UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ___________ to ___________
Commission file number: 000-50095
Clinical Trials Assistance Corporation
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(Name of Small Business Issuer in its charter)
Nevada 27-0009939
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
2078 Redwood Crest, Vista, California 92083-7340
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(Address of principal executive offices) (zip code)
Issuer's telephone number: (760) 727-8448 Fax number: (760) 598-2611
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Securities registered under Section 12(b) of the Exchange Act:
Title of each class registered: None Name of each exchange on which
registered: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $0.001
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(Title of class)
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Check if no disclosure of delinquent filers in response to Item 405
of Regulation S-B is contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year. $7,200.
The Issuer's stock is not trading on any stock exchange.
As of March 31, 2003, the issuer had 12,000,000 shares of common
stock outstanding.
Documents incorporated by reference: See Item 13. Exhibits and Reports
on Form 8-K in Part III.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
1
CONTENTS
CONTENTS
PAGE
PART I
Item 1. Description of Business..................................... 3
Item 2. Description of Property.....................................23
Item 3. Legal Proceedings...........................................23
Item 4. Submission of Matters to a Vote of Security Holders.........23
PART II
Item 5. Market for Common Equity and Related Stockholder Matters....24
Item 6. Management's Discussion and Analysis or Plan of Operation...25
Item 7. Financial Statements........................................29
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure......................31
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the
Exchange Act.............................................31
Item 10. Executive Compensation......................................34
Item 11. Security Ownership of Certain Beneficial Owners and
Management...............................................35
Item 12. Certain Relationships and Related Transactions..............36
Item 13. Exhibits and Reports on Form 8-K............................37
Item 14 Control and Procedures......................................37
SIGNATURES ............................................................38
Forward-Looking Statements
This report contains forward-looking statements. The forward-looking
statements include all statements that are not statements of historical
fact. The forward-looking statements are often identifiable by their use of
words such as "may," "expect," "believe," "anticipate," "intend," "could,"
"estimate," "continue," "plans" or the negative or other variations of
those or comparable terms. Our actual results could differ materially from
the anticipated results described in the forward-looking statements. Factors
that could affect our results include, but are not limited to, those
discussed in Item 6, "Management's Discussion and Analysis or Plan of
Operation" and included elsewhere in this report.
2
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
A. BUSINESS DEVELOPMENT
(i) Business Development, Organization and Acquisition Activities
-----------------------------------------------------------------
Clinical Trials Assistance Corporation, a developmental stage company,
hereinafter referred to as ("the Company") or ("CTAC"), was organized by the
filing of Articles of Incorporation with the Secretary of State of the State
of Nevada on April 22, 2002. The original articles of the Company authorized
the issuance of twenty million (20,000,000) shares of Common Stock at par
value of $0.001 per share and five million (5,000,000) shares of Preferred
Stock at par value of $0.001. On April 30, 2002, the Company issued ten
million (10,000,000) shares of its $0.001 par value Common Stock for cash
of $10,000, held by one (1) shareholders of record.
On September 30, 2002, the Company completed a private offering of shares
of common stock of the Company pursuant to Regulation D, Rule 504 of the
Securities Act of 1933, as amended, which resulted in the sale of an
additional 2,000,000 shares of its $0.001 par value common stock to
approximately 46 shareholders. As of September 30, 2002, therefore, the
number of common shares issued and outstanding is twelve million
(12,000,000).
The Company anticipates that the proceeds from the sale of the common
shares offered in the 504 Offering referred to above were sufficient to
provide the capital requirements to implement the Company's initial plans
over the next twelve months to test its business model.
The Company's president and CEO, Kamill Rohny, has been actively involved in
the pharmaceutical industry for the past thirty-two years. Prior to his
retirement from Procter & Gamble Pharmaceuticals, he developed recruiting
methodologies for patient studies. This included the identification of
computer data bases to help research physicians find patients for their
investigative studies.
From inception on April 22, 2002 through December of 2002, the Clinical
Trials Assistance Corporation efforts has been devoted primarily to startup
and development activities, which include the following:
1. Formation of the Company and obtaining start-up capital;
2. Developing services;
3. Developing new recruitment tools.
4. Testing the identified recruitment tools.
Clinical Trials Assistance Corporation is a development stage company which
plans to help physician researchers recruit appropriate patients to participate
in specific clinical research trials sponsored by the pharmaceutical industry.
In helping the investigative sites to recruit patients for clinical studies, by
developing effective recruitment programs, which enlist patients to participate
in the early stages of these studies, clinical recruitment companies help
the pharmaceutical industry shorten its development cycles and reduce the cost
for evaluating new pharmaceutical products. There are no assurances that the
Company will be able to recruit patients faster than its competition.
4
The Company has begun evaluating its business model to identify prospective
customers for its clinical recruiting services. Initially, the customer
list will be derived from known physician acquaintances and past contacts
made by Kamill Rohny, during his 32 years in the pharmaceutical industry.
This would include known clinical researchers in the industry who conduct
clinical trials. Management views this as the most efficient and
cost effective manner to develop a customer base.
The company expects to develop its business over a number of years with the
first stage taking approximately a year to complete. The Company's plan of
operations for the next twelve months includes:
1. The success of this development program will be measured by the amount
dollars a physician researcher is willing to spend versus the time and
dollars spent to recruit patients for clinical research trials.
If the cost to recruit patients exceeds the amount a physician can spend
based on his research budget, the Company will need to find a more
economical means to recruit patients. Management believes the Company
has sufficient funding to complete this development period. Management
expects this development period will take one year to complete and
estimates a cost of approximately $20,000 to complete this development
period.
2. If the Company can identify a successful financial success model to
recruit patients for clinical studies through this, during its
development period, management plans to expand its operations beyond
Southern California. This expansion would be scheduled for Fiscal Year
2004, and would require additional funding of approximately $50,000-
$75,000 to hire and train recruiters as well as identify physician
researchers as a client base. It should be noted that Southern
California's population provides a sufficient number of participants
for clinical studies. However, this population base would depend on
the particular disease state or conditions for which a clinical trial
is being conducted or designed to address. Additionally, the area
provides other investigative sites, such as, private practice physicians,
hospitals, major medical centers, health maintenance organizations,
pharmaceutical and biotechnology companies, all who conduct clinical
studies. This offers the Company with a solid base to expand its
operations.
Management believes if the development period is financially successful,
it may need to raise an additional $50,000-$75,000 in funding to expand its
operations beyond Southern California in Fiscal Year 2004. If in the future
the Company should seek to raise additional capital it would be accomplished
via a private placement offering pursuant to Regulation D, Rule 505. To do
so, management believes the Company should be a fully reporting entity with
the U.S. Securities and Exchange Commission. In this sense, potential
investors will have the opportunity to review the company's activities and
financial status. There is no guarantee that such financing will be available
to the Company, or if available, will be on terms and conditions satisfactory
to management.
5
As a fully reporting company with the U.S. Securities and Exchange Commission,
("SEC") the company will be required to pay for financial audits and quarterly
financial reviews, along with the legal preparation of the required documents
to maintain its reporting status. Based on the future complexity of the
business, the accounting and legal fees could cost the Company a minimum of
$5,000 to $10,000 per year. If the company fails to raise or generate
sufficient funding to maintain its full reporting status, it will be required
to withdraw its Registration with the SEC.
The Company currently has no understandings, commitments or agreements
with respect to engage in any material acquisitions and no material acquisition
is currently being pursued. Additionally, the Company does not plan to be
acquired. If appropriate opportunities present themselves, the Company would
consider acquiring businesses, technologies, services or product(s) that the
Company believes are strategic to its operations.
(ii) Principal Products and Principal Markets
Clinical Trials Assistance Corporation plans to help physician researchers
find patients for ongoing clinical studies. These clinical trials would be
conducted in a physician's office, hospital setting, or private clinic, who
have separately contracted with a major pharmaceutical Company or U.S.
Government agency to test developmental pharmaceutical products, which have
been approved by the Food and Drug Administration ("FDA") for testing in humans.
In some case, the pharmaceutical companies themselves conduct clinical research
studies. The Company plans to solely focus on patient recruitment for these
clinical studies. Said differently, the Company helps these researchers find
patients for on-going studies. The researchers screen and evaluate whether
these patients qualify for these studies. The Company does not plan to
involve itself with data analysis, regulatory services, quality assurance and
other consultation services. The actual clinical trials are performed at the
investigative sites as approved by the FDA. The Company's business is
currently focused on the U.S. markets.
Management believes the Company's services to the investigative sites would
allow them to build and maintain successful clinical research businesses.
Patient Recruitment
-------------------
CTAC will need to develop a series of patient recruitment tools for the
investigative sites. These tools might include: an 1-800 phone number for
patients to obtain information and schedule an appointment, an attractive
newspaper ad, mail flyers or radio commercials. To date, the Company's best
success in developing patient recruitment tools has been with first class
pre-sorted postcard directed to specific age groups in targeted geographic
locations.
6
Business Strategy
-----------------
The first priority for Clinical Trials Assistance Corporation is to create
new business and evaluate its recruiting concepts with physician researchers
in Southern California. The Company's business plans encompasses the following
strategies:
o Market its services to physicians who conduct research projects.
The clientele would include investigative sites, such as, private
practice physicians, hospitals, major medical centers, health
maintenance organizations, pharmaceutical and biotechnology
companies, all who conduct clinical studies.
o Identify physician researchers and offer the services of patient
recruitment for these studies.
o Based on the type of studies performed, such as targeted age group
or specific illness, develop specific patient data base to target.
The database would include purchasing names and addresses and
sorting by age group and gender to determine who is most likely to
suffer from a particular disease state. The Company plans to
purchase mailing labels from brokers who specialize collecting this
type of demographic data. These mailing labels will be purchased on
a Quarterly basis, when the Company undertakes a specific recruitment
program. There is no way of knowing, who has a particular disease
state to target; therefore, a mass population is targeted to receive
a mailer, which invites them to participate in a study. Patients who
participate in a clinical study receive free medication and a small
fee to entice them to participate.
o Utilize known networking groups, e.g., senior centers, churches,
social clubs, ethnic groups, who conduct regular meetings among their
members. to recruit these patients. These groups consists of people
who talk among themselves to give the studies a word-of mouth
endorsement, where the recommend that their friends are evaluated
for the study. CTAC plans to utilize these groups to by scheduling
the investigative physician(s), as guest speakers, for their regular
scheduled meetings. This gives the audience an opportunity to determine
whether or not they wish to participate in the study, by meeting the
investigative physician who will be conducting the study. CTAC has
already enrolled three patients, in a clinical study, by working with
a senior center and church group. In each case, management of the
Company had not difficulty in contacting the administrators' to
schedule a presentation at one of their monthly social meetings.
o Advertise for patients utilizing newspapers, radio, and television
to recruit these patients.
o Schedule these subject patients with the physician researchers as
candidates to be evaluated for their studies.
o Establish a reputation for Clinical Trials Assistance Corporation as
a premier patient recruitment company.
