SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
___________________________________________
SCHEDULE
14F-1
INFORMATION
STATEMENT
PURSUANT
TO SECTION 14F OF THE
SECURITIES
EXCHANGE ACT OF 1934
AND
RULE 14F-1 THEREUNDER
IMMUNOTECHNOLOGY
CORPORATION
(Exact
Name of Registrant as Specified in Charter)
|
Delaware
|
|
0-24641
|
|
84-1016435
|
|
(State
or other jurisdiction of
incorporation)
|
|
(Commission
File
Number)
|
|
(IRS
Employer Identification
Number)
|
Executive
Pavilion, 90 Grove Street, Ridgefield, Connecticut
06877
(Address
of principal executive offices) (Zip Code)
(203)
431-3300
(Registrant's
telephone number, including area code)
N/A
(Former
Name or Former Address, if Changed Since Last Report)
August
4, 2006
INFORMATION
STATEMENT PURSUANT TO SECTION 14(F) AND RULE 14F-1 OF
THE SECURITIES
EXCHANGE ACT OF 1934
REPORT
OF ANTICIPATED CHANGE IN MAJORITY OF DIRECTORS
Executive
Pavilion
90
Grove Street
Ridgefield,
Connecticut 06877
August
4, 2006
This
information statement is being filed with the Securities and Exchange Commission
(the "SEC")
and
mailed to holders of record as of August 2, 2006 of the common stock, par
value
$.00001 per share, of ImmunoTechnology Corporation, a Delaware corporation,
in
accordance with the requirements of Section 14(f) of the Securities Exchange
Act
of 1934, as amended (the "Exchange
Act"),
and
Rule 14f-1 promulgated under the Exchange Act. References throughout this
information statement to "Immuno",
the
"Company",
"we",
"us"
and
"our"
are to
ImmunoTechnology Corporation.
NO
VOTE OR OTHER ACTION BY OUR SHAREHOLDERS IS REQUIRED IN RESPONSE TO THIS
INFORMATION STATEMENT. NEVERTHELESS, YOU ARE URGED TO READ THIS INFORMATION
STATEMENT CAREFULLY AND IN ITS ENTIRETY.
NO
PROXIES ARE BEING SOLICITED AND THE STOCKHOLDERS ARE
REQUESTED NOT TO SEND
IMMUNO A PROXY.
FORWARD-LOOKING
STATEMENTS
This
Information Statement contains forward-looking statements, which are subject
to
inherent uncertainties which are difficult to predict, and may be beyond
the
ability of ImmunoTechnology Corporation to control. Certain statements in
this
Information Statement constitute forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 that are not historical
facts but rather reflect the Company's current expectations concerning future
results and events.
The
words
"expect," "believe," "anticipate," "project," "estimate," "intend" and similar
expressions, and their opposites, are intended to identify forward-looking
statements. These forward-looking statements are not guarantees of future
performance. These forward-looking statements involve risks and uncertainties
that could render actual results materially different from management's
expectations. Such risks and uncertainties include, without limitation, the
availability of capital to fund operations, risks related to our ability
to
successfully implement our business strategy, failure to recruit key personnel,
changes in applicable laws and regulations, risks related to our ability
to
integrate acquired companies, general economic conditions, and other risks.
All
statements herein that are not statements of historical fact are forward-looking
statements.
Although
we believe that the expectations reflected in such forward-looking statements
are reasonable, there can be no assurance that those expectations will prove
to
have been correct. Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect our view only as of the date of
this
Information Statement. ImmunoTechnology Corporation undertakes no obligation
to
publicly release the result of any revisions to these forward-looking statements
that may be made to reflect events or circumstance after the date hereof
or to
reflect the occurrence of unanticipated events, conditions or
circumstances.
INTRODUCTION
You
are
receiving this Information Statement in connection with an anticipated change
in
the majority of members of the board of directors of the Company which will
result from the consummation of the transactions contemplated by the
Contribution Agreement dated as of June 23, 2006 (the "Contribution
Agreement"),
by
and between us and Petals Decorative Accents, LLC, a Delaware limited liability
company ("Petals").
Pursuant to the Contribution Agreement, on June 30, 2006, we acquired
substantially all the assets of Petals in exchange for the assumption by
us of
all but certain specified liabilities of Petals and the issuance to Petals
of
shares of our capital stock (the "Acquisition").
At
the
time of the closing of the Acquisition, the number of members of our board
of
directors was fixed at two. Immediately following the Acquisition, Daniel
O.
Price resigned as a member of the board of directors and Stephen M. Hicks,
our
president, was appointed to fill the vacancy created by Mr. Price's resignation
and was elected to the position of chairman. Mr. Hicks and Mark A. Scharmann
are
the current members of our board of directors. In addition, on June 30, 2006,
our board of directors created an executive committee, the initial member
of
which is Mr. Hicks. Our board of directors delegated all of the directors'
powers which may be delegated to committees pursuant to Section 141 of the
General Corporation Law of the State of Delaware to the executive committee.
On
July
31, 2006, Mr. Scharmann resigned as a member of our board of directors effective
upon the expiration of the 10-day period beginning on the later of the date
of
the filing of this Information Statement with the SEC pursuant to Rule 14f-1
or
the date of mailing of this Information Statement to our shareholders. The
combined resignations of Mr. Price and Mr. Scharmann represent a complete
change
in the members of our board of directors since the Acquisition. Our board
of
directors appointed Henry Sargent to fill the vacancy on our board that will
be
created by the resignation of Mr. Scharmann. Mr. Sargent's appointment is
conditioned and effective upon the effectiveness of Mr. Scharmann's board
resignation.
