive officers and directors of Cancer Therapeutics as a group. Unless indicated otherwise, the address for each officer, director and 5% stockholder is c/o Cancer Therapeutics, Inc., 210 West Hansell Street, Thomasville, Georgia 31792.
SHARES BENEFICIALLY OWNED PRIOR TO SHARES BENEFICIALLY OWNED FOLLOWING OFFERING MAXIMUM OFFERING -------- ---------------- DIRECTORS, EXECUTIVE OFFICERS AND 5% STOCKHOLDERS NUMBER PERCENT OF CLASS(1) NUMBER PERCENT OF CLASS(1) - --------------- ------ ------------------ ------ ------------------- Robert K. Oldham, M.D. (2) 428,211 10.45% 428,211 8.40% Michael K. Low(3) 1,700,000 31.49% 1,700,000 26.57% Healthcare Enterprise Group, Inc. 1,700,000 26.57% (4) 1,700,000 31.49% Chene Gardner(5) 1,000,000 24.40% 1,000,000 19.62% David L. Ross(6) 1,300,000 24.08% 1,300,000 25.50% Kenneth I. Denos(7) 400,000 9.76% 400,000 7.85% Kenneth I. Denos, P.C. (8) 400,000 9.76% 400,000 7.85% Lyndon Gaborit(9) 1,850,000 34.27% 1,850,000 28.92% --------- ------ --------- ------ All Officers and Directors as a Group (3 Persons) 3,128,211 57.95% 3,128,211 48.90%
(1) For each shareholder, the calculation of percentage of beneficial ownership prior to this offering is based upon 4,097,688 shares of common stock outstanding and shares of common stock subject to options, warrants and/or conversion rights held by the shareholder that are currently exercisable or exercisable within 60 days, which are deemed to be outstanding and to be beneficially owned by the shareholder holding such options, warrants, or conversion rights. The calculation of percentage ownership following this offering is based upon 5,097,688 share of common stock outstanding, and shares of common stock subject to options, warrants and/or conversion rights held by the shareholder that are currently exercisable or exercisable within 60 days, which are deemed to be outstanding and to be beneficially owned by the shareholder holding such options, warrants, or conversion rights. The percentage ownership of any shareholder is determined by assuming that the shareholder did not purchase any shares in this offering and has exercised all options, warrants and conversion rights to obtain additional securities and that no other shareholder has exercised such rights. Except as otherwise indicated below, the persons and entity named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to applicable community property laws. 26 (2) Chief Executive Officer and Director. Includes 428,211 shares of common stock held directly by Dr. Oldham. (3) Secretary and Director. Includes 400,000 shares of common stock held by Healthcare Enterprise Group, Inc. of which Mr. Low serves as the Chief Executive Officer. Also includes 1,300,000 shares of common stock issuable upon exercise of warrants held by Healthcare Enterprise Group that are not currently exercisable and will not become exercisable within 60 days. (4) Principal shareholder. Includes 400,000 shares of common stock held directly by Healthcare Enterprise Group, Inc. Also includes 1,300,000 shares of common stock issuable upon exercise of warrants held by Healthcare Enterprise Group that are not currently exercisable and will not become exercisable within 60 days. Healthcare Enterprise Group, Inc. is a wholly-owned subsidiary of Healthcare Enterprise Group PLC, a corporation traded on the Alternative Investment Market of the London Stock Exchange. Under the ownership attribution rules of the Alternative Investment Market, Michael Low and Stuart Bruck are the only two persons holding more than ten percent of the shares of Healthcare Enterprise Group PLC. Mr. Low and Mr. Bruck each hold 20.31% and 21.92%, respectively, of the shares of Healthcare Enterprise Group PLC. (5) Chief Financial Officer and Director. Includes 1,000,000 shares of common stock held directly by Mr. Gardner. (6) Principal Shareholder. Includes 1,300,000 shares of common stock held directly by Mr. Ross. (7) Principal shareholder. Includes 400,000 shares of common stock held by Kenneth I. Denos, P.C. of which Mr. Denos is the President and sole shareholder. (8) Principal shareholder. Includes 400,000 shares of common stock held directly by Kenneth I. Denos, P.C. (9) Principal shareholder. Includes 150,000 shares of common stock held by LG Investment Trust, a family trust formed for the benefit of immediate family members of Mr. Gaborit, and 400,000 shares of common stock held by Healthcare Enterprise Group, Inc. of which Mr. Gaborit serves as a member of the board of directors. Also includes 1,300,000 shares of common stock issuable upon exercise of warrants held by Healthcare Enterprise Group that are not currently exercisable but will become exercisable within 60 days. DESCRIPTION OF SECURITIES COMMON STOCK Cancer Therapeutics is authorized to issue up to 100,000,000 shares of common stock, par value $0.001 per share. As of May 31, 2005, there were 4,097,688 shares of common stock outstanding. Holders of our common stock are entitled to one vote per share for the election of directors and with respect to all other matters to be voted on by stockholders. Our shares of common stock do not carry cumulative voting rights and, therefore, a holder of a majority of our shares of common stock will be able to elect the entire board of directors. If any holder or group of holders constituting a majority of our shares of common stock elect the entire board of directors, minority shareholders would not be able to elect any members to the board of directors. Our board of directors has authority, without action by our shareholders, to issue all or any portion of the authorized but unissued shares of common stock, which would reduce your percentage ownership of Cancer Therapeutics and the percentage ownership of other shareholders, and may also dilute the book value of your common stock. Shareholders of the Company have no pre-emptive rights to acquire additional shares of common stock. Our shares of common stock are not subject to redemption and carry no subscription, sinking fund, or conversion rights. As a holder of our common stock, you will be entitled to receive ratably such dividends as may be declared by our board of directors from time to time out of funds legally available therefore. Cancer Therapeutics has not paid dividends on its common stock in the past and we do not anticipate that we will pay dividends in the foreseeable future. In the event of liquidation of Cancer Therapeutics, all shares of our common stock are entitled to share equally in the corporate assets after satisfaction of all liabilities. PREFERRED STOCK Cancer Therapeutics is authorized to issue up to 10,000,000 shares of preferred stock, par value $0.001 per share, in one or more series and to fix the rights, preferences, privileges, qualifications, limitations, and restrictions thereof, and the number of shares constituting any series or the designation of such series without shareholder approval. The existence of unissued preferred stock may enable our board of directors, without further action by the stockholders, to issue such stock to persons friendly to current management or to issue such stock with terms that could render more difficult or discourage an attempt to obtain control of Cancer Therapeutics, thereby protecting the continuity of our management. No shares of preferred stock are outstanding and we have no current plans to issue any shares of preferred stock. WARRANTS On May 28, 2004 we issued and sold a warrant to Healthcare Enterprise Group, Inc. in connection with an investment into Cancer Therapeutics. The warrant gives Healthcare Enterprise Group the right, at any time during the period commencing January 1, 2005 and ending May 27, 2007, to purchase 1,300,000 shares of our common stock for an aggregate purchase price of $25,000. The warrant provides for proportionate adjustment of the number of shares 27 receivable from the exercise thereof in the event of a reorganization of our share capital, as well as a merger, consolidation, stock dividend, or stock split. The warrant also gives Healthcare Enterprise Group the right, commencing January 1, 2005, to demand that we register with the Commission the shares receivable from the exercise thereby. The warrant is transferable only to a parent, subsidiary, or other company under common control with Healthcare Enterprise Group, and any such transfer must be, in our opinion, in compliance with the Securities Act of 1933. No other warrants, rights, options, or other instruments convertible into capital stock of Cancer Therapeutics are outstanding. TRANSFER AGENT AND REGISTRAR The transfer agent and registrar for our shares of common stock is Integrity Stock Transfer and Registrar, 2920 North Green Valley Parkway, Building 5, Suite 527, Henderson, Nevada 89014, telephone (702) 212-8797. DIVIDEND POLICY Cancer Therapeutics has not previously paid any cash dividends on any of its shares and does not anticipate paying dividends in the foreseeable future. Our present intention is to utilize all available funds for the development of our business. The only restrictions that limit the ability to pay dividends on common equity or that are likely to do so in the future, are those restrictions imposed by law. Under Delaware corporate law, no dividends or other distributions may be made which would render Cancer Therapeutics insolvent or would reduce assets to less than the sum of its liabilities plus the amount needed to satisfy outstanding liquidation preferences. PLAN OF DISTRIBUTION We are offering up to 1,000,000 shares of our Common Stock to the public on a "best efforts, 200,000 shares minimum, 1,000,000 shares maximum" basis, at a price of $0.50 per share. We will manage the offering without an underwriter. The shares will be offered and sold by our officers and directors, Robert K. Oldham, Michael Low and Chene Gardner, who will receive no sales commissions or other compensation in connection with the offering, except for reimbursement of reasonable expenses actually incurred on behalf of Cancer Therapeutics in connection with such activities. None of our officers and directors nor any other associated person of Cancer Therapeutics is an associated person of a broker or dealer or subject to any statutory disqualification as defined in Section 3(a)(39) of the Securities Act, nor will any such person be compensated in connection with his participation in the offering, which participation will be limited to distributing this prospectus or other written communication (the content of which is approved by an officer or director of Cancer Therapeutics), by mail or other means that does not involve oral solicitation, responding to inquiries of prospective purchasers with information contained herein and performing ministerial and clerical work involved in effecting sales transactions. If we fail to receive subscriptions for a minimum of 200,000 Shares within 120 days from the date of this prospectus (or 150 days if extended), we will terminate the offering and will promptly refund any subscription payments within 5 days to subscribers, without any deduction or any interest. If we receive subscriptions for at least the minimum amount specified in this offering, we will not return funds to investors and we may continue the offering until such periods expire or we have received subscriptions for all 1,000,000 shares, whichever occurs first. All subscription payments should be made payable to Kenneth I. Denos, P.C. Trust Account as escrow agent for Cancer Therapeutics. We will mail or otherwise forward all subscription payments received, by noon of the next business day following receipt, to Kenneth I. Denos, P.C. at 11585 South State St. Suite 102, Draper, Utah 84020 for deposit into the escrow account being maintained by Kenneth I Denos, P.C. as escrow agent for Cancer Therapeutics, pending receipt of subscriptions for at least a minimum of 200,000 shares or expiration of the offering period, whichever occurs first. Subscription payments will only be disbursed from the escrow account to Cancer Therapeutics if at least 200,000 shares are sold, of if not sold, for the purpose of refunding subscription payments to the subscribers. If you subscribe for shares, you will have no right to return or use of your funds during the offering period, which may last up to 150 days. All expenses of the registration statement including, but not limited to, legal, accounting, printing and mailing fees are and will be borne by Cancer Therapeutics. We will pay cash expenses from our cash balance and from related party loans. Our cash balance as of December 7, 2005, was $2,865. INTEREST OF NAMED EXPERTS AND COUNSEL 28 Kenneth I. Denos, P.C., a Utah professional corporation, has been engaged by Cancer Therapeutics to prepare and file our registration statement (of which this prospectus forms a part) in exchange for $50,000 and 400,000 shares of our common stock. Kenneth I. Denos, P.C. has received payment in full of $50,000 and 400,000 shares of our common stock. Kenneth I. Denos, P.C., will not receive further compensation in connection with this offering. Kenneth I. Denos is the President and sole shareholder of Kenneth I. Denos, P.C. John D. Thomas, J.D., an attorney practicing law in Utah, was engaged as general counsel for Cancer Therapeutics on May 10, 2004, for various corporate and commercial legal services provided during the spring and summer of 2004 in exchange for 1,300,000 shares of our common stock. The financial statements of Cancer Therapeutics included in this registration statement have been audited by Bouwhuis, Morrill & Company, LLC, independent chartered accountants, for the periods set forth in their report appearing elsewhere in this registration statement, and included in such reliance upon such report given upon the authority of said firm as experts in accounting and auditing. LEGAL PROCEEDINGS On July 31, 2002, Cancer Therapeutics entered into a structured settlement with the Internal Revenue Service in connection with unpaid payroll taxes during 1999 and 2000. We agreed to pay the IRS a total of $42,690.81, exclusive of penalties and interest. The IRS filed a tax lien in 2002 against Cancer Therapeutics to secure payment of the settlement amount. The IRS tax lien covers property of Cancer Therapeutics including the Cryobank, equipment, inventory and all of our other assets. This lien gives the IRS priority over other creditors in the event we experience bankruptcy or dissolution. The settlement amount calls for a payment of $1,000 per month until the settlement amount is paid in full, although the IRS may require us to increase our monthly payments if our financial condition improves. As of August 31, 2005, the total amount owing to the IRS, including penalties and interest, was $49,521. As of the date of this prospectus, we are current with respect to our obligations under this settlement. DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES Under Delaware General Corporation Law, we are allowed to eliminate or limit the personal liability of our directors to Cancer Therapeutics or to our shareholders for monetary damages for breach of fiduciary duty except for: (i) any breach of the duty of loyalty to Cancer Therapeutics or to our stockholders; (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) declaration of unlawful dividends or unlawful stock repurchases or redemptions; (iv) any transaction from which any such director derived an improper benefit; or (v) any act or omission occurring prior to the date any such provision eliminating or limiting such liability became effective. Delaware General Corporation Law also allows us to indemnify our officers or directors who are or are threatened to be made a party to a proceeding other than an action by or in the right of Cancer Therapeutics by reason of the fact that such officer or director is or was serving as an officer, director, employee, or agent of Cancer Therapeutics. We may only provide indemnification if the officer's or director's conduct was in good faith and in a manner such person reasonably believed to be in or not opposed to Cancer Therapeutic's best interests, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his conduct was unlawful. The Delaware General Corporation Law provides that Cancer Therapeutics shall indemnify any of our officers or directors for their reasonable expenses in connection with the defense of any proceeding if the officer or director has been successful, on the merits or otherwise. We are also permitted to advance expenses to any of our officers or directors who are made a party to a criminal or civil proceeding before a final disposition is made, if we receive an undertaking by or on behalf of such officer or director to repay any amounts advanced if a court of competent jurisdiction determines that such officer or director was not entitled to indemnification. CERTIFICATE OF INCORPORATION Article VI of our Certificate of Incorporation provides that the liability of directors to Cancer Therapeutics or its stockholders is eliminated to the fullest extent permitted under the Delaware General Corporation Law, as described in the preceding paragraphs. BYLAWS Article VI, Section 6.1(a) of our Bylaws provides that an officer or director who was or is made party to, or is threatened to be made a party to, or is involved in any proceeding by reason of the fact that he or she is or was an officer or director, or is or was serving at the request of Cancer Therapeutics as a director, officer, employee, or agent of another 29 corporation, or as its representative in another enterprise shall be indemnified and held harmless to the fullest extent permitted and subject to the standards of conduct, procedures, and other requirements under Delaware law. Article, VI, Section 6.1(a) further provides that Cancer Therapeutics may purchase and maintain insurance on behalf of an officer or director against any liability arising out of their status as such, whether or not the corporation would have the power to indemnify such officer or director. Article VI, Section 6.1(b) of our Bylaws provides that the right of an officer or director to indemnification shall continue beyond termination and such right inures to the benefit of the heirs and personal representatives of such officer or director. Article VI, Section 6.1(d) of our Bylaws provides that Cancer Therapeutics shall, from time to time, reimburse or advance to an officer or director the funds necessary for payment of expenses incurred in connection with defending any proceeding for which he or she is indemnified by Cancer Therapeutics, in advance of the final disposition of such proceeding, provided that, if then required by the Delaware General Corporation Law, such advancements may only be paid upon the receipt by the corporation of an undertaking by or on behalf of such officer or director to repay any such amount so advanced if it is ultimately determined by a final and unappealable judicial decision that the officer or director is not entitled to be indemnified for such expenses. Insofar as indemnification for liabilities under the Securities Act may be permitted to directors, officers and controlling persons of Cancer Therapeutics under Delaware law or otherwise, we have been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. ORGANIZATION WITHIN THE LAST FIVE YEARS Not Applicable. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. REPORTS TO SECURITY HOLDERS Commencing with our fiscal year ended May 31, 2006, we will send an annual report to our stockholders, together with our annual audited financial statements. As of the effective date of this registration statement of which this prospectus forms a part, Cancer Therapeutics became subject to the informational requirements of the Securities Exchange Act of 1934, as amended and, in accordance therewith, will file annual, quarterly and current reports, proxy statements, and other information with the Commission. Reports and other information filed by Cancer Therapeutics with the Commission pursuant to the informational requirements of the Exchange Act will be available for inspection and copying at prescribed rates at the Public Reference Room maintained by the Commission at 100 F. Street, NE, Washington, D.C. 20549. The public may also obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. Our filings with the Commission are also available to the public over the Internet at the Commission's website at http://www.sec.gov. Our website may be viewed at www.cancer-therapeutics.com. 30 FINANCIAL STATEMENTS CANCER THERAPEUTICS, INC. Financial Statements for the Years Ended May 31, 2005 and 2004 and Report of Independent Registered Public Accounting Firm 31 CONTENTS Report of Independent Registered Public Accounting Firm................... F/S-1 Balance Sheet............................................................. F/S-2 Statements of Operations.................................................. F/S-3 Statements of Stockholders' Deficit........................................F/S-4 Statements of Cash Flows.................................................. F/S-5 Notes to the Financial Statements......................................... F/S-6 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ------------------------------------------------------- Board of Directors Cancer Therapeutics, Inc. Thomasville, Georgia We have audited the accompanying balance sheet of Cancer Therapeutics, Inc. as of May 31, 2005 and the related statements of operations, stockholders' deficit and cash flows for the years ended May 31, 2005 and 2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Cancer Therapeutics, Inc. as of May 31, 2005 and the results of its operations and its cash flows for the years ended May 31, 2005 and 2004 in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 11 to the financial statements, the Company has negative working capital, negative cash flows from operations and recurring operating losses which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 11. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. Bouwhuis, Morrill & Company, LLC Layton, Utah September 7, 2005 F/S-1 CANCER THERAPEUTICS, INC. Balance Sheet ASSETS ------
May 31, 2005 -------------------------- CURRENT ASSETS Cash and cash equivalents $ 13,814 Accounts receivable 3,000 -------------------------- Total Current Assets 16,814 -------------------------- TOTAL ASSETS $ 16,814 ========================== LIABILITIES AND STOCKHOLDERS' DEFICIT ------------------------------------- CURRENT LIABILITIES Bank overdraft $ 909 Accounts payable and accrued expenses (Note 4) 145,712 Due to related parties (Note 3) 73,557 Notes payable (Note 8) 50,000 Notes payable - related parties (Note 7) 239,944 -------------------------- Total Current Liabilities 510,122 -------------------------- CONTINGENCIES (Note 9) STOCKHOLDERS' DEFICIT Common stock, $0.001 par value; 100,000,000 shares authorized, 4,097,688 shares issued and outstanding 4,098 Additional paid-in capital 2,487,922 Accumulated deficit (2,985,328) -------------------------- Total Stockholders' Deficit (493,308) -------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 16,814 ==========================
The accompanying notes are an integral part of these financial statements F/S-2 CANCER THERAPEUTICS, INC. Statements of Operations
May 31, -------------------------------------------- 2005 2004 --------------------- ------------------- NET REVENUES $ 44,858 $ 36,104 --------------------- ------------------- OPERATING EXPENSES General and administrative ` 177,090 58,229 Professional fees 105,497 115,000 --------------------- ------------------- Total Operating Expenses 282,587 173,229 --------------------- ------------------- LOSS FROM OPERATIONS (237,729) (137,125) --------------------- ------------------- OTHER EXPENSES Interest expense (27,028) (34,173) --------------------- ------------------- Total Other Expenses (27,028) (34,173) --------------------- ------------------- NET LOSS BEFORE INCOME TAXES (264,757) (171,298) PROVISION FOR INCOME TAXES - - --------------------- ------------------- NET LOSS $ (264,757) $ (171,298) ===================== =================== BASIC AND DILUTED NET LOSS PER SHARE $ (0.08) $ (0.37) ===================== =================== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 3,481,798 468,236 ===================== ===================
The accompanying notes are an integral part of these financial statements F/S-3 CANCER THERAPEUTICS, INC. Statements of Stockholders' Deficit
Additional Common Stock Paid-in Accumulated Shares Amount Capital Deficit -------------- --------------- ------------------- ---------------------- Balance, May 31,2003 447,688 $ 448 $ 2,014,072 $ (2,549,273) Common stock issued for cash at $0.375 per share, May 2004 200,000 200 74,800 - Common stock issued for services at $0.375 per share, May 2004 1,300,000 1,300 486,200 - Reduction in paid-in capital for the excess of value of shares issued for services over the value of the services received (Note 5) - - (422,500) Net loss for the year ended May 31, 2004 - - - (171,298) -------------- --------------- -------------------- ----------------------- Balance, May 31, 2004 1,947,688 1,948 2,152,572 (2,720,571) Common stock issued for services at $0.375 per share, September 2004 (Note 5) 750,000 750 280,500 - Common stock issued for accounts payable at $0.375 per share, September 2004 (Note 5) 1,000,000 1,000 374,000 - Common stock issued for notes payable at $0.313 per share, September 2004 400,000 400 124,600 - Reduction in paid-in capital for the excess of value of shares issued for services over the value of the services received (Note 5) - - (443,750) - Net loss for the year ended May 31, 2005 - - - (264,757) -------------- --------------- -------------------- ----------------------- Balance, May 31, 2005 4,097,688 $ 4,098 $ 2,487,922 $ (2,985,328) ============== =============== ==================== =======================
The accompanying notes are an integral part of these financial statements F/S-4 CANCER THERAPEUTICS, INC. Statements of Cash Flows
May 31, 2005 2004 ----------------------- -------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (264,757) $ (171,298) Adjustments to reconcile net loss to net cash used by operating activities: Common stock issued for services 162,500 65,000 Change in operating assets and liabilities: Increase in accounts receivable (3,000) - Increase in accounts payable and accrued expenses 24,534 69,924 Increase in due to related parties 15,631 4,476 Net Cash Used by Operating Activities (65,092) (31,898) CASH FLOWS FROM INVESTING ACTIVITIES - - CASH FLOWS FROM FINANCING ACTIVITIES Bank overdraft 909 (1,429) Proceeds from issuance of common stock - 75,000 Proceeds from issuance of notes payable - related parties - 44,691 Payment on notes payable - related parties - (8,367) Net Cash Provided by Financing Activities 909 109,895 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (64,183) 77,997 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 77,997 - CASH AND CASH EQUIVALENTS, END OF PERIOD $ 13,814 $ 77,997 SUPPLEMENTAL DISCLOSURES: Cash paid for interest $ 5,506 $ - Cash paid for income $ - $ - NON-CASH INVESTING AND FINANCING ACTIVITIES: Common stock issued for services $ 16,500 $ 65,000 Common stock issued for accounts payable $ 50,000 $ - Common stock issued for notes payable - related parties $ 125,000 $ -
The accompanying notes are an integral part of these financial statements F/S-5 CANCER THERAPEUTICS, INC. Notes to the Financial Statements May 31, 2005 and 2004 NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS Cancer Therapeutics, Inc. (the Company), was incorporated under the laws of the State of Delaware on August 12, 2004 with authorized common stock of 100,000,000 shares and authorized preferred stock of 10,000,000 shares. Both classes of stock have a par value of $0.001 per share. The Company was organized for the purpose of producing and preserving activated cells for use in cancer treatment primarily through agreements with clinics, hospitals, and physicians. The Company was originally formed as Cancer Therapeutics, Incorporated, under the laws of the State of Tennessee on May 1, 1991. On September 7, 2004, the Company reincorporated into the State of Delaware by filing with the state a Certificate of Merger whereby Cancer Therapeutics, Incorporated (Tennessee) merged with and into Cancer Therapeutics, Inc. (Delaware) which was incorporated for this purpose on August 12, 2004. As part of the merger one (1) common share of Cancer Therapeutics, Inc. (Delaware) were issued for each five (5) outstanding common shares of Cancer Therapeutics, Incorporated (Tennessee) for a total of 1,947,688 common shares of Cancer Therapeutics, Inc. (Delaware) issued upon incorporation. All references to shares issued and outstanding in the financial statements have been retroactively restated to reflect the effects of this change in capital structure. During this process the Company changed its name from Cancer Therapeutics, Incorporated to Cancer Therapeutics, Inc. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of the Company is presented to assist in understanding the Company's financial statements. The financial statements and notes are representations of the Company's management who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. The following policies are considered to be significant: a. Accounting Method The Company recognizes income and expenses based on the accrual method of accounting. The Company has elected a May 31 year-end. b. Cash and Cash Equivalents Cash equivalents are generally comprised of certain highly liquid investments with original maturities of less than three months. c. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. d. Revenue Recognition Policy F/S-6 CANCER THERAPEUTICS, INC. Notes to the Financial Statements May 31, 2005 and 2004 NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued) Revenue is recognized when contracts are signed and related contract activities have commenced, where the fee is fixed or determinable, and collectibility is reasonably assured. Revenue is not recognized until persuasive evidence of an arrangement exists. Advance payments are recorded as deferred revenue until such time as they are recognized. Our contracts typically state a monthly fee which is recorded as revenue on a monthly basis. e. Allowance for Doubtful Accounts Accounts receivable are recorded net of the allowance for doubtful accounts. The Company generally offers 30-day credit terms on sales to its customers and requires no collateral. The Company maintains an allowance for doubtful accounts which is determined based on a number of factors, including each customer's financial condition, general economic trends and management judgment. As of May 31, 2005, the allowance for doubtful accounts was $-0-. Bad debt expense was $-0- for the years ended May 31, 2005 and 2004. f. Basic Net Loss per Share of Common Stock In accordance with Financial Accounting Standards No. 128, "Earnings per Share," basic net loss per common share is based on the weighted average number of shares outstanding during the periods presented. Diluted earnings per share is computed using weighted average number of common shares plus dilutive common share equivalents outstanding during the period.
