1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended June 30, 2003
-------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________ to __________
Commission File Number 0-24641
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IMMUNOTECHNOLOGY CORPORATION
----------------------------
(Exact name of registrant as specified in charter)
Delaware 84-1016435
------------------------------ -------------------------
State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization
1661 Lakeview Circle, Ogden, Utah 84403
------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (801) 399-3632
---------------
Securities registered pursuant to section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None N/A
------------------ -----------------------------------------
Securities registered pursuant to section 12(g) of the Act:
Common Stock, par value $0.00001
--------------------------------
(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. (1) Yes [X]
No [ ] (2) Yes [X] No [ ]
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not 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. [X]
State issuer's revenues for its most recent fiscal year: $-0-
2
State the aggregate market value of the voting stock held by nonaffiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days:
Based on the average bid and asked prices of the common stock at September
30, 2003 of $0.095__ per share, the market value of shares held by
nonaffiliates (7,342,015 shares) would be $660,781.
As of September 30, 2003, the Company had 50,000,000 shares of common stock
issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and
the part of the form 10-KSB (e.g., part I, part II, etc.) into which the
document