As
of
July 31, 2006, we had 96,150,000 shares of common stock, 10,800 shares of
Series
A preferred stock and 240 Shares of Series B preferred stock issued and
outstanding, all of which are voting securities that would be entitled to
vote
for directors at a shareholders meeting if one were to be held. As of July
31,
2006, each share of common stock is entitled to one vote. Shares of each
of the
Series A preferred stock and the Series B preferred stock are entitled to
vote
on an as-if-converted basis with the our common stock on all matters. As
of July
31, 2006, each share of Series A preferred stock was entitled to approximately
1,666.67 votes per share and the Series B preferred stock was entitled to
100,000 votes per share. The designations, rights and preferences of the
Series
A preferred stock and the Series B preferred stock are described in more
detail
below under the heading "Post-Acquisition Description of Securities", beginning
at page 8.
We
intend
to ask Petals Decorative Accents LLC, our controlling stockholder, to approve
an
amendment to our Certificate of Incorporation creating a classified board
of
directors. Pursuant to the proposed amendment, the board of directors will
be
divided into three classes designated as Class I, Class II and Class III,
respectively. Directors will be assigned to each class in accordance with
a
resolution or resolutions adopted by the board of directors. At the first
annual
meeting of stockholders following the date these changes were adopted, the
term
of office of the Class I directors will expire and Class I directors will
be
elected for a full term of three years. At the second annual meeting of
stockholders following the date these changes were adopted, the term of office
of the Class II directors will expire and Class II directors will be elected
for
a full term of three years. At the third annual meeting of stockholders
following the date these changes were adopted, the term of office of the
Class
III directors will expire and Class III directors will be elected for a full
term of three years. At each succeeding annual meeting of stockholders,
directors will be elected for a full term of three years to succeed the
directors of the class whose terms expire at such annual meeting.
Please
read this Information Statement carefully. It describes the terms of the
Contribution Agreement and contains certain biographical and other information
concerning our executive officers and directors after completion of the
Acquisition. Copies of the Contribution Agreement and other agreements related
to the Acquisition are attached as exhibits to our current reports on Form
8-K
filed with the SEC on June 30, 2006 and July 7, 2006. All Company filings
and
exhibits thereto, may be inspected without charge at the public reference
section of the SEC N.W. at 450 Fifth Street, Washington, D.C. 20549 or obtained
on the SEC's website at www.sec.gov.
PRINCIPAL
TERMS OF THE ACQUISITION AND THE CHANGE OF CONTROL
The
following is a summary of selected provisions of the Contribution Agreement
and
the Acquisition. While we believe this description covers the material terms
of
the Contribution Agreement, it may not contain all of the information that
is
important to you and it is qualified in its entirety by reference to the
Contribution Agreement. The Contribution Agreement is attached as Exhibit
10.1
to our current report on Form 8-K filed with SEC on June 30, 2006, and is
incorporated herein by reference. We urge you to carefully read the Contribution
Agreement in its entirety for a more complete understanding of the Acquisition.
In addition, please see
“Where You Can Find More Information” beginning at page 19.
On
June
23, 2006, we entered into the Contribution Agreement, pursuant to which we
agreed to acquire substantially all the assets of Petals in exchange for
the
assumption by us of all but certain specified liabilities of Petals and the
issuance to Petals of shares of our capital stock.
Pursuant
to the Contribution Agreement, we also entered into an Assignment and Assumption
Agreement dated June 30, 2006 (the "Assignment
and Assumption Agreement"),
pursuant to which Petals delegated to us, and we assumed and agreed to perform,
certain obligations of Petals.
Also
in
connection with the Contribution Agreement, as a condition to closing the
Acquisition, we entered into agreements with certain of our creditors (the
"Debt
Restructuring Agreements"),
pursuant to which we restructured our obligations to these creditors, in
part
through the issuance to them in a private placement of shares of our common
stock.
On
June
30, 2006, pursuant to the terms of the Contribution Agreement and the Assignment
and Assumption Agreement, we completed the Acquisition.
The
assets acquired by Immuno consist of cash in the amount of approximately
$1.0
million representing the proceeds of an unsecured note offering by Petals,
and
all of the assets and property, real, personal and mixed, tangible and
intangible, used in or forming a part of the business of Petals, including,
without limitation,
furniture, furnishings, office equipment and other tangible personal
property,
inventory,
trade
accounts and notes receivable,
intellectual
property,
customer, distributor, supplier and mailing lists of Petals and
rights
of Petals under contracts and agreements, including all open customer purchase
orders.
The
liabilities assumed by us consisted
of substantially all of the liabilities of Petals, including, without
limitation, liabilities associated with or arising out of the business of
Petals, liabilities under the assumed contracts (including leases and employment
agreements), trade payables and obligations of Petals for borrowed money,
but
excluded term indebtedness of Petals to certain of its equity holders identified
in the Contribution Agreement. For more information regarding the liabilities
of
Petals assumed by us in the Acquisition, please see our current report on
Form
8-K filed with the SEC on July 7, 2006, which is incorporated herein by
reference.
At
the
effective time of the Contribution Agreement, there were issued to Petals
shares
of our Series A preferred stock and Series B preferred stock, and shares
of our
common stock, as follows:
| · |
10,800
shares of Series A preferred stock;
|
| · |
240
shares of Series B preferred stock; and
|
| · |
90,000,000
shares of common stock.
|
The
designations, rights and preferences of the Series A preferred stock and
the
Series B preferred stock are described in more detail below under the title
"Post-Acquisition Description of Securities", beginning at page 7.
On
August
2, 2006, Petals filed a Form 4 with the SEC to report that it had entered
into
an Assignment Agreement with Mountain West Partners LLC (“MWP”),
dated
July 31, 2006, pursuant to which it assigned 5,700,000 shares of our common
stock to MWP in exchange for services rendered (the “MWP
Assignment’).