May 31, May 31, 2005 2004 Net loss (numberator) $ (264,757) $(171,298) Weighted average shares outstanding (denominator) 3,481,798 468,236 Loss per share amount $ (0.08) $ (0.37)
Common stock warrants have not been included as their effect is antidilutive. g. Recent Accounting Pronouncements In April 2002, the Financial Accounting Standards Board issued Statement No. 145 ("SFAS 145"), "Rescission of FASB Statements Nos. 4, 44, and 64 and Amendment of FASB Statement No. 13." SFAS 145 addresses the presentation for losses on early retirements of debt in the statement of operations. The Company has adopted SFAS 145 and will not present losses on early retirements of debt as an extraordinary item. In June 2002, the Financial Accounting Standards Board issued Statement No. 146 ("SFAS 146"), "Accounting for Costs Associated with Exit or Disposal Activities." The provisions of SFAS 146 become effective for exit or disposal activities commenced subsequent to December 31, 2002. The adoption of SFAS 146 had no impact on the Company's financial position, results of operations or cash flows. In November 2002, the Financial Accounting Standards Board issued FASB Interpretation No. 45 ("FIN 45"), "Guarantor's Accounting and Disclosure Requirements for Guarantees, F/S-7 CANCER THERAPEUTICS, INC. Notes to the Financial Statements May 31, 2005 and 2004 NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued) Including Indirect Guarantees of Indebtedness of Others." This interpretation elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also clarifies (for guarantees issued after January 1, 2003) that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligations undertaken in issuing the guarantee. At May 31, 2005, the Company does not have any outstanding guarantees and accordingly does not expect the adoption of FIN 45 to have any impact on their financial position, results of operations or cash flows. h. Income Taxes The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards Board (SFAS) No. 109, "Accounting for Income Taxes." Under this method, deferred income taxes are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which differences are expected to reverse. In accordance with the provisions of SFAS No. 109, a valuation allowance would be established to reduce deferred tax assets if it were more likely than not that all or some portion, of such deferred tax assets would not be realized. A full allowance against deferred tax assets was provided as of May 31, 2005. At May 31, 2005, the Company had net operating loss carryforwards of approximately $3,000,000 that may be offset against future taxable income through 2025. No tax benefits have been reported in the financial statements, because the potential tax benefits of the net operating loss carry forwards are offset by a valuation allowance of the same amount. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to future use. i. Checks Written in Excess of Cash in Bank Under the Company's cash management system, checks issued but not presented to banks frequently result in overdraft balances for accounting purposes. Additionally, at times banks may temporarily lend funds to the Company by paying out more funds than are in the Company's account. These overdrafts are included as a current liability in the balance sheet. NOTE 3 - RELATED PARTY TRANSACTIONS The Company has been dependent upon certain individuals, officers, stockholders and other related parties to provide working capital, management services, assistance in finding new sources for debt and equity financing, and guidance in the development of the Company's business. The related parties have generally provided services and/or incurred expenses on behalf of the Company or have provided the necessary operating capital to continue pursuing its business. At May 31, 2005, the Company had related party payables of $73,557. These amounts are payable to the Company's president and are without terms. F/S-8 CANCER THERAPEUTICS, INC. Notes to the Financial Statements May 31, 2005 and 2004 NOTE 4 - ACCRUED EXPENSES The Company's accounts payable and accrued expenses balance includes accrued interest of $95,800 as of May 31, 2005. This interest primarily relates to notes payable. During 2002, the Internal Revenue Service (IRS) placed a tax lien against the Company and the Company entered into a structured settlement with the IRS in connection with unpaid payroll taxes during 1999 and 2000 in the amount of $42,691, exclusive of penalties and interest. The tax lien covers all of the assets of the Company. This lien gives the IRS priority over other creditors in the event of bankruptcy or dissolution. The settlement calls for a payment of $1,000 per month until the settlement amount is paid in full. As of May 31, 2005, the total amount owing the IRS on this settlement is $25,754 and is included in accounts payable and accrued expenses. In addition to the above IRS settlement the Company also has accrued but not paid payroll taxes for the fiscal years ended May 31, 2005 and 2004 in the amount of $19,343 and $4,843, respectively. As of May 31, 2005, the Company has accrued an additional $3,482 as an estimate of penalties and interest relating to this balance. Both of these amounts are included in accounts payable and accrued expenses. NOTE 5 - EQUITY TRANSACTIONS The Company has 10,000,000 shares of $0.001 par value preferred stock authorized. As of May 31, 2005, no rights or preferences have been designated and no preferred shares have been issued. During the year ended May 31, 2004, the Company issued 1,300,000 shares of common stock to an attorney for services. The shares were valued at the market price of the services on the date the shares were authorized for issuance of $0.05 per share or $65,000. The value of the shares issued was determined to be $0.375 per share or $487,500. The excess of the value of the shares issued over the value of the services received is $422,500 and has been recorded as a reduction of additional paid-in capital. During the year ended May 31, 2004, the Company issued 200,000 shares of common stock to a company in exchange for cash of $75,000 or $0.375 per share. Pursuant to the stock purchase agreement, and in addition to the common shares purchased, the company also received warrants for the purchase of 1,300,000 shares of common stock at an aggregate exercise price of $25,000 or approximately $0.019 per share. The warrants become exercisable on January 1, 2005 and expire on May 27, 2007. During September 2004, the Company issued 550,000 shares of common stock for legal and advisory services rendered to the Company valued at $87,500. The value of the shares issued was determined to be $0.375 per share or $206,250. The excess of the value of the shares issued over the value of services received is $118,750 and has been recorded as a reduction of additional paid-in capital. During September 2004, the Company issued 200,000 shares of common stock for advisory services rendered to the Company. The value of the services was determined to be $281,250 or $0.375 per share. F/S-9 CANCER THERAPEUTICS, INC. Notes to the Financial Statements May 31, 2005 and 2004 NOTE 5 - EQUITY TRANSACTIONS (Continued) During September 2004, the Company issued 1,000,000 shares of common stock in satisfaction of accounts payable for accounting services of $50,000. The value of the shares was determined to be $0.375 per share or $375,000. The excess of the value of the shares issued over the value of the debt converted is $325,000 and has been recorded as a reduction of additional paid-in capital. During September 2004, the Company issued 400,000 shares for the conversion of a $125,000 promissory note. The value of the shares was determined to be $.313 per share. NOTE 6 - FINANCIAL INSTRUMENTS Statement of Financial Accounting Standards No. 107 (SFAS 107), "Disclosures about Fair Value of Financial Instruments" requires disclosure of the fair value of financial instruments held by the Company. SFAS 107 defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. The following methods and assumptions were used to estimate fair value: The carrying amount of cash equivalents, accounts payable and accrued expenses approximate fair value due to their short-term nature. NOTE 7 - NOTES PAYABLE - RELATED PARTIES The Company has notes payable due to related parties consisting of the following:
May 31, 2005 ------------------ Convertible note payable to a company, 8% interest, due May 1, 2004, unsecured, in default $ 110,000 Notes payable to an individual, 6% interest, due on demand, unsecured 104,944 Note payable to an individual, 9% interest, due on demand, unsecured 25,000 ------------------ Total Notes Payable - Related Parties 239,944 Less: Current Portion (239,944) ------------------- Long-Term Notes Payable - Related Parties $ - ===================
The convertible note payable indicated above is convertible, at the holders option, into shares of preferred stock at a rate equal to that of other purchasers of preferred stock. The note is currently in default. No preferred shares have been authorized or issued as of the date of these financial statements. For notes in default, the Company is currently in negotiations to extend the terms. There has been no action regarding foreclosure by the note holders. F/S-10 CANCER THERAPEUTICS, INC. Notes to the Financial Statements May 31, 2005 and 2004 NOTE 8 - NOTES PAYABLE The Company has notes payable consisting of the following:
May 31, 2005 ------------------ Note payable to a bank, 6.0% interest, due December 31, 2005, secured by all tangible and intangible assets of the Company $ 50,000 ------------------ Total Notes Payable 50,000 Less: Current Portion (50,000) ------------------- Long-Term Notes Payable $ - ===================
NOTE 9 - CONTINGENCIES Food and Drug Administration The Company is subject to extensive Federal laws and regulations. These laws, which are constantly changing, regulate various therapies through the Food and Drug Administration ("FDA"). However, the Company provides various cellular therapies for which regulations have been vague or nonexistent. Management continuously monitors activities of the FDA, particularly with regard to regulations concerning the use of autologous cells. Although management feels the Company is in compliance with existing FDA regulations, new regulations, if any, developed in the area of autologous cells, or differing interpretations of existing regulations by the FDA, could have a material effect on the Company's operations. Presently, such effect, if any, cannot be determined. Office Space The Company has been utilizing the offices of another, unrelated, entity. The Company has not been billed for nor has it paid rent for several years and believes that the rent is being donated as the building would otherwise be empty. It is estimated that the fair market value of this office space is approximately $900 per month. It is possible that the entity which owns the building may request monthly rental payments or even payment in arrears for the past occupancy. No amount has been accrued in the financial statements for this potential contingency. Unregistered Spin-Off The Company has become aware that it may have been in violation of the Securities Act of 1933 (the "Act") due to its spin-off from Immune Complex Corporation ("ICC") during 2000 which was not registered under the Act. During the liquidation of the assets of ICC the shares of Cancer Therapeutics, Inc. ("CTI") (a then wholly-owned subsidiary of ICC) were distributed to the shareholders of ICC on a pro rata basis for a total of 447,688 shares. These spin-off shares were not registered under the Act. Management is currently evaluating this potential violation and its possible impacts which may include rescission of the spin-off of CTI from ICC by the shareholders and fair market value compensation to the shareholders. The Company's management and legal counsel believes that the potential liability could range from $0.03 to $0.05 per spin-out share or $13,431 to $22,384, F/S-11 CANCER THERAPEUTICS, INC. Notes to the Financial Statements May 31, 2005 and 2004 NOTE 9 - CONTINGENCIES (Continued) respectively. No amount has been accrued in the financial statements for this potential loss due to the uncertainty of the outcome at the present time. NOTE 10 - COMMON STOCK WARRANTS During 2004 the Company issued warrants to purchase 1,300,000 shares of common stock (see Note 5). The following schedules summarize the changes during the year and the warrants issued and outstanding at May 31, 2005:
May 31, 2005 - ------------ Outstanding, May 31, 2004 1,300,000 Issued - -------------- Outstanding, May 31, 2005 1,300,000 ============== Weighted average exercise price of warrants outstanding as of May 31, 2005 $ 0.019 ==============
Outstanding Exercisable -------------------------------------------- ----------------------------- Weighted Average Weighted Weighted Number Remaining Average Number Average Outstanding Contractual Exercise Exercisable Exercise Exercise Prices at 5/31/05 Life (in Yrs.) Price at 5/31/05 Price --------------- ------------- --------------- ---------- ------------ ------------ $ 0.019 1,300,000 1.96 $ 0.019 1,300,000 $ 0.019 ============= =============== ========== ============ ===========
F/S-12 CANCER THERAPEUTICS, INC. Notes to the Financial Statements May 31, 2005 and 2004 NOTE 11 - GOING CONCERN CONSIDERATIONS The accompanying financial statements have been prepared using U.S. generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As reported in the financial statements, the Company has incurred losses of approximately $3,000,000 from inception of the Company through May 31, 2005. The Company's stockholders' deficit at May 31, 2005 was $493,308 and its current liabilities exceeded its current assets by the same amount. These factors combined raise substantial doubt about the Company's ability to continue as a going concern. Management's plans to address and alleviate these concerns are as follows: The Company's management is exploring all of its options so that it can develop successful operations and have sufficient funds, therefore, as to be able to operate over the next twelve months. As a part of this plan, management is currently seeking to transform into a publicly traded entity. Management believes that its business model has significant potential as long as extra working capital is received through operations and/or business development. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of these uncertainties. F/S-13 CANCER THERAPEUTICS, INC. Unaudited Financial Statements for the Periods Ended November 30, 2005 and 2004 F/S-14 CANCER THERAPEUTICS, INC. Balance Sheet (Unaudited) ASSETS ------
November 30, 2005 -------------------------- CURRENT ASSETS Cash and cash equivalents $ 431 -------------------------- Total Current Assets 431 -------------------------- TOTAL ASSETS $ 431 ========================== LIABILITIES AND STOCKHOLDERS' DEFICIT ------------------------------------- CURRENT LIABILITIES Accounts payable and accrued expenses (Note 4) $ 157,932 Due to related parties (Note 3) 77,570 Notes payable (Note 8) 50,000 Notes payable - related parties (Note 7) 239,944 -------------------------- Total Current Liabilities 525,446 -------------------------- CONTINGENCIES (Note 9) STOCKHOLDERS' DEFICIT Common stock, $0.001 par value; 100,000,000 shares authorized, 4,097,688 shares issued and outstanding 4,098 Additional paid-in capital 2,487,922 Accumulated deficit (3,017,035) -------------------------- Total Stockholders' Deficit (525,015) -------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 431 ==========================
The accompanying notes are an integral part of these financial statements F/S-15 CANCER THERAPEUTICS, INC. Statements of Operations Unaudited
For the Six Months Ended Novemnber 30, -------------------------------------------- 2005 2004 --------------------- ------------------- NET REVENUES $ 25,338 9,848 --------------------- ------------------- OPERATING EXPENSES General and administrative 33,558 143,679 Professional fees 13,016 98,031 --------------------- ------------------- Total Operating Expenses 46,574 241,710 --------------------- ------------------- LOSS FROM OPERATIONS (21,236) (231,862) --------------------- ------------------- OTHER EXPENSES Interest expense (10,471) (15,235) --------------------- ------------------- Total Other Expenses (10,471) (15,235) --------------------- ------------------- NET LOSS BEFORE INCOME TAXES (31,707) (247,097) PROVISION FOR INCOME TAXES - - --------------------- ------------------- NET LOSS $ (31,707) (247,097) ===================== =================== BASIC AND DILUTED NET LOSS PER SHARE $ (0.01) $ (0.11) ===================== =================== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 4,097,688 2,178,715 ===================== ===================
The accompanying notes are an integral part of these financial statements F/S-16 CANCER THERAPEUTICS, INC. Statements of Stockholders' Deficit
Additional Common Stock Paid-in Accumulated Shares Amount Capital Deficit -------------- ------------------ ----------------- -------------------- Balance, May 31, 2004 1,947,688 1,948 2,152,572 (2,720,571) Common stock issued for services at $0.375 per share, September 2004 (Note 5) 750,000 750 280,500 - Common stock issued for accounts payable at $0.375 per share, September 2004 (Note 5) 1,000,000 1,000 374,000 - Common stock issued for notes payable at $0.313 per share, September 2004 400,000 400 124,600 - Reduction in paid-in capital for the excess of value of shares issued for services over the value of the services received (Note 5) - - (443,750) - Net loss for the year ended May 31, 2005 - - - (264,757) -------------- ------------------ ------------------ -------------------- Balance, May 31, 2005 4,097,688 4,098 2,487,922 (2,985,328) Net loss for the six months ended November 30, 2005 (Unaudited) - - - (31,707) -------------- ------------------ ------------------ -------------------- Balance, November 30, 2005 (Unaudited) 4,097,688 $ 4,098 $ 2,487,922 $ (3,017,035) ============== ================== ================== =====================
The accompanying notes are an integral part of these financial statements F/S-17 CANCER THERAPEUTICS, INC. Statements of Cash Flows (Unaudited)
November 30, ----------------------------------------------- 2005 2004 ----------------------- -------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (31,707) $ (247,097) Adjustments to reconcile net loss to net cash used by operating activities: Common stock issued for services 162,500 Change in operating assets and liabilities: Decrease in accounts receivable 3,000 - Increase in accounts payable and accrued expenses 12,220 15,674 Increase in due to related parties 4,013 15,286 ----------------------- -------------------- Net Cash Used by Operating Activities (12,474) (53,637) ----------------------- -------------------- CASH FLOWS FROM INVESTING ACTIVITIES - - CASH FLOWS FROM FINANCING ACTIVITIES Bank overdraft (909) - ----------------------- -------------------- Net Cash Used in Financing Activities (909) - ----------------------- -------------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (13,383) (53,637) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 13,814 77,997 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 431 $ 24,360 SUPPLEMENTAL DISCLOSURES: Cash paid for interest $ - $ 5,506 Cash paid for income taxes $ - $ -
The accompanying notes are an integral part of these financial statements F/S-18 CANCER THERAPEUTICS, INCORPORATED Notes to the Financial Statements November 30, 2005 and 2004 (Unaudited) NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS Cancer Therapeutics, Inc. (the Company), was incorporated under the laws of the State of Delaware on August 12, 2004 with authorized common stock of 100,000,000 shares and authorized preferred stock of 10,000,000 shares. Both classes of stock have a par value of $0.001 per share. The Company was organized for the purpose of producing and preserving activated cells for use in cancer treatment primarily through agreements with clinics, hospitals, and physicians. The Company was originally formed as Cancer Therapeutics, Incorporated, under the laws of the State of Tennessee on May 1, 1991. On September 7, 2004, the Company reincorporated into the State of Delaware by filing with the state a Certificate of Merger whereby Cancer Therapeutics, Incorporated (Tennessee) merged with and into Cancer Therapeutics, Inc. (Delaware) which was incorporated for this purpose on August 12, 2004. As part of the merger one (1) common share of Cancer Therapeutics, Inc. (Delaware) were issued for each five (5) outstanding common shares of Cancer Therapeutics, Incorporated (Tennessee) for a total of 1,947,688 common shares of Cancer Therapeutics, Inc. (Delaware) issued upon incorporation. All references to shares issued and outstanding in the financial statements have been retroactively restated to reflect the effects of this change in capital structure. During this process the Company changed its name from Cancer Therapeutics, Incorporated to Cancer Therapeutics, Inc. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of the Company is presented to assist in understanding the Company's financial statements. The financial statements and notes are representations of the Company's management who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. The following policies are considered to be significant: a. Accounting Method The Company recognizes income and expenses based on the accrual method of accounting. The Company has elected a May 31 year-end. b. Cash and Cash Equivalents Cash equivalents are generally comprised of certain highly liquid investments with original maturities of less than three months. c. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. d. Revenue Recognition Policy F/S-19 CANCER THERAPEUTICS, INCORPORATED Notes to the Financial Statements November 30, 2005 and 2004 (Unaudited) NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued) Revenue is recognized when contracts are signed and related contract activities have commenced, where the fee is fixed or determinable, and collectibility is reasonably assured. Revenue is not recognized until persuasive evidence of an arrangement exists. Advance payments are recorded as deferred revenue until such time as they are recognized. Our contracts typically state a monthly fee which is recorded as revenue on a monthly basis. e. Allowance for Doubtful Accounts Accounts receivable are recorded net of the allowance for doubtful accounts. The Company generally offers 30-day credit terms on sales to its customers and requires no collateral. The Company maintains an allowance for doubtful accounts which is determined based on a number of factors, including each customer's financial condition, general economic trends and management judgment. As of November 30, 2005 and 2004, the allowance for doubtful accounts was $-0-. Bad debt expense was $-0- for the six months ended November 30, 2005 and 2004. f. Basic Net Loss per Share of Common Stock In accordance with Financial Accounting Standards No. 128, "Earnings per Share," basic net loss per common share is based on the weighted average number of shares outstanding during the periods presented. Diluted earnings per share is computed using weighted average number of common shares plus dilutive common share equivalents outstanding during the period.