7
(iii) Status of Products and Services
--------------------------------------
In order to accomplish these objectives, the Company has established a business
development program with Eugene Boling, MD, a Rheumatologist at Boling Clinical
Trials, located at 8263 Grove Avenue, Suite 100, Rancho Cucamonga, CA 91730.
Boling Clinical Trials is one of the larger patient research centers in
Southern California. This is measured by the number of patients enrolled in
their clinical trials. This data was shared with Dr. Boling by the sponsoring
pharmaceutical companies who are conducting these studies. They can conduct
as many has sixteen different patients studies at the same time. Each study
seeks to enroll anywhere from 24 to 60 patients, on average. Boling Clinical
Trials is situated in an area of Southern California with a surrounding
population of 500-600,000 inhabitants. CTAC has participated in recruiting
patients for two separate studies at Boling Clinical Trails, and the Company
is in process of recruiting patients two additional patient studies for Boling
Clinical Trials. The clinical studies included recruitment for an osteoporosis
study and a rheumatoid arthritis study. The Company's best results in the
recruitment of patients for these two studies came from a targeted mail program
directed to an older age group, in zip codes adjacent to Boling Clinical Trials.
The Company evaluated two different postcard recruitment initiatives, they are:
a) Through a mailing of ten thousand postcards per month for a three month
period, or a total of 30,000 postcards, the Boling Clinic received
appointment calls from approximately 150 patients per month. These patients
were initially interviewed over the telephone by the staff of Boling
Clinical Trials. They invited approximately 100 of these patients into
their offices for a screening test, approximately 9 patients qualified for
the study, and approximately 6 patients were ultimately enrolled in a
clinical trial during a three month period.
b) The second initiative was a scaled-up version of the first initiative.
Through a mailing of thirty thousand postcard mailings, per month, over a
three month period, or a total of 90,000 postcards, the Boling Clinic
received appointment calls from approximately 450 patients per month. These
patients were initially interviewed over the telephone by the staff of
Boling Clinical Trials. They invited approximately 300 of these patients
in for a screening test, approximately 27 patients qualified for the study,
and approximately 18 patients were ultimately enrolled in a clinical trial
during this three month period.
Based on the results of these two postcard mailing initiatives, the end results
per enrolled patient were proportionally the same based on the size of the
mailing. There are no assurances CTAC can duplicate these results for similar
studies conducted by different investigative centers. The Company was
compensated for its efforts with these two initiatives through an oral
understanding it has in place with Boling Clinical Trials. This oral
understanding includes:
a) CTAC and Boling Clinical Trials will work together to recruit patients
for clinical studies conducted by Boling Clinical Trials.
8
b) CTAC bills Boling Clinical Trials 50 percent of the amount of its
estimated invoice for recruitment services, and the balance is due 30
days after the completion of services, for that particular invoice.
This invoice includes any agreed upon hard cost, such as the purchase of
mailing labels, printing costs, the cost of a mailing, or newspaper
advertising. The final invoice will include actual costs plus a 20
percent mark-up.
c) Boling Clinical Trials is responsible to hire and pay for additional
personnel. This would include the hiring of two additional technicians
for screening patients, two clerical personnel and one registered nurse
to help screen patients. They are also responsible for paying for an
answering service, which screens initial enrollees and sets appointments.
d) Boling Clinical Trials and the Company agreed to work together to measure
the financial costs of this developmental program to recruit patients for
clinical studies. They agreed to evaluate recruitment for clinical trails
per individual disease state. Initially, they are focusing on osteoporosis
and rheumatoid arthritis patient recruitment. The initial data indicates
that it cost $1,475 in recruitment fees per patient enrolled in the
clinical study. The measurements are based on the final costs of the six
patients enrolled in the studies.
e) The oral understanding can be cancelled by either party, without notice
or penalties to the party who cancels this agreement.
Until CTAC can further develop its recruitment programs, the Company does not
plan into enter into a formal written agreement with Boling Clinical Trials.
It should be noted that Dr. Eugene Boling, who is the head of Boling Clinical
Trials is a director of CTAC.
The purpose of this development period is to help the company establish a
cost effective business model which it can duplicate and market its services
at other research centers. According to Dr. Boling, of Boling Clinical
Trials, they paid CTAC approximately $8,850 to recruit six (6) patients per
study during one month, this equates to $1,475 per enrolled patient. This
development period includes:
a) Establish what a physician researcher is willing to pay to recruit a
particular patient type for a clinical study. For example, based on the
disease state to be studied, what is a physician researcher willing to pay
to recruit a patient with diabetes versus osteoporosis versus
osteoarthritis? Management recognizes that certain disease states would
be difficult to recruit patients, e.g. Crohn's disease, AIDS patients,
heart disease. In these cases, the patients would most likely be unwilling
to forego their present treatment regimen, to participate in a study. For
this reason, management plans to be selective in the types of studies the
Company would undertake recruitment activities.
9
There are no clear payment schedules for patient recruitment services.
Some clinical researchers, such as Boling Clinical Trials, have
advanced payments to recruitment companies for standard services to be
rendered, e.g., newspaper and radio advertising, without any guarantees
of results. These payment advances come from their own pockets, rather
than sponsoring pharmaceutical Company. Other clinical researchers, wait
until they receive an advance from the sponsoring pharmaceutical company
before they spend any monies on patient recruitment. Based on past
recruitment costs from Boling Clinical Trials, recruitment costs
can account for one-third of the total budget for a clinical trial.)
b) Determine what are the best services to recruit patients versus advertising
dollars to be spent, e.g., newspaper advertising, radio advertising, mail
flyers, contacting church and social groups.
c) Determine the amount of time it will take to recruit patients for these
clinical studies based on their particular disease states.
d) Determine a dollar value to recruit patients by disease types, based on
geographic and demographic data. For example, it is more or less costly to
recruit patients with diabetes versus osteoporosis versus other disease
states.
e) Develop of cost versus revenue model for each of these disease states to
determine which patient studies offer the greatest return for the Company
to pursue.
The Company will use this model to market its services. In addition, if the
Company can establish a successful model, management plans to attend trade
shows and conventions to market its services and keep abreast of new
opportunities.
Since CTAC has begun its recruiting activities, the average cost to recruit
patients for Boling Clinical Trials has been $1,475 per enrolled patient. This
cost is based a targeted postcard mail program directed to an older age group,
in zip codes adjacent to Boling Clinical Trials. The data is based on a three
month postcard mailing program of 30,000 mailings per month for a total of
90,000 mailings. The results of this postcard program has enrolled, on average,
six (6) patients per month at a cost of $8,850 ($1,475 times 6 patients) per
month versus Boling's historic patient recruitment costs of $2,950 per enrolled
patient. During this developmental stage, as of December 31, 2002, CTAC has
received $7,200 from Boling Clinical Trials for its hard costs, which includes
postcard printing and postage. There are no assurances CTAC can duplicate these
results for similar studies conducted by different investigative centers.
10
The Pharmaceutical Industry
---------------------------
Before a new pharmaceutical or biotechnology product can be marketed in the
United States, it must undergo extensive testing and regulatory review to
determine its relative safety and effectiveness. Companies seeking approval
of these products are responsible for performing and analyzing the results
of preclinical and multi-phase clinical trials. Preclinical trials can last
for up to three years and involve animal testing and laboratory analysis to
determine the basic biological activity and safety of the product. Upon
successful completion of the preclinical phase, the product undergoes a
series of clinical tests in humans, this includes healthy volunteers as well
as patients with the specific disease. Clinical trials generally take longer
to perform than preclinical trials, typically lasting five to seven years.
in the United States, preclinical and clinical testing must comply with the
requirements of Good Clinical Practices and other standards promulgated by
the Food and Drug Administration, or the FDA, and other federal and state
governmental authorities. The FDA defines Good Clinical Practices as
"a standard for the design, conduct, performance, monitoring, auditing,
recording, analyses, and reporting of clinical trials that provides
assurance that the data and reported results are credible and accurate and
that the rights, integrity, and confidentiality of trial subjects are
protected."
According to clinical trials data provided by the National Institutes of Health
website, at www.clinicaltrials.gov, they list approximately 7,000 on-going
clinical studies, with approximate enrollment of 200 patients per study. These
clinical studies are sponsored by the National Institutes of Health, other
federal agencies, and the pharmaceutical industry.
Clinical trials often represent the most expensive and time-consuming part
of the overall drug development process. The information generated during
these trials is critical for gaining marketing approval from the FDA or other
regulatory agencies. After the successful completion of Phase III trials, the
sponsor of a new drug must submit a New Drug Application ("NDA") to the FDA.
The NDA is a comprehensive filing that includes, among other things, the
results of all preclinical and clinical studies, information about the drug's
composition and the sponsor's plans for producing, packaging and labeling the
drug. Most of the clinical data contained in an NDA is generated during the
Phase II and III trials. The FDA's review of an NDA can last from several
months to several years, with the average review lasting two years. Drugs that
successfully complete this review may be marketed in the United States, subject
to the conditions imposed by the FDA in its approval.
Pharmaceutical and biotechnology companies face increased pressure to bring
new drugs to market in the shortest possible time, thereby reducing costs,
maintaining market share and accelerating realization of revenue. Currently,
total development of a new drug takes approximately eight to twelve years, a
significant portion of a drug's twenty year period for protection under
United States patent laws. Certain pharmaceutical companies have initiated
11
plans to reduce this time to approximately five to seven years. Pharmaceutical
and biotechnology companies are attempting to increase the speed of new product
development, and thereby maximize the period of marketing exclusivity and
economic returns for their products, by outsourcing development activities.
The clinical research process generally has been inefficient and costly for
sponsors, requiring the expenditure of considerable resources and efforts
associated with study start-up, meeting enrollment quotas and collecting
complete and consistent data. Historically, sponsors have had to identify
and negotiate contracts and study budgets with numerous geographically
dispersed clinical research investigators, a process which impedes quick
study start-up. These clinical trials are generally reviewed and approved
by an independent institutional review board ("IRB") for each research site
participating in a study. There is a separate IRB for each ongoing clinical
trial.
