************THE REST OF THE STORY***************
THE "PLUVIA" REPORT IS FULL OF MISINFORMATION. PLEASE STUDY IT AND THINK ABOUT IT.
LAS VEGAS -- June 22, Pluvia Securities Research Initiates Coverage of Computerized Thermal Imaging, Inc., (OTC Bulletin Board: COII), with a STRONG SELL Recommendation at the current price of $9.125, giving a 12 month price target of under $0.25 cents.
Our Strong Sell Recommendation and price target are based on:
1. Computerized Thermal Imagingïs lack of a commercially viable product and our belief that the technology in the companyïs proposed product is insignificant and will never be commercially successful;
2. A series of press releases issued by Computerized Thermal Imaging that appear to be false and misleading, and, misrepresent the companyïs business prospects and relationships;
3. Computerized Thermal Imagingïs failure to disclose managementïs past involvement in fraudulent investment schemes.
???..NO ONE AT CTI HAS EVER BEEN CONVICTED OF FRAUD. THIS IS ABSURD.
Specifically, a lawsuit filed by investors against Computerized Thermal Imagingïs CEO, under the auspices of the"Racketeering Influenced and Corrupt Organizations Act", (RICO), alleging "Fraud and Deceit", in which the defrauded investors won the suit and subsequent appeal, and were awarded a $25 million judgement;
??..DAVE JOHNSTON ORGANIZED TAX INCENTIVE INVESTMENTS THROUGH LIMITED PARTNERSHIPS IN THE LATE 80'S THAT WERE DISSOLVED DUE TO GOVERNMENT MODIFICATION OF TAX CODE. THIS CHANGE CAUSED BIG LOSSES IN ALMOST ALL TAX SHELTERS AROUND THE COUNTRY. MR. JOHNSTON TOOK THE BIGGEST LOSS OF ALL INVESTORS AND DECLARED BANKRUPTCY. THIS WAS MERELY A BUSINESS LOSS AND WAS NEVER JUDGED BY ANY COURT AS BEING CRIMINAL OF ANY EHTICAL VIOLATION. OF DAVE JOHNSTON'S 35 YEARS IN BUSINESS, THIS WAS HIS ONLY SERIOUS FINANCIAL LOSS. THE COURT NEVER SANCTIONED HIM FOR ANY BUSINESS IMPROPRIETY--I HAVE PROOF OF THAT.
4. 23 million shares of COII stock recently registered, which if sold could cause a very negative impact on COIIïs stock price.
??? COMPANY OFFICERS IN OTHER COMPANIES REGULARLY SELL SHARES. THIS IS A NON-ISSUE. THESE PEOPLE HAVE REGISTERED TO SELL, THEY HAVE NOT SOLD. REALIZE THAT THERE ARE INSTITUTIONS THAT ARE EXCITED ABOUT THIS SALE OF STOCK BECAUSE THEY WANT TONS OF SHARES.
THE "STORY" FROM THE COMPANY
Computerized Thermal Imaging, (herein as CTI or COII), claims to be developing a computerized thermal imaging, diagnostic and patient management system. Their main product is supposed to be a non-invasive, non-contact, non-radiation procedure for the detection of breast cancer. Many investors have come to believe that COII has a product that will replace traditional mammography with a fast, painless and accurate procedure.
OUR RESEARCH
1. A radiologist with a major teaching hospital who reviewed the companyïs product said the product was, in his opinion "a complete scam".
?????.WHAT RADIOLOGIST? WHERE? WHO? HAVE THEY INTERVIEWED YURI PARISKY, MD AT USC SCHOOL OF MEDICINE OR MANNY VIAMANTE, MD AT MT. SINAI HOSPITAL? QUINTILES, TRW, BATELLE ALL HAVE FAITH IN CTI. REMEMBER THAT!
HAD THEY INTERVIEWED PARISKY OR VIAMANTE, THEY WOULD HAVE BEEN TOLD THE TRUTH--COMPUTERIZED THERMAL IMAGING (CTI) WILL REVOLUTIONIZE THE IMAGING OF BREAST CANCER. WE ALL AGREE THAT OLD FASHIONED THERMOGRAPHY IS UNRELIABLE, BUT CTI IS A COMPLETELY DIFFERENT MODALITY.