November 30, November 30, 2005 2004 Net loss (numerator) $ (294,855) $ (247,097) Weighted average shares outstanding (denominator) 4,097,688 2,178,715 Loss per share amount $ (0.01) $ (0.11)
Common stock warrants have not been included as their effect is antidilutive. g. Recent Accounting Pronouncements In April 2002, the Financial Accounting Standards Board issued Statement No. 145 ("SFAS 145"), "Rescission of FASB Statements Nos. 4, 44, and 64 and Amendment of FASB Statement No. 13." SFAS 145 addresses the presentation for losses on early retirements of debt in the statement of operations. The Company has adopted SFAS 145 and will not present losses on early retirements of debt as an extraordinary item. In June 2002, the Financial Accounting Standards Board issued Statement No. 146 ("SFAS 146"), "Accounting for Costs Associated with Exit or Disposal Activities." The provisions of SFAS 146 become effective for exit or disposal activities commenced subsequent to December 31, 2002. The adoption of SFAS 146 had no impact on the Company's financial position, results of operations or cash flows. F/S-20 CANCER THERAPEUTICS, INCORPORATED Notes to the Financial Statements November 30, 2005 and 2004 (Unaudited) NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued) In November 2002, the Financial Accounting Standards Board issued FASB Interpretation No. 45 ("FIN 45"), "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." This interpretation elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also clarifies (for guarantees issued after January 1, 2003) that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligations undertaken in issuing the guarantee. At May 31, 2005, the Company does not have any outstanding guarantees and accordingly does not expect the adoption of FIN 45 to have any impact on their financial position, results of operations or cash flows. h. Income Taxes The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards Board (SFAS) No. 109, "Accounting for Income Taxes." Under this method, deferred income taxes are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which differences are expected to reverse. In accordance with the provisions of SFAS No. 109, a valuation allowance would be established to reduce deferred tax assets if it were more likely than not that all or some portion, of such deferred tax assets would not be realized. A full allowance against deferred tax assets was provided as of May 31, 2005. At November 30, 2005, the Company had net operating loss carryforwards of approximately $3,000,000 that may be offset against future taxable income through 2025. No tax benefits have been reported in the financial statements, because the potential tax benefits of the net operating loss carry forwards are offset by a valuation allowance of the same amount. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to future use. i. Checks Written in Excess of Cash in Bank Under the Company's cash management system, checks issued but not presented to banks frequently result in overdraft balances for accounting purposes. Additionally, at times banks may temporarily lend funds to the Company by paying out more funds than are in the Company's account. These overdrafts are included as a current liability in the balance sheet. NOTE 3 - RELATED PARTY TRANSACTIONS The Company has been dependent upon certain individuals, officers, stockholders and other related parties to provide working capital, management services, assistance in finding new sources for debt and equity financing, and guidance in the development of the Company's business. The related parties have generally provided services and/or incurred expenses on behalf of the Company or have provided the necessary operating capital to continue pursuing its business. At November 30, 2005, the Company had related party F/S-21 CANCER THERAPEUTICS, INCORPORATED Notes to the Financial Statements November 30, 2005 and 2004 (Unaudited) NOTE 3 - RELATED PARTY TRANSACTIONS (Continued) payables of $77,570. These amounts are payable to the Company's president and are without terms. NOTE 4 - ACCRUED EXPENSES The Company's accounts payable and accrued expenses balance includes accrued interest of $105,625 as of November 30, 2005. This interest primarily relates to notes payable. During 2002, the Internal Revenue Service (IRS) placed a tax lien against the Company and the Company entered into a structured settlement with the IRS in connection with unpaid payroll taxes during 1999 and 2000 in the amount of $42,691, exclusive of penalties and interest. The tax lien covers all of the assets of the Company. This lien gives the IRS priority over other creditors in the event of bankruptcy or dissolution. The settlement calls for a payment of $1,000 per month until the settlement amount is paid in full. As of November 30, 2005, the total amount owing the IRS on this settlement is $20,400 and is included in accounts payable and accrued expenses. In addition to the above IRS settlement the Company also has accrued but not paid payroll taxes for the quarters ended November 30, 2005 and 2004 in the amount of $26,576 and $12,103, respectively. As of November 30, 2005, the Company has accrued an additional $3,482 as an estimate of penalties and interest relating to this balance. Both of these amounts are included in accounts payable and accrued expenses. NOTE 5 - EQUITY TRANSACTIONS The Company has 10,000,000 shares of $0.001 par value preferred stock authorized. As of August 31, 2005, no rights or preferences have been designated and no preferred shares have been issued. During September 2004, the Company issued 550,000 shares of common stock for legal and advisory services rendered to the Company valued at $87,500. The value of the shares issued was determined to be $0.375 per share or $206,250. The excess of the value of the shares issued over the value of services received is $118,750 and has been recorded as a reduction of additional paid-in capital. During September 2004, the Company issued 200,000 shares of common stock for advisory services rendered to the Company. The value of the services was determined to be $281,250 or $0.375 per share. During September 2004, the Company issued 1,000,000 shares of common stock in satisfaction of accounts payable for accounting services of $50,000. The value of the shares was determined to be $0.375 per share or $375,000. The excess of the value of the shares issued over the value of the debt converted is $325,000 and has been recorded as a reduction of additional paid-in capital. During September 2004, the Company issued 400,000 shares for the conversion of a $125,000 promissory note. The value of the shares was determined to be $.313 per share. F/S-22 CANCER THERAPEUTICS, INCORPORATED Notes to the Financial Statements November 30, 2005 and 2004 (Unaudited) NOTE 6 - FINANCIAL INSTRUMENTS (Continued) Statement of Financial Accounting Standards No. 107 (SFAS 107), "Disclosures about Fair Value of Financial Instruments" requires disclosure of the fair value of financial instruments held by the Company. SFAS 107 defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. The following methods and assumptions were used to estimate fair value: The carrying amount of cash equivalents, accounts payable and accrued expenses approximate fair value due to their short-term nature. NOTE 7 - NOTES PAYABLE - RELATED PARTIES The Company has notes payable due to related parties consisting of the following:
November 30, 2005 ------------------ (Unaudited) Convertible note payable to a company, 8% interest, due May 1, 2004, unsecured, in default $ 110,000 Notes payable to an individual, 6% interest, due on demand, unsecured 104,944 Note payable to an individual, 9% interest, due on demand, unsecured 25,000 ------------------ Total Notes Payable - Related Parties 239,944 Less: Current Portion (239,944) ------------------- Long-Term Notes Payable - Related Parties $ - ===================
The convertible note payable indicated above is convertible, at the holders option, into shares of preferred stock at a rate equal to that of other purchasers of preferred stock. The note is currently in default. No preferred shares have been authorized or issued as of the date of these financial statements. For notes in default, the Company is currently in negotiations to extend the terms. There has been no action regarding foreclosure by the note holders. F/S-23 CANCER THERAPEUTICS, INCORPORATED Notes to the Financial Statements November 30, 2005 and 2004 (Unaudited) NOTE 8 - NOTES PAYABLE The Company has notes payable consisting of the following:
November 30, 2005 ------------------ Note payable to a bank, 6.0% interest, due December 31, 2005, secured by all tangible and intangible assets of the Company $ 50,000 ------------------ Total Notes Payable 50,000 Less: Current Portion (50,000) ------------------- Long-Term Notes Payable $ - ===================
NOTE 9 - CONTINGENCIES Food and Drug Administration ---------------------------- The Company is subject to extensive Federal laws and regulations. These laws, which are constantly changing, regulate various therapies through the Food and Drug Administration ("FDA"). However, the Company provides various cellular therapies for which regulations have been vague or nonexistent. Management continuously monitors activities of the FDA, particularly with regard to regulations concerning the use of autologous cells. Although management feels the Company is in compliance with existing FDA regulations, new regulations, if any, developed in the area of autologous cells, or differing interpretations of existing regulations by the FDA, could have a material effect on the Company's operations. Presently, such effect, if any, cannot be determined. Office Space ------------ The Company has been utilizing the offices of another, unrelated, entity. The Company has not been billed for nor has it paid rent for several years and believes that the rent is being donated as the building would otherwise be empty. It is estimated that the fair market value of this office space is approximately $900 per month. It is possible that the entity which owns the building may request monthly rental payments or even payment in arrears for the past occupancy. No amount has been accrued in the financial statements for this potential contingency. Unregistered Spin-Off --------------------- The Company has become aware that it may have been in violation of the Securities Act of 1933 (the "Act") due to its spin-off from Immune Complex Corporation ("ICC") during 2000 which was not registered under the Act. During the liquidation of the assets of ICC the shares of Cancer Therapeutics, Inc. ("CTI") (a then wholly-owned subsidiary of ICC) were distributed to the shareholders of ICC on a pro rata basis for a total of 447,688 shares. These spin-off shares were not registered under the Act. Management is currently evaluating this potential violation and its possible impacts which may include rescission of the spin-off of CTI from ICC by the shareholders and fair market value compensation to the F/S-24 CANCER THERAPEUTICS, INCORPORATED Notes to the Financial Statements November 30, 2005 and 2004 (Unaudited) NOTE 9 - CONTINGENCIES (Continued) shareholders. The Company's management and legal counsel believes that the potential liability could range from $0.03 to $0.05 per spin-out share or $13,431 to $22,384, respectively. No amount has been accrued in the financial statements for this potential loss due to the uncertainty of the outcome at the present time. NOTE 10 - COMMON STOCK WARRANTS During 2004 the Company issued warrants to purchase 1,300,000 shares of common stock (see Note 5). The following schedules summarize the changes during the year and the warrants issued and outstanding at May 31, 2005:
November 30, 2005 ----------------- Outstanding, May 31, 2005 1,300,000 Issued - ---------------- Outstanding, November 30, 2005 1,300,000 ================ Weighted average exercise price of warrants outstanding as of November 30, 2005 $ 0.019 ================
Outstanding Exercisable -------------------------------------------- ----------------------------- Weighted Average Weighted Weighted Number Remaining Average Number Average Outstanding Contractual Exercise Exercisable Exercise Exercise Prices at 11/30/05 Life (in Yrs.) Price at 11/30/05 Price --------------- ------------- --------------- ---------- ----------- ------------ $ 0.019 1,300,000 1.96 $ 0.019 1,300,000 $ 0.019 ============= =============== ========== =========== ============
NOTE 11 - GOING CONCERN CONSIDERATIONS The accompanying financial statements have been prepared using U.S. generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As reported in the financial statements, the Company has incurred losses of approximately $3,000,000 from inception of the Company through November 30, 2005. The Company's stockholders' deficit at November 30, 2005 was $525,015 and its current liabilities exceeded its current assets by the same amount. These factors combined raise substantial doubt about the Company's ability to continue as a going concern. Management's plans to address and alleviate these concerns are as follows: The Company's management is exploring all of its options so that it can develop successful operations and have sufficient funds, therefore, as to be able to operate over the next twelve months. As a part of this plan, management is currently seeking to transform into a publicly traded entity. Management believes that its business model has F/S-25 CANCER THERAPEUTICS, INCORPORATED Notes to the Financial Statements November 30, 2005 and 2004 (Unaudited) NOTE 11 - GOING CONCERN CONSIDERATIONS (Continued) significant potential as long as extra working capital is received through operations and/or business development. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of these uncertainties. F/S-26 - -------------------------------------------------------- ------------------------------------------------------- No dealer, salesperson or other person has been 1,000,000 Shares authorized to give any information or to make any representations other than those contained in this prospectus and, if given or made, such information or representations must not be relied upon as having been CANCER THERAPEUTICS, INC. authorized by us. This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any security other than the shares of common stock to which this prospectus relates, or any offer in any jurisdiction in which the person making such offer or Common Stock solicitation is not qualified to do so, or to any person to whom it is unlawful to make such offer or solicitation. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the business of ------------------- Cancer Therapeutics or that the information contained herein is correct as of any time subsequent to the PROSPECTUS date hereof. -------------------
TABLE OF CONTENTS Page PROSPECTUS SUMMARY...................................2 RISK FACTORS.........................................4 SECURITIES AND EXCHANGE COMMISSION'S PUBLIC REFERENCE.......................7 USE OF PROCEEDS......................................7 DETERMINATION OF OFFERING PRICE......................9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION.....................9 BUSINESS............................................12 DESCRIPTION OF PROPERTY.............................21 DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS....................................22 EXECUTIVE COMPENSATION..............................23 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........................................24 DIVIDEND POLICY.....................................25 MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS........................25 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...................26 DESCRIPTION OF SECURITIES...........................27 PLAN OF DISTRIBUTION................................28 INTEREST OF NAMED EXPERTS AND COUNSEL...............28 LEGAL PROCEEDINGS...................................29 ORGANIZATION WITHIN THE LAST FIVE YEARS.............30 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS........................................30 REPORTS TO SECURITY HOLDERS.........................30 FINANCIAL STATEMENTS................................31 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 102(b)(7) of the Delaware General Corporation Law allows a corporation to eliminate or limit the personal liability of a director to the corporation or its shareholders for monetary damages for breach of fiduciary duty except for:(i) any breach of the duty of loyalty to the corporation or its stockholders; (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) declaration of unlawful dividends or unlawful stock repurchases or redemptions; (iv) any transaction from which the director derived an improper benefit; or (v) any act or omission occurring prior to the date any such provision eliminating or limiting such liability became effective. Section 145(a) of the Delaware General Corporation Law provides that a corporation may indemnify an officer or director who is or is threatened to be made a party to a proceeding (other than an action by or in the right of the corporation) by reason of the fact that such officer or director is or was (i) serving as an officer, director, employee, or agent of the corporation, or (ii) served at the request of such corporation as an officer, director, employee, or agent of another corporation or other enterprise or entity. Such indemnification may only be made if the officer's or director's conduct was in good faith and in a manner such person reasonably believed to be in or not opposed to the corporation's best interests, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his conduct was unlawful. Section 145(c) of the Delaware General Corporation Law provides that a corporation shall indemnify an officer or director for his reasonable expenses in connection with the defense of any proceeding if the officer or director has been successful, on the merits or otherwise. Section 145(e) provides that a corporation may advance expenses to an officer or director who is made a party to a criminal or civil proceeding before a final disposition is made, if the corporation receives an undertaking by or on behalf of such officer or director to repay any amounts advanced if it is determined that such officer or director was not entitled to indemnification. Section 145(j) provides that the indemnification provisions of Section 145 continue for a person who has ceased to be an officer or director, and inures to the benefit of the heirs, executors, and administrators of such person. Section 145(g) provides that a corporation may purchase and maintain insurance on behalf of officers or directors, among others, against liabilities imposed upon them by reason of actions in their capacities as such, and whether or not the corporation would have the power to indemnify them against such liability under Section 145. CERTIFICATE OF INCORPORATION Article VI of our Certificate of Incorporation provides that the liability of directors to Cancer Therapeutics or its stockholders is eliminated to the fullest extent permitted under the Delaware General Corporation Law, as described in the preceding paragraphs. BYLAWS Article VI, Section 6.1(a) of our Bylaws provides that an officer or director who was or is made party to, or is threatened to be made a party to, or is involved in any proceeding by reason of the fact that he or she is or was an officer or director, or is or was serving at the request of Cancer Therapeutics as a director, officer, employee, or agent of another corporation, or as its representative in another enterprise shall be indemnified and held harmless to the fullest extent permitted and subject to the standards of conduct, procedures, and other requirements under Delaware law. Article, VI, Section 6.1(a) further provides that Cancer Therapeutics may purchase and maintain insurance on behalf of an officer or director against any liability arising out of their status as such, whether or not the corporation would have the power to indemnify such officer or director. Article VI, Section 6.1(b) of our Bylaws provides that the right of an officer or director to indemnification shall continue beyond termination and such right inures to the benefit of the heirs and personal representatives of such officer or director. 32 Article VI, Section 6.1(d) of our Bylaws provides that Cancer Therapeutics shall, from time to time, reimburse or advance to an officer or director the funds necessary for payment of expenses incurred in connection with defending any proceeding for which he or she is indemnified by Cancer Therapeutics, in advance of the final disposition of such proceeding, provided that, if then required by the Delaware General Corporation Law, such advancements may only be paid upon the receipt by the corporation of an undertaking by or on behalf of such officer or director to repay any such amount so advanced if it is ultimately determined by a final and unappealable judicial decision that the officer or director is not entitled to be indemnified for such expenses. ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth the costs and expenses, payable by us in connection with the sale of the securities being registered. All amounts are estimates except for the fees payable to the Commission. SEC Registration Fee.................................. $ 58.85 Printing and engraving expenses....................... 1,000.00 Legal fees and expenses............................... 90,000.00(1) Accounting fees and expenses.......................... 14,000.00 Blue Sky filing fees.................................. Nil Transfer Agent fees and expenses...................... 2,500.00 Miscellaneous......................................... 1,000.00 ------------------ Total........................... $108,558.85 ------------------ (1) Represents cash paid, as well as the number of shares of common stock received by our securities counsel, multiplied by $0.10 per share, which is the value per share estimated at the time of engagement. The value of the shares issued was determined to be $0.375 per share and is disclosed in the notes to the financial statements. ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES For the three year period ending April 30, 2004, we did not issue any securities of Cancer Therapeutics. On May 10, 2004, we issued 1,300,000 shares of our common stock in connection with the engagement of our corporate counsel, an "accredited investor" as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933. No solicitation was made and no underwriting discounts were given or paid in connection with this transaction. We believe that this transaction was exempt from the registration provisions of the Securities Act pursuant to Sections 3(a)(11) and 4(2) of such Act. On May 28, 2004, we issued and sold 200,000 shares of our common stock, together with a warrant to acquire 1,300,000 shares of our common stock at an aggregate purchase price of $25,000, to an accredited investor in exchange for $75,000 in cash proceeds. No solicitation was made and no underwriting discounts were given or paid in connection with this transaction. We believe that this transaction was exempt from the registration provisions of the Securities Act pursuant to Sections 3(a)11 and 4(2) of such Act. On September 10, 2004, we issued 400,000 shares of our common stock in satisfaction of amounts owed to our securities counsel in connection with an engagement dated July 20, 2004. Our securities counsel is an "accredited investor" as such term is defined in Rule 501 to Regulation D promulgated under the Securities Act of 1933. No solicitation was made and no underwriting discounts were given or paid in connection with this transaction. We believe that this transaction was exempt from the registration provisions of the Securities Act pursuant to Sections 3(a)(11) and 4(2) of such Act. On September 10, 2004, we issued 1,000,000 shares of our common stock in satisfaction of amounts owed to our Chief Financial Officer in connection with an engagement dated May 15, 2004. Our Chief Financial Officer is an "accredited investor" as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933. No solicitation was made and no underwriting discounts were given or paid in connection with this 33 transaction. We believe that this transaction was exempt from the registration provisions of the Securities Act pursuant to Sections 3(a)(11) and 4(2) of such Act. On September 15, 2004, we issued 400,000 shares of our common stock pursuant to the conversion of a promissory note issued by Cancer Therapeutics in 2001 to an accredited investor. No solicitation was made and no underwriting discounts were given or paid in connection with this transaction. We believe that this transaction was exempt from the registration provisions of the Securities Act of 1933 pursuant to Sections 3(a)(11) and 4(2) of such Act. On September 20, 2004, we issued 200,000 shares of our common stock in satisfaction of amounts owed to an accredited investor for healthcare advisory services rendered to Cancer Therapeutics pursuant an advisory agreement dated January 8, 2001. No solicitation was made and no underwriting discounts were given or paid in connection with this transaction. We believe that this transaction was exempt from the registration provisions of the Securities Act pursuant to Sections 3(a)(11) and 4(2) of such Act. On September 20, 2004, we issued 150,000 shares of our common stock in connection with the execution of a financial advisory agreement with Industrial Management & Equity Limited., which is owned and controlled by Lyndon Gaborit, a citizen and resident of the United Kingdom. The securities were issued to LG Investment Trust, a trust formed for the benefit of immediate family members of Mr. Gaborit. No solicitation was made and no underwriting discounts were given or paid in connection with this transaction. We believe that this transaction was exempt from the registration provisions of the Securities Act pursuant to Section 4(2) of such Act and Rule 903 promulgated under the Act. 34 ITEM 27. EXHIBITS The following exhibits are filed as part of this Registration Statement
EXHIBIT NUMBER TITLE OF DOCUMENT ------ ----------------- 3.1 Certificate of Incorporation of Cancer Therapeutics, Inc., a Delaware corporation. 3.2 Bylaws of Cancer Therapeutics, Inc., a Delaware corporation. 4.1 Form of Common Stock Certificate. 5.1 Opinion of Kenneth I. Denos, P.C., Attorney at Law (including consent). 10.1 Warrant Issued to Healthcare Enterprise Group, Inc. 10.2 Engagement Agreement between the Registrant and John Thomas, Esq. 10.3 Accounting Services Agreement between the Registrant and Chene C. Gardner 10.4 Engagement Agreement between the Registrant and Kenneth I. Denos, P.C. 10.5 Advisory Agreement between the Registrant and Industrial Management & Equity Limited 10.6 Form of Subscription Agreement between Cancer Therapeutics and Investors 10.7 Escrow Agreement 10.8 Summary of Oral Agreement between the Registrant and Robert K. Oldham 10.9 Summary of Oral Agreement between the Registrant and Walter Lewko 10.10 Appointment Letter for Mike K. Low 10.11 Specimen Contract with John D. Archibold Memorial Hospital, Inc. 23.1 Consent of Bouwhuis, Morrill and Company, LLC. 23.2 Consent of Kenneth I. Denos, P.C. (Filed as part of Exhibit 5.1). 99.1 Other Documentation - Senate Bill 341 - ----------------
ITEM 28. UNDERTAKINGS Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers, and controlling persons of the registrant pursuant to any provisions or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by a controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. The undersigned registrant hereby undertakes that: 35 (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration Statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a new form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. POWER OF ATTORNEY Each person whose signature appears below hereby designates and appoints Chene Gardner, as his attorney-in-fact (the "Attorney-in-Fact") with full power to act alone, and to execute in the name and on behalf of each such person, individually in each capacity stated below, one or more amendments (including post-effective amendments) to this Registration Statement, which amendments may make such changes in this Registration Statement as the Attorney-in-Fact, deems appropriate, including any post-effective amendments, as well as any related registration statement (or amendment thereto) filed in reliance upon Rule 462(b) under the Securities Act of 1933, and to file each such amendment to this Registration Statement, together with all exhibits thereto and any and all documents in connection therewith with the U.S. Securities and Exchange Commission, hereby granting unto said Attorney-in-Fact and agents, and each of them, full power and authority to do and perform any and all acts and things requisite and necessary to be done in and about the premises as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said Attorney-in-Fact and agents, or either of them, may lawfully do or cause to be done by virtue hereof. SIGNATURES In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, in the city of Thomasville, state of Georgia, on February 7, 2006. CANCER THERAPEUTICS, INC. By: /s/ Robert Oldham ----------------------- Robert Oldham Chief Executive Officer In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated.