After
giving effect to the MWP Assignment, the Acquisition and the transactions
contemplated by the Contribution Agreement and the Debt Restructuring
Agreements, Petals controls us and beneficially owns approximately 91.4%
of our
common stock, on a fully diluted, as-converted to common stock basis. Petals
is
controlled by affiliates of Stephen M. Hicks, our president and the chairman
of
our board of directors. Because the shares issued to Petals in the Acquisition
represent a controlling interest in us, the transaction will be accounted
for as
a recapitalization, and Petals is considered to have acquired us for accounting
purposes.
Copies
of the Assignment and Assumption Agreement, each
material agreement assumed by us under the Assignment and Assumption Agreement,
and the Debt Restructuring Agreements are included as Exhibits 2.3 and 10.1
through 10.23 to our current report on Form 8-K filed with the SEC on July
7,
2006. These summaries are qualified in their entirety by the complete agreements
which are incorporated herein by reference.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Immediately
prior to the Acquisition and the Debt Restructuring Agreements, there were
5,120,016 issued and outstanding shares of Immuno common stock. At the closing
of the Acquisition, Immuno issued 90,000,000 shares of its common stock to
Petals. In addition, Immuno issued 1,029,984 shares of its common stock to
Immuno creditors in connection with the Debt Restructuring Agreements. After
giving effect to the Acquisition and the Debt Restructuring Agreements, there
were issued and outstanding 96,150,000 shares of Immuno common stock.
The
following table provides information regarding beneficial ownership of Immuno
common stock after giving effect to the MWP Assignment, the Acquisition and
the
Debt Restructuring Agreements by:
| · |
each
person known by us to be the beneficial owner of more than five percent
of
our common stock;
|
| · |
each
executive officer named in the summary compensation table;
and
|
| · |
all
of our current directors and executive officers as a
group.
|
The
inclusion of shares listed as beneficially owned does not constitute an
admission of beneficial ownership. Shares included in the "Right to Acquire"
column consist of shares that may be issued through the conversion of Series
A
preferred stock or Series B preferred stock within 60 days of July 31,
2006.
|
|
Shares
Beneficially Owned
|
|
Name
and Address of Beneficial Owner
|
Outstanding
|
Right
to
Acquire(1)
|
Total
|
Percent
|
|
Petals
Decorative Accents, LLC
90
Grove Street, Suite 206
Ridgefield,
Connecticut 06877
|
84,300,000
|
24,000,000(4)
|
108,300,000
|
90.14%
|
| |
|
|
|
|
|
Accelerant
Partners, LLC (2)
c/o
Southridge Capital Mgmt
90
Grove Street, Suite 206
Ridgefield,
Connecticut 06877
|
84,300,000
|
24,000,000(4)
|
108,300,000
|
90.14%
|
| |
|
|
|
|
|
Stephen
M. Hicks, (3)
president
and chairman
c/o
Southridge Capital Mgmt
90
Grove Street, Suite 206
Ridgefield,
Connecticut 06877
|
84,300,000
|
24,000,000(4)
|
108,300,000
|
90.14%
|
| |
|
|
|
|
|
Mark
A. Scharmann,
director
1661
Lakeview Circle
Ogden,
Utah 84403
|
2,824,330
|
―
|
2,824,330
|
2.35%
|
|
|
|
|
|
|
|
Christopher
Topping,
chief
executive officer
c/o
Petals Decorative Accents, LLC
90
Grove Street
Ridgefield,
Connecticut 06877
|
―
|
―
|
―
|
―
|
|
|
|
|
|
|
|
Stephen
Hieber,
chief
financial officer
c/o
Petals Decorative Accents, LLC
90
Grove Street
Ridgefield,
Connecticut 06877
|
―
|
―
|
―
|
―
|
|
|
|
|
|
|
|
Daniel
Dorzback,
chief
merchandising officer
c/o
Petals Decorative Accents, LLC
90
Grove Street
Ridgefield,
Connecticut 06877
|
―
|
―
|
―
|
―
|
|
|
|
|
|
|
|
Antonio
Yenidjeian,
senior
vice president of operations
c/o
Petals Decorative Accents, LLC
90
Grove Street
Ridgefield,
Connecticut 06877
|
―
|
―
|
―
|
―
|
|
|
|
|
|
|
|
All
current directors and executive officers as a group (6 persons)
(5)
|
87,124,330
|
24,000,000(4)
|
111,124,330
|
92.49%
|
(1)
Our
certificate of incorporation authorizes the corporation to issue 100,000,000
shares of common stock. At June 30, 2006, there were 96,150,000 shares of
common
stock issued and outstanding. This column assumes that a sufficient number
of
authorized but unissued shares would be available and therefore includes
shares
that are not issuable as of the date of this current report.
(2)
Accelerant Partners, LLC is the sole voting member of Petals and therefore
may
be deemed to be the beneficial owner of the shares of our capital stock held
by
Petals.
(3)
Stephen M. Hicks, our president and chairman, is also the president of Petals
and therefore may be deemed to be the beneficial owner of the shares of our
capital stock held by Petals.
(4)
Represents the number of shares of our common stock that would be issuable
upon
the conversion of 240 shares of our Series B preferred stock held by Petals.
As
of the date of this current report, we lack a sufficient number of authorized
and unissued shares of common stock to satisfy the conversion of more than
38
shares of Series B preferred stock (see note 1 above). Not included are the
shares of our common stock issuable upon conversion of 10,800 shares of our
Series A preferred stock held by Petals. Pursuant to the certificate of
designations, preferences and rights of our Series A preferred stock, shares
of
Series A preferred stock may not be converted into shares of our common stock
before the first anniversary of the original issue date of such shares. All
of
the outstanding shares of our Series A preferred stock held by Petals were
issued on June 30, 2006. But for these time restrictions, the shares of our
Series A preferred stock held by Petals would be convertible into 18,000,000
shares of our common stock.