The IRB has been established to assure the protection of all human subjects
in research projects. In accordance with U. S. Department of Health and Human
Services Regulations for Protection of Human Subjects (45 CFR 46), an
institutional review board committee, composed of members from a variety of
scientific disciplines as well as community members, assists investigators in
the protection of the rights and welfare of human subjects. The IRB also
serves to facilitate valuable human subject research as well as protect the
investigator and the institution through a comprehensive review process. All
human research projects must be reviewed and approved by the IRB prior to
initiation and then conducted in full compliance with the IRB guidelines
established by U. S. Department of Health and Human Services.
The clinical research industry is driven by the need of the pharmaceutical
and biotechnology companies to produce new drugs at low costs while at the
same time maintaining compliance with governmental regulations principally
imposed by the FDA. Competition and the increasing pressure to control
costs are forcing pharmaceutical and biotechnology companies to become more
efficient in developing new drugs. The pharmaceutical and biotechnology
companies are actively seeking improved ways to save time in the clinical
development process in order to bring products to market faster. The benefit
in bringing their products to the market faster, helps these companies
recover their research and development costs and achieve higher prices on
their patented products before they lose their patent protection and
generics enter the market. In an effort to save time and cut costs,
physician researchers are outsourcing certain aspects of the clinical
research process to third parties, including research networks.
The services Clinical Trials Assistance Corporation plans to provide are
subject to federal regulations pursuant to IRB review. For example, the
Company's brochures and advertisements to recruit patients are subject
to a Independent Board Review and subsequent approval from the physician
12
researchers. The IRB is required to apply institutional rules, federal, state
laws and regulation in reviewing study protocols, evaluating risks and benefits,
ensuring the selection of subjects is equitable, monitoring the data collected
to ensure the safety of subjects, protecting the privacy of subjects and to
maintain the confidentiality of files. During their regularly scheduled board
meetings, they also review and approve brochures and advertisements to ensure
compliance with the study protocol.
Investigative Sites
-------------------
The investigative site industry includes all of the clinical investigators
who enroll patients in clinical trials and collect information at the patient
level for pharmaceutical and biotechnology companies and contract research
organizations ("CRO"). The investigative site industry is facing significant
cost reduction pressures as a result of the pressures on pharmaceutical and
biotechnology companies to reduce costs and the amount of time required to
bring a drug to market. As a result of increased pressures, pharmaceutical
and biotechnology companies who need to conduct clinical research have reduced
their use of academic medical centers for clinical studies and have increased
their use of private practice research sites. In many instances, private
practice physician sites can provide greater access to patients and the
ability to conduct trials more rapidly and efficiently than academia. In
addition, participation in clinical trials by private physicians has increased
as healthcare providers discover that they are able to offer patients access
to more advanced therapies and the opportunity to receive free or reduced-cost
medical care.
CTAC plans to assist the investigative sites, with planning and coordinating
the patient recruitment of independent clinical trials on drugs for
pharmaceutical and biotechnology companies. By assisting these investigative
sites in patient recruitment, and helping them identify and enroll patients
in the early stages of their clinical studies, the Company plans to
facilitate faster study start-up. It is not uncommon for an investigate site
to undertake a clinical study project, and not begin their patient recruitment
efforts for six months after the study is scheduled to begin. CTAC by assisting
physician researches in recruiting patients for their studies, at the outset of
the study, plans to help will be helping the pharmaceutical and biotechnology
companies conducting clinical trials to complete the clinical research process
efficiently and cost effectively, by saving them time in completing these
studies. According to Boling Clinical Trials, based on historical data to
conduct a clinical trial research project for an osteoporosis and rheumatoid
arthritis study it can cost, on average, $500,000 per study, of which one-third
($166,000) of these funds are used to recruit approximately 57 patients for
each study. Initial cost data from CTAC results and Boling Clinical Trials
13
indicates that it costs $1,475 in recruitment fees per patient enrolled in a
similar osteoporosis and rheumatoid arthritis clinical study versus $2,950
paid in recruitment fees per enrolled patient for similar studies conducted in
the past. When monies are spent on recruiting patients for a clinical trial, it
can take a year just to recruit patients for a study and there are no guarantees
that advertising methodologies used will bring in any patients for trial
evaluation. If CTAC can develop a cost-effective methodology to recruit
patients, it could reduce the time and money spent on recruiting patients. A
cost-effective methodology benefits the investigate site.
The investigative sites typically perform the clinical trials, focusing on
Phases II through IV of the drug development process. The clinical
research portion of the drug development process involves selection of
investigative sites to conduct the trials. The physician researchers are
responsible for the actual conduct of the trials and the gathering and
completion of the data generated during the trials. CTAC solely assists these
sites by helping them find patients, who are subsequently screen by these
physician recruiters who are in the process of conducting research studies.
The physician researchers are responsible to determine whether or not these
patients should be enrolled in their studies, based on the criteria of the
study protocols.
In conducting these studies, the investigative sites administer medical
evaluations, healthcare procedures and study medications to patients in
accordance with the protocol under the direction of a qualified principal
investigator. A "qualified principal investigator" has been approved by both
the FDA and sponsoring pharmaceutical/biotechnology company to conduct
human clinical trials.
A "qualified principal investigator" requires sufficient knowledge, scientific
training, a medical degree and accreditation as evidenced by their credentials,
to conduct clinical studies to investigate the effectiveness and in-use safety
of investigational products in conducting clinical trials on human patients.
The qualified principal investigator needs to be familiar with the background
and requirement of the study before taking receipt of the investigational
product. The qualified principal investigator is responsible for all aspects
of the conduct of the study. This would include: the dispensing and the
administration of the investigational product(s), the implementation of the
study protocol, the collection and reporting of the study data and the
protection of the health and welfare of the personnel and patients involved in
the study. The qualified principal investigator is employed by the sponsor or
a contract research organization. The investigator may be assisted by trained
technical assistants in collecting, recording and the subsequent processing of
data.
Clinical Trials Assistance Corporation plans to focus it patient recruitment
activities with investigative sites that are owned by private practice
physicians. The size of the private physician practices range from one
physician to approximately twenty physicians. Typically, management expects
the investigative sites in its network will consist of two to four partners
in a private practice medical office.
14
Marketing Strategies
--------------------
CTAC also plans to assist pharmaceutical and biotechnology companies in
developing and implementing patient recruitment programs to speed completion
of these studies. These services would include the development and
implementation of advertising programs, public service announcements and other
tools to assist sites in finding and enrolling suitable patients into studies.
These can include, but not limited to newspaper, radio, television, senior
centers, churches, social clubs, and ethnic groups. The Company is
investigating the utilization and subcontracting of a phone room as a tool
to help the clinical investigators screen patients and set appointments.
The management and training of the phone room staff would be the responsibility
of the clinical investigators. The Company would help them identify a
phone room to outsource these services. The purpose of the phone room is to
hire and train an 24-hour answering service to screen patients and answer
basic questions about the clinical study. They would subsequently set an
appointment for the patient to come into the office for further evaluation.
This service would relieve the investigators staff in screening these initial
calls. It was initially discovered that where investigate offices are
understaffed, phone calls were unanswered and potential study patients did not
pursue enrolling in a clinical study.
The Company plans to contact known physicians who participate in medical
studies and pharmaceutical companies who wish to conduct a pharmaceutical
study. Based on the results of the Company's pilot program development period,
the Company will decide which specific disease states to target, based on the
cost effectiveness to recruit patients. Once this known, the Company will plans
market its services to specific physician who specialize in conducting clinical
trials with these known disease states.
The industry is highly fragmented with many small, limited-service providers
as well as in-house research departments, universities and teaching hospitals,
have substantially greater resources than the Company. However, the Company
believes it has an opportunity to take advantage of the trend toward
outsourcing. Physicians who conduct clinical trials do not have the time or
staff to recruit patients for their studies. They are busy with their own
medical practices and qualifying patients for the clinical studies. They
prefer to outsource the patient recruitment job to a third party. The
Company's strategy is to help facilitate patent enrollment in these
preclinical trials.
CTAC plans to market its patient recruitment services to investigative sites,
so that the physicians at these sites are not encumbered in devoting a greater
percentage of their time in recruiting patients versus attending to their own
practice.
The Company's success is dependent upon its ability to attract and retain high
quality investigative sites and recruit patients for their active studies.
15
Competition
-----------
The clinical research industry is highly fragmented. The Company will primarily
compete with Clinical Research Organizations, other patient recruitment
organizations and private practice research sites who are competing to
recruit the same patient based in Southern California. The majority of these
private practice research sites are single sites. CTAC will also compete with
hospitals and academic medical centers and site management organizations
("SMO"), who recruit patients for their clinical studies. No single
competitor or group of competitors has a substantial presence in the recruitment
of patients for clinical trials. All of the Company's competitors, who recruit
patients, have greater financial resources and name recognition, greater
experience in specific diseases and conditions and larger medical specialist
networks than Clinical Trials Assistance Corporation.
CTAC has little experience in competing favorably in most of these areas,
there are no assurances that the Company will be able to respond to these
pressures or changes. Further, there are no significant barriers to entry
into the recruitment of patients for clinical trials. A better funded company
with knowledge of the industry could capture any potential business from CTAC.
(iv) Risk Factors
------------------
a) LIMITED OPERATING HISTORY AND DEVELOPMENT PERIOD MAKES POTENTIAL
DIFFICULT TO ASSESS.
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The Company was incorporated in the State of Nevada on April 22, 2002 (Nevada
File Number: C9967-20). As of the date of this document, the Company has
developed a business plan, established administrative offices and an operating
facility in Vista, California and begun the process of testing its model
for recruiting patients for human pharmaceutical research studies. During the
development period, the company hopes to evaluate methodologies to recruit
patients in a timely, cost effective basis for investigative clinical
research centers. There are no assurances the company will be able to identify
efficient and cost effective methodologies to recruit patients during this
development period. Failure to find effective patient recruitment
methodologies can have an adverse effect on the Company's future.
The Company has limited operating history and must be considered to be
a developmental stage company. Prospective investors should be aware of the
difficulties encountered by such new enterprises, as the Company faces all of
the risks inherent in any new business and especially with a developmental
stage company. The likelihood of success of the Company must be considered
in light of these problems, expenses that are frequently incurred in the
operation of a new business and the competitive environment in which the
Company will operate.
16
b) EVENTUAL NEED FOR ADDITIONAL CAPITAL TO REMAIN A GOING CONCERN.