2. One of the physicians actively testing the companyïs product claimed to be "very skeptical", stating the product produced "just a temperature map and canït localize anything". The physician went on to say Computerized Thermal Imaging "would get laughed off the podium if you tried to present this (research) at an industry meeting", (the company did attempt to present at the Radiological Society of North America conference - and was rejected).
?????NOTICE THAT THEY DID NOT NAME THAT INDIVIDUAL! THE DIGITAL TRACKING SYSTEM OF THE CTI FINDS SPOTS TO 1/10 OF A mm, EVERY 15 MILLISECONDS! THE TEMPERATURE GRADIENT SYSTEM IS ACCURATE TO 1/10,000 OF A DEGREE! IT IS ABSURD TO SAY THAT IT CAN'T LOCALIZE ANYTHING.?
3. The Clinical Practice Guideline put out by the US Department of Health and Human Services specifically addresses thermography by issuing the following Strong Recommendation: "Thermography should not be used as a screening or diagnostic tool for breast cancer detection or evaluation of breast disease".
4.
?????.THERMMOGRAPHY IS NOT COMPUTERIZED THERMAL IMAGING. NEVER CONFUSE THE TWO.
5. Joan Schellenbach, senior director of media relations for the American Cancer Society, said in an interview with The Salt Lake Tribune regarding the company and similar products; "There is a lot of heavy marketing of products out there, and not all are worth the money or the improvement". She added that mammograms followed by biopsies, if needed, remain the standard method for breast cancer detection. Also stating "Many [doctors] wouldnït count on an alternative for fear of serious consequences if it gave the wrong result".
???..A GENERAL STATEMENT FROM SOMEONE WHO OBVIOUSLY DOES NOT KNOW ABOUT THE CTI SYSTEM. REMEMBER THAT ALMOST EVERYONE INVOLVED IN CANCER HAS NOT YET HEARD ABOUT THE CTI SYSTEM.
6. Of the 20 board certified radiologists we talked to, many who specialize in mammography, not one indicated any favorable impression of Computerized Thermal Imagingïs product and none thought the product had a future in radiology.
????DID THEY LIST THE NAMES OF THE 20? OF COURSE NOT. BUT, I COULD FIND 20 RADIOLOGISTS RIGHT NOW WHO HAVE NEVER HEARD OF CTI. IN 6 MONTHS THAT WILL BE DIFFERENT.
7. The company has been around since 1987 and reports spending a mere $10.2 million on research and development compared to $18.2 million spent on general and administrative expenses during the same time period.
????.. SPENDING $1M/YEAR DEMONSTRATES THEIR ABILITY TO CONTAIN COSTS. AND MUCH OF THE $10M CAME OUT OF MR. JOHNSTON'S OWN POCKET.
8. The companyïs only granted patent is for an examination table design, not thermal imaging.
?????FALSE. CTI NOW HAS MANY PATENTS SINCE THEY PURCHASED BALES AND HAVE ADDITIONAL PATENTS ON THE ALGORITHM AND MANY OTHER ASPECTS OF THE SYSTEM--OTHER PATENTS ARE PENDING. SOME OF THEM COULD BE HUGE. CTI HAS A WORLD CLASS TECHNOLOGY THAT IS REVOLUTIONARY IN NATURE. ONCE THOSE PATENTS ARE GRANTED IT WILL BE ALMOST IMPOSSIBLE FOR ANY COMPETITOR TO EVEN APPROACH THEIR EFFICACY. INSIDE THE TABLE IS SYSTEM THAT IS UNIQUE AND WILL QUICKLY DISTANCE CTI FROM COMPTEITORS.
9. The companyïs market valuation is just under a billion dollars and as of March 31, 2000, the company had only managed to generate $180,000 in product revenue during itïs entire thirteen year history.
?????..CTI IS A DEVELOPMENT STAGE COMPANY. THIS IS TYPICAL FOR THIS STAGE OF DEVELOPMENT. ALSO, THIS STATEMENT WAS WRITTEN BEFORE THEY RECEIVED $5M FROM THE MEXICAN CONSORTIUM! WHY DO YOU THINK THEY DATED THE REPORT TODAY AND DATED THE LACK OF SALES IN MARCH? THESE GUYS ARE VERY SNEAKY AND SLIMY, INDEED.