Signature Title Date --------- ----- ---- President, Chief Executive March 17, 2006 /s/ Robert Oldham Officer, and Director - ------------------------------ Robert Oldham (Principal Executive Officer) /s/ Michael Low Director March 17, 2006 - ------------------------------ Michael Low Chief Financial Officer and March 17, 2006 /s/ Chene Gardner Director (Principal Financial - ------------------------------ Chene Gardner and Accounting Officer)
36 EX-3.(I) 2 certificateinc.txt EXHIBIT 3.1 CERT OF INC. CERTIFICATE OF INCORPORATION OF Cancer Therapeutics, Inc. ARTICLE I. NAME The name of the corporation is Cancer Therapeutics, Inc. ARTICLE II. REGISTERED OFFICE The address of the Corporation's registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, in the County of New Castle, in the State of Delaware. The name of the registered agent at such address is The Corporation Trust Company. ARTICLE III. PURPOSE The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. ARTICLE IV. CAPITAL STOCK (a) Common. 100,000,000 shares of Common stock having a par value of $.001 per share; (b) Preferred. 10,000,000 shares of Preferred stock having a par value of $.001 per share and to be issued in such series and to have such rights, preferences, and designation as determined by the Board of Directors of the corporation ARTICLE V. BOARD OF DIRECTORS (a) Number. The number of directors constituting the entire Board shall be as fixed from time to time by vote of a majority of the entire Board, provided, however, that the number of directors shall not be reduced so as to shorten the term of any director at the time in office. (b) Vacancies. Vacancies on the Board shall be filled by the affirmative vote of the majority of the remaining directors, though less than a quorum of the Board, or by election at an annual meeting or at a special meeting of the stockholders called for that purpose. (c) Election. The election of directors need not be by written ballot. ARTICLE VI. BYLAWS In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter, amend or repeal the Bylaws of the Corporation. ARTICLE VII. LIABILITY To the fullest extent permitted by the Delaware General Corporation Law as the same exists or as may hereafter be amended, no director of the Corporation shall be personally liable to the Corporation or its stockholders for or with respect to any acts or omissions in the performance of his or her duties as a director of the Corporation. Any amendment or repeal of this Article VI will not eliminate or reduce the affect of any right or protection of a director of the Corporation existing immediately prior to such amendment or repeal. ARTICLE VIII. INCORPORATOR The name and mailing address of the incorporator is as follows: Kenneth I. Denos 11585 South State St. Suite 102 Draper, Utah 84020 I, the undersigned, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying, under penalties of perjury, that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 3rd day of August, 2004. /s/ Kenneth I. Denos ---------------------------- Kenneth I. Denos EX-3.(II) 3 bylaws.txt EXHIBIT 3.2 BYLAWS BYLAWS OF CANCER THERAPEUTICS, INC. Adopted by Resolution on August 12, 2004 BYLAWS OF Cancer Therapeutics, Inc. ARTICLE I Shareholders Section 1.1. Annual Meetings. An annual meeting of shareholders shall be held for the election of directors on such date, and at such time and place as the Board of Directors may, from time to time, determine. Any other proper business may be transacted at an annual meeting. If the annual meeting is not held on the date designated, it may be held as soon thereafter as convenient and shall be called the annual meeting. Section 1.2. Special Meetings. Special meetings of the shareholders, for any purpose or purposes, unless otherwise prescribed by the General Corporation Law of the State of Delaware, may be called by the President or the Board of Directors. The shareholders do not have the authority to call a special meeting of the shareholders. Section 1.3. Shareholder Proposals/Nominees. a. Shareholder Proposals. Shareholders seeking to place shareholder proposals on the agenda for a shareholders' meeting must (i) notify the Corporation of such proposal not less than 30 nor more than 60 days prior to the date of the meeting; provided, however, that if the Corporation provides shareholders with less than 40 days advance notice of the date of the meeting, the shareholder notice must be given no later than the close of business on the 10th day following the day the Corporation's notice was mailed or publicly disclosed. Such notice must provide the Corporation with adequate information regarding the proposal. b. Shareholder Director Nominees. Shareholders director nominations must (i) be in writing and contain adequate information about the nominee; and (ii) be received by the secretary of the Corporation not less than 30 nor more than 60 days prior to the date of the meeting at which Directors will be elected; provided, however, that if the Corporation provides shareholders with less than 40 days advance notice of the date of the meeting, the shareholder notice must be given no later than the close of business on the 10th day following the day the Corporation's notice was mailed or publicly disclosed. Section 1.4. Notice of Meetings. Whenever shareholders are required or permitted to take any action at a meeting, a written notice of the meeting will be given that states the place, date and hour of the meeting, and in the case of a special meeting, the purpose(s) for which the meeting is called. Unless otherwise provided by law, the Certificate of Incorporation or these Bylaws, the 1 written notice of any meeting will be given not less than ten nor more than sixty days before the date of the meeting to each shareholder entitled to vote at such meeting. If mailed, such notice will be deemed to be given when deposited in the United States mail, postage prepaid, directed to the shareholder at his or her address as it appears in the records of the Corporation. Section 1.5. Waiver of Notice. A shareholder may waive notice of any meeting; provided that a shareholder's attendance at a meeting shall constitute waiver of notice of such meeting, except when the shareholder attends a meeting for the express purpose of objecting to the transaction of any business to be transacted at the meeting, and not for the purpose of objecting to the purpose of the meeting. Section 1.6. Adjournments. Any meeting of shareholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business that might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, pursuant to Section 1.3, notice of the adjourned meeting will be given to each shareholder of record entitled to vote at the meeting. Section 1.7. Record Date. a. Determination of Record Date. For purposes of determining the number and identity of shareholders for any purpose, the Board of Directors may fix a date in advance as the record date for any such determination of shareholders, provided that the record date may not precede the date of the resolution fixing the record date. The record date may not be more than sixty days prior to the date that the particular action requiring the determination of shareholders is to occur. If to determine the shareholders entitled to notice of, or to vote at, a meeting of shareholders, the record date may not be fewer than ten days prior to the meeting. The record date for determining shareholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of shareholders of record entitled to notice of, or to vote at, a meeting of shareholders will apply to any adjournment of the meeting; provided that the Board of Directors may fix a new record date for the adjourned meeting. b. Failure to Fix Record Date. If the stock transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice or to vote, or to receive payment of a dividend, the date on which the notice is mailed or the Board of Directors resolution declaring the dividend is adopted, as the case may be, will be the record date for such determination of shareholders. Section 1.8 List of Shareholders Entitled to Vote. At least ten days before each meeting of shareholders, the officer or agent charged with 2 overseeing the stock transfer books of the Corporation will compile a complete list of the shareholders entitled to vote at such meeting, or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each. Such list will be kept on file at the Corporation's principal office for the ten days before the meeting and will be subject to the inspection of any shareholder during that ten day period during normal business hours for any purpose related to the meeting and during the meeting. Section 1.9. Quorum. Except as otherwise provided by law, the Certificate of Incorporation, or these Bylaws, a majority of the outstanding shares of the Corporation entitled to vote, represented in person or by proxy, will constitute a quorum at a meeting of shareholders. If less than a majority of the outstanding shares are represented at the meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. If a quorum is present or represented at such adjourned meeting, any business may be transacted that might have been transacted at the meeting as originally notified. The shareholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. Section 1.10. Voting. a. One Vote Per Share. Unless otherwise provided by the Certificate of Incorporation (or action of the Board of Directors as provided therein) or these Bylaws, each outstanding share entitled to vote will be entitled to one vote on each matter submitted to a vote at a meeting of shareholders. b. Required Vote. Article VIII of the Certificate of Incorporation provides for super-majority voting in certain circumstances. Except as set forth therein, or as provided in the General Corporation Law of the State of Delaware, a majority vote of those shares present and voting at a duly organized meeting will suffice to defeat or enact any proposal; provided that with respect to votes to elect directors, a plurality of the votes cast will be sufficient to elect. c. Shares Held By Other Than the Record Owner. Shares held by an administrator, executor, guardian or conservator may be voted by him or her, in person or by proxy, without the transfer of such shares into his or her name. Shares held in the name of a trustee may be voted by him or her, in person or by proxy, only if the shares are transferred into the trustee's name. Shares held in the name of, by or under the control of a receiver may be voted by the 3 receiver without transferring the shares into the receiver's name if authority to do so is evidenced in an order from the court that appointed the receiver. A shareholder whose shares are pledged shall be entitled to vote his or her shares until the shares are transferred into the name of the pledgee, and thereafter, the pledgee will be entitled to vote the shares so transferred. Shares belonging to the Corporation or held by it in a fiduciary capacity may not be voted, directly or indirectly, at any meeting, and will not be counted in determining the total number of outstanding shares at any given time. Section 1.11. Proxies. a. General. At all meetings of shareholders, a shareholder may vote by proxy. Proxies must be written, signed by the shareholder or by his or her duly authorized attorney-in-fact, and filed with the Secretary of the Corporation before or at the time of a meeting where a proxy is granted. No proxy is valid after six months from the date of its execution, unless otherwise provided in the proxy or coupled with an interest. b. Irrevocable Proxies. A proxy may be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. c. Revocation of a Proxy. A shareholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by delivering a proxy in accordance with applicable law bearing a later date to the Secretary of the Corporation. Section 1.12. Shareholder Action by Written Consent Without a Meeting. a. Action. Any action required to be taken at any annual or special meeting of shareholders of the Corporation, or any action that may be taken at any annual or special meeting of such shareholders may be taken without a meeting, without prior notice, and without a vote, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. b. Notice. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those shareholders who have not consented in writing. If the action which is consented to is such as would have required the filing of a certificate under any Section of the General Corporation Law of Delaware, if such action had been voted on by shareholders at a meeting thereof, then the certificate filed under such Section shall state, in lieu of any statement required by such Section concerning any vote of shareholders, that written notice and written consent have been given as provided in Section 228 of the General Corporation Law of Delaware. 4 ARTICLE II Board of Directors Section 2.1. Number, Qualifications. The Board of Directors shall consist of that number of directors as are set from time to time by the affirmative vote of a majority of the members of the Board of Directors. A director will hold office until his or her successor is elected and qualified. Directors need not be shareholders of the corporation. Section 2.2. Election; Resignation; Vacancies. The Board of Directors will initially consist of the persons designated by the Incorporator, and each director so elected will hold office until the first annual meeting of shareholders and until his or her successor is elected and qualified. At the first annual meeting of shareholders, the shareholders will elect directors to the Board of Directors. A director may resign at any time on written notice to the Corporation. Any vacancy occurring in the Board of Directors, whether by reason of death, resignation, removal, or an increase in the number of directors, may be filled by the affirmative vote of the majority of the remaining directors, though less than a quorum of the Board of Directors, or by election at an annual meeting or at a special meeting of the shareholders called for that purpose. A director elected to fill a vacancy will be elected for the unexpired term of his predecessor in office. Section 2.3. Regular Meetings. A regular meeting of the Board of Directors for the election of officers and the transaction of any other business that may properly come before the meeting shall be held immediately after, and at the same place as, each annual meeting of shareholders, if a quorum of directors is then present or as soon thereafter as may be convenient. Regular meetings of the Board of Directors may be held at such places within or without the State of Delaware and at such times as the Board of Directors may from time to time determine. The Board of Directors may provide, by resolution, the date, time and place for the holding of additional regular meetings without other notice than such resolution. Section 2.4. Special Meetings. Special meetings of the Board of Directors may be called by or at the request of the President or any director. The person(s) authorized to call special meetings of the Board of Directors may fix any place, within or without the State of Delaware, to hold a special meeting of the Board of Directors. Notice of a special meeting must be given to each director by the person(s) calling the meeting at least two days before the meeting. Section 2.5. Waiver of Notice. A director may waive notice of any meeting. A director's attendance at a meeting shall constitute waiver of notice of such meeting; provided that, when a director attends a meeting for the express purpose of objecting to the transaction of any business to be transacted at the meeting, the director will not be deemed to have waived notice of such meeting. 5 Section 2.6. Telephonic Meetings Permitted. Members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting thereof by means of telephonic conference, or similar communications equipment that permits all persons participating in the meeting to hear each other, and participation in a meeting pursuant to this Bylaw will constitute presence at such meeting. Section 2.7. Quorum. Vote Required for Action. At all meetings of the Board of Directors, a majority of the whole Board of Directors will constitute a quorum for the transaction of business. Unless required by the General Corporation Law of the State of Delaware, the Certificate of Incorporation or these Bylaws, the vote of a majority of the directors present at a meeting at which a quorum is present will be the act of the Board of Directors. If less than a majority is present at a meeting, a majority of the directors present may adjourn the meeting from time to time without further notice. Once a quorum has been established at a duly organized meeting, the Board of Directors may continue to transact corporate business until adjournment, notwithstanding the withdrawal of enough members to leave less than a quorum. Section 2.8. Payment of Expenses. By resolution of the Board of Directors, directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors. Directors may be paid also either a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. Such payment will not preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Section 2.9. Dissent to Corporate Action. A director who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless he or she (i) enters his or her dissent in the minutes of the meeting, (ii) files written dissent to such action with the Secretary of the meeting before adjournment, or (iii) expresses such dissent by written notice to the Secretary of the Corporation within one (1) day after the adjournment of the meeting. The right to dissent shall not apply to a director who voted in favor of such action. Section 2.10. Action by Written Consent. Any action required or permitted to be taken at a meeting of the Board of Directors may be taken without a meeting if all members of the Board of Directors sign a written consent with respect to such action. Such consent shall be filed with the minutes of proceedings of the Board of Directors. 6 ARTICLE III Committees Section 3.1. Committees. The Board of Directors may, by resolution passed by a majority of the whole Board of Directors, designate one or more committees, each to consist of one or more of the directors. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not constituting a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by the General Corporation Law of the State of Delaware and to the extent provided in the resolution of the Board of Directors, will have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it. Section 3.2. Committee Rules. Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter and repeal rules for the conduct of its business. In the absence of such rules, each committee will conduct its business pursuant to Article II of these Bylaws. ARTICLE IV Officers Section 4.1. Officers. The officers of the Corporation may be a President, Vice President, Secretary, and Treasurer. Other officers and assistant officers may be authorized and elected or appointed by the Board of Directors. An individual is permitted to hold more than one office. Section 4.2. Election. The officers of the Corporation will be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of the shareholders. If the election of officers is not held at such meeting, it will be held as soon thereafter as convenient. Each officer will hold office until his or her successor is duly elected and qualified, or until his or her death, resignation or removal. Section 4.3. Removal. Any officer, elected or appointed, may be removed by the Board of Directors, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Section 4.4. Vacancy. A vacancy in any office for any reason may be filled by majority vote of the Board of Directors, and any officer so elected will serve for the unexpired portion of the term of such office. 7 Section 4.5. President. The President presides at all meetings of the Board of Directors and of shareholders and has general charge and control over the affairs of the Corporation subject to the Board of Directors. The President signs or countersigns all certificates, contracts and other instruments of the Corporation as authorized by the Board of Directors and performs such other duties incident to the office or required by the Board of Directors. Section 4.6. Vice President. The Vice President exercises the functions of the President in the President's absence, and has such powers and duties as may be assigned to him or her from time to time by the Board of Directors. Section 4.7. Secretary. The Secretary issues all required notices for meetings of the Board of Directors and of the shareholders, keeps a record of the minutes of the proceedings of the meetings of the Board of Directors and of the shareholders, has charge of the Corporate Seal and the corporate books, and makes such reports and performs such other duties as are incident to the office or required by the Board of Directors. Section 4.8. Treasurer. The Treasurer has custody of all monies and securities of the Corporation, keeps regular books of account, disburses the funds of the Corporation, renders account to the Board of Directors of all transactions made on behalf of the Corporation and of the financial condition of the Corporation from time to time as the Board requires, and performs all duties incident to the office or properly required by the Board of Directors. Section 4.9. Additional Officers. The Corporation may have such additional officers as the Board of Directors deems necessary or appropriate including, without limitation, a Chairman of the Board, Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Assistant Vice Presidents, Assistant Secretaries and Assistant Treasurers. Each such officer shall perform those duties as determined or assigned by the Board of Directors. Section 4.10. Salaries. The salaries of all officers will be fixed by the Board of Directors, and may be changed from time to time by a majority vote of the Board of Directors 8 ARTICLE V Certificate of Shares Section 5.1. Certificates. The Corporation may issue certificates representing shares of the Corporation, which will be in the form determined by the Board of Directors, and will be signed by the President of the Corporation or any other officers permitted by law, certifying the number of shares owned by him or her in the Corporation. Any of or all the signatures on the certificate may be a facsimile. If any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon, a certificate ceases to hold that position before the certificate is issued, it may be issued by the Corporation with the same effect as if the officer, transfer agent or registrar continued to hold that position at the date of issue. Section 5.2. Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates. If a certificate is lost, stolen or destroyed, a new one may be issued on such terms and indemnity to the Corporation as the Board of Directors may prescribe. ARTICLE VI Indemnification of Directors and Officers Section 6.1. Directors. a. Right to Indemnification Insurance. Every person who was or is a party to, or is threatened to be made a party to, or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she, or a person of whom he is the legal representative, is or was a director or officer, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, or as its representative in another enterprise (an "Indemnitee"), shall be indemnified and held harmless by the Corporation to the fullest extent legally permissible under the laws of the State of Delaware against all judgments, fines, penalties, excise taxes, amounts paid in settlement and costs, charges and expenses (including attorneys' fees and disbursements) actually and reasonably incurred or suffered by him or her in connection therewith, subject to the standards of conduct, the procedures, and other applicable provisions of the General Corporation Law of the State of Delaware. Such right of indemnification is a contract right which may be enforced in any manner desired by such person. The Corporation may purchase and maintain insurance on behalf of an Indemnitee against any liability arising out of such status, whether or not the corporation would have the power to indemnify such person. b. Inurement. The right to indemnification shall inure whether or not the claim asserted is based on matters that predate the adoption of this Article VI, will continue as to an Indemnitee who has ceased to hold the position by virtue of which he or she was entitled to indemnification, and will inure to the benefit of his or her heirs and personal representatives. 