(5)
Henry
Sargent, the Designated Director (as defined below), will not become a director
until Mr. Scharmann’s resignation is effective and therefore Mr. Sargent is not
included in this table. As reported on a Form 4 filed by Petals with the
SEC on
August 2, 2006, Petals entered into an Assignment Agreement with MWP, dated
July
31, 2006, assigning to MWP 5,700,000 shares of our common stock. Mr. Sargent
is
a control person of MWP.
POST
ACQUISITION DESCRIPTION OF SECURITIES
Pursuant
to our certificate of incorporation, our board of directors has the authority
to
issue, without any further vote or action by stockholders, a total of up
to
10,000,000 shares of preferred stock and to fix the rights, preferences,
privileges, and restrictions, including voting rights, of the preferred stock,
which typically are senior to the rights of the common stockholders. In
connection with the transactions contemplated by the Contribution Agreement
and
the Acquisition, the board of directors designated 10,800 and 240 shares
of
preferred stock as Series A preferred stock and Series B preferred stock
respectively. All of the designated Series A preferred stock and Series B
preferred stock were issued to Petals on June 30, 2006 in connection with
the
Acquisition.
The
following section contains a description of our common stock and other
securities that we have issued from time to time. Our authorized capital
stock
consists of 100,000,000 shares of common stock, $0.00001 par value per share,
and 10,000,000 shares of preferred stock, $0.00001 par value per share, of
which
10,800 are designated as Series A preferred stock and 240 are designated
as
Series B preferred stock. As of July 31, 2006, we had 96,150,000 shares of
our common stock, 10,800 shares of our Series A preferred stock and 240 shares
of our Series B preferred stock issued and outstanding. This summary of the
securities issued by the Company is qualified in its entirety by reference
to
our certificate of incorporation and the certificates of designations, rights
and preferences of the Series A preferred stock and the Series B preferred
stock, copies of which are attached as exhibits to our current report on
Form
8-K filed with the SEC on July 7, 2006.
Common
Stock
Voting
Rights.
Holders
of our common stock are entitled to one vote per share held of record on
all
matters to be voted upon by our stockholders. Our common stock does not have
cumulative voting rights. Persons who hold a majority of the outstanding
common
stock entitled to vote on the election of directors can elect all of the
directors who are eligible for election.
Dividends.
Subject
to preferences that may be applicable to the holders of any outstanding shares
of our preferred stock, the holders of our common stock are entitled to receive
such lawful dividends as may be declared by our board of directors.
Notwithstanding
the rights of the holders of our common stock set forth in our charter, we
are
subject to the following contractual restrictions regarding the payment of
dividends:
Liquidation
And Dissolution.
In the
event of our liquidation, dissolution or winding up, and subject to the rights
of the holders of any outstanding shares of our preferred stock, the holders
of
shares of our common stock will be entitled to receive pro rata all of our
remaining assets available for distribution to our stockholders.
Other
Rights And Restrictions.
Our
charter prohibits us from granting preemptive rights to any of our stockholders.
All outstanding shares are fully paid and nonassessable.
Our
common stock is quoted on the OTC Bulletin Board by the National Association
of
Securities Dealers, Inc. under the symbol "IMUO.OB." We intend to ask our
stockholders to approve a 3-for-1 reverse stock split. After the effective
date
of a reverse split, the Series B Shares will be immediately convertible at
the
option of the holder. The Series A Shares will not be convertible until the
first anniversary of the original issue date of such shares.
Series
A Preferred Stock
Voting
Rights.
Shares
of Series A preferred stock vote on an as-if-converted basis with our common
stock on all matters. Shares of Series A preferred stock also are entitled
to
vote as a separate class on, among other things, any amendment to the terms
or
authorized number of shares of Series A preferred stock and the issuance
of any
equity security ranking senior to the Series A preferred stock. Where pursuant
to the certificate of designations, preferences and rights of the Series
A
Preferred Stock, the Series A Preferred Stockholders do have the right to
vote
as a series, the affirmative vote of the holders of not less than a majority
of
the outstanding shares of Series A preferred stock is necessary to constitute
approval.
Dividends.
Dividends accrue on shares of Series A preferred stock cumulatively at the
rate
of 8% per annum and are payable as and when declared by the Company's Board
of
Directors, provided that, accrued dividends will be paid no less frequently
than
semi-annually with the first payment to be made on January 1, 2007. In addition,
in the event we make, or fix a record date for the determination of holders
of
common stock entitled to receive any distribution payable in our property
or in
our securities other than shares of common stock, then and in each such event
the holders of the Series A preferred stock will receive, at the time of
such
distribution, the amount of property or the number of our securities that
they
would have received had their Series A preferred shares been converted into
common stock on the date of such event.
Conversion.
Beginning on the first anniversary of the original issue date, each share
of the
Series A preferred stock is convertible at option of the Series A stockholder
at
any time and from time to time, without the payment of additional consideration.
Each share of Series A preferred stock converts into such number of fully
paid
and nonassessable shares of common stock as is determined by dividing $1,000
by
the Series A Conversion Price (as defined in the certificate of designations,
preferences and rights of the Series A Preferred Stock) which is currently
$0.60, and which will be subject to adjustment from time to time. In the
event
that such a conversion would result in the issuance of fractional shares
of
common stock, the number of shares of common stock issued will be rounded
down
to the nearest whole number. Any shares of Series A preferred stock so converted
will be retired and cancelled and will not be reissued as shares of such
series.