FALSE & MISLEADING PRESS RELEASES & STATEMENTS
1. In an August 29, 1990 release, the company stated, "By 1992 CTI believes that substantially all hospitals and clinics, as well as 2 percent of all hospital-related physicians, will be users of CTI units".
??..IN THE EARLY 90?S DAVE JOHNSTON THOUGHT THIS WOULD OCCUR. HOWEVER, AFTER FURTHER THOUGHT, CTI DECIDED THAT IT WOULD BE MORE EFFECTIVE TO DISCONTINUE PLACING SYSTEMS IN HOSPITALS UNTIL THEY WERE FDA APPROVED.
2. In a December 3, 1990 press release, the company stated; "CTI has verbal agreements from the following medical facilities: Highland Park Imaging Center (2 units), University of Chicago (2 units), Rush Presbyterian Saint Lukes (3 units) University of Wisconsin (1 unit). Management believes all of the above verbal agreements should be signed within 30 days. Each thermal imaging unit sold brings in a minimum of $225,000 in revenue. Once the unit is in, furthermore, the contract (which is locked into for 6 years) provides the medical facility with an average $500 per case, which translates into $600,000 of which CTI receives 25 percent or $150,000 on an annual basis."
Total revenue projected in this release was over $9 million by 1997. We have found no evidence the company sold any of the thermal imaging units noted in this press release.
???CTI STILL HAS LETTERS OF INTENT FROM THE ABOVE HOSPITALS. HOWEVER, ONCE THEY DECIDED TO GO FOR FDA APPROVAL THEY DISCONTINUED ALL INTENT OF PLACING SYSTEMS IN U.S. HOSPITALS UNTIL APPROVED BY THE FDA.
Our researchers spoke to a physician at one of the centers COII claimed had a "verbal agreement" to purchase 2 units. The physician recalled being contacted by COII and commented that his facility never agreed to accept delivery of any thermal imaging units. Furthermore, his only response was a request for the company to send some images to him for review. If interested, he said they would talk further. He recalled only a single telephone conversation and no subsequent follow-up from the company.
??..CTI HAS WRITTEN APPROVAL FROM THESE HOSPITALS TO INSTALL SYSTEMS. SEE ANSWER ABOVE.
3. In a April 7, 1992 press release the company stated they had signed a letter of intent to acquire a profitable hospital and arranged for financing which would net them $2.5 million in capital. David Johnston, CEO, proclaimed; "The completion of this acquisition and financing will constitute a major breakthrough for CTI, allowing the company to finance the installation of the first 10 systems ordered by hospitals around the country. In addition, having the first installation at a medical facility owned by the company will provide an installed and operating site system for other hospitals to visit and examine results of performance activities, while providing the company with the asset base and operating revenues and profits to expand".
We found no evidence the company acquire this or any hospital, or sold any of the thermal imaging units noted in this press release.
PRESS RELEASES ANNOUNCING INTERNATIONAL BUSINESS
????SAME ANSWER ABOVE
1. In an October 6, 1994 press release the company announced a joint venture with Trisun Medical America to bring computerized thermal imaging technology to China. The press releases stated; "Over the next five years it is the intent of the venture to install 6000 CTI Systems in the PRC [Peopleïs Republic of China]. The top 500 medical facilities will receive systems within the first two years providing the hub for the additional 5500 installations."
???SAME ANSWER. THEY DECIDED TO SPEND MONEY ON FDA APPROVAL, NOT FOREIGN ROLL-OUT.
2. A November 29, 1994 press release stated "The first units are scheduled to be shipped to China in the first quarter of 1995. It was announced to the shareholders that this endeavor results in $3 billion in sales for the Company".
3.
?????..ONE UNIT WAS SHIPPED AND INSTALLED. AGAIN, SYSTEMS WERE BROUGHT BACK TO U.S. FOR AMERICAN CLINICAL TRIALS.