9 c. Non-exclusivity of Rights. The right to indemnification and to the advancement of expenses conferred by this Section 6.1 are not exclusive of any other rights that an Indemnitee may have or acquire under any statute, bylaw, agreement, vote of shareholders or disinterested directors, this Certificate of Incorporation or otherwise. d. Advancement of Expenses. The Corporation shall, from time to time, reimburse or advance to any Indemnitee the funds necessary for payment of expenses, including attorneys' fees and disbursements, incurred in connection with defending any proceeding for which he or she is indemnified by the Corporation, in advance of the final disposition of such proceeding; provided that, if then required by the General Corporation Law of the State of Delaware, the expenses incurred by or on behalf of an Indemnitee may be paid in advance of the final disposition of a proceedings only upon receipt by the Corporation of an undertaking by or on behalf of such Indemnitee to repay any such amount so advanced if it is ultimately determined by a final and unappealable judicial decision that the Indemnitee is not entitled to be indemnified for such expenses. Section 6.2. Officers, Employees and Agents. The Board of Directors may, on behalf of the Corporation, grant indemnification to any officer, employee, agent or other individual to such extent and in such manner as the Board of Directors in its sole discretion may from time to time and at any time determine, in accordance with the General Corporation Law of the State of Delaware. ARTICLE VII General Provisions Section 7.1. Fiscal Year. The fiscal year of the Corporation will be fixed by the Board of Directors. Section 7.2. Amendments. These Bylaws may be amended or repealed or new Bylaws may be adopted (i) at any regular or special meeting of shareholders at which a quorum is present or represented, by the vote of the holders of a majority of the shares entitled to vote in the election of any directors, provided notice of the proposed alteration, amendment or repeal is contained in the notice of such meeting; or (ii) by affirmative vote of a majority of the Board of Directors at any regular or special meeting thereof. Section 7.3. Books and Records; Examination. Any records maintained by the corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or be in any form of information storage, provided that the records can be converted into clearly legible form within a reasonable time. The books and records of the Corporation may be kept outside of the State of Delaware. Except as may otherwise be provided by the General Corporation Law of the State of Delaware, the Board of Directors will have the power to determine from time to time whether and to what extent and at what times and places and under what conditions any of the accounts, records and books of the Corporation are to be open to the inspection of any shareholder. 10 Section 7.4. Dividends. Subject to the provisions, if any, of the General Corporation Law of Delaware and the Certificate of Incorporation, dividends on the capital shares of the Corporation may be declared by the Board of Directors at any regular or special meeting. Dividends may be paid in cash, in property or in shares of the capital stock. Before payment of any dividend, the Board of Directors may set aside out of any funds of the Corporation available for dividends such reserves for any purpose that the directors will think conducive to the interests of the Corporation. Section 7.5. Seal. The Corporation may or may not have a corporate seal, as may from time to time be determined by resolution of the Board of Directors. If a corporate seal is adopted, it will have inscribed thereon the name of the corporation and the words "Corporate Seal" and "Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced or by causing the word {SEAL}, in brackets, to appear where the seal is required to be impressed or affixed. 11 EX-4 4 stockcert.txt EXHIBIT 4.1 STOCK CERT [Stock Certificate Border Graphics] Number Shares [No. of Cert] [No. of Shares] Cancer Therapeutics, Inc. Incorporated Under the Laws of the State of Delaware 100,000,000 Common Shares Authorized, $001 Par Value THIS CERTIFIES THAT [Name of Shareholder] IS THE RECORD HOLDER OF [Number of Shares] transferable on the books of the Corporation in person or by duly authorized attorney upon surrender of this Certificate properly endorsed. IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed by its duly authorized officers and its Corporate Seal to be hereunto affixed this_____ day of ____________ A.D. ________. _____________________ President [Graphic of Corporate Seal] [Border Graphics] EX-5 5 attopinion.txt EXHIBIT 5.1 OPINION KID PC K E N N E T H I. D E N O S, P. C. 11585 SOUTH STATE #102 DRAPER, UTAH 84020 (801)619-1195 FAX:(801)816-2599 KDENOS@DENOSLAW.COM December 29, 2004 Board of Directors Cancer Therapeutics, Inc. 210 w. Hansell St. Thomasville, GA 31792 Re: Opinion and Consent of Counsel with respect to Registration Statement on Form SB-2 TO WHOM IT MAY CONCERN: You have requested the opinion and consent of this law firm, as counsel, with respect to the proposed issuance and public distribution of certain securities of Cancer Therapeutics, Inc. pursuant to the filing of a registration statement on Form SB-2 with the Securities and Exchange Commission. The proposed offering and public distribution relates to 1,000,000 shares of common stock, $.001 par value to be offered and sold to the public at a price of $.50 per share. It is our opinion that the shares of common stock will, when issued in accordance with the terms and conditions set forth in the registration statement, be legally issued, duly authorized, validly issued, fully paid and non-assessable shares of common stock of Cancer Therapeutics in accordance with the State of Delaware corporation laws, statutory provisions, all applicable provisions of the Delaware Constitution , and reported decisions interpreting those laws. We hereby consent to be named as counsel for Cancer Therapeutics in the registration statement and prospectus included therein. Sincerely yours, KENNETH I. DENOS, P.C. /s/ Kenneth I. Denos _______________________ Kenneth I. Denos KID:mf EX-10 6 warrant.txt EXHIBIT 10.1 WARRANT THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE STATE LAW AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR STATE LAW OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THE SECURITIES, SUCH OFFER, SALE, OR TRANSFER, PLEDGE, OR HYPOTHECATION IS IN COMPLIANCE THEREWITH. Void after 5:00 p.m., Pacific Standard Time on May 27, 2007 WARRANT This certifies that, for value received, Healthcare Enterprise Group, Inc., a Delaware corporation, or registered assigns (the "Holder"), is entitled to purchase at a price of ($0.00384615384615) per share (the "Exercise Price"), subject to the provisions of this Warrant, from Cancer Therapeutics, Incorporated, a Tennessee corporation (the "Company"), Six Million, Five Hundred Thousand (6,500,000) shares of the unregistered Common Stock of the Company. The shares of common stock issuable from the exercise of the Warrant are hereafter referred to as the "Warrant Stock". 1. Exercise of Warrant. This Warrant may be exercised in whole or in part at any time or from time to time on or after January 1, 2005, but not later than 5:00 p.m., Pacific Daylight Time, on May 27, 2007, or if such date is a day on which federal or state chartered banking institutions are authorized by law to close, then on the next succeeding day which shall not be such a day, by presentation and surrender thereof to the Company at its principal office, with the Purchase Form annexed hereto duly executed and accompanied by payment, in cash or by certified or official bank check, payable to the order of the Company, of the Exercise Price for the number of shares of Warrant Stock specified in such form, together with all taxes applicable upon such exercise. If this Warrant should be exercised in part only, the Company shall upon surrender of this Warrant for cancellation, execute and deliver a new Warrant of the same tenor evidencing the right of the Holder to purchase the balance of the shares of Warrant Stock purchasable hereunder upon the same terms and conditions as herein set forth. 2. Fractional Shares. No fractional shares or stock representing fractional shares shall be provided by the Company upon the exercise of this Warrant. In lieu of any fractional shares which would otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied by the fair market value of one share of the Warrant Stock on the date of exercise, as determined in good faith by the Company. 3. Transfer, Exchange, Assignment or Loss of Warrant. 1 3.1 This Warrant may not be assigned or transferred except as provided herein and in accordance with and subject to the provisions of the Securities Act of 1933 and the Rules and Regulations promulgated thereunder (said Act and such Rules and Regulations being hereinafter collectively referred to as the "Act"). Any purported transfer or assignment made other than in accordance with this Section 3 and Section 7 hereof shall be null and void and of no force and effect. 3.2 This Warrant may be transferred or assigned only with the written consent of the Company, which shall not be unreasonably withheld. In addition, this Warrant shall be transferable only upon the opinion of counsel satisfactory to the Company, which may be counsel to the Company, that (i) the transferee is a person to whom the Warrant may be legally transferred without registration under the Act; and (ii) such transfer will not violate any applicable law or governmental rule or regulation including, without limitation, any applicable federal or state securities law, as further referenced in Section 7 below. Prior to the transfer or assignment, the assignor or transferor shall reimburse the Company for its reasonable expenses, including attorneys' fees, incurred in connection with the transfer or assignment. 3.3 Any assignment permitted hereunder shall be made by surrender of this Warrant to the Company at its principal office with the Assignment Form annexed hereto duly executed and funds sufficient to pay any transfer tax. In such event the Company shall, without charge, execute and deliver a new Warrant in the name of the assignee named in such instrument of assignment and this Warrant shall promptly be cancelled. This Warrant may be divided or combined with other Warrants which carry the same rights upon presentation thereof at the principal office of the Company together with a written notice signed by the Holder thereof, specifying the names and denominations in which new Warrants are to be issued. The terms "Warrant" and "Warrants" as used herein includes any Warrants in substitution for or replacement of this Warrant, or into which this Warrant may be divided or exchanged. 3.4 Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this Warrant, if mutilated, the Company will execute and deliver a new Warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void. Any such new Warrant executed and delivered shall constitute an additional contractual obligation on the part of the Company, whether or not the Warrant so lost, stolen, destroyed or mutilated shall be at any time enforceable by anyone. 3.5 Each Holder of this Warrant, the shares of Warrant Stock issued hereunder or any other security issued or issuable upon the exercise of this Warrant shall indemnify and hold harmless the Company, its directors and officers, and each person, if any, who controls the Company, against any losses, claims, damages or liabilities, joint or several, to which the Company or any such director, officer or any such person may become subject under the Act or statute or common law, insofar as such losses, claims, damages or liabilities, or actions in respect thereof, arise out of or are based upon the disposition by such Holder of the Warrant, the shares of Warrant Stock acquired under the Warrant, or other such securities in violation of this Warrant. 4. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or equity, and the 2 rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein. 5. Demand Registration Rights. 5.1 Demand Registration. (a) If the Company shall receive, at any time during the two (2) year period commencing January 1, 2005, a written request from the Holder that the Company file a registration statement under the Act covering the registration of the Warrant Stock, then as soon as practicable thereafter, and subject to the limitations and restrictions contained in this Section 5, the Company shall use its reasonable best efforts to effect the registration of all of the shares of Warrant Stock which the Holder requests to be registered. (b) The Company is obligated to effect only one (1) demand registration pursuant to this Section 5. 5.2 Obligations of the Company. Whenever required under Section 5 to use its reasonable best efforts to effect the registration of any Warrant Stock, the Company shall do the following as expeditiously as possible: (a) Prepare and file with the SEC a registration statement with respect to such Warrant Stock and use its reasonable best efforts to cause such registration statement to become and remain effective. (b) Prepare and file with the SEC such amendments and supplements to such registration statements and the prospectus used in connection therewith to comply with the requirements of the Act. (c) Furnish to the Holder such number of copies of a prospectus (including a preliminary prospectus), in conformity with the requirements of the Act, and such other documents as the Holder may reasonably request in order to facilitate the disposition of the Warrant Stock to be sold under the registration statement. (d) Use its reasonable best efforts to register and qualify the securities covered by such registration statements under the securities laws of such states of the United States as shall be reasonably appropriate for the distribution of the securities covered by such registration statement. 5.3 Expenses of Registration. All expenses incurred in connection with any registration, qualification, or compliance pursuant to Section 5 of this Warrant shall be borne by the Company. 5.4 Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the SEC which may permit the sale of any outstanding shares to the public without registration, the Company agrees after any registration to use its best efforts to: 3 (a) make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times; and (b) file with the SEC in a timely manner all reports and other documents required of the Company under the Act and the Securities Exchange Act of 1934, as amended, as long as it is subject to such reporting requirements. 5.5 No Transfer of Registration Rights. The rights to cause the Company to register the Warrant Stock under this Warrant may not be assigned by the Holder without the written consent of the Company. 6. Adjustment of Exercise Price and Number of Shares. The number and kind of securities issuable upon the exercise of this Warrant and the Exercise Price of such securities shall be subject to adjustment from time to time upon the happening of certain events as follows: 6.1 Adjustment for Dividends in Stock. In case at any time or from time to time on or after the date hereof the holders of the Common Stock of the Company (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received, or, on or after the record date fixed for the determination of eligible stockholders, shall have become entitled to receive without payment therefor, other or additional stock of the Company by way of dividend, then and in each case, the Holder of this Warrant shall, upon the exercise hereof be entitled to receive, in addition to the number of shares of Warrant Stock receivable thereupon, and without payment of any additional consideration therefor, the amount of such other or additional stock of Company which such Holder would hold on the date of such exercise had it been the holder of record of such shares of Warrant Stock on the date hereof and had thereafter, during the period from the date hereof to and including the additional stock receivable by it as aforesaid during such period, giving effect to all adjustments called for during such period by paragraphs (a) and (b) of this Section 6. 6.2 Adjustment for Reclassification, Reorganization or Merger. In case of any reclassification or change of the outstanding securities of the Company or of any reorganization of the Company (or any other corporation the stock or securities of which are at the time receivable upon the exercise of this Warrant) on or after the date hereof, or in case, after such date, the Company (or any such other corporation) shall merge with or into another corporation or convey all or substantially all of its assets to another corporation, then and in each such case the Holder of this Warrant, upon the exercise hereof at any time after the consummation of such reclassification, change, reorganization, merger or conveyance, shall be entitled to receive, in lieu of the stock or other securities and property receivable upon the exercise hereof prior to such consummation, the stock or other securities or property which such Holder would have been entitled upon such consummation if such Holder had exercised this Warrant immediately prior thereto. In each such case, the terms of this Section 6 shall be applicable to the shares of stock or other securities properly receivable upon the exercise of this Warrant after such consummation. 6.3 Stock Splits and Reverse Stock Splits. If at any time on or after the date hereof the Company shall subdivide its outstanding shares of Warrant Stock into a greater number of shares, the Exercise Price in effect immediately prior 4 to such subdivision shall thereby be proportionately reduced and the number of shares of Warrant Stock receivable upon exercise of the Warrant shall thereby be proportionately increased; and, conversely, if at any time on or after the date hereof the outstanding number of shares of Warrant Stock shall be combined into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall thereby be proportionately increased and the number of shares of Warrant Stock receivable upon exercise of the Warrant shall thereby be proportionately decreased. 7. Transfer to Comply with the Securities Act of 1933. 7.1 Unless registered under the Act pursuant to Section 5 herein, this Warrant and the shares of Warrant Stock issued hereunder or any other security issued or issuable upon exercise of this Warrant may not be sold, transferred or otherwise disposed of, except to a person who, in the opinion of counsel reasonably satisfactory to the Company, is a person to whom this Warrant or such shares of Warrant Stock may legally be transferred pursuant to Section 3 hereof without registration and without the delivery of a current prospectus under the Act with respect thereto and then only against receipt of an agreement of such person to comply with the provision of this Section 7 with respect to any resale or other disposition of such securities unless, in the opinion of such counsel, such agreement is not required. 7.2 Unless registered under the Act pursuant to Section 5 herein, the Company may cause the following legend to be set forth on each certificate representing shares of Warrant Stock acquired under this Warrant or any other security issued or issuable upon exercise of this Warrant, unless counsel for the Company is of the opinion as to any such certificate that such legend is unnecessary: THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE STATE LAW AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR STATE LAW OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THE SECURITIES, SUCH OFFER, SALE, OR TRANSFER, PLEDGE, OR HYPOTHECATION IS IN COMPLIANCE THEREWITH. 7.3 Governing Law. This Warrant shall be governed by, and construed in accordance with, the laws of the State of California excluding that body of law pertaining to conflicts of law. 7.4 Notice. Notices and other communications to be given to the Holder of the Warrants evidenced by this certificate shall be delivered by hand or mailed, postage prepaid, to or such other address as the Holder shall have designated by written notice to the Company as provided herein. Notices or other communications to the Company shall be deemed to have been sufficiently given if delivered by hand or mailed postage prepaid to the Company at 412 Chelsa Cove, Franklin, Tennessee 37064, attn: Robert K. Oldham, or such other address as the Company shall have designated by written notice to such registered owner as herein provided. Notice by mail shall be deemed given when deposited in the United States mail, postage prepaid, as herein provided. 5 [CONTINUED ON NEXT PAGE] 6 IN WITNESS WHEREOF, the authorized officer of the Company has executed this Warrant to be effective as of the date first set forth above. Cancer Therapeutics, Incorporated a Tennessee corporation By: _________________________________________ Robert K. Oldham, President 7 PURCHASE FORM The undersigned hereby irrevocably elects to exercise the within Warrant to the extent of purchasing _________ shares of Warrant Stock, and hereby makes payment of $________ in payment of the actual exercise price thereof. ___________________________________ Signature ________________________________________________________________________________ ASSIGNMENT FORM FOR VALUE RECEIVED, _______________________ hereby sells, assigns and transfers (please type or print) unto __________________________________________________________________________ (please type or print) _______________________________________________________________________________ (address) the right to purchase shares of Warrant Stock represented by this Warrant to the extent of __________ shares as to which such right is exercisable, and does hereby irrevocably constitute and appoint the Company and/or its transfer agent as attorney to transfer the same on the books of the Company with full power of substitution in the premises. _________________________________ Signature 8 EX-10 7 jdt_engagement.txt EXHIBIT 10.2 ENGAGEMENT JOHN THOMAS John D. Thomas Attorney 887 W. Vahe St. Draper, Utah 84020 801-414-5383 Licensed in Texas and Utah May 10, 2004 Attn Robert Oldham Cancer Therapeutics 210 W. Hansell St. Thomasville, GA 31792 Re:Engagement as General Counsel Dear Mr. Oldham: Thank you for engaging me as general counsel for Cancer Therapeutics, Incorporated ("CTI"). The purpose of this letter is to set forth the duties and responsibilities of John D. Thomas ("JDT") (hereafter, the "Engagement"). Please review this letter carefully and, if it meets with your approval, please sign the enclosed copy of this letter and return it to me at the above address. 1. Services and Scope of Engagement JDT's Engagement is limited to the Following: i. Providing general corporate legal services; ii. Reviewing, drafting and editing contracts; iii. Assisting with various limited governmental filings; and iv. Other tasks directly related to legal issues of CTI. JDT's acceptance of this Engagement does not involve an undertaking to represent your interests in any other matter. 2. Fees for Professional Services. CTI agrees to pay JDT 6,500,000 shares of CTI's common stock upon execution of this Agreement. 3. Termination & Withdrawal (a) Termination. You may terminate JDT's representation at any time by notifying the undersigned. Your termination of our services will not affect your responsibility for the payment of fees as set forth herein. If such termination occurs, your papers and property will be returned to you promptly upon receipt of payment for outstanding fees and costs. (b) Withdrawal I may withdraw from representation if you fail to fulfill your obligations under this Engagement, or as permitted or required under any applicable law, standard of professional conduct or rule of court, or upon our reasonable notice to you. Once again, thank you for selecting me to represent your company. Please call me if you have any questions. Very truly yours, /s/ John D.Thonmas ___________________ John D. Thomas Agreed and accepted: Cancer Therapeutics, Incorporated By:/s/ Robert Oldham _________________________________ Robert Oldham President EX-10 8 cgagmt.txt EXHIBIT 10.3 AGREEMENT CHENE GARDNER SERVICES AGREEMENT THIS SERVICES AGREEMENT (the "Agreement") is made and entered into this 15th day of May, 2004, by and between CANCER THERAPEUTICS, INCORPORATED, a Tennessee corporation ("CTI"), and Chene Gardner, an individual residing in South Ogden, Utah ("CG"), collectively referred to hereinafter as the "Parties" or individually as a "Party." R E C I T A L S ----------- CTI desires to engage CG, and CG desires to accept such engagement from CTI, to perform various financial and accounting services in accordance with generally accepted accounting principles (the "Services"), including, but not limited to, preparing financial statements for the years 2002 and 2003, forecasting and working with auditors for and on behalf of CTI. This Agreement contains the entire understandings between the Parties concerning the subject matter hereof, and all other agreements, understandings and documents are hereby merged into this Agreement and made a part hereof. NOW THEREFORE, In consideration of the foregoing premises and the mutual covenants contained herein, the Parties hereto agree as follows: A G R E E M E N T -------------- 1. TERM. This Agreement shall commence on the Effective Date and may be terminated by either Party at any time with thirty (30) days' written notice to the other Party of the intent to terminate. Upon the termination of this Agreement, all obligations of the Parties shall cease, except that the provisions of this Agreement contained in Sections 8 and 9 shall continue in effect. 2. SERVICES. 