Antidilution.
Upon
the occurrence of a stock distribution, stock combination or stock dividend,
the
conversion rate will be adjusted so that the conversion rights of the Series
A
preferred stock stockholders will be nearly equivalent as practicable to
the
conversion rights of the Series A preferred stock stockholders prior to such
event. If the Company issues additional shares of its equity securities,
or
securities or debentures exchangeable for or convertible into additional
shares
of its equity securities, at a purchase price less than the then applicable
conversion price of the Series A preferred stock (excluding shares issued
to
employees, directors and consultants in the form of Board of Director approved
stock options and stock purchase plans), then the applicable conversion price
will be reduced on a weighted average formula basis to diminish the effect
of
the dilutive issuance on the Series A preferred stock.
Redemption.
We may
not redeem shares of the Series A preferred stock.
Liquidation.
In the
event of any voluntary or involuntary liquidation, dissolution or winding
up of
our affairs, holders of the Series A convertible preferred stock will be
entitled to receive a liquidation preference of $1,000 per share plus accrued
and unpaid dividends. The Series A preferred stock is senior in right of
distribution in liquidation to the Series B preferred stock and the common
stock. If, upon any winding up of our affairs, our assets available to pay
the
holders of Series A preferred stock are not sufficient to permit payment
in
full, then all our assets will be distributed to those holders on a pro rata
basis.
Series
B Preferred Stock
Voting
Rights.
Shares
of Series B preferred stock vote on an as-if-converted basis with our common
stock on all matters. Shares of Series B preferred stock also are entitled
to
vote as a separate class on, among other things, any amendment to the terms
or
authorized number of shares of Series B preferred stock and the issuance
of any
equity security ranking senior to the Series B preferred stock. Where pursuant
to the certificate of designations, preferences and rights of the Series
B
Preferred Stock, the Series B Preferred Stockholders do have the right to
vote
as a series, the affirmative vote of the holders of not less than a majority
of
the outstanding shares of Series B preferred stock is necessary to constitute
approval.
Dividends.
In the
event we make, or fix a record date for the determination of holders of common
stock entitled to receive any distribution payable in our property or in
our
securities, then and in each such event the holders of the Series B preferred
stock will receive, at the time of such distribution, the amount of our property
or the number of our securities that they would have received had their Series
B
preferred shares been converted into common stock on the date of such
event.
Conversion.
Provided that sufficient shares of authorized and unissued shares of common
stock are available, each share of the Series B preferred stock is convertible,
at the option of the holder into 100,000 fully paid and nonassessable shares
of
common stock. Any shares of Series B preferred stock so converted will be
retired and cancelled and retired and cancelled and will not be reissued
as
shares of such series.
Antidilution.
Upon
the occurrence of a stock split, stock dividend, combination or reclassification
of our common stock, the conversion rate of the Series B preferred stock
will be
proportionately adjusted so that the conversion rights of the Series B preferred
stock stockholders will be nearly equivalent as practicable to the conversion
rights of the Series B preferred stock stockholders prior to such
event.
Liquidation.
We may
not redeem shares of the Series B preferred stock.
Dissolution.
In the
event of any voluntary or involuntary liquidation, dissolution or winding
up of
our affairs, holders of the Series B preferred stock will be entitled to
participate with the common stock in the distribution of assets or funds
on a
pro rata basis as if the shares of Series B preferred stock had been converted
immediately prior to such liquidation, dissolution, or winding up of the
Company.
DIRECTORS
AND EXECUTIVE OFFICERS
Prior
to
the Acquisition, our directors and executive officer were as
follows:
|
Name
|
|
Age
|
|
Position
|
|
Mark
A. Scharmann
|
|
47
|
|
President,
treasurer and director
|
|
Daniel
O. Price
|
|
51
|
|
Director
|
The
Contribution Agreement required
that each of our executive officers deliver a written resignation and release
prior to the Closing. Mr. Scharmann delivered his resignation as an officer
on
June 30, 2006 and therefore has ceased to serve as our president. On the
same
date, Mr. Price resigned as a director.
In
connection with the Contribution Agreement, all of the executive officers
of
Petals became executive officers of Immuno and Stephen M. Hicks was appointed
as
a director of Immuno and elected to serve as chairman. On June 30, 2006,
our
board of directors created an executive committee, the initial member of
which
is Mr. Hicks. Our board of directors delegated all of the directors’ powers
which may be delegated to committees pursuant to Section 141 of the General
Corporation Law of the State of Delaware to the executive
committee.
Set
forth
below is information regarding our post Acquisition directors (excluding
Mr.
Scharmann who has resigned and the Designated Director, identified below)
and
executive officers:
|
Name
|
Age
|
Position
|
Year
Began
|
|
Stephen
M. Hicks
|
46
|
Chairman
of the board of directors
|
2006
|
|
Christopher
Topping
|
45
|
Chief
executive officer
|
2006
|
|
Stephen
Hieber
|
40
|
Chief
financial officer
|
2006
|
|
Daniel
Dorzback
|
49
|
Chief
merchandising officer
|
2006
|
|
Antonio
Yenidjeian
|
50
|
Senior
vice president of operations
|
2006
|
Stephen
M. Hicks. Mr.
Hicks
assumed his position as chairman of our board of directors immediately following
the Acquisition. Prior to that, Mr. Hicks was chairman of Petals. Mr. Hicks
founded Southridge Capital Management, LLC in 1996. Southridge is a fund
management company that generally focuses on financing small-cap public
companies. He has been chief executive of Southridge since its inception.