---------------------------------------------------------------
As of September, 2002, the Company initiated a 504 Offering and was able to
generate enough working capital to implement plans for the first year of its
operations. However, management believes the Company will need $50,000-
$75,000 of additional capital in order to expand its operations, provided it
can create a successful business model. Management believes the Company
will need $50,000-$75,000 reserve of capital from which to draw in order to
expand its operations and identify customer bases of physician researchers,
outside of Southern California. These funds would be use to hire and train
staff on how to duplicate the business model in other areas of the country.
The funds would also be used to duplicate the Company's database for other
geographic areas. This need for additional funds will be derived from any
future revenues and earnings the Company might generate, further management
believes the majority of funding will be received from future private placement
stock offerings pursuant to Regulation "D" Rule 505 or 506. Without this
funding, the Company might exhaust all of its cash reserves to remain as a
Going Concern.
c) ISSUANCE OF STOCK TO FUND THE COMPANY MAY DILUTE YOUR INVESTMENT AND
REDUCE YOUR EQUITY INTEREST IN THE COMPANY.
---------------------------------------------------------------------
It is likely that the Company will issue additional shares of common stock or
preferred stock to expand operations. The proceeds of any offering will
be used for the operations of the business. This would include, but not
limited to hiring additional personnel, upgrading demographic data bases, and
the development of marketing materials to attract new business. The
consequences may be a significant dilution to shareholders' investment, and a
material decrease in shareholders' equity interest in the company. Since CTAC
has not made any determination with respect to new equity funding, management
cannot speculate on the amount of securities which CTAC might issue. At its
sole discretion, the board of directors may issue additional company
securities without seeking shareholder approval. These future offerings could
significantly dilute the value of any previous investor's investment value.
d) OPERATING LOSSES, NEGATIVE CASH FLOW FROM OPERATIONS LIKELY FOR
FORESEEABLE FUTURE.
---------------------------------------------------------------
In its initial operating period from April 22, 2002 (date of inception)
through September 30, 2002, the Company incurred an operating net loss of
$12,767 and a negative cash flow of $26,767 from operations. There is no
guarantee that the Company will ever be able to operate profitably or derive
any significant revenues from its operation. The Company could be required
to raise additional $50,000-$75,000 through a Regulation D, 505 or 506
Offering to expand its business plan to other markets.
17
e) COMPANY MAY FAIL TO CONVINCE ENOUGH CUSTOMERS TO USE ITS SERVICES.
------------------------------------------------------------------
The Company's plans to establish a patient recruitment business with a
primary emphasis in Southern California with physician researchers. Despite
contacts and a referral base from the Company's management, if CTAC cannot
establish itself as an effective business in its home market CTAC will not
be able to expand its business plan regionally or subsequently nationally.
There can be no assurances that its market acceptance will be forthcoming.
f) THE COMPANY IS DEPENDENT ON ONE KEY OFFICER TO DEVELOP AND IMPLEMENT ITS
BUSINESS PLAN.
------------------------------------------------------------------------
The Company plans to rely heavily on the expertise from its sole officer,
Mr. Kamill Rohny, who has knowledge of the pharmaceutical industry. Should
the Company be deprived of the services of its sole officer for any reason
during this period of initial and expansion, the results would be devastating
to the Company and could lead to its dissolution. Although this sole officer
has had experience in helping physician researchers in the past recruit
patients, he cannot be sure that this business model will be successful in
other markets. For example, the Company may be unable to train other personnel
on how to develop another market to recruit patients for clinical studies.
Future operating results would be adversely affected if the Company is unable
to expand its operations. The Company does not have an employment agreement
with Mr. Rohny and Mr. Rohny is engaged in other business activities which
may detract his attention from the Company.
g) THE COMPANY'S MANAGEMENT HAS LITTLE EXPERIENCE IN PROVIDING PATIENT
RECRUITMENT SERVICES
-----------------------------------------------------------------------
Our sole officer/director, Kamill Rohny, has limited business experience in
providing patient recruitment services for clinical studies. As such, the
business model and methodologies he develops may be unsuccessful. As a
consequence, failure to identify effective patient recruitment methodologies
and build a customer base can have an adverse effect on the Company's future.
h) THERE IS A LACK OF INFORMATION ON THE DOLLARS SPENT BY THE
PHARMAECEUTICAL INDUSTRY FOR CLINICAL TRIALS AND PATIENT RECRUITING.
---------------------------------------------------------------------
The majority of the company's expected revenue is expected to be derived
from pharmaceutical spending in clinical research projects. Pharmaceutical
companies do not disclose their research data for proprietary reasons. As
such, it is difficult to collect data on pharmaceutical spending for clinical
trials and patient recruitment. Therefore, there are no spending trends to
evaluate. This means the Company could be facing declines in pharmaceutical
research spending without the knowledge this is taking place. Any event that
results in decreased pharmaceutical research would likely have a negative
effect on the Company's operating results.
18
i) PLANS FOR EXPANSION MAY BE UNREALISTIC BASED ON UNPROVEN BUSINESS MODEL.
------------------------------------------------------------------------
The management of Clinical Trials Assistance Corporation has confidence in its
vision for the Company and believes that in time, if the Company can create
a successful business model, the Company may wish to expand its clinical
trials recruitment business to other geographic area. However the fact that
the Company has not developed a successful business model is indicative of the
strong possibility that the difficulties and challenges in creating such a
company are too great to be overcome. Other companies, pursing this market
have had such a vision and have been unsuccessful in their attempts to realize
it. Potential investors should carefully consider the possibility that the
Company's plans to expand may not be realistic and could ultimately prove to
be unworkable.
j) PATIENT RECRUITMENT MAY INFRINGE ON PRIVACY CONCERNS.
--------------------------------------------------------
The Company collects and utilizes data derived from various sources to recruit
patients for clinical studies. The Company has access to names and addresses
of potential patients who may participate in these studies. This subjects the
Company to knowledge of what studies are taking place, and who may be
participating in these studies. In order to deliver a targeted mail program,
the Company compiles specific demographic information. This information needs
to be protected to circumvent privacy concerns. The information keyed to a
specific disease state could inadvertently fall into the wrong hands without
the consent of the patient.
Due to privacy concerns, the company must take steps to ensure patient lists
remain confidential. There can be no assurance that any protection will be
available for such data or that others will not claim rights to such data.
k) GOVERNMENT REGULATION COULD UNDERMINE THE COMPANY'S PROFITABILITY.
------------------------------------------------------------------
Though the Company plans on obtaining all required federal and state
permits, licenses, and bonds to operate its facilities, there can be no
assurance that the Company's operation and profitability will not be subject
to more restrictive regulation. The services Clinical Trials Assistance
Corporation plans to provide are subject to various federal regulations.
For example, its brochures and advertisements to recruit patients are subject
to a Independent Board Review and subsequent approval from the physician
researchers.
19
l) SHARES SUBJECT TO RULE 144, IF SOLD COULD HAVE A MATERIAL NEGATIVE
IMPACT UPON THE MARKET PRICE OF THE COMPANY'S SHARES.
------------------------------------------------------------------
On September 30, 2002, the Company had 10,000,000 Common Shares issued and
outstanding that have not been registered with the Commission or any State
securities agency and which are currently restricted pursuant to Rule 144
promulgated by the Commission under the 1933 Act. Rule 144 provides, in
essence, that a person holding restricted securities for two years from the
date the securities were purchased from the issuer, or an affiliate of the
issuer, and fully paid, may sell limited quantities of the securities to the
public without registration, provided there shall be certain public
information with respect to the issuer. Pursuant to Rule 144, securities
held by non-affiliates for more than three years may generally be sold
without reference to the current public information or broker transaction
requirements, or the volume limitations. None of the current outstanding
restricted shares are available for resale pursuant to Rule 144. The sale of
some or all of the currently restricted Common Shares could have a material
negative impact upon the market price of the Common Shares if a market for
the Common Shares should develop in the future. (See "PRINCIPAL STOCKHOLDERS")
m) RISKS ASSOCIATED WITH ACQUISITIONS MAY NOT BENEFIT THE COMPANY AND
DILUTE THE VALUE OF THE COMPANY'S SHARES.
-------------------------------------------------------------------
If appropriate opportunities present themselves, the Company would acquire
businesses, technologies, or service(s) that the Company believes are
strategic and would help it to expand its operations and/or future customer
base.
The Company currently has no understandings, commitments or agreements with
respect to any other material acquisition and no other material acquisition
is currently being pursued. There can be no assurance that the Company will
be able to identify, negotiate or finance future acquisitions successfully, or
to integrate such acquisitions with its current business. The process of
integrating an acquired business, technology, service or product(s) into the
Company may result in unforeseen operating difficulties and expenditures and
may absorb significant management attention that would otherwise be available
for ongoing development of the Company's business. Further, there can be no
assurance that the anticipated benefits of any acquisition will be realized.
Future acquisitions could result in potentially dilutive issuances of equity
securities, the incurrence of debt, contingent liabilities and/or amortization
expenses related to goodwill and other intangible assets, which could
materially adversely affect the Company's business, results of operations and
financial condition. Any future acquisitions of other businesses, technologies,
services or product(s) might require the Company to obtain additional equity or
debt financing, which might not be available on terms favorable to the Company,
or at all, and such financing, if available, might be dilutive.
20
n) NO MARKET EXISTS FOR THE COMPANY'S STOCK WHICH MAKES IT DIFFICULT TO
FIND A BUYER FOR THE COMPANY'S STOCK.
--------------------------------------------------------------------
There is currently no established public trading market for Clinical Trails
Assistance Corporation securities. A trading market in the Company's securities
may never develop or, if developed, it may not be able to be sustained. If for
any reason Clinical Trials Assistance Corporation's common stock is not listed
on the OTC Bulletin Board or a public trading market does not otherwise develop,
purchasers of the shares may have difficulty selling their common stock should
they desire to do so. Various factors, such as the Company's operating results,
changes in laws, rules or regulations, general market fluctuations, and other
factors may have a significant impact on the market price of Clinical Trials
Assistance Corporation's securities.
o) LOW-PRICED STOCKS MAY AFFECT THE RESELL THE COMPANY'S SHARES.
-------------------------------------------------------------
Penny Stock Regulation Broker-dealer practices in connection with transactions
in "Penny Stocks" are regulated by certain penny stock rules adopted by the
Securities and Exchange Commission. Penny stocks generally are equity securities
with a price of less than $5.00 (other than securities registered on certain
national securities exchanges or quoted on the NASDAQ system). The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document that provides information about penny stocks and the risk associated
with the penny stock market. The broker-dealer must also provide the customer
with current bid and offer quotations for the penny stock, the compensation of
the broker-dealer and its salesperson in the transaction, and monthly account
statements showing the market value of each penny stock held in the customer's
account. In addition, the penny stock rules generally require that prior to a
transaction in a penny stock, the broker-dealer must make a written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser's written agreement to the transaction. These
disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for a stock that becomes subject to the penny
stock rules. When the Registration Statement becomes effective and the
Company's securities become registered, the stock will likely have a trading
price of less than $5.00 per share and will not be traded on any exchanges.