2.1. During the term of this Agreement, CG agrees to provide the Services as requested by CTI on a continuous basis and in accordance with accepted industry practices and guidelines and all applicable federal, state and local laws, rules and regulations. CG also agrees to provide the Services pursuant to the guidelines and requirements promulgated by CTI from time to time and provided to CG by CTI. 2.2. During the term of this Agreement, CTI understands, agrees and acknowledges that by performing the Services for and on behalf of CTI, CG: (a) is not providing any legal or tax advice to CTI or any other person; (b) is acting as an independent contractor to provide the Services, and that no employment, partnership, joint venture, or fiduciary relationship has been created by this Agreement; (c) is not responsible for advising CTI in respect of any applicable laws and regulations, and CTI will undertake to obtain appropriate advice in respect of all other laws and regulations which may be applicable in any relevant jurisdiction and promptly to communicate that advice to CG insofar as the same is relevant to the performance by CG of the Services; and (d) will not incur any liability to CTI in respect of any breach of applicable laws or regulations where CG has acted in good faith in the absence of or in accordance with such advice. 1 3. FEES AND EXPENSES. 3.1. FEES. In exchange for his Services under this Agreement, CG shall receive from CTI a non-refundable fee in the amount of Fifty Thousand Dollars and No Cents ($ 50,000.00), payable as of the Effective Date of this Agreement. 3.2. EXPENSES. Unless otherwise specified in writing, CG shall be responsible for all expenses incurred while performing services under this Agreement. This includes license fees, memberships and dues; general automobile and other travel expenses; meals and entertainment; insurance premiums; and all salary expenses and other compensation paid to employees or contract personnel CG hires to complete the work under this Agreement, unless approved by CTI in advance. Notwithstanding the above, CTI will reimburse CG for documented, out-of-pocket expenses incurred in connection with the Services performed by CG under this Agreement. 4. OBLIGATIONS OF CTI. 4.1. Information. CTI will provide CG with all material information relevant in his performance of the Services under this Agreement. CTI will ensure that information so supplied is true and accurate in all material respects and is not misleading, whether by omission or otherwise. 4.2. Authorization. CTI confirms and undertakes that it has all necessary powers and has obtained or will obtain all necessary authorizations, consents and approvals, including from the board of directors of CTI, validly and lawfully required to enter into this Agreement. The entering into of this Agreement does not violate the Bylaws of CTI or any other agreement. 4.3. Accuracy. In performing his services hereunder, CG shall be entitled to assume the accuracy and completeness of all financial and other information that may be furnished to CG by CTI and CG will not be responsible for independently verifying the accuracy and completeness of such information, and CTI will review all materials prepared by CG for factual accuracy. 5. OBLIGATIONS OF CG. 5.1. Licenses and Education. CG shall be responsible for obtaining and maintaining his professional licenses, and/or certifications, if any, and obtaining any continuing education or certification that is required or is prudent to remain current and knowledgeable in his field. 5.2. Federal and State Taxes. CG shall pay all taxes incurred while performing the Services under this Agreement, including all applicable income taxes and self-employment (social security) taxes. Upon demand, CG shall provide CTI with proof that such payments have been made. 5.3. No Conflicts. CG hereby represents that, to the best of his knowledge and belief, the performance by CG of all of the terms of this Agreement and work as an independent contractor for CTI does not breach any oral or written agreement which CG has made prior to the Effective Date of this Agreement. 6. INDEPENDENT CONTRACTOR STATUS. CG is an independent contractor, not an employee of CTI. Any employee or contract personnel employed or hired by CG to complete the work under this Agreement are not employees of CTI. CG and CTI agree to the following terms and conditions consistent with an independent contractor relationship: 6.1. This Agreement is non-exclusive, and CG has the right to perform services for others during the term of this Agreement, provided such services are not in conflict with the Services to be performed by CG under this Agreement; 6.2. CG has the sole right to control and direct the means, manner and method by which the Services will be performed; 2 6.3. CG has the right to perform the Services at any place, location or time; 6.4. CG will furnish all equipment and materials used to provide the Services; 6.5. CG has the right to hire assistants as subcontractors, or to use employees to provide the Services, without the approval of CTI; 6.6. Neither CG nor any employee or contract personnel employed or hired by CG shall receive any training from CTI in the skills necessary to perform the Services; and 6.7. CTI shall not require CG or any employee or contract personnel employed or hired by CG to devote full time to performing the Services. 7. BENEFITS. 7.1. Fringe Benefits. CG understands that neither CG nor any employee or contract personnel employed or hired by CG are eligible to participate in any employee pension, health, vacation pay, sick pay or other fringe benefit plan of CTI. 7.2. Workers' Compensation. CTI shall not obtain workers' compensation insurance on behalf of CG or any employee or contracted personnel employed or hired by CG. If CG hires employees to perform any Service under this Agreement, CG will cover them with workers' compensation insurance and provide CTI with a certificate of workers' compensation insurance before the employees begin the work. 7.3. Unemployment Compensation. CTI shall make no state or federal unemployment compensation payments on behalf of CG any employee or contract personnel employed or hired by CG. CG will not be entitled to these benefits in connection with the Services performed under this Agreement. 7.4. Insurance. CTI shall not provide any insurance coverage of any kind for CG or any employee or contract personnel employed or hired by CG. 8. CONFIDENTIAL INFORMATION. CG acknowledges that during the term of this Agreement, CG will develop, discover, have access to, and become acquainted with technical, financial, marketing, personnel, and other information relating to the present or contemplated products or the conduct of business of CTI which is of a confidential and proprietary nature (the "Confidential Information"). CG agrees that all files, records, documents, and the like relating to such Confidential Information, whether prepared by him or otherwise coming into his possession, shall remain the exclusive property of CTI, and CG hereby agrees to promptly disclose such Confidential Information to CTI upon request and hereby assigns to CTI any rights which CG may acquire in any Confidential Information. CG further agrees not to disclose or use any Confidential Information and to use his best efforts to prevent the disclosure or use of any Confidential Information either during the term of this Agreement or at any time thereafter, except as may be necessary in the ordinary course of performing the Services under this Agreement. Upon termination of this Agreement for any reason, CG shall promptly deliver to CTI all materials, documents, data, equipment, and other physical property of any nature containing or pertaining to any Confidential Information, and CG shall not take from CTI, without its prior written consent, any such material or equipment or any reproduction thereof. 9. INDMENITY. CTI hereby agrees to indemnify and hold harmless CG, its agents, representatives, employees, partners and independent contractors for any losses, damages or expenses that may be incurred by CG or such other parties as a result of any breach of any covenant, agreement, representation or warranty made hereunder or any other loss, damage or expenses incurred by CG or such other parties resulting from the acts or actions of CTI under this Agreement. CG hereby agrees to indemnify and hold harmless CTI, its agents, representatives, employees and independent contractors for any losses, damages or expenses that may be incurred by CTI or such other parties as a result of any breach of any covenant, agreement, representation or warranty made under this Agreement by CG in connection herewith. 3 10. MISCELLANEOUS. 10.1. Waiver. Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition. No waiver by any party of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of this Agreement on any future occasion. All remedies, either under this Agreement or by law or otherwise afforded, will be cumulative and not alternative. 10.2. Amendment. This Agreement shall not be amended or modified, nor rights hereunder waived, except by writing, signed by both Parties. 10.3. No Third Party Beneficiary. The terms and provisions of this Agreement are intended solely for the benefit of each Party hereto and their respective successors or permitted assigns, and it is not the intention of the parties hereto to confer third-party beneficiary rights upon any person. 10.4. Invalid Provisions. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of any Party hereto under this Agreement will not be materially and adversely affected thereby, (a) such provision will be full severable, (b) this Agreement will be constituted and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible. 10.5. Counterparts. This Agreement nay be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The Parties acknowledge that the persons named below have the requisite authority to execute this Agreement and bind their respective principals. 10.6. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Utah without regard to the conflict of laws. The Parties further agree that proper venue and jurisdiction for any dispute under this agreement shall be the courts in the State of Utah 10.7. Notices. All notices, demands to other communications to be given under or by reason of the Agreement shall be in writing and shall be deemed to have been received when delivered personally, or when transmitted by facsimile or by overnight delivery service, addressed as follows: If to CG: Chene Gardner 11585 S. State Street, Suite 102 Draper, Utah 84020 If to CTI: Cancer Therapeutics, Incorporated Attention: Robert Oldham 412 Chelsa Cove Franklin, Tennessee 37064 Either Party hereto may change its address for notices, demands and other communications hereunder by giving notices of such change to the other party in accordance with this Section 10.7. 4 10.8. Assignment; Binding Effect. This Agreement may not be assigned by either Party without the prior written consent of the other. This Agreement shall bind the Parties hereto and their assigns and successors in interest. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed as of the date set forth above. "CG" /s/ Chene Gardner ______________________________ Chene Gardner "CTI" Cancer Therapeutics, Incorporated /s/ Robert Oldham _______________________________ Robert Oldham, President EX-10 9 kid_engagement.txt EXHIBIT 10.4 ENGAGEMENT KID PC K E N N E T H I. D E N O S, P. C. 11585 SOUTH STATE ST. SUITE #102 SALT LAKE CITY, UTAH 84 020 (801) 816-2511 FAX: (801) 816-2599 KDENOS@DENOSLAW.COM July 14, 2004 Attn Robert Oldham Cancer Therapeutics 210 W. Hansell St. Thomasville, GA 31792 Re:Engagement of Cancer Therapeutics, Incorporated Dear Bob: Thank you for selecting Kenneth I. Denos, P.C., a Utah professional corporation ("KIDPC"), to represent Cancer Therapeutics, Incorporated (the "Company") in connection with the preparation of the Company's SB-2 filing. The purpose of this letter is to set forth the terms of such representation (hereafter, the "Engagement"). Please review this letter carefully and, if it meets with your approval, please sign the enclosed copy of this letter and return it to me at the above address. 1. Services and Scope of Engagement KIDPC's Engagement is limited to the Following: 1.1 Drafting an SB-2 Registration Statement; 1.2 Answering any comments from the SEC. KIDPC's acceptance of this Engagement does not involve an undertaking to represent the Company or your interests in any other matter. 2. Fees for Professional Services. 2.1 $100,000 for drafting and filing the SB-2 with the SEC. 2.2 $50,000 for the successful listing of the Company as a Bulletin Board Company. 3. Payment $100,000 shall be paid by the Company upon filing the SB-2 with the SEC. $50,000 shall be paid by the Company to KIDPC upon successful listing of the Company. 4. Representations & Warranties of the Company In connection with the Engagement, Robert Oldham, on behalf of the Company, makes the following representations and confirms to the best of his knowledge and belief, the following: Cancer Therapeutics, Incorporated Page 2 (a) The financial statements of the Company for the twenty-four (24) months prior to this Engagement have been presented in accordance with generally accepted accounting principles applied on a consistent basis. There have been no significant changes in the nature or volume of the Company's business. (b) All shares of the Company's capital stock issued and outstanding have been authorized by the Company's board of directors, and are fully paid and are non-accessible shares. (c) All shares of the Company's capital stock issued and outstanding were issued for services rendered to the Company and without cash consideration. Therefore, no cash has been presented to the Company and no subscription documents have ever been submitted to the Company. (d) The Company has made available to KIDPC all financial records and related data and minutes of the meetings of stockholders, directors and committees of directors, or summaries of actions of recent meetings for which minutes have not yet been prepared. (e) There has been no: (i) Fraud involving management or employees, the result of which have a material effect on the business, results of operations, or financial condition of the Company; or (ii) Communications from regulatory agencies concerning noncompliance with, or deficiencies in, operational or financial reporting practices that could have a material effect business, results of operations, or financial condition of the Company. (f) The Company has no plans or intentions that may materially affect the carrying value or classification of assets. (g) The following have been properly recorded and/or disclosed in the Company's financial statements and in reports required to be filed with U.S. federal and state regulatory agencies: (i) Related party transactions and related amounts receivable or payable including sales, purchases, loans, transfers, leasing arrangements and guarantees, all of which have been recorded in accordance with the economic substance of the transactions; (ii) All material contracts and agreements affecting the Company, its business, operations, or financial condition; (iii)Capital stock repurchase options or agreements or capital stock reserved for options, warrants, conversions or other requirements; or (iv) Concentrations of credit risk. (h) There are no unasserted claims or assessments against the Company or its officers or directors that are probable of assertion that have not been disclosed in the Company's prior reports filed with the Securities and Exchange Commission. (i) The Company has satisfactory title to all owned assets. (j) The Company has complied with all aspects of contractual agreements that would have a material effect on the interim financial information in the event of noncompliance. Cancer Therapeutics, Incorporated Page 3 (k) The Company has provided to KIDPC all information necessary or relevant to the Engagement and such information does not contain any untrue fact or omit to state a material fact necessary in order to make the information provided, in light of the circumstances in which such information has been provided and will be presented to the public in the course of the Engagement, not misleading. 5. Termination & Withdrawal (a) Termination. The Company may terminate KIDPC's representation at any time by notifying the undersigned. Your termination of our services will not affect the Company's responsibility for the payment of fees as set forth herein. If such termination occurs, the Company's papers and property will be returned to the Company promptly upon receipt of payment for outstanding fees and costs. Our own files, including lawyer work product, pertaining to the matter will be retained. (b) Withdrawal We may withdraw from representation if you fail to fulfill your obligations under this Engagement, or as permitted or required under any applicable law, standard of professional conduct or rule of court, or upon our reasonable notice to you. 6. Arbitration Although we do not expect that any dispute between us will arise, in the event of any dispute under this Engagement, including a dispute regarding the amount of fees or the quality of our services, such dispute shall be determined by binding arbitration under the Commercial Arbitration Rules of the American Arbitration Association by one arbitrator appointed in accordance with said rules. Any such Arbitration shall be held in Salt Lake City, Utah. The arbitrator shall have the discretion to order that the costs of arbitration, including fees, other costs and reasonable attorney's fees shall be borne by the losing party. By agreeing to this provision both the Company and KIDPC waive the right to a trial by jury or to a judge. You may wish to seek the advice of independent counsel of your choosing before agreeing to this provision. Once again, thank you for selecting Kenneth I. Denos, P.C. to represent the Company in this matter. Please call me if you have any questions. Very truly yours, KENNETH I. DENOS, P.C. /s/ Kenneth I. Denos _____________________ Kenneth I. Denos President Cancer Therapeutics, Incorporated Page 4 Agreed and accepted: Cancer Therapeutics, Incorporated /s/ Robert Oldham _____________________________ Robert Oldham President EX-10 10 industmgmt.txt EXHIBIT 10.5 AGREEMENT INDUSTRIAL MANAGEMENT Industrial Management & Equity Limited 28 Welbeck Street, London W1G 8EW Tel: 020 7224 5091 Fax: 020 7224 5093 20 September 2004 Robert Oldham President Cancer Therapeutics Inc. 210 W. Hansell St. Thomasville, GA 31792 Dear Mr. Oldham, You are hereby authorised and directed to issue shares of Cancer Therapeutics, Inc. ("the Company") which are required to be issued pursuant to that certain agreement between the Company and Industrial Management & Equity Limited and its nominated affiliates ("Industrial Management") dated 20 September 2004, to a trust of which Lyndon Gaborit and/or his family members are the beneficiaries, or to such other nominee as may be designated by Industrial Management. Yours sincerely, /s/ Lyndon Gaborit ____________________ Lyndon Gaborit Managing Director of Industrial Management & Equity Limited Incorporated in the U.K. Company No. 2565051 VAT registration No. 577 3156 17-Registered office 1 Lumley St. Mayfair W1Y 2NB E-mail: LGaborit@aol.com 2 We hereby agree to observe and be bound by the engagement and terms and conditions of Industrial Management as set out in the attachment. /s/ Robert Oldham September 20, 2004 _________________________ __________________ Signed Date Robert Oldham Cancer Therapeutics, Inc. Duly authorised for and on behalf of Cancer Therapeutics Inc. Incorporated in the U.K. Company No. 2565051 VAT registration No. 577 3156 17-Registered office 1 Lumley St. Mayfair W1Y 2NB E-mail: LGaborit@aol.com 3 Industrial Management & EquityLimited 28 Welbeck Street, London W1G 8EW Tel: 020 7224 5091 Fax: 020 7224 5093 20 September 2004 Robert K. Oldham, M.D. Chief Executive Officer Cancer Therapeutics, Inc. 210 West Hansell Street Thomasville, Georgia 31792 Dear Dr. Oldham, Further to our recent discussions, I am writing to agree formally the terms and conditions upon which Industrial Management & Equity Limited and its nominated affiliates ("Industrial Management") would act as strategic adviser to Cancer Therapeutics, Inc. ("the Company") in relation to various business development and advisory services described below ("the Proposed Transaction"). 1. Engagement The Company hereby engages Industrial Management, and Industrial Management agrees to act, as the Company's strategic adviser in relation to gathering market intelligence regarding the Proposed Transaction. Industrial Management will identify and introduce suitable potential customers, suppliers, joint venture partners, or acquisition/merger opportunities for the Company In carrying out the assignment, Industrial Management will expect its responsibilities to include (but not necessarily be limited to) the following services: a) Survey the UK and European market, and maintain a watching brief, to ascertain what opportunities might be advanced on the Company's behalf to establish a commercial presence in Europe, b) Conduct specific negotiations with potential customers, suppliers, or strategic partners either nominated or approved by the Company, c) Industrial Management will take purely an introductory role in relation to any such transaction and would not advise the Company in relation to the details of any transaction, apart from general strategic advice in relation to the Proposed Transaction should it be authorised to proceed by the Company, including strategy, tactics, timing, and the approach to be adopted in negotiations; d) Acting at all times in accordance with the Company's reasonable instructions; and e) Such other advice and assistance as the Company may reasonably request in relation to the Proposed Transaction. Incorporated in the U.K. Company No. 2565051 VAT registration No. 577 3156 17-Registered office 1 Lumley St. Mayfair W1Y 2NB E-mail: LGaborit@aol.com 4 2. Fees and Expenses In consideration of the provision of the services referred to in paragraph 1 above, the Company agrees that it will pay Industrial Management the following: a) One Hundred Fifty Thousand (150,000) shares of its common stock; b) The Company shall reimburse all reasonable out of pocket expenses incurred by Industrial Management in relation to the Proposed Transaction, such as all travel, hotel accommodation costs and the reasonable fees and disbursements of any legal or other adviser retained by Industrial Management with the prior agreement of the Company; c) The Company shall be responsible for all other fees and expenses incurred in connection with the Proposed Transaction including, without limitation, the fees and disbursements of any other professional adviser engaged (with the prior approval of the Company) to provide advice or services in relation to the Proposed Transaction and any stamp and other duties and taxes together with any fees payable to any relevant regulatory authority; d) The amounts to be paid or reimbursed to Industrial Management under the terms of this letter of engagement shall be subject to all applicable value added tax thereon at the appropriate rate prevailing from time to time and will be paid within thirty days of the date of the issue of the relevant invoice. 3. General Terms and Conditions I would also draw your attention to the general terms and conditions set out in the Schedule attached to this letter, which shall apply in relation to the Proposed Transaction and be incorporated into this letter of engagement by reference. I will be grateful if you will sign and return the attached copy of this letter to indicate your acceptance of the terms and conditions outlined above. Yours sincerely, /s/ Lyndon Gaborit __________________ Lyndon Gaborit Managing Director Incorporated in the U.K. Company No. 2565051 VAT registration No. 577 3156 17-Registered office 1 Lumley St. Mayfair W1Y 2NB E-mail: LGaborit@aol.com 5 We hereby agree to observe and be bound by the engagement and terms and conditions of Industrial Management as set out in the attachment. /s/ Robert K. Oldham September 20, 2004 ____________________ __________________ Signed Date Robert K. Oldham Cancer Therapeutics, Inc. Duly authorised for and on behalf of Cancer Therapeutics, Inc. Incorporated in the U.K. Company No. 2565051 VAT registration No. 577 3156 17-Registered office 1 Lumley St. Mayfair W1Y 2NB E-mail: LGaborit@aol.com 6 SCHEDULE to a fee letter from Industrial Management Limited to Cancer Therapeutics Inc. (the "Company") Dated 20 September 2004 The following general terms and conditions shall apply in relation to and be deemed to be incorporated into the fee letter by reference. Words defined in the letter of engagement shall have the same meaning in this Schedule, save where the context otherwise requires. 1. Financial Services Authority Industrial Management is not authorised by the Financial Services Authority ("FSA") and only conducts those tasks of a strategic planning and negotiating nature that are acceptable under appropriate legislation. 