From
April 1994 until August 1997, Mr. Hicks was associated with Trans Pacific
Capital (USA) Inc. as a fund manager specializing in derivatives and negotiated
private placements. From September 1990 until April 1994, Mr. Hicks was employed
by Wertheim Schroeder & Co. Inc., and became Head of Proprietary Derivatives
Trading. Mr. Hicks received his BS from Kings College and his MBA from Fordham
University.
Christopher
Topping.
Mr.
Topping assumed his current position immediately following the Acquisition.
Prior to that, Mr. Topping had been chief Executive officer of Petals since
August 2004. From 2001 to August 2004, he was the chief marketing officer
of The
Wine Enthusiast, a private company based in Elmsford, NY. From 1994 to 2001
he
was the vice president of marketing of Old Petals. Old Petals later filed
for
protection from creditors under Chapter 11 of the bankruptcy code in May
2003.
Mr. Topping holds a Bachelor of Science from the University of Rhode Island
and
a Master of Business Administration from New York University Stern School
of
Business.
Stephen
Hieber.
Mr.
Hieber became our chief financial officer immediately following the Acquisition.
Prior to that, Mr. Hieber had served as Petals' chief financial officer since
October 2005. From 1997 until October 2005, Mr. Hieber was the chief financial
officer of The Wine Enthusiast, a private company based in Elmsford, NY.
Mr.
Hieber holds a BS in finance from Rider University.
Daniel
Dorzback.
Mr.
Dorzback became our chief merchandising officer immediately following the
Acquisition. Mr. Dorzback has over 20 years of experience as a merchandising
executive. Most recently he was the Retail Director of Mikasa for two years.
From September 2000 to January 2002, Mr. Dorzback was the Senior Vice President
of Merchandising for Petals. Petals later filed for protection from creditors
under Chapter 11 of the bankruptcy code in May 2003. In his role at Petals,
Mr.
Dorzback was instrumental in developing the company's accessory product mix
and
reducing the company's cost of goods in this category. Mr. Dorzback started
his
career with Macy's. Mr. Dorzback received a BA and MBA from Boston
University.
Antonio
Yenidjeian Mr.
Yenidjeian became our senior vice president of operations immediately following
the Acquisition. Prior to that, he had served as Petals' senior vice president
of operations since October 2005. Mr. Yenidjeian was a consultant to Petals.
From 1999 to 2001 Mr. Yenidjeian was senior vice president and chief operating
officer of Camdens, an LVMH venture-backed incentive, rewards and recognition
gifting service. From 1996 to 1999 , Mr. Yenidjian served as senior vice
president and chief information officer at Doubleday Direct, now called
BookSpan, a Bertelsmann AG company and the largest continuity business in
the
world. Mr. Yenidjeian holds a B.S.E.E. from the Universidad de Buenos Aires,
Argentina.
Designated
Director
Henry
Sargent (the “Designated
Director”),
has
consented to act as a director of ImmunoTechnology Corporation. Mr. Sargent
has
been appointed to the board of directors pending the effectiveness of Mr.
Scharmann's resignation and with Stephen M. Hicks, will constitute all of
the
members of our board of directors.
Henry
Sargent (Age 39).
Mr.
Sargent has been a director of Petals since its inception. He has held various
executive positions with Southridge Capital Management, LLC since 1998. Prior
to
joining Southridge, Mr. Sargent practiced corporate law with Claugus &
Mitchell, a New York law firm. Mr. Sargent is a CFA and received his BA from
Connecticut College and his JD from Fordham University.
Compensation
of Directors and Executive Officers
Immuno
Director Compensation
Our
directors received no compensation for their service on our board of directors
for fiscal year 2006, ended on June 30, 2006.
Immuno
Officer Compensation
Our
officers received no compensation for their services for fiscal year 2006,
ended
on June 30, 2006.
Summary
Compensation Table of the Officers and Directors of Petals
The
following table relates to the historical management of Petals and sets
forth the compensation earned during Petals’ fiscal year 2005, ended on
September 5, 2005, by the chief executive officer of Petals, its other executive
officer who was in office on the last day of its fiscal year ended September
3,
2005, and its former chief financial officer, whom we refer to in this Report
as
the "named executive officers" of Petals.
|
|
|
|
|
Long-Term
Compensation
|
|
|
|
Annual
Compensation
|
|
Awards
|
Payouts
|
|
Name
and Principal Position
|
Fiscal
Year
|
Salary
($)
|
Bonus
($)
|
Other
Annual
Compensation
($)
|
|
Restricted
Stock
Award(s)
($)
|
Securities
Underlying
Options
(#)
|
Other
Compensation
|
|
Christopher
Topping (1)
chief
executive officer
|
2005
|
235,000
|
15,000
|
1,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel
Dorzback (2)
chief
merchandising officer
|
2005
|
151,292
|
5,000
|
723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
Hersh (3)
former
chief financial officer
|
2005
|
191,667
|
|
1,219
|
|
|
|
|
_________________
|
1.
|
Mr.
Topping joined us on August 30, 2004.
|
|
2.
|
Mr.
Dorzback joined us on October 15, 2004.
|
|
3.
|
Mr.
Hersh, our chief financial officer, separated from Petals on October
18,
2005.
|
Steven
Hieber, Petals chief financial officer, joined Petals on October 11, 2005.
Antonio Yenidjeian, Petals executive vice president of operations, joined
Petals
on October 1, 2005. No executive officer of Petals has received any stock
or
other equity-based compensation.
Employment
agreement with chairman.
Petals
entered into a five-year employment agreement with its president and chairman,
Mr. Hicks, as of March 31, 2006 which provides for an annual salary of $280,000.
Petals may defer payment of the base salary to him until January 1, 2007.