Therefore, the Company's stock is initially selling at $0.01 per share they will
become subject to the penny stock rules and investors may find it more difficult
to sell their securities, should they desire to do so.
p) RISKS ASSOCIATED WITH INFRINGEMENT OF INTELLECTUAL PROPERTY.
------------------------------------------------------------
If the Company is successful in developing materials from its test program which
demonstrates above average results in recruiting patients, the Company is
subject to intellectual property infringement from its competition. Likewise,
the competitors in the industry, hold their recruiting methods highly
confidential. The more widely the Company employs any methods which are
successful, the more likely these methods become vulnerable to duplication by
other recruiting centers. The are no assurances that the Company will be able
to protect, even if it copyrights its recruiting methodologies, from the
competition.
21
(v) Customers
--------------
The Company has yet to establish a customer base of physician researchers.
There are no assurances that the Company's services would attract future
customers from its competition.
(vi) Patents, Trademarks, Licenses, Franchises, Concessions, Royalty
Agreements, or Labor Contracts
---------------------------------------------------------------------
The Company regards substantial elements of its future and underlying
infrastructure and technology as proprietary and attempts to protect them
by relying on trademark, service mark, copyright and trade secret laws and
restrictions on disclosure and transferring title and other methods. This
would include the methodologies the Company develops to recruit patients for
clinical studies. The Company plans to enter into confidentiality agreements
with its future physician researchers and employees. Despite these precautions,
it may be possible for a third party to copy or otherwise obtain and use the
Company's proprietary information without authorization or to develop similar
technology independently. Legal standards relating to the validity,
enforceability and scope of protection of certain proprietary rights in the
clinical trials business may be uncertain, and no assurance can be given as
to the future viability or value of any of the Company's proprietary rights.
This can be no assurance that the steps taken by the Company will prevent
misappropriation or infringement of its proprietary information, which could
have a material adverse effect on the Company's business, results of operations
and financial condition.
(vii) Impact on Environmental Laws
-----------------------------------
As the Company is involved in recruiting patients for clinical trials, it does
not expect to have any impact on environmental laws.
(viii) Employees
----------------
The Company currently has one (1) employee, who serves as President and Chief
Executive Officer. In order to further implement its business plan,
management recognizes that additional staff will be required. This would
include clerical personnel, and a marketing staff as required to complete the
work. No assurances can be given that the Company will be able to find
suitable employees that can support the future needs of the Company or that
these employees can be hired on terms favorable to the Company.
(a) The Company's performance is substantially dependent on the performance
of its President, Kamill Rohny.
22
(b) The Company does not carry key person life insurance on any of its
personnel. The loss of the services of its executive officers could have a
material adverse effect on the business, results of operations and financial
condition of the Company. The Company's future success also depends on its
eventual ability to attract and retain highly qualified technical and
managerial personnel.
(c) There can be no assurance that in the future the Company will be able
to attract and retain additional highly qualified technical and managerial
personnel. The inability to attract and retain the technical and managerial
personnel necessary to support the growth of the Company's business, due to,
among other things, a large increase in the wages demanded by such personnel,
could have a material adverse effect upon the Company's business, results of
operations and financial condition.
(ix) Present Licensing Status
-----------------------------
The Company is currently registered with the State of California to conduct
business in the State.
ITEM 2. DESCRIPTION OF PROPERTY.
The Company's administrative offices/corporate headquarters and operating
facility are located at: 2078 Redwood Crest, Vista, California 92083-7340.
Telephone number: (760) 727-8448. An officer of the Company provides the
Company with 120 square feet of office space. The estimated fair market
value of the office space is valued at $2,400 per year.
Investment Policies
The Company does not currently own and the Company has not made any
investments in real estate, including real estate mortgages, and the
Company does not intend to make such investments in the near future.
ITEM 3. LEGAL PROCEEDINGS.
As of the date hereof, Clinical Trials Assistance Corporation is not a party
to any material legal proceedings, and none are known to be contemplated
against it.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable.
23
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(i) Market Information
----------------------
The common stock of the Company is currently not traded on the NASDAQ OTC
Bulletin Board or any other formal or national securities exchange. There is
no trading market for the Company's Common Stock at present and there has
been no trading market to date.
(a) There is currently no Common Stock which is subject to outstanding
options or warrants to purchase, or securities convertible into, the
Company's common stock.
(b) There is currently no common stock of the Company which could be sold
under Rule 144 under the Securities Act of 1933 as amended or that the
registrant has agreed to register for sale by security holders.
(ii) Holders
------------
The approximate number of holders of record of common stock as of December 31,
2002 was approximately forty-seven (47).
(iii) Dividends
---------------
Holders of common stock are entitled to receive such dividends as the board of
directors may from time to time declare out of funds legally available for the
payment of dividends. No dividends have been paid on our common stock, and we
do not anticipate paying any dividends on our common stock in the foreseeable
future.
(iv) Recent Sales of Unregistered Securities
--------------------------------------------
On September 10, 2002, Clinical Trials was issued a permit to sell securities
by the State of Nevada, pursuant to our application for registration by
qualification of our offering of Common Stock in that state. The application
for registration by qualification was filed pursuant to the provisions of NRS
90.490, which requires the public filing and delivery to investors of a
substantive disclosure document before sale. On September 30, 2002, Clinical
Trials completed a private offering of shares of our common stock pursuant to
Regulation D, Rule 504 of the Securities Act of 1933, as amended, and the
registration by qualification of said offering in the State of Nevada, whereby
Clinical Trials sold 2,000,000 shares of Common Stock to approximately 46
unaffiliated shareholders of record, none of whom were or are officers,
directors or affiliates of the Company. The entire offering was conducted
exclusively in the State of Nevada, pursuant to the permit issued by the State
of Nevada. The Company filed an original Form D with the Securities and
Exchange Commission on or about September 30, 2002.
24
As of December 31, 2002, the Company has 12,000,000 shares of common stock
issued and outstanding held by approximately 47 shareholders of record.
(iv) Liquidity and Capital Resources
-------------------------------------
On April 30, 2002, the Company issued ten million (10,000,000) shares of
its $0.001 par value Common Stock for cash of $10,000, purchased by Mr.
Kamill Rohny, President and founder of the Company.
On September 30, 2002, Clinical Trials completed a private offering of shares
of our common stock pursuant to Regulation D, Rule 504 of the Securities Act of
1933, as amended, and the registration by qualification of said offering in the
State of Nevada, whereby Clinical Trials sold 2,000,000 shares of Common Stock
to approximately 46 unaffiliated shareholders of record, none of whom were or
are officers, directors or affiliates of the Company.
The Company could be required to secure additional financing to fully
implement its entire business plan. There are no guarantees that such
financing will be available to the Company, or if available, will be on
terms and conditions satisfactory to management.
The Company does not have any preliminary agreements or understandings
between the company and its stockholders/officers and directors with
respect to loans or financing to operate the company. The Company
currently has no arrangements or commitments for accounts and accounts
receivable financing.
The Company has no current commitments or other long-term debt. Additionally,
the Company has and may in the future invest in short-term investments from
time to time. There can be no assurance that these investments will result in
profit or loss.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
General
-------
A. Management's Plan of Operation
(i) In its initial operating period from April 22, 2002 (date of inception)
through December 31, 2002, the Company generated revenues of $7,200 and incurred
an operating net loss of $(28,691). The majority of these costs were State
incorporation fees, accounting costs, legal fees, business license fees and the
purchase of mailing lists for of patient databases. Clinical Trials Assistance
Corporation has $15,909 in available cash to continue its operations.
25
The Company has yet to determine a fee schedule for its services. According to
Boling Clinical Trials, based on historical data to conduct a clinical trial
research project for an osteoporosis and rheumatoid arthritis study it can cost,
on average, $500,000 per study, of which one-third ($166,000) of these funds
are used to recruit approximately 57 patients for each study. Initial cost
data from CTAC and Boling Clinical Trials indicates that it costs on average,
$1,475 n recruitment fees per patient enrolled in a similar osteoporosis and
rheumatoid arthritis clinical study versus Boling's historic patient recruitment
costs of $2,950 per enrolled patient. There are no assurances CTAC can
duplicate these results for similar studies conducted by different investigative
centers. Management believes it can currently handle a work capacity of ten
studies per year. Based on the costs of advertising, developing data bases,
and mailing flyers to these data bases, management expects its hard costs of
services to represent approximately forty percent of revenues generated.
The major components to expenses faced by the company in its day to day
operations includes auditor fees, legal fees, developing databases of potential
patients, based on demographic information, and general administrative expenses.
If the Company becomes profitable, the company will access salaries and
adding additional personnel to the payroll. Management intends to continue
minimize costs until such a time in its discretion it believes expansion would
be prudent. One element in making this determination is positive cash flow on
a quarterly basis. If or when the company is successful in achieving this
quarterly positive cash flow, it is likely that the company will consider
expanding its personnel which will increase costs.
Additionally, management believes the Company will need to implement the
following before it can fully proceed with its business plan:
a) Management anticipates the Company will incur additional start-up costs
which include but is not limited to: telephone expenses, utilities,
insurance, office expenses, travel expenses, computer expenses, and the
development of customer demographic data bases. To date, the Company has
purchased its mailing data bases from a local mailing labeler supplier,
who breaks the mailing labels into zip codes and age groups. The Company
purchases these mailing labels from brokers who specialize collecting this
data. The Company plans to purchase this information on a Quarterly basis,
when it undertakes a specific recruitment program. The Company has
developed a postcard which has been sent to senior citizens who reside
near the clinical researcher's office. Management still needs to
understand distance a patient will travel to participate in one of these
studies. Management anticipates this phase will take an additional three
months to complete. Management estimates the cost for start-up expenses
between $10,000 and $20,000 for the calendar year.
b) Develop promotional tools to generate new business and new customers.
Management estimates the cost to develop promotional tools could range
between $5,000 to $10,000 depending on graphics, art work, quality of
paper and printing costs. Management anticipates this phase will take
an additional twelve months to complete.
26
c) Initiate marketing efforts of its recruitment services through the use of
promotional activities. Promotional activities would include contacting
known clinical trials research centers and physician researchers.