2. Definitions In the fee letter and this schedule the following additional definitions shall have the meaning ascribed to them below: "acquisition " means any transaction or series or combination of transactions whereby, directly or indirectly, control of, or any interest in, the company or business forming the subject matter of the Proposed Transaction or any of its assets is transferred to the Company (or as it directs) for consideration, including the formation of a joint venture, minority investment or partnership or undertaking or any similar transaction. Acquisition also includes the transfer for consideration of part only of the assets or undertaking of the company or business forming the subject matter of the Proposed Transaction; "affiliate" means (i) any company, authorised by the FSA and nominated by Industrial Management which provides financial advice to the Company in relation to the Proposed Transaction (ii) any company in which Industrial Management or any company controlling, controlled by or under the same control as Industrial Management holds 20 per cent. or more of the shares carrying the right to attend and vote at a general meeting of such company or (iii) any company which shall be a holding company of Industrial Management from time to time; "consideration" means the total value of all cash, securities, other property, and any other consideration, including without limitation, any contingent, earned or other consideration, paid or payable, directly or indirectly, in connection with an acquisition. Consideration shall also be deemed to include any indebtedness (including, without limitation, short-term and long-term indebtedness, pension liabilities, guarantees, finance leases and other obligations) assumed or to be assumed in connection with the acquisition. The value of any securities (whether debt or equity) or other property shall be determined as follows: (i) the value of securities that are freely tradable in an established public market shall be the last closing market price (or in the absence of such a closing price, the mid-price between the indicative bid and offer prices) on the business day prior to the public announcement of the acquisition; and (ii) the value of securities which are not freely tradable or which have no established public market or, if the consideration consists of property other than securities, the value of such other property shall be the fair market value thereof as mutually agreed by the Company and Industrial Management (or, if they are unable to agree, by Independent appraisal by an appraiser appointed by Industrial Management). If the consideration to be paid is computed in any currency other than Pounds Sterling, the value of such Incorporated in the U.K. Company No. 2565051 VAT registration No. 577 3156 17-Registered office 1 Lumley St. Mayfair W1Y 2NB E-mail: LGaborit@aol.com 7 currency shall, for the purposes hereof, be converted into Pounds Sterling at the prevailing exchange rate on the date or dates on which such consideration is to be invoiced; 3. Provision of Information and Confidentiality The following terms will govern the treatment of information and advice supplied by the parties under the terms of this letter of engagement: a) The Company will provide Industrial Management with such information as is necessary and appropriate in order to provide the services specified in this fee letter. Industrial Management will keep confidential and not use, other than in connection with the Proposed Transaction, any information which is not in the public domain or until such information enters the public domain, save that Industrial Management shall where so required be entitled to disclose any information known to it or its affiliates, and to produce documents and other materials in its or their possession or under its or their control, relating to the Proposed Transaction or any related matter to any Court, Tribunal, or other regulatory body under whose regulation Industrial Management, its affiliates or the Company falls from time to time; and b) The Company recognises and acknowledges that Industrial Management will use and rely primarily on the information provided to it by the Company or its other advisers without having independently verified the accuracy thereof and the Company accepts that Industrial Management does not assume responsibility for the accuracy or completeness of such information. 4. Indemnity The Company hereby agrees with Industrial Management for itself and on trust for each of the others referred to below: a) To indemnify and hold harmless Industrial Management and its affiliates, and their respective directors, officers, agents and employees (" Indemnified Persons " or " Indemnified Person " as the case may be) from and against any and all losses, costs, claims, actions, expenses, judgements, charges, proceedings, liabilities and damages (" Claim" or "Claims " as the case may be) which an Indemnified Person may suffer or incur (including, without limitation, all costs, charges and expenses which any Indemnified Person may suffer or incur in disputing or investigating any such Claim, whether or not such Claim is successful, compromised or settled ) arising directly or indirectly out of or in connection with the services provided under the fee letter and will reimburse Industrial Management and any Indemnified Person for all time, costs and expenses incurred in connection with investigating, preparing for or defending any such Claim or other proceeding whether or not Industrial Management or any Indemnified Person is named as a party thereto and whether or not any liability results therefrom. b) That neither Industrial Management nor any other Indemnified Person shall have any liability (whether direct or indirect, in contract tort or otherwise) to the Company or its shareholders or any holding company of the Company or any subsidiary or subsidiary of such holding company or their respective directors, officers, employees or agents for or in connection with the engagement except for any such liability for claims, liabilities, losses, damages or expenses incurred by the Company which arise from Industrial Management's failure to exercise the degree of skill, care and diligence required of it under the Act in the provision of investment business services and investment advice. Incorporated in the U.K. Company No. 2565051 VAT registration No. 577 3156 17-Registered office 1 Lumley St. Mayfair W1Y 2NB E-mail: LGaborit@aol.com 8 5. E-Mail Where information or data is transferred by e-mail in pursuance of any provision of this Agreement the transmitting party shall not be required to cause or procure the encryption of such information or data or the integrity of the transmission (other than the correct addressing thereof) and any discovery by a third party of the contents thereof or of any part thereof shall not be a breach of the above confidentiality provisions. 6. Validity of Instructions Industrial Management shall be entitled to assume that any instructions in relation to the Proposed Transaction have been properly authorised by the Company if they are given or purport to be given by an individual or person who is or purports to be or is reasonably believed by Industrial Management to be a director, employee or authorised agent of the Company; 7. Interests of Affiliates The Company accepts that Industrial Management's affiliates are engaged in the provision of a wide range of financial services including the giving of investment and other advice and may have an interest in, or conflict of duty in relation to, any transaction or matter which relates to the Proposed Transaction or to the services which are to be provided to the Company hereunder or may have a client or clients whose interests may give rise to such a conflict. 8. Independent Contractor Industrial Management is an independent contractor, not the Company's employee. Industrial Management's employees or contract personnel are not the Company's employees. Industrial Management and the Company agree to the following terms and conditions consistent with an independent contractor relationship: a) This agreement is non-exclusive, and Industrial Management has the right to perform services for others during the term of this Agreement, provided such services are not in conflict with the services to be performed by Industrial Management hereunder. b) Industrial Management has the sole right to control and direct the means, manner and method by which the services required by this Agreement will be performed. c) Industrial Management has the right to perform the services required by this Agreement at any place, location or time. d) Industrial Management will furnish all equipment and materials used to provide the services required by this Agreement. e) Industrial Management has the right to hire assistants as subcontractors, or to use employees to provide the services required by this Agreement, without the approval of the Company. f) Neither Industrial Management nor Industrial Management's employees or contract personnel shall receive any training from the Company in the skills necessary to perform the services required by this Agreement. g) The Company shall not require Industrial Management or Industrial Management's employees or contract personnel to devote full time to performing the services required by this Agreement. 9. Deductions and Withholdings All sums payable to Industrial Management or to any Indemnified Person shall be paid free and clear of all deductions or withholdings unless the deduction or withholding is required by law, in which case the Company shall pay such additional amount as shall be required to ensure that the net amount received by Incorporated in the U.K. Company No. 2565051 VAT registration No. 577 3156 17-Refistered office 1 Lumley St. Mayfair W1Y 2NB E-mail: LGaborit@aol.com 9 Industrial Management or that Indemnified Person will equal the full amount which would have been received by it had no such deduction or withholding been made. If the British Inland Revenue or any other taxing authority brings into charge to tax any sum payable to Industrial Management or any Indemnified Person by way of reimbursement or indemnity, the amount so payable shall be grossed up by such amount as will ensure that after deduction of the tax so chargeable (ignoring for this purpose the availability of any relief or other deductions available to Industrial Management or such Indemnified Person) there shall be left a sum equal to the amount that would otherwise be payable hereunder as a result of such reimbursement or indemnity. 9. Privacy of Advice The Company acknowledges and agrees that any advice provided by Industrial Management under the terms of this letter of engagement is provided solely for the benefit of the Company and its affiliates in relation to the Proposed Transaction and may not be used or relied upon in relation to any other matter or be disclosed to any other party without the prior written consent of Industrial Management. 10. Period and Scope of Arrangement This Agreement shall commence on the date of the engagement letter and will continue in force until determined: a) Within 30 days of Industrial Management giving notice to the Company in writing; or b) Within 30 days of the Company giving notice in writing to Industrial Management, with or without cause; save that the monthly retainer be for a minimum period of 6 months, or c) Until replaced by a later Agreement. All or any business dealings between the Company and Industrial Management are subject to this Agreement. a) Following termination, Industrial Management shall be entitled to recover all fees, costs and disbursements due and owing to them under this letter of engagement up to and including the date of termination. In addition, Industrial Management shall also be entitled to receive the success related fee, as set out in clause 2 b) of the letter engagement, computed pro-rata from the date of successful completion of a transaction up to and including the date of termination; b) A termination under this letter of engagement will not restrict the obligations of the Company to Industrial Management under paragraph 4 of this letter of engagement. c) If within 12 months of a termination under this letter of engagement, the Company enters into an agreement to sell, acquire, raise finance or enter any transaction as envisaged by this letter of engagement, with a party which had been introduced to the Company by Industrial Management, then Industrial Management will be entitled to recover all fees which would have been payable to it if the transaction contemplated by this letter of engagement had completed prior to termination. 11. Complaints Industrial Management undertakes that any complaint made in writing by the Company will be investigated by Industrial Management. Complaints should be addressed to The Managing Director, Industrial Management 28 Welbeck Street, London W1G 8EW. 12. Notices Incorporated in the U.K. Company No. 2565051 VAT registration No. 577 3156 17-Registered office 1 Lumley St. Mayfair W1Y 2NB E-mail: LGaborit@aol.com 10 (a) Any notice or demand given or served under this letter of engagement shall be in writing and shall be duly expressed to be a notice under this letter of engagement and will be deemed duly given or served if sent by facsimile at the time of transmission (subject to the correct code or facsimile number being received), or if posted, 48 hours after the time at which it was posted or, if delivered by hand, at the time of delivery if such a day is a Business Day (where Business Day means a day other than a Saturday or Sunday during normal business hours only and excludes bank holidays and public holidays) in London or if such day is not a Business Day on the next following Business Day, to the party to whom it is to be given or served at its address or facsimile number as set out below or such other address or facsimile number as such party may have previously communicated for such purpose by notice to the party giving such notice or demand. The addresses and facsimile numbers for service on the parties to this letter of engagement are: The Company: As stated at the end of this Schedule. Industrial Management: Address: 28 Welbeck Street, London W1 Attention: The Managing Director Facsimile Number: +44 20 7224 5093
(b) Any party giving or serving a notice under this letter of engagement by facsimile shall, but without prejudice to the validity of the notice given, send a copy of the notice by pre-paid registered post to the party receiving such notice to that party's address set out above or to such other address as such party shall have previously communicated by notice to the party in accordance with this letter of engagement. 13. Severability If any term or provision of this letter of engagement shall be held to be illegal or unenforceable, in whole or in part, such term or provision or part shall to that extent be deemed not to form part of this letter of engagement and the enforceability of the remainder of this letter of engagement shall not be affected. 14. Amendment and Governing Law This letter, which may not be amended except in writing by both parties, represents the entire agreement between the parties and shall be governed by and construed in accordance with the laws of England and shall be subject to the jurisdiction of the British Courts. Incorporated in the U.K. Company No. 2565051 VAT registration No. 577 3156 17-Registered office 1 Lumley St. Mayfair W1Y 2NB E-mail: LGaborit@aol.com 11 Accepted and acknowledged for and on behalf of the Company: ____________________________________ Name: Robert Oldham_____________ Position: President_____ Company Fax Number for Notices: __________________ Address of Company Registered Office: 412 Chelsa Cove, Franklin, TN 37064 ____________________________________ Address of Company for Notices (if different):__________________________ Incorporated in the u.K. Company No. 2565051 VAT registration No. 577 3156 17-Registered office 1 Lumley St. Mayfair W1Y 2NB E-mail: LGaborit@aol.com EX-10 11 subscriptionagmt.txt EXHIBIT 10.6 SUBSCRIPTION AGREEMENT SUBSCRIPTION AGREEMENT CANCER THERAPEUTICS, INC. 210 West Hansell Street Thomasville, GA 31792 This Subscription Agreement (this "Agreement") is entered into as of the date set forth below next to Subscriber's signature, by and between CANCER THERAPEUTICS, INC., a Delaware corporation (the "Company" or "Issuer"), and the Subscriber, (hereafter, the "Subscriber"). 1. Subscription. The Subscriber hereby subscribes for _______________ shares of common stock of the Company, par value $0.001 per share (the "Shares") for the purchase price of fifty cents ($0.50) per Share. The Subscriber hereby tenders to the Company the amount of _________________Dollars ($________________) (the "Invested Amount") as payment for these Shares. This Agreement is an irrevocable offer by the Subscriber to subscribe for the securities offered by the Company, and, subject to the terms hereof, shall become a contract for the sale of said securities upon the acceptance thereof by the Company. 2. Acceptance. The Subscriber acknowledges that this Agreement is subject to the Company's discretionary right to accept or reject the subscription herein, in full or in part, and the Subscriber will be notified upon closing of the offering (the "Acceptance Date") whether the Agreement has been accepted by the Company. If this Agreement is rejected for any reason, the Company shall promptly return to the Subscriber the Invested Amount submitted to the Company with this Agreement without interest or deduction, and this Subscription Agreement shall be null, void and of no effect. Acceptance of this Agreement by the Company will be evidenced by the execution hereof by an officer of the Company 3. Warranties of Company. The Company hereby represents and warrants that: (a) The issuance of the Shares to the Subscriber upon the terms and conditions set forth herein has been authorized by all requisite corporate action; (b) The Company is a corporation validly formed and existing in good standing as of the date hereof in the State of Delaware; and (c) Upon acceptance of this Agreement and delivery to the Subscriber of the stock certificate(s) representing the Shares, such Shares shall be validly issued, fully paid, and nonassessable. 4. Cancer Therapeutics, Inc. Prospectus. The Subscriber represents that it has received a copy of Cancer Therapeutics, Inc.'s Prospectus dated __________________, 2005, including supplements and amendments thereto, concerning the operations and prospects for the Company (the "Prospectus"). 1 5. State of Residence or Domicile. The Subscriber represents that the Subscriber's address of principal residence (for individual purchasers) or principal office (for non-individual purchasers) is as follows: ________________________________________________________________ Street Address ________________________________________________________________ City State Zip Code ________________________________________________________________ Tel. No Fax No. 6. Additional Representations of Subscriber. The Subscriber hereby represents and warrants that: (a) The Subscriber's representations in this Agreement are complete and accurate to the best of the Subscriber's knowledge, and the Company may rely upon them. The Subscriber will notify the Company immediately if any material change occurs in any of this information before the sale of the Shares is consummated. (b) The Subscriber hereby agrees that the Subscriber does not have the right to cancel this Subscription Agreement, which shall survive the death, disability, or the cessation of existence as a legal entity, of the Subscriber. Further the Subscriber agrees that the Subscriber does not have the right, and will not attempt, to transfer its interest herein. (c) This Agreement when executed and delivered by the Subscriber will constitute a valid and legally binding obligation of the Subscriber, enforceable in accordance with its terms. The Subscriber, if it is a partnership, joint venture, corporation, trust or other entity, was not formed or organized for the specific purpose of acquiring the Shares. The purchase of the Shares by the Subscriber, if it is an entity investor, is a permissible investment in accordance with the Subscriber's Articles of Incorporation, Bylaws, Partnership Agreement, Declaration of Trust, or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person(s) signing this document and all documents necessary to consummate the purchase of the Shares has all requisite authority to sign such documents on behalf of the Subscriber, if it is an entity investor. 7. Execution of Subscription Agreement. The Subscriber represents that the Subscriber has executed this Agreement either personally or by its duly authorized representative and that the information that the Subscriber has provided herein is both accurate and complete. 8. Power of Attorney of Spouse. If the Subscriber is a married person, the Subscriber agrees to cause the Subscriber's spouse to execute this Agreement at the space provided for that spouse's signature immediately following the signature of the Subscriber, and by such signature hereto said spouse certifies that said spouse is the spouse of the person who signed this Agreement, that said spouse has read and approves the provisions hereof and hereby consents and agrees to this Agreement and agrees to be bound by and accepts such provisions of 2 this Agreement in lieu of all other interests said spouse may hae in the Company, whether such interests be community property or otherwise. Said spouse grants to the Subscriber irrevocable power of attorney to represent said spouse in all matters connected with the Company to the end that, in all cases, the Company may rely on any approval, direction, vote or action taken by the Subscriber, as said spouse's attorney in fact. Such power of attorney is, and shall be deemed to be, coupled with an interest so that the authority granted hereby may continue during the entire period of the Company and regardless of the death or incapacity of the spouse granting the same. Said spouse further agrees to execute, acknowledge and deliver such other and further instruments and documents as may be required to evidence such power of attorney. 9. Survival of Representations. The representations, warranties, acknowledgments and agreements made by the Subscriber shall survive the acceptance of this Agreement and run in favor of, and for the benefit of, the Company. 10. Waiver. No waiver or modification of any of the terms of this Agreement shall be valid unless in writing. No waiver of a breach of, or default under, any provision hereof shall be deemed a waiver of such provision or of any subsequent breach or default of the same or similar nature or of any other provision or condition of this Agreement. 11. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 12. Notices. Except as otherwise required in this Agreement, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon person delivery or upon deposit with the United States Post Office, by registered or certified mail, postage prepaid, addressed to the last known address of the party. 13. Non-assignability. The obligations of the Subscriber hereunder shall not be delegated or assigned to any other party without the prior written consent of the Company. 14. Entire Agreement. This Subscription Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes any prior or contemporaneous oral or written agreements or understandings with respect to the subject matter hereof.. 15. Amendments. This Agreement may be amended only in a writing that refers to this Agreement and that it is signed by both parties hereto. 16. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. IN WITNESS WHEREOF, the Subscriber or its duly authorized representative has executed this Agreement on the date set forth on the attached signature page. 3 [remainder of page intentionally left blank] 4 (Signature Page to Subscription Agreement with CANCER THERAPEUTICS, INC.) FOR INDIVIDUAL INVESTORS SIGNATURE OF INDIVIDUAL INVESTOR: ____________________ ________________________________________________________ Date Name (please print) ____________________ ________________________________________________________ Social Security No. Signature ________________________________________________________ (Street Address) ________________________________________________________ (City, State, Zip) ________________________________________________________ Telephone and Facsimile Numbers SIGNATURE OF INDIVIDUAL INVESTOR'S SPOUSE: ___________________ ________________________________________________________ Date Name (please print) ___________________ ________________________________________________________ Social Security No. Signature Invested Amount: $__________________ Please make checks payable to: "CANCER THERAPEUTICS, INC." Number of Shares Subscribed for Purchase: _____________________________________
Subscriber hereby directs that the Shares be held as follows (check one): ____ Individual Ownership ____ Joint Tenants with right of Survivorship ____ Tenants in Common ____ Community Property ____ Other (specify): _______________________________________________
ACCEPTANCE BY THE COMPANY This Subscription Agreement is hereby accepted by CANCER THERAPEUTICS, INC. as of (the "Acceptance Date"). By______________________________________________________ Its_____________________________________________________ 5 (Signature Page to Subscription Agreement with CANCER THERAPEUTICS, INC.) FOR JOINT INVESTORS SIGNATURES OF JOINT INVESTORS ____________________ ________________________________________________________ Date Name (please print) ____________________ ________________________________________________________ Social Security No. Signature ________________________________________________________ (Street Address) ________________________________________________________ (City, State, Zip) ________________________________________________________ Telephone and Facsimile Numbers ____________________ ________________________________________________________ Date Name (please print) ____________________ ________________________________________________________ Social Security No. Signature ________________________________________________________ (Street Address) ________________________________________________________ (City, State, Zip) ________________________________________________________ Telephone and Facsimile Numbers Invested Amount: $__________________ Please make checks payable to: CANCER THERAPEUTICS, INC.