From
time to time, the chairman, at his sole discretion, may elect to receive
all or
any part of his base salary in the form of common equity of Petals. The value
of
any common equity to be paid to the chairman will be determined as follows:
(i)
if there exists a public market for Petals' common equity, then the price
per
share will be 75% of the average of the closing trading prices for the ten
trading days ending on the trading day immediately prior to the due date,
or
(ii) if no public market exists for Company's common equity, then by the
Board
of Directors of Petals in its reasonable good faith judgment. The Chairman
will
be granted an annual equity bonus in each year during the term of the Agreement
equal to two percent of the then outstanding common equity of Petals in the
event that Petals generates annual earnings before interest, taxes, depreciation
and amortization of at least $2,000,000 during such fiscal year. The equity
grant is payable to the Chairman within 30 days after the end of each fiscal
year.
The
Agreement automatically renews for successive one year periods unless either
party declines to renew this Agreement by giving the other party hereto written
notice within 90 days of the end of any one-year renewal period.
As
part
of the Agreement, Mr. Hicks agreed to devote such time as he, in his sole
discretion, deems reasonable necessary to fulfill his obligations under the
Agreement, recognizing that his employment does not require his full business
time or limit his association with other entities.
Employment
agreement with chief executive officer.
On
August
12, 2004 Petals entered into an Employment Agreement with Christopher Topping,
Petals'
chief
executive officer. Mr. Topping was approved as our chief executive officer
on
June 30, 2006 in connection with the Acquisition. The
initial term of the agreement is for two years and renews automatically for
successive one year periods unless terminated earlier pursuant to its terms.
The
agreement provides for an annual base salary of $240,000 and bonus compensation
equal to 4% of Petals' earnings before interest, taxes, depreciation and
amortization, as well as performance based equity grants.
Future
Events
We
intend
to ask Petals Decorative Accents LLC, our controlling stockholder, to ratify
a
stock incentive plan to permit the issuance of incentive stock options,
non-statutory stock options, stock awards, performance share awards and stock
appreciation rights to our officers, directors, employees, consultants and
advisors. After the approval of the plan by our stockholders, but no earlier
than sixty (60) days after the filing of this current report, we intend to
register the shares of common stock underlying the stock awards issued pursuant
to this stock incentive plan with the SEC on Form S-8.
CORPORATE
GOVERNANCE
The
Board
During
the fiscal year ended June 30, 2006, our board consisted of two members.
We will
have one vacancy upon the effectiveness of Mr. Scharmann's resignation as
a
member of the board. Mr. Scharmann's resignation will become effective upon
the
expiration of the 10-day period beginning on the later of the date of the
filing
of this Information Statement with the SEC pursuant to Rule 14f-1 or the
date of
mailing of this Information Statement to our shareholders.
Mr.
Sargent, the designated director, will replace Mr. Scharmann upon the
effectiveness of Mr. Scharmann's resignation. This step will be accomplished
by
unanimous written consent of directors appointing the designated director
to
fill the current vacancy on the board of directors. In accordance with the
General Corporation Law of the State of Delaware and our certificate of
incorporation and bylaws, our business and affairs are managed under the
direction of the Board.
We
intend
to ask our stockholders to approve an amendment to our Certificate of
Incorporation creating a classified board of directors. Pursuant to the proposed
amendment, the board of directors will be divided into three classes designated
as Class I, Class II and Class III, respectively. Directors will be assigned
to
each class in accordance with a resolution or resolutions adopted by the
board
of directors. At the first annual meeting of stockholders following the date
these changes were adopted, the term of office of the Class I directors will
expire and Class I directors will be elected for a full term of three years.
At
the second annual meeting of stockholders following the date these changes
were
adopted, the term of office of the Class II directors will expire and Class
II
directors will be elected for a full term of three years. At the third annual
meeting of stockholders following the date these changes were adopted, the
term
of office of the Class III directors will expire and Class III directors
will be
elected for a full term of three years. At each succeeding annual meeting
of
stockholders, directors will be elected for a full term of three years to
succeed the directors of the class whose terms expire at such annual meeting.
Meetings
of the Board
Our
board
consisted of two directors during the fiscal year ended June 30, 2006, and
no
board meetings were held and all resolutions were adopted by unanimous written
consent.
Committees
of the Board
Executive
Committee
Our
board
of directors has created an executive committee of the board. The number
of
positions on the committee is set at one (1), and Stephen M. Hicks is the
sole
appointed member. Our board has delegated to this committee all of the
directors' powers which may be delegated to committees pursuant to Section
141
of the General Corporation Law of the State of Delaware.
Audit
Committee
We
do not
have an Audit Committee. We are not a "listed issuer" within the meaning
of Rule
10A-3 under the Exchange Act of 1934, as amended. As a result, we are not
required to have an audit committee. However, our board of directors may
consider appointing such a committee in the future. Currently, our entire
board
of directors serves the function of an audit committee.
We
do not
have an Audit Committee Financial Expert. The SEC has adopted rules to implement
certain requirements of the Sarbanes-Oxley Act of 2002 pertaining to audit
committees of listed companies. One of the rules adopted by the SEC requires
a
company to disclose whether it has an "Audit Committee Financial Expert"
serving
on its audit committee. We are not required to have an audit committee. As
a
result, we do not have an Audit Committee Financial Expert, as defined by
Item
401(e)(2) of Regulation S-B, serving as a director of the Company.
Compensation
Committee
We
do not
have a standing compensation committee. Until we form a compensation committee,
the board of directors as a whole will make recommendations concerning executive
salaries and incentive compensation for our employees and will administer
any
stock incentive plans adopted by the Company.