Management estimates the cost of advertising could range from $10,000 to
$15,000 based on reach of audience. Management anticipates this phase will
take an additional twelve months to complete.
d) The Company needs to test its patient recruitment strategies with
physician researchers to determine costs, results, efficiencies and
deficiencies. This includes performing a cost analysis on patient
recruitment. It is a time consuming process to analyze the cost versus
potential return on patients who ultimately qualify for patient studies.
Management anticipates this phase will take an additional twelve months
to complete.
As of September 30, 2002, the Company has generated $7,200 in revenues from
its development period with one physician researcher, Eugene Boling, M.D.,
Boling Clinical Trials, Rancho Cucamonga, CA 91730. The Company presented
Dr. Boling with an invoice for expenses it incurred in recruiting patients
through a mail program. Boling Clinical Trials paid the Company for this
invoice of $7,200. The Company does not have any formal agreement in place
with Boling Clinical Trials, as it needs to determine how to structure its
fee for recruitment services. The Company does not expect to generate
positive cash flows from operations until it can further define its it patient
recruitment abilities, and develop a client base. The company believes that
it has sufficient liquidity and cash reserves for the next 12 months. If
management can develop successful patient recruitment methodologies during its
development period, in order to expand its operations beyond Southern
California, management believes it will need to raise approximately
$50,000-$75,000. While these expectations are formulated based upon prudent
and conservative presumptions, there can be no assurance that in fact
such projections will indeed come to fruition. The company does believe
however, that by positioning itself as a fully reporting company with the U.S.
Securities and Exchange Commission, it will secure a more optimal position in
the view of the investing public to invest funds in the Company. As such
management believes that it would be more likely to attract additional
investors via potential private placements for additional capitalization.
It should be noted that any investor investing in a private placement will hold
restricted securities. In order for such investor to sell such securities,
they must register the resale or the investor must have a valid exemption.
Notwithstanding such an assessment, the company is not presently aware of any
specific interest from potential investors, nor is management certain that
such additional private capital will be available or that the company will in
fact be successful in securing additional capital. The raising an additional
$50,000 to $75,000 privately via the issuance of common stock, debt, or hybrid
instruments as of yet not determined. This capital infusion shall be used
mainly for furtherance of the company's business plan to expand its customer
base and enhance its patient recruitment strategies. If the company cannot
succeed in implementing such a strategy, then its prospects for growth are
substantially undermined. There are no guarantees that such financing will
be available to the Company, or if available, will be on terms and conditions
satisfactory to management. If additional financing does not become available
to the Company, Clinical Trials may be forced to terminate it business.
27
The Company does not have any preliminary agreements or understandings
between the company and its stockholders/officers and directors with
respect to loans or financing to operate the company. The Company
currently has no arrangements or commitments for accounts and accounts
receivable financing. There can be no assurance that any such financing
can be obtained or, if obtained, that it will be on reasonable terms.
There remains no guarantees that other companies might not be working on
similar plans and that some of these may have better funding or more
workable business plans. These could curtail the Company's earning
potential or even force it out of business entirely.
(ii) Management believes that the Company's future growth and success
will be largely dependent on its ability to find physician researchers who
need help in recruiting patients for their clinical studies.
(iii) The Company does not expect to purchase or sell any of its
facilities or equipment.
B. Segment Data
Clinical Trials has only one business segment, therefore, no table showing
percentage breakdown of revenue by business segment or product line is
included.
Going Concern - The Company's financial statements are prepared using the
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. However, the Company has not commenced its planned
principal operations and it has generated minimal revenues. In order to obtain
the necessary capital, the Company raised funds via private offering. If the
securities offering does not provide sufficient capital, the shareholder of
the Company has agreed to provide sufficient funds as a loan over the next
twelve-month period. However, the Company is dependent upon its ability to
secure equity and/or debt financing and there are no assurances that the
Company will be successful, without sufficient financing it would be unlikely
for the Company to continue as a going concern. (See Financial Footnote 3.)
Results of Operations
---------------------
For the year ended December 31, 2002, the Company generated $7,200 in revenues.
This cannot be compared to last year, as the Company was first incorporated on
April 22, 2002. For year ended, the Company had revenues of $7,200 and incurred
a net loss $28,691. The net loss for the year ended December 31, 2002 included
executive compensation of $8,000; general and administrative expenses of
$26,291; and general and administrative expenses-related party of $1,600.
Management does not believe that the Company will be able to generate
significant profit during the coming year, unless the company can define
a better strategy to build a clinical investigators' customer base.
Management does not believe the company will generate any significant profit
in the near future, as developmental, marketing and administrative costs will
most likely exceed any anticipated revenues.
28
ITEM 7. FINANCIAL STATEMENTS.
Clinical Trials Assistance Corporation
Balance Sheet
as of
December 31, 2002
and
Statement of Operations,
Changes in Stockholders' Equity, and
Cash Flows
for the period ended
29
TABLE OF CONTENTS
TABLE OF CONTENTS
PAGE
Independent Auditor's Report F-1
Balance Sheet F-2
Income Statement F-3
Statement of Changes in Stockholder's Equity F-4
Statement of Cash Flows F-5
Notes to Financial Statements F-6-11
30
BECKSTEAD AND WATTS, LLP
----------------------------
CERTIFIED PUBLIC ACCOUNTANTS
3340 Wynn Road, Suite B
Las Vegas, NV 89102
702.257.1984
702.362.0540 (fax)
INDEPENDENT AUDITORS' REPORT
Board of Directors
Clinical Trials Assistance Corporation
Las Vegas, Nevada
We have audited the Balance Sheet of Clinical Trials Assistance
Corporation (the "Company"), as of December 31, 2002, and the related
Statement of Operations, Stockholders' Equity, and Cash Flows for the
period then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing
standards in the United States of America. Those standards require that
we plan and perform the audit 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 statement presentation. 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 audit provides 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 Clinical Trials
Assistance Corporation as of December 31, 2002, and the results of its
operations and cash flows for the period then ended, in conformity with
generally accepted accounting principles in the United States of America.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has had limited operations and have not
commenced planned principal operations. This raises substantial doubt
about its ability to continue as a going concern. Management's plan in
regard to these matters are also described in Note 3. The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Beckstead and Watts, LLP
----------------------------
March 30, 2003
F-1
CLINICAL TRIALS ASSISTANCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
BALANCE SHEETS
December 31,
2002
-------------
ASSETS
Assets
Current assets:
Cash $ 15,909
------------
Total current assets 15,909
------------
$ 15,909
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: $ -
------------
Stockholders' equity:
Preferred stock - Series A, $0.001 par
value, 2,000,000 shares authorized,
no shares issued and outstanding -
Preferred stock - Series B, $0.001 par
value, 2,000,000 shares authorized,
no shares issued and outstanding -
Preferred stock - Series C, $0.001 par
value, 1,000,000 shares authorized,
no shares issued and outstanding -
Common stock - Class A, $0.001 par
value, 20,000,000 shares authorized,
12,000,000 shares issued and outstanding 12,000
Additional paid-in capital 32,600
(Deficit) accumulated during development stage (28,691)
-------------
15,909
------------
$ 15,909
============
F-2
CLINICAL TRIALS ASSISTANCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
STATEMENT OF OPERATIONS
April 22, 2002
(Inception) to
December 31,
2002
--------------
Revenue $ 7,200
--------------
Expenses:
Executive compensation 8,000
General and administrative expenses 26,291
General and administrative expenses - related party 1,600
--------------
Total expenses 35,891
--------------
Net (loss) $ (28,691)
==============
Weighted average number of common shares outstanding -
basic and fully diluted 10,417,323
==============
Net (loss) per share - basic and fully diluted $ (0.00)
==============
F-3
CLINICAL TRIALS ASSISTANCE CORPORATION
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Deficit)
Accumulated
Common Stock Additional During the Total
------------------ Paid-in Development Stockholders'
Shares Amount Capital Stage Equity
---------- ------- ---------- ----------- -------------
April 2002
Founder shares
issued for cash 10,000,000 $10,000 $ 5,000 $ - $ 15,000
September 2002
504 offering
issued for cash 2,000,000 2,000 18,000 20,000
December 2002
Donated capital 9,600 9,600
Net (loss)
April 22, 2002
(inception) to
December 31, 2002 (28,691) (28,691)
---------- ------- ---------- ----------- -------------
Balance,
December 31, 2002 12,000,000 $12,000 $ 32,600 $ (28,691) $ 15,909
========== ======= ========== =========== =============
F-4
CLINICAL TRIALS ASSISTANCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
STATEMENT OF CASH FLOWS
April 22, 2002
(Inception) to
December 31,
2002
--------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ (28,691)
Non-cash general and administrative expense 1,600
Non-cash executive compensation 8,000
--------------
Net cash (used) by operating activities (19,091)
--------------
CASH FLOWS FROM INVESTING ACTIVITIES -
--------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuances of common stock 35,000
--------------
Net cash provided by financing activities 35,000
--------------
Net increase in cash 15,909
Cash - beginning -
--------------
Cash - ending $ 15,909
==============
Supplemental disclosures:
Interest paid $ -
==============
Income taxes paid $ -
==============
F-5
Clinical Trials Assistance Corporation
(a Development Stage Company)
Notes
Note 1 - History and organization of the company
The Company was organized April 22, 2002 (Date of Inception) under the laws of
the State of Nevada, as Clinical Trials Assistance Corporation. The Company
has minimal operations and in accordance with SFAS #7, the Company is
considered a development stage company. The Company is authorized to issue
20,000,000 shares of $0.001 par value class A common stock, 2,000,000 shares
of $0.001 par value series A preferred stock, 2,000,000 shares of $0.001 par
value series B preferred stock, and 1,000,000 shares of $0.001 par value series
C preferred stock. The series A preferred stock has voting rights with each
share having a voting weight equal to 10 shares of 0.001 par value class A
common stock, and each share may be converted to 10 shares of 0.001 par value
class A common stock. The series B preferred stock has voting rights with each
share having a voting weight equal to 2 shares of 0.001 par value class A
common stock, and each share may be converted to 2 shares of 0.001 par value
class A common stock. The series C preferred stock has no voting rights.
Note 2 - Accounting policies and procedures
Cash and cash equivalents
-------------------------
The Company maintains a cash balance in a non-interest-bearing account that
currently does not exceed federally insured limits. For the purpose of the
statements of cash flows, all highly liquid investments with an original
maturity of three months or less are considered to be cash equivalents.
There are no cash equivalents as of December 31, 2002.
Revenue recognition
-------------------
The Company recognizes revenue and gains when earned and related costs of
sales and expenses when incurred.
Advertising costs
-----------------
The Company expenses all costs of advertising as incurred. There were no
advertising costs included in general and administrative expenses as of
December 31, 2002.