Subscriber hereby directs that the Shares be held as follows (check one): ____ Individual Ownership ____ Joint Tenants with right of Survivorship ____ Tenants in Common ____ Community Property ____ Other (specify): _________________________________________________
ACCEPTANCE BY THE COMPANY This Subscription Agreement is hereby accepted by CANCER THERAPEUTICS, INC. as of (the "Acceptance Date"). By______________________________________________________ Its_____________________________________________________ 6 (Signature Page to Subscription Agreement with CANCER THERAPEUTICS, INC.) FOR ENTITY (CORPORATION, PARTNERSHIP, TRUST, or OTHER ENTITY) SIGNATURE OF ENTITY INVESTOR ____________________ ________________________________________________________ Date Print Entity Name ____________________ ________________________________________________________ Federal I.D. Number Type of Entity ________________________________________________________ Signature of Authorized Officer or Representative ________________________________________________________ Title of Authorized Officer or Representative Invested Amount: $____________________ Please make checks payable to: "CANCER THERAPEUTICS, INC." ACCEPTANCE BY THE COMPANY This Subscription Agreement is hereby accepted by CANCER THERAPEUTICS, INC. as of ______________________________ (the "Acceptance Date"). By______________________________________________________ Its_____________________________________________________ 7 EX-10 12 escrowagmt.txt EXHIBIT 10.7 ESCROW AGREEMENT PROCEEDS ESCROW AGREEMENT THIS PROCEEDS ESCROW AGREEMENT (this "Agreement") is made and entered into this 23rd day December, 2005, by and between CANCER THERAPEUTICS, INC, (the "Company"), and KENNETH I. DENOS P.C., a Utah professional corporation (the "Escrow Agent") Premises The Company proposes to offer for sale to the general public in certain states a total of One Million (1,000,000) Shares of Common Stock (the "Common Stock"), par value, $0.001, at an offering price of $0.50 per share, pursuant to a registration statement on Form SB-2 (the "Registration Statement") to be filed with the Securities and Exchange Commission. The Company agrees herein to offer for sale the Common Stock in accordance with the terms of the prospectus contained in the Registration Statement, or any amendments thereto. In accordance with the terms of the Registration Statement, the Company desires to provide for an escrow of the gross subscription payments for Common Stock until the amount, as set forth below, has been received. Agreement NOW, THEREFORE, the parties hereto agree as follows: 1. Funds received by the Company, or any officer or representative of the Company, from subscriptions for the purchase of Common Stock in the subject offering shall be deposited promptly with the Escrow Agent, but in any event, no later than noon of the next business day following receipt. 2. Concurrently with transmitting funds to the Escrow Agent, the Company shall also deliver to the Escrow Agent a schedule setting forth the name and address of each subscriber whose funds are included in such transmittal, the number of Shares subscribed for, and the dollar amount paid. All funds so deposited shall remain the property of the subscriber and shall not be subject to any lien or charges by the Escrow Agent, or judgments or creditors' claims against the Company until released to it in the manner hereinafter provided. 3. If at any time prior to the expiration of the minimum offering period, as specified in Paragraph 4, One Hundred Thousand Dollars ($100,000) has been deposited pursuant to this Agreement, the Escrow Agreement shall confirm the receipt of such funds to the Company. 4. If, within four (4) months after the effective date of the Registration Statement, or any extensions or amendments thereof, the Company and its agent have not deposited One Hundred Thousand Dollars ($100,000) in good funds with the Escrow Agent, the Escrow Agent shall so notify the Company and shall promptly transmit to those investors who subscribed for 1 the purchase of Shares the amount of money each such investor so paid. The Escrow Agent shall furnish to the Company an accounting for the refund in full to all subscribers. 5. If at any time prior to the termination of this escrow the Escrow Agent is advised by the Securities and Exchange Commission that a stop order has been issued with respect to the Registration Statement, the Escrow Agent shall thereon return all funds to the respective subscribers. 6. It is understood and agreed that the duties of the Escrow Agent are entirely ministerial, being limited to receiving monies from the Company and its agents and holding and disbursing such monies in accordance with this Agreement. 7. The Escrow Agent is not a party to, and is not bound by, any agreement between the Company and any other party which may be evidenced by or arise out of the foregoing instructions. 8. The Escrow Agent acts hereunder as a depository only, and is not responsible or liable in any manner whatsoever for the sufficiency, correctness, genuineness, or validity of any instrument deposited with it, or with respect to the form or execution of the same, or the identity, authority, or rights of any person executing or depositing the same. 9. The Escrow Agent shall not be required to take or be bound by notice of any default of any person or to take any action with respect to such default involving any expense or liability, unless notice in writing is given to an officer of the Escrow Agent of such default by the undersigned or any of them, and unless it is indemnified in a manner satisfactory to it against any expense or liability arising therefrom. 10. The Escrow Agent shall not be liable for acting on any notice, request, waiver, consent, receipt, or other paper or document believed by the Escrow Agent to be genuine and to have been signed by the proper party or parties. 11. The Escrow Agent shall not be liable for any error of judgment or for any act done or step taken or omitted by it in good faith, or for any mistake of fact or law, or for anything which it may do or refrain from doing in connection herewith, except its own willful misconduct. 12. The Escrow Agent shall not be answerable for the default or misconduct of any agent, attorney, or employee appointed by it if such agent, attorney, or employee shall have been selected with reasonable care. 13. The Escrow Agent may consult with legal counsel in the event of any dispute or question as to the consideration of the foregoing instructions or the Escrow Agent's duties hereunder, and the Escrow Agent shall incur no liability and shall be fully protected in acting in accordance with the opinion and instructions of such counsel. 2 14. In the event of any disagreement between the undersigned or any of them, the person or persons named in the foregoing instructions, and/or any other person, resulting in adverse claims and/or demands being made in connection with or for any papers, money, or property involved herein or affected hereby, the Escrow Agent shall be entitled at its option to refuse to comply with any such claim, or demand so long as such disagreement shall continue and, in so refusing, the Escrow Agent shall not be or become liable to the undersigned or any of them or to any person named in the foregoing instructions for the failure or refusal to comply with such conflicting or adverse demands, and the Escrow Agent shall be entitled to continue to refrain and refuse to so act until: (a) the rights of adverse claimants have been finally adjudicated in a court assuming and having jurisdiction of the parties and the money, papers, and property involved herein or affected hereby; and/or (b) all differences shall have been adjusted by agreement and the Escrow Agent shall have been notified thereof in writing signed by all of the persons interested. 15. The fee of the Escrow Agent is $750.00, receipt of which is hereby acknowledged. In addition, if a minimum of $100,000 is not received in escrow within the escrow period and the Escrow Agent is required to return funds to investors as provided in Section 4, the Escrow Agent shall receive a fee of $5.00 per check for such service. The fee agreed on for services rendered hereunder is intended as full compensation for the Escrow Agent's services as contemplated by this Agreement; however, in the event that the conditions of this Agreement are not fulfilled, the Escrow Agent renders any material service not contemplated by this Agreement there is any assignment of interest in the subject matter of this Agreement, there is any material modification hereof, any material controversy arises hereunder, or the Escrow Agent is made a party to or justifiably intervenes in any litigation pertaining to this Agreement or the subject matter hereof, the Escrow Agent shall be reasonably compensated for such extraordinary expenses, including reasonable attorneys' fees, occasioned by any delay, controversy, litigation, or event and the same may be recoverable only from the Company. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers, as of the date first above written. CANCER THERAPEUTICS, INC. By:/s/Robert K. Oldham ________________________________________________ (Signature) Its:CEO _______________________________________________ (Duly Authorized Officer, print title) 3 KENNETH I. DENOS, P.C. hereby acknowledges receipt of this Agreement and agrees to act in accordance with said Agreement and on the terms and conditions above set forth this 23rd day of December, 2005. KENNETH I. DENOS, P.C. By:/s/Kenneth I. Denos _______________________________________________ (Signature) Its:President ______________________________________________ (Duly Authorized Officer, print title) 4 EX-10 13 oralagmtrobertoldham.txt EXHIBIT 10.8 ORAL AGREEMENT ROBERT OLDHAM Summary of Oral Employment Agreement with Robert K. Oldham M.D. Robert K. Oldham M.D., is a principal shareholder of Cancer Therapeutics, Inc. Dr. Oldham is the CEO and a member of the board of directors. Dr. Oldham does not receive a salary, and does not accrue salary. Cancer Therapeutics and Dr. Oldham have not entered into a written employment agreement, and either Cancer Therapeutics or Dr. Oldham may terminate their oral employment agreement at any time, for any reason or for no reason. Dr. Oldham does not receive any health, dental or life insurance benefits, and he does not receive any retirement or severance benefits from Cancer Therapeutics. EX-10 14 oralagmtwalterlewko.txt EXHIBIT 10.9 ORAL AGREEMENT WALTER LEWKO Summary of Oral Employment Agreement with Walter Lewko Walter Lewko, Ph.D., is the principal biochemist/immunologist of Cancer Therapeutics, Inc. Dr. Lewko is paid $3,274 per month as an at-will employee. Cancer Therapeutics and Dr. Lewko have not entered into a written employment agreement, and either Cancer Therapeutics or Dr. Lewko may terminate their oral employment agreement at any time, for any reason or for no reason. Dr. Lewko does not receive any health, dental or life insurance benefits, and he does not receive any retirement or severance benefits from Cancer Therapeutics. EX-10 15 offermikelow.txt EXHIBIT 10.10 APPOINTMENT MIKE LOW Cancer Therapeutics, Inc. 210 West Hansell Street Thomasville, GA 31792 (229) 403-1282 July 5, 2004 Sent Via First-Class Mail Michael Low 22121 Rosecrans Ave. Suite 2340 El Segundo, CA 90245 Re: CTI- Offer to Join the Board of Directors Dear Mr. Low: The purpose of this letter is to formally extend an offer to you to become a member of the Board of Directors of Cancer Therapeutics, Inc. (CTI). As you can understand, we are rather excited and optimistic about the future prospects of CTI because of the strategic direction that has been charted by our current management team. You are an essential part of this team that we have been assembling over the past few years to lead CTI into its next phase of growth. We believe that your considerable experience and industry contacts will be a superior benefit to the company. Accordingly, we propose that you undertake the following commitment: 1. Fulfill the role as corporate secretary; 2. Assist CTI in developing a strategic plan to expand nationwide; 3. Assist with the overall development and mission of CTI; and 4. Become an active member of the board of directors. In exchange for your commitment above, we will provide to you the following: 1. Regular briefings on developments within CTI; and 2. Reimbursement of pre-approved expenses incurred on the company's behalf, such as travel and lodging for meetings, etc. I look forward to discussing this matter with you further, as well as addressing any specific questions you may have. Yours sincerely, /s/Robert K. Oldham _____________________ Robert K. Oldham CEO Agreed to and Accepted This 7th day of July 2004. /s/Michael Low _________________________________ Mr. Michael Low EX-10 16 johnarchibaldagrmnt.txt EXHIBIT 10.11 CONTRACT JOHN ARCHIBOLD AGREEMENT This Agreement is made and entered into this 9th day of January, 2004, and is effective January 1, 2004, by and between CANCER THERAPEUTICS INC. (hereinafter referred to as "CTI"), a corporation licensed to do business in Georgia, and JOHN D. ARCHBOLD MEMORIAL HOSPITAL, INC. (hereinafter referred to as "Hospital"). WITNESSETH: WHEREAS, Hospital is desirous of obtaining the services of CTI to initiate and establish a cryobanking service for cancerous tumors in Thomasville, Georgia. WHEREAS, CTI retains duly licensed physicians and qualified personnel capable of furnishing cryobanking of rumor specimens for individuals undergoing surgery at John D. Archbold Memorial Hospital. WHEREAS, CTI is willing to provide said services as hereinafter set forth, under the terms, covenants and conditions stated below; NOW, THEREFORE, for the mutual covenants herein contained and for other good and valuable considerations in hand paid or delivered, each party to the other, the receipt and adequacy of which is hereby acknowledged, it is agreed as follows; 1. CTI shall make cryobanking services available to patients within Hospital's system, including the collection, storage and retrieval of tumor specimens. 2. CTI shall provide applicable patient information and reimbursement codes for Hospital's billing purposes. 3. CTI warrants that at all times during the term of this agreement its personnel have appropriate training and / or certification to perform all cryobanking duties and services. 4. CTI shall provide cryobanking services in such a manner as may be required by any standard, ruling, or regulation of the State of Georgia, the U.S. department of Health and Human Services, the Joint Commission on Accreditation of Healthcare Organizations, or any other applicable federal, state, or local governmental agency, corporate entity, or such other entity exercising authority with respect to Hospital. 5. CTI shall promptly prepare such medical and other records and reports relating to the provision of cryobanking services consistent with Hospital Policies and as reasonably requested by Hospital. The ownership and right of control of all reports, records, and supporting documents submitted to or by CTI shall rest exclusively with Hospital. Hospital:________________ 1 CTI:________________ 6. It is expressly acknowledged by the parties hereto that CTI, in performing CTI's duties and obligations under this Agreement, is an "independent contractor" and nothing in this Agreement is intended nor shall be construed to create an employer/employee relationship, a joint venture relationship, or to allow Hospital to exercise control or direction over the manner or method by which CTI performs the cryobanking services. CTI understands and agrees that, unless otherwise required under applicable federal income tax laws or the terms of any agreement between Hospital and the Internal Revenue Service, (i) CTI staff will not be treated as an employee for federal tax purposes; (ii) Hospital will not with hold on behalf of CTI staff pursuant to this Agreement any sums for income tax, unemployment insurance, social security, retirement benefits, or any other withholding pursuant to any law or requirement of any governmental body relating to CTI, or make available to CTI staff any of the benefits afforded to employees of Hospital; (iii) all of such payments, withholdings, and benefits, if any, are the sole responsibility of CTI; and (iv) CTI will indemnify and hold harmless Hospital from any and all loss or liability arising with respect to such payments, with holding, or benefits, if any. 7. If this Agreement has a value or cost to Hospital of $10,000 or more over any twelve-month (12-month) period, CTI shall perform the obligations as may be from time to time specified for subcontractors in Social Security Act ss. 1861 (v)(1)(I) and the regulations promulgated in implementation thereof (currently codified at 42 C.F.R. ss.ss. 420.300.304), including, but not limited to, retention and delivery of records related to this Agreement. In the event any request for this Agreement of CTI's books, documents, and records is make pursuant to Social Security Act ss. 1861(v)(1)(I) and associated regulations, CTI shall promptly give notice of sucquest to Hospital and provide Hospital with a copy of such request and, thereafter, to consult and cooperate with Hospital concerning the proper response to such request. Additionally, CTI shall provide Hospital with a copy of each book, document, and record made available to one or more persons and agencies pursuant to Social Security Act ss. 1861(v)(1)(I) or shall identify each such book, document, and record to Hospital and shall grant Hospital access thereto for review and copying. 8. This Agreement has been executed and delivered in, and shall be interpreted, construed, and enforced pursuant to and in accordance with the laws of the State of Georgia. 9. In the event that either party elects to incur legal expenses to enforce or interpret any provision of this Agreement, the prevailing party will be entitled to recover such legal expenses, including, without limitation, reasonable attorneys' fees, costs and necessary disbursements, in addition to any other relief to which such party shall be entitled. 10. Hospital agrees to pay CTI each month during the term of this agreement an all-inclusive fee of three thousand dollars ($3,000.00) for cryobanking services. 11. CTI agrees to render a statement to Hospital during the first week of each month Hospital: ______________ 2 CTI:_______________ of the term hereof for the cryobanking services provided during the previous month. Hospital shall make said payment to CTI on or before the 15thday of each month following the month of service. 12. The parties agree that the term of this Agreement shall be for a period of six (6) months from the date of execution of the Agreement by Hospital and CTI. The agreement shall not automatically renew for any additional period of time. 13. Notwithstanding anything to the contrary in this Agreement, either party hereto may terminate this Agreement, without cause, upon the delivery to the other party hereto of thirty (30) days prior written notice of such termination. 14. CTI acknowledges that during the course of performance under this Agreement, it may receive confidential information concerning the method of operation and administration of Hospital's business, including, but not limited to, materials relation to fee schedules and various operational procedures used by Hospital. Said confidential information is the property of Hospital and CTI agrees that it will not make use of any information obtained from Hospital with any party other than Hospital. 15. This Agreement and any amendments hereto, shall constitute the complete agreement of the parties and shall supersede any and all prior agreements make by and between the parties. The parties hereto agree that no warranties, inducements or representations exist except as stated herein. The parties agree that this agreement may not be amended unless in writing executed by an authorized representative of each of the parties to this Agreement. 16. Any notice to be given under this Agreement shall be delivered by hand or mailed by United States mail to the parties at the following address: To CTI: Cancer Therapeutics, Inc. 210 West Hansell Street Thomasville, GA 31792 To Hospital: John D. Archbold Memorial Hospital, Inc. Attention: Chief Executive Officer Post Office Box 1018 Thomasville, Georgia 31799 IN WITNESS WHEREOF, the parties have hereunto set their hands and seals, respectively, by the undersigned authorized officers of each party hereto as of the day and year first above written. Hospital:______________ 3 CTI:______________ CTI By:_______________________________ Title:______________________________ John D. Archbold Memorial Hospital, Inc. By:________________________________ Title: President Hospital:__________________ 4 CTI:__________________ EX-23 17 accountantsconsent.txt EXHIBIT 23.1 CONSENT BOUWHUIS, MORRILL Certified Public Accountants CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors Cancer Therapeutics, Inc. Thomasville, Georgia We consent to the use in this Registration Statement of Cancer Therapeutics, Inc. on amended Form SB-2, of our report dated September 7, 2005 of Cancer Therapeutics, Inc., for the years ended May 31, 2005 and 2004, which are part of this Registration Statement, and to all references to our firm included in this Registration Statement. /s/ Bouwhuis, Morrill & Company - ------------------------------------------ Bouwhuis, Morrill & Company Layton, Utah March 17, 2006 EX-23 18 kidconsent.txt EXHIBIT 23.2 CONSENT KID PC K E N N E T H I. D E N O S, P. C. 11585 South State #102 Draper, UT 84020 Tel: (801) 619-1195 Fax: (801) 816-2500 KDENOS@DENOSLAW.COM March 17, 2006 Board of Directors Cancer Therapeutics, Inc. 210 W. Hansell St. Thomasville, GA 31792 Re: Opinion and Consent of Counsel with respect to Registration Statement on Form SB-2 TO WHOM IT MAY CONCERN: You have requested the opinion and consent of this law firm, as counsel, with respect to the proposed issuance and public distribution of certain securities of Cancer Therapeutics, Inc. pursuant to the filing of a registration statement on Form SB-2 with the Securities and Exchange Commission. The proposed offering and public distribution relates to 1,000,000 shares of common stock, $.001 par value to be offered and sold to the public at a price of $.50 per share. It is our opinion that the shares of common stock will, when issued in accordance with the terms and conditions set forth in the registration statement, be legally issued, duly authorized, validly issued, fully paid and non-assessable shares of common stock of Cancer Therapeutics in accordance with the State of Delaware corporation laws, statutory provisions, all applicable provisions of the Delaware Constitution , and reported decisions interpreting those laws. We hereby consent to be named as counsel for Cancer Therapeutics in the registration statement and prospectus included therein. Sincerely yours, KENNETH I. DENOS, P.C. /s/ Kenneth I. Denos _______________________ Kenneth I. Denos KID:mf EX-99.77Q1 19 medicaltreatment.txt EXHIBIT 99.1 MEDICAL TREATMENT RIGHTS SB 341 - Medical Treatment - individual's right of treatment desired FIRST READER SUMMARY A bill to amend Article 2 of Chapter 34 of Title 43 of the Official Code of Georgia Annotated, relating to licenses to practice medicine, so as to provide that individuals have the right to be provided with any medical treatment desired or authorized under certain conditions; to provide immunity from disciplinary actions. SB 341 97 SB341/AP SENATE BILL 341 By: Senator Gochenour of the 27th A BILL TO BE ENTITLED AN ACT 1- 1 To amend Article 2 of Chapter 34 of Title 43 of the Official 1- 2 Code of Georgia Annotated, relating to licenses to practice 1- 3 medicine, so as to provide that individuals have the right 1- 4 to be provided with any medical treatment desired or 1- 5 authorized under certain conditions; to provide for a short 1- 6 title; to provide immunity from actions relating to 1- 7 unprofessional practice or conduct; to provide an effective 1- 8 date; to repeal conflicting laws; and for other purposes. 1- 9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA: 1-10 SECTION 1. --------- 1-11 Article 2 of Chapter 34 of Title 43 of the Official Code of 1-12 Georgia Annotated, relating to licenses to practice 1-13 medicine, is amended by adding after Code Section 43-34-42 a 1-14 new Code section to read as follows: 1-15 "43-34-42.1. 1-16 (a) This Code section shall be known and may be cited as 1-17 the 'Access to Medical Treatment Act.' 1-18 (b) Notwithstanding any other provision of law, and except 1-19 as provided in subsection (c) of this Code section, an 1-20 individual shall have the right to be treated for any 1-21 illness or disease which is potentially life threatening 1-22 or chronically disabling by a person licensed to practice 1-23 medicine under this article with any experimental or 1-24 nonconventional medical treatment that such individual 1-25 desires or the legal representative of such individual 1-26 authorizes if such person licensed to practice medicine 1-27 under this article has personally examined such individual 1-28 and agrees to treat such individual. 1-29 (c) A person licensed to practice medicine under this 1-30 article may provide any medical treatment to an individual 1-31 described in subsection (b) of this Code section if: 1-32 (1) There is no reasonable basis to conclude that the 1-33 medical treatment itself, when administered as directed, 2- 1 poses an unreasonable and significant risk of danger to 2- 2 such individual; and 2- 3 (2) The person licensed to practice medicine under this 2- 4 article has provided the patient with a written 2- 5 statement and an oral explanation, which the patient has 2- 6 acknowledged by the patient's signature or the signature 2- 7 of the patient's legal representative, that discloses 2- 8 the facts regarding the nature of the treatment, 2- 9 specifically including that the treatment offered is 2-10 experimental or nonconventional, that the drug or 2-11 medical device has not been approved by the Food and 2-12 Drug Administration for any indication, as well as the 2-13 material risks generally recognized by reasonably 2-14 prudent physicians of such treatment's side effects. 2-15 (d) The treatment of patients in compliance with this Code 2-16 section by a person licensed to practice medicine under 2-17 this article shall not by itself constitute unprofessional 2-18 practice or conduct." 2-19 SECTION 2. --------- 2-20 This Act shall become effective upon its approval by the 2-21 Governor or upon its becoming law without such approval. 2-22 SECTION 3. --------- 2-23 All laws and parts of laws in conflict with this Act are 2-24 repealed. -----END PRIVACY-ENHANCED MESSAGE-----