3. A June 20, 1995, press release announced that Air Force Major General Richard Secord had joined the company to manage the China project. The company also stated; "The first CTI system was shipped today for installation in the Army Hospital in Beijing. The company is also pleased to announce that the first Health Cards have already been deployed in China". Two days later, COII CEO David Johnston was quoted in an Associated Press report as saying that Computerized Thermal Imaging has no revenues to date, but that the China venture should begin showing up in its financial statements in the next quarter.
The following quarterïs financials showed no revenue from this China project. Contrary to these press releases, we found no evidence the company has ever sold any thermal imaging units in China.
???.SAME ANSWER
4. In an April 25, 1996, press release, the company stated; "The first CTI System has now been sold to Thailand. The first of two payments has been received by CTI and the unit will be shipped on or about April 25, 1996..., After a few months of operation in Thailand we expect to place a large number of units throughout the country".
5. On September 16, 1996 the company stated; "After several months of operation in Thailand, CTI expects to place an additional 1,000 systems by 1999".
Contrary to these press releases, we found no evidence the company has ever sold any thermal imaging units to anyone in Thailand.
???.CTI HAS A SYSTEM IN ORCHARD HOSPITAL THAT CONTINUES TO COLLECT DATA AS WE SPEAK.
6. On May 20, 1999, CTI claimed to have accompanied Utah Governor Michael Leavitt on a tour of South America and reported; "We had very productive meetings with medical community leaders, private and public hospitals and high ranking government officials in Argentina, Brazil and Chile, all of whom expressed genuine interest in our technology".
??..TRUE
7. On November 22, 1999 the company announced they had expanded this initiative by signing an engagement letter with a consortium of Latin American investors and service providers. They stated the consortium; "has made a firm commitment to the purchase of 100 CTI diagnostic systems valued at approximately $50,000,000 over a two-year period. It is expected that about 40 of these units can be deployed in Mexico beginning in the second quarter of 2000".
??FIRST $5M HAS ARRIVED.
8. A June 19, 2000 press release states the company sold 10 units to the consortium for $5 million, and had received $1.75 million as a down payment.
Our researchers spoke with CTI and asked for a list of members of the Computerized Thermal Imaging International consortium. The company refused to give out any additional information about the "customer". We performed a comprehensive search in an attempt to obtain an address, a phone number, a list of officers, a credit report or even any past news about this "customer". We found nothing other than the press releases put out by CTI.
This lead us to ask the question "is there really a consortium of Latin American investors and service providers, or is this just another scheme to make it look the company has a customer... Similar to the fraudulent scheme run by the companyïs CEO David Johnston where investors were bilked out of millions?"
????YES, THERE IS A CONSORTIUM AND IT INVOLVES POWERFUL, SUCCESSFUL MEXICAN BUSINESSMEN. THE FIRST $5M IS SOME PROOF, DON?T YOU THINK?
COURT RECORDS SUGGEST COIIïS CEO AND LARGEST SHAREHOLDER IS A CON MAN.
???IF I WERE MR. JOHNSTON I WOULD CALL MY LAWYER ABOUT THAT ONE!!!!!!
Recent SEC filings describing the background of COIIïs CEO David B. Johnston fail to include the period of time he was involved running a fraudulent scheme via a company named Agricultural Services Associates. According to an August 20, 1989 UPI article;
1. 21 partnerships representing about 650 investors paid $3.5 million to Agricultural Services and pledged $18 million more in notes.
2. The partnerships were paying for an interest in white doe rabbits implanted with embryos of Rex rabbits, a superior breed whose pelts are favored by furriers. Each doe rabbit was expected to produce eight to 10 Rex rabbits, which would then be bred to create a sustaining herd. The rabbits later would be slaughtered and their pelts sold to a Canadian trading company.
3. The partnerships bought the rabbits for $9,000 to $10,000 each in lots of 100.
4. The rabbits were raised and bred on a farm managed by Promorex Corp. Promorex, charged the investors management fees and were to sell the pelts to Scotia Trading Co. Unknown to the investors, Johnston was also secretly behind the activities of Scotia Trading Co.
5. Johnson secretly loaned money to Scotia to buy the rabbit pelts from Promorex at artificially high prices, thus creating the illusion of a highly profitable market for these pelts. Johnston used the deception of an easy profit to lure more investors into the rabbit partnerships.