Use of estimates
----------------
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 revenue and expenses during the reporting period.
Actual results could differ from those estimates.
F-6
Clinical Trials Assistance Corporation
(a Development Stage Company)
Notes
Fair value of financial instruments
-----------------------------------
Fair value estimates discussed herein are based upon certain market
assumptions and pertinent information available to management as of December
31, 2002. The respective carrying value of certain on-balance-sheet financial
instruments approximated their fair values. These financial instruments
include cash and accounts payable. Fair values were assumed to approximate
carrying values for cash and payables because they are short term in nature
and their carrying amounts approximate fair values or they are payable on
demand.
Impairment of long-lived assets
-------------------------------
Long-lived assets held and used by the Company are reviewed for possible
impairment whenever events or circumstances indicate the carrying amount of
an asset may not be recoverable or is impaired. No such impairments have
been identified by management at December 31, 2002.
Reporting on the costs of start-up activities
---------------------------------------------
Statement of Position 98-5 (SOP 98-5), "Reporting on the Costs of Start-Up
Activities," which provides guidance on the financial reporting of start-up
costs and organizational costs, requires most costs of start-up activities
and organizational costs to be expensed as incurred. SOP 98-5 is effective
for fiscal years beginning after December 15, 1998. With the adoption of
SOP 98-5, there has been little or no effect on the Company's financial
statements.
Loss per share
--------------
Net loss per share is provided in accordance with Statement of Financial
Accounting Standards No. 128 (SFAS #128) "Earnings Per Share". Basic loss
per share is computed by dividing losses available to common stockholders by
the weighted average number of common shares outstanding during the period.
As of December 31, 2002, the Company had no dilutive common stock equivalents,
such as stock options or warrants.
Dividends
---------
The Company has not yet adopted any policy regarding payment of dividends.
No dividends have been paid or declared since inception.
F-7
Clinical Trials Assistance Corporation
(a Development Stage Company)
Notes
Segment reporting
-----------------
The Company follows Statement of Financial Accounting Standards No. 130,
"Disclosures About Segments of an Enterprise and Related Information." The
Company operates as a single segment and will evaluate additional segment
disclosure requirements as it expands its operations.
Income taxes
------------
The Company follows Statement of Financial Accounting Standard No. 109,
"Accounting for Income Taxes" ("SFAS No. 109") for recording the provision
for income taxes. Deferred tax assets and liabilities are computed based upon
the difference between the financial statement and income tax basis of assets
and liabilities using the enacted marginal tax rate applicable when the
related asset or liability is expected to be realized or settled. Deferred
income tax expenses or benefits are based on the changes in the asset or
liability each period. If available evidence suggests that it is more likely
than not that some portion or all of the deferred tax assets will not be
realized, a valuation allowance is required to reduce the deferred tax assets
to the amount that is more likely than not to be realized. Future changes in
such valuation allowance are included in the provision for deferred income
taxes in the period of change.
Deferred income taxes may arise from temporary differences resulting from
income and expense items reported for financial accounting and tax purposes
in different periods. Deferred taxes are classified as current or non-current,
depending on the classification of assets and liabilities to which they
relate. Deferred taxes arising from temporary differences that are not
related to an asset or liability are classified as current or non-current
depending on the periods in which the temporary differences are expected to
reverse.
Recent pronouncements
---------------------
In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities", which addresses financial accounting and
reporting for costs associated with exit or disposal activities and supersedes
EITF No. 94-3, "Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." SFAS No. 146 requires that a liability for a cost associated
with an exit or disposal activity be recognized when the liability is incurred.
Under EITF No. 94-3, a liability for an exit cost was recognized at the date of
an entity's commitment to an exit plan. SFAS No. 146 also establishes that the
liability should initially be measured and recorded at fair value. The
provisions of SFAS No. 146 will be adopted for exit or disposal activities that
are initiated after December 31, 2002.
F-8
Clinical Trials Assistance Corporation
(a Development Stage Company)
Notes
Recent pronouncements (continued)
---------------------------------
In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure-an amendment of SFAS No. 123." This
Statement amends SFAS No. 123, "Accounting for Stock-Based Compensation", to
provide alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation. In
addition, this statement amends the disclosure requirements of SFAS No. 123 to
require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The adoption of SFAS No. 148 is
not expected to have a material impact on the company's financial position or
results of operations.
In November 2002, the FASB issued FASB Interpretation ("FIN") No. 45,
"Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees and Indebtedness of Others", an interpretation of FIN
No. 5, 57 and 107, and rescission of FIN No. 34, "Disclosure of Indirect
Guarantees of Indebtedness of Others". FIN 45 elaborates on the disclosures
to be made by the guarantor in its interim and annual financial statements
about its obligations under certain guarantees that it has issued. It also
requires that a guarantor recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing the
guarantee. The initial recognition and measurement provisions of this
interpretation are applicable on a prospective basis to guarantees issued or
modified after December 31, 2002; while, the provisions of the disclosure
requirements are effective for financial statements of interim or annual
periods ending after December 15, 2002. The company believes that the adoption
of such interpretation will not have a material impact on its financial
position or results of operations and will adopt such interpretation during
fiscal year 2003, as required.
In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable
Interest Entities", an interpretation of Accounting Research Bulletin No. 51.
FIN No. 46 requires that variable interest entities be consolidated by a
company if that company is subject to a majority of the risk of loss from the
variable interest entity's activities or is entitled to receive a majority of
the entity's residual returns or both. FIN No. 46 also requires disclosures
about variable interest entities that companies are not required to
consolidate but in which a company has a significant variable interest. The
consolidation requirements of FIN No. 46 will apply immediately to variable
interest entities created after January 31, 2003. The consolidation
requirements will apply to entities established prior to January 31, 2003
in the first fiscal year or interim period beginning after June 15, 2003.
The disclosure requirements will apply in all financial statements issued
after January 31, 2003. The company will begin to adopt the provisions of
FIN No. 46 during the first quarter of fiscal 2003.
F-9
Clinical Trials Assistance Corporation
(a Development Stage Company)
Notes
Stock-Based Compensation
------------------------
The Company accounts for stock-based awards to employees in accordance with
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" and related interpretations and has adopted the disclosure-only
alternative of SFAS No. 123, "Accounting for Stock-Based Compensation."
Options granted to consultants, independent representatives and other non-
employees are accounted for using the fair value method as prescribed by
SFAS No. 123.
Year end
--------
The Company has adopted December 31 as its fiscal year end.
Note 3 - Going concern
The Company's financial statements are prepared using the 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. However, the Company has not commenced its planned principal
operations and it has generated minimal revenues. In order to obtain the
necessary capital, the Company raised funds via private offering. If the
securities offering does not provide sufficient capital, the shareholder of
the Company has agreed to provide sufficient funds as a loan over the next
twelve-month period. However, the Company is dependent upon its ability to
secure equity and/or debt financing and there are no assurances that the
Company will be successful, without sufficient financing it would be unlikely
for the Company to continue as a going concern.
The officers and directors are involved in other business activities and may,
in the future, become involved in other business opportunities. If a specific
business opportunity becomes available, such persons may face a conflict in
selecting between the Company and their other business interests. The
Company has not formulated a policy for the resolution of such conflicts.
Note 4 - Income taxes
The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"), which
requires use of the liability method. SFAS No. 109 provides that deferred
tax assets and liabilities are recorded based on the differences between the
tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes, referred to as temporary differences. Deferred tax assets
and liabilities at the end of each period are determined using the currently
enacted tax rates applied to taxable income in the periods in which the
deferred tax assets and liabilities are expected to be settled or realized.
F-10
Clinical Trials Assistance Corporation
(a Development Stage Company)
Notes
Note 4 - Income taxes (continued)
The provision for income taxes differs from the amount computed by applying
the statutory federal income tax rate to income before provision for income
taxes. The sources and tax effects of the differences are as follows:
U.S federal statutory rate (34.0%)
Valuation reserve 34.0%
------
Total -%
======
As of December 31, 2002, the Company has a net operating loss carry forward
of approximately $19,086, for tax purposes, which will be available to offset
future taxable income. If not used, this carry forward will expire in 2022.
Note 5 - Stockholder's equity
The Company is authorized to issue 20,000,000 shares of its $0.001 par value
class A common stock, 2,000,000 shares of it $0.001 par value series A
preferred stock, 2,000,000 shares of it $0.001 par value series B preferred
stock, and 1,000,000 shares of it $0.001 par value series C preferred stock.
On April 30, 2002, the Company issued 10,000,000 shares of its $0.001 par
alue class A common stock to an individual who is an officer and director of
the Company in exchange for cash of $15,000.
On September 30, 2002, the Company closed and issued 2,000,000 shares of its
$0.001 par value class A common stock in a Regulation D, Rule 504 offering
for total cash received of $20,000.
There have been no other issuances of common and/or preferred stock.
Note 6 - Warrants and options
As of December 31, 2002, there are no warrants or options outstanding to
acquire any additional shares of common and/ or preferred stock.
Note 7 - Related party transactions
On April 30, 2002, the Company issued 10,000,000 shares of its $0.001 par
value class A common stock to an individual who is an officer and director
of the Company in exchange for cash of $15,000.
F-11
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
A. The names, ages and positions of the Company's directors and executive
officers are as follows:
Name Age Position Appointed
------------ --- --------------------------- ---------
Kamill Rohny 62 Chairman of the Board April, 2002
President, CEO, CFO
Secretary
Eugene P. Boling, M.D. 52 Director Nov., 2002
-----------------------------------------------------------------------------
B. Family relationships
None.
C. Work Experience
Kamill Rohny, Director, President, CEO/CFO, Secretary
-----------------------------------------------------------------
Kamill Rohny had 32-years of service (December, 1969 through February, 2002)
with Procter & Gamble Pharmaceuticals (formerly known as Norwich Eaton
Pharmaceuticals). He voluntarily retired from the Company in February,
2002.
While at Procter and Gamble Pharmaceuticals, Kamill Rohny was a Regional
Scientific Manager of the Professional Scientific Organization of Procter &
Gamble Pharmaceuticals, leading and executing educational and clinical
research projects, disseminating scientific data to national and regional
physician thought leaders, in one-on-one and group settings. This resulted
in the education of current and future treatment modalities and included
patient recruitment activities.
31
Key strategies and activities included but were not limited to, working with
clinical research departments in identifying investigators, clinical research
centers, including site assessment and pre-study visits and served as a
conduit for handling independent research proposals.