Nominating
Committee
We
do not
have a standing nominating committee or a charter with respect to the nominating
process. Our board of directors believes that it is not necessary to have
such a
committee because its size and composition allow it to adequately identify
and
evaluate qualified candidates for directors. Our board of directors does
not
have any minimum qualifications that must be met by director nominees. Until
we
form a separate Nominating Committee, the board of directors as a whole will
be
responsible for the process of nominating directors.
Our
board
of directors does not have a formal process for identifying and evaluating
nominees for directors, including nominees recommended by security holders.
Moreover, we do not pay fees to any third party to assist in the process
of
identifying or evaluating director candidates.
Policy
Regarding Director Attendance at Annual Meetings
We
do not
have a policy regarding director attendance at annual stockholder meetings.
Stockholder
Communications with the Board
The
board
of directors has not implemented a process by which shareholders may send
written communications to the board's attention. Stockholders may communicate
with the board of directors, you may send correspondence to the attention
of the
Corporate Secretary, ImmunoTechnologies Corporation, 90 Grove Street,
Ridgefield, Connecticut 06887.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act")
requires our executive officers and directors, as well as persons who own
more
than 10% of a registered class of its equity securities, to file reports
of
ownership and changes in ownership with the SEC. These persons are also required
by SEC regulation to furnish us with copies of all Section 16(a) forms they
file.
Based
solely on our review of such forms received by us or written representations
from certain reporting persons provided to us, we believe that during the
fiscal
year ended June 30, 2006 all applicable filing requirements were complied
with
by our executive officers and directors.
Initial
reports under Section 16(a) of the Securities Exchange Act of 1934 were not
timely filed by Messrs. Dorzback, Hieber and Yenidjeian. These delayed reports
did not involve any transaction in our common stock but rather were related
to
each individual’s election as officers of the Company on June 30, 2006, in
connection with the Acquisition. The Company is not aware of any outstanding
report required to be filed by any of Messrs. Dorzback, Hieber and Yenidjeian.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Revolving
credit facility with Ridgefield Bank.
On
December 10, 2004, Petals entered into a $1,500,000 commercial revolving
line of
credit with Ridgefield Bank. Petals' chairman, Stephen Hicks, guaranteed
Petals'
obligations pursuant to this credit facility and Southridge Holdings, LLC,
an
entity controlled by Mr. Hicks, is a co-borrower of the loan. At February
28,
2006, Petals owed $1,500,000 pursuant to this credit facility.
Information
technology services agreement with an affiliated
entity
On
February 3, 2005, Petals entered into a Technology Services Agreement with
Southridge Technology Group, Inc., an entity controlled by Petals' chairman,
Stephen Hicks. Petals incurred expenses of $61,103 in the six months ended
February 28, 2006, $131,752 in fiscal 2005 and $205,768 in fiscal 2004 for
information technology services provided pursuant to this agreement.
Revolving
credit facility with affiliated entities
On
January 3, 2005, Petals entered into a Loan and Security Agreement and two
Revolving Credit Notes with Southshore Capital Fund, Ltd. and Southridge
Partners, LP, entities affiliated with Petals' chairman Stephen Hicks, which
allowed for Petals to borrow up to $10,000,000. The notes bore interest at
the
rate of two and one-half percent per year and were secured, on a subordinated
basis, by a blanket lien on all of Petals' assets.
On
November 30, 2005, Petals entered into agreements with Southshore Capital
Fund,
Ltd. and Southridge Partners, LP pursuant to which Petals exchanged an aggregate
of $5,000,000 of outstanding principal indebtedness pursuant to the foregoing
revolving promissory notes for term promissory notes maturing on December
31,
2008. The term notes bear interest at the rate equal to the prime lending
rate,
as published in the Wall Street Journal, plus two percent (2%), and are secured
on a subordinated basis by a blanket lien on all Petals' assets.
Lease
agreement with Southridge Holdings, LLC.
On
January 16, 2006, Petals entered into a Lease Agreement with Southridge Holdings
LLC, an entity controlled by Petals' chairman, Stephen Hicks, for approximately
7,000 square feet of office space located at Executive Pavilion, 90 Grove
Street, Ridgefield, Connecticut. The lease agreement expires on December
31,
2008 and requires monthly rental payments of approximately $21,010. This
space
is used for Petals' corporate headquarters.
Employment
agreement with chairman
Petals
entered into a five-year employment agreement with its president and chairman,
Mr. Hicks, as of March 31, 2006. For more information regarding this employment
agreement, please
see
the
section titled “Employment agreement with chairman” beginning at page
16.
Each
of
the foregoing agreements of Petals was assumed by Immuno in the
Acquisition.
Assignment
of common stock to Designated Director
As
reported on a Form 4 filed by Petals with the SEC on August 2, 2006, Petals
entered into an Assignment Agreement with MWP, dated July 31, 2006, assigning
to
MWP 5,700,000 shares of our common stock. Mr. Sargent is a control person
of
MWP.
WHERE
YOU CAN FIND MORE INFORMATION
We
are a public company and file annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission.
Copies of the reports, proxy statements and other information may be read
and
copied at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549. You can request copies of such documents by writing to the SEC
and
paying a fee for the copying cost. You may obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC
maintains a web site at (http://www.sec.gov) that contains reports, proxy
and
information statements and other information regarding registrants that file
electronically with the SEC.
For
further information you may:
| · |
read
a copy of the information statement, including the exhibits and schedules,
without charge at the SEC's Public Reference Room;
or
|
| · |
obtain
a copy from the SEC upon payment of the fees prescribed by the
SEC.
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
|
|
IMMUNOTECHNOLOGY
CORPORATION
|
|
|
|
|
|
Dated:
August 4, 2006
|
|
By:
/s/ Stephen M. Hicks
|
|
|
|
Stephen
M. Hicks
|
|
|
|
President
|
|
|
|
|