6. Johnston reported to investors he bought the rabbit herd for $20 million. In reality he paid less than $100,000.
7. Investors caught on to the ponzi scheme and sued Johnston under the auspices of the Securities Act, the Racketeer Influenced and Corrupt Organizations Act, (RICO), and pendent claim for fraud and deceit. The case was heard in United States District Court, the Northern District of California; Stanley A. Weigel, District Judge, Presiding; Ted Wanderer vs David B. Johnston; et al.
8. The investors lawyer, Jon Vaught, reported that during the lawsuits Johnston would often show up in overalls and claim he cut grass for a living and thus couldnït afford to repay the defrauded investors. All the while he lived in a spacious mansion.
9. The investors won and were awarded a $25 million judgement. David Johnston appealed the judgement but lost the appeal.
10. Agricultural Services Associates and its controlling company, DBJ, Inc. filed bankruptcy. Johnstonïs victims in the fraud never got a penny of their money back. According to their attorney, Johnston managed to transfer all of his ill-gotten gains offshore.
11.
???.THERE WERE NO FINDINGS OF FRAUD AND ANY LEGAL PROBLEMS WERE PROCEDURAL IN NATURE. THE IRS DECLARED THE NOTES NULL AND VOID. REMEMBER, THERE WAS NEVER ANY JUDGEMENT AGAINST JOHNSTON FOR FRAUD--THE LIMITED PARTNERSHIP WAS JUST DECLARED NULL AND VOID.
SHARES THAT CAN BE DUMPED ON THE PUBLIC MARKET
1. Salah Al-Hasawi vs. Computerized Thermal Imaging Inc., and David B. Johnston, Case No. 2:00-CV-0317K, US District Court, District of Utah.
2. According to the lawsuit: On a trip to Kuwait, Salah Al-Hasawi met Johnston and COII affiliates. At this meeting Johnston complained his attempts to raise $30,000,000 in a private placement had failed and they hadnït reached the minimum amount needed to conduct a closing. As a result they had to extend the closing date for an additional two months.
3. Al-Hasawi reviewed the failed private placement memorandum and agreed to help raise the money in exchange for a 17% commission. He was directly able to raise $10,700,000 from the sale of COII securities in Kuwait and the Persian Gulf.
4. COII decided they didnït want to pay Al-Hasawi the commission he was promised. In response he filed a fraud suit against Johnston and COII and requests damages of $15,516,000.
5.
???CRIMINAL INVESTIGATION OF AL-HASAWI IS UNDERWAY IN KUWAIT AS WE SPEAK FOR FRAUD. HE HAS BEEN FIRED FROM HIS FORMER EMPLOYER (THE INVESTOR IN COII) FOR IMPROPERLY DIVERTING COMMISISIONS PAYABLE TO THE EMPLOYER. HE HAS ALSO BEEN DENIED TRAVEL PRIVILEGES OUT OF THE COUNTRY.
What does this have to do with stock being dumped on the open market?
The problem for COII shareholders is that the company agreed to commence the application for registration of the private placement shares by July 1, 2000. A lot of posters on chat board claim these investors will hold their shares. We find that hard to believe, given the main placement agent who sold them these securities is now accusing the company of fraud. It would seem much more likely that they dump this stock as fast as possible.
???..HIS EMPLOYER (WHO FIRED HIM) WAS THE PLACEMENT AGENT! THE POLICE ARE TRYING TO TRACK HIM DOWN AT THIS TIME.
In the last several weeks the company has filed to register over 23 million shares of stock. We think given the circumstances noted herein there is significant potential for this newly registered stock to be sold causing the stock price to fall.
???.THERE HAS BEEN NO FAILED PLACEMENT.
Given the lack of a viable product
?????..WHY WOULD ONE HAVE THE FDA, QUINTILES, BATELLE, AND TRW INVOLVED IF IT WAS NOT VIABLE?
IN SUMMARY: THE DOCUMENT DISTORTS AND TWISTS THE FACTS TO SCARE SHAREHOLDERS INTO SELLING. THOSE OF YOU OF SOUND MIND SHOULD SEE THIS AS A BUYING OPPORTUNITY. |