During his last year at Procter and Gamble Pharmaceuticals, Mr. Rohny designed,
tested and implemented a patient recruitment program for people with
osteoporosis that helped participants improve their bone health through self
management. The company implemented his recruitment programs on a national
level. These programs were not offered to physicians by any other
pharmaceutical company. Pharmaceutical companies are in business to sell their
pharmaceutical products through physician prescriptions. This was a patient
recruitment program offered by a pharmaceutical which helped build goodwill and
did not directly sell pharmaceutical products. After Mr. Rohny retired from
Procter and Gamble Pharmaceuticals, his former employer did not actively pursue
patient recruitment programs.
He plans to develop 25-30 hours per week to Clinical Trials Assistance
Corporation ("CTAC").
Eugene P. Boling, M.D., F.A.C.P., F.A.C.R., Director
----------------------------------------------------
Office Address: 8283 Grove Avenue, Suite 203, Rancho Cucamonga, California
91730; Medical License # G57099
Private Practice Physician: Establishment of a single specialty group
rheumatology practice. The practice services an area in Southern California
populated by of 500-600,000 people. Practice employs and is supported by
twelve full time and five part-time personnel (not including the physician).
1986 to present.
Research Practice: Boling Clinical Trials a.k.a. Inland Clinical Research.
1989 to present. Boling Clinical Trials works with approximately fifteen
pharmaceutical and biotechnology companies, in conducting human clinical
trials for pharmaceutical products in their final stages of approval by the
FDA. Dr. Boling is responsible for screening clinical study candidates and
evaluating their response to these treatment modalities. The results of
his work will help determine whether or not a pharmaceutical product offers
any marked patient benefit and its subsequent FDA approval.
Clinical Assistant Professor, Rheumatology Department University of Southern
California/ Los Angeles County Hospital 1987-1994 Clinical Assistant
Professor, Rheumatology Department, Department of Medicine, Loma Linda
University Loma Linda, California 1987-1997.
Military Service: Staff Internist, Malcolm Grow USAF Hospital, Andrew AFB,
Wash. D.C. 1979-1981; Fellowship 1981-1983; Staff Rheumatologist, Malcolm Grow,
USAF Hospital, 1983-1986; Visiting Research Institute, Naval Medical Research
Institute, Bethesda, Maryland, 1983-1986; Acting Director, Malcolm Grow U.S.
Air Force Rheumatology fellowship program, 1983-1986.
32
Education: FELLOWSHIP: Johns Hopkins University, 1981-1983. Baltimore,
Maryland Rheumatology fellowship; RESIDENCY: University of Utah, 1977-1979.
Salt Lake City, Utah. INTERNSHIP: University of Utah, 1976-1977. Bachelor
of Science, University of California at Los Angeles School of Medicine,
1972-1976; M.D. Degree. Loyola University Los Angeles, 1968-1972.
D. Involvement on Certain Material Legal Proceedings During the Last Five
Years
(1) No director, officer, significant employee or consultant has been
convicted in a criminal proceeding, exclusive of traffic violations
or is subject to any pending criminal proceeding.
(2) No bankruptcy petitions have been filed by or against any business or
property of any director, officer, significant employee or consultant
of the Company nor has any bankruptcy petition been filed against a
partnership or business association where these persons were general
partners or executive officers.
(3) No director, officer, significant employee or consultant has been
permanently or temporarily enjoined, barred, suspended or otherwise
limited from involvement in any type of business, securities or
banking activities.
(4) No director, officer or significant employee has been convicted of
violating a federal or state securities or commodities law.
33
ITEM 10. EXECUTIVE COMPENSATION.
Compensation of Executive Officer/Director
Name Title Salary Bonus Common Stock
----------------------------------------------------------------------
Kamill Rohny(1) President/CEO (1) None None
Eugene P. Boling, M.D. Director None None None
All Executive Officers as a Group (2 persons)
(1) An officer of the Company agreed to take no salary until the Company can
generate enough revenues to support salaries on a regular basis. The estimated
fair market value of the services rendered is valued at $12,000 per year.
Total officer compensation expense is $8,000 for the 8 months ended December
31, 2002. The sole officer will not be compensated for services previously
provided, he will only be compensated on a going forward bases at the time until
the Company can generate enough revenues to support salaries on a regular basis.
The Company currently does not have employment agreements with its
executive officers. The executive officer will not draw any salary
until the Company can generate a profit for three consecutive Quarters.
Kamill Rohny, is currently involved in other activities.
(ii) Compensation of Directors
There were no arrangements pursuant to which any director of the Company was
compensated for the period from April 22, 2002 to December 31, 2002 for any
service provided as a director. In addition, no such arrangement is
contemplated for the foreseeable future.
34
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the beneficial
ownership of our outstanding common stock as of December 31, 2002, by each
person known by Benchmark Technology Corporation, to own beneficially more than
5% of the outstanding common stock, by each of our directors and officer and by
all of our directors and officers as a group. Unless otherwise indicated
below, all persons listed below have sole voting and investment power with
respect to their shares of common stock.
A. The following table sets forth information concerning stock ownership
of (i) each director, (ii) each executive officer, (iii) the directors and
officers of the Company as a group, (iv) and each person known by the
Company to own beneficially more than five percent (5%) of the Common Stock
of the Company. Unless otherwise indicated, the owners have sole voting and
investment power with respect to their respective shares.
Amount
Title Name and Address of shares Percent
of of Beneficial held by Date of
Class Owner of Shares Position Owner Acquired Class
-----------------------------------------------------------------------------
Common Kamill Rohny Pres./CEO 10,000,000 04/30/02 83.33%
Eugene P. Boling, M.D. Director 0 - -
-----------------------------------------------------------------------------
All Executive Officers as
a Group (2 persons) 10,000,000 83.33%
(1) c/o Clinical Trials Assistance Corporation, 2078 Redwood Crest, Vista,
California 92083.
B. Persons Sharing Ownership of Control of Shares
Kamill Rohny owns and shares the power to vote ten percent (10%) or more
of the Company's securities.
35
C. Non-voting Securities and Principal Holders Thereof
The Company has not issued any non-voting securities.
D. Options, Warrants and Rights
There are no options, warrants or rights to purchase securities of the
Company.
E. Parents of the Issuer
Under the definition of parent, as including any person or business
entity who controls substantially all (more than 80%) of the issuers of
common stock, the Company has no parents.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
By Board Resolution, the Company hired the professional services of Beckstead
and Watts, LLP, Certified Public Accountants, 3340 Wynn Road, Suite C,
Las Vegas, NV 89102, Phone: (702) 257-1984. There Certified Public
Accountants were hired to perform audited financials for the Company.
Beckstead and Watts, LLP, own no stock in the Company. The company
has no formal contracts its CPA, who is paid on a fee-for-service basis.
The Company is conducting an evaluation of its recruiting methods at Boling
Clinical Trials, a.k.a. Inland Clinical Research in Rancho Cucamonga,
California. This research facility is owned and operated by Eugene P. Boling,
M.D. who is a Director of the Company. This arrangement benefits both the
Company and Dr. Boling, in that, it helps the Company develop and define its
methodologies for recruiting patients in a real clinical setting; and, it helps
Dr. Boling recruit patients for his clinical studies. Dr. Boling receives
no direct compensation from the Company other than the Company helping him to
recruit patients. Dr. Boling provides the management of the Company with
feedback as to which methodologies work best in recruiting patients during
this developmental program. Once the Company defines its methodologies, and
markets its services to other medical research centers, it will most likely
to continue recruiting patients for Dr. Boling's research clinic to further
refine and develop its recruiting methods.
The officers and directors are involved in other business activities and may,
in the future, become involved in other business opportunities. If a specific
business opportunity becomes available, such persons may face a conflict in
selecting between the Company and their other business interests. The
Company has not formulated a policy for the resolution of such conflicts.
36
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS.
23 Consent of Beckstead and Watts, LLP
99 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Chief Executive Officer and Chief Financial Officer).
(b) REPORTS ON FORM 8-K
Not applicable.
ITEM 14 - CONTROL AND PROCEDURES
The Company's Chief Executive Officer and Chief Financial Officer have
concluded, based on an evaluation conducted within 90 days prior to the filing
date of this Annual Report on Form 10-KSB, that the Company's disclosure
controls and procedures have functioned effectively so as to provide those
officers the information necessary whether:
(i) this Annual Report on Form 10-KSB contains any untrue
statement of a material fact or omits to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this
Annual Report on Form 10-KSB, and
(ii) the financial statements, and other financial
information included in this Annual Report on Form 10-KSB,
fairly present in all material respects the financial
condition, results of operations and cash flows of the
Company as of, and for, the periods presented in this
Annual Report on Form 10-KSB.
There have been no significant changes in the Company's internal controls
or in other factors since the date of the Chief Executive Officer's and
Chief Financial Officer's evaluation that could significantly affect these
internal controls, including any corrective actions with regards to
significant deficiencies and material weaknesses.
37
SIGNATURES
In accordance with the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant, caused this report to be signed on its
behalf by the undersigned based upon the best information available pursuant
to Section 12b-25, thereunto duly authorized.
Clinical Trials Assistance Corporation
--------------------------------------
(Registrant)
Dated: April 1, 2003 By: /s/ Kamill Rohny
---------------------------------
Kamill Rohny
Chairman of the Board
President, Secretary
Chief Executive Officer
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
By: /s/ Kamill Rohny April 1, 2003
-------------------------------------
Kamill Rohny
Chief Executive Officer and
Chief Financial Officer
38
EXHIBIT 99.1
Clinical Trials Assistance Corporation
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Kamill Rohny, Chief Executive Officer and Chief Financial
Officer of Clinical Trials Assistance Corporation (the "Registrant"), certify
that:
1. I have reviewed this Annual Report on Form 10-KSB of the Registrant;
2. Based on my knowledge, this Annual Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this Annual
Report;
3. Based on my knowledge, the financial statements, and other financial
information included in this Annual Report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this Annual Report;
4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
Annual Report is being prepared;
b) evaluated the effectiveness of the Registrant's disclosure
controls and procedures as of a date within 90 days prior
to the filing date of this Annual Report (the "Evaluation Date");
and
c) presented in this Annual Report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The Registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the Registrant's auditors and the audit committee
of Registrant's board of directors (or persons performing the equivalent
function);
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Registrant's ability to
record, process, summarize and report financial data and have
identified for the Registrant's auditors any material weaknesses
in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Registrant's
internal controls; and
6. The Registrant's other certifying officer and I have indicated in this
Annual Report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Dated: April 1, 2003 Signature: /s/ Kamill Rohny
----------------- -----------------------------
Kamill Rohny
Chief Executive Officer
Chief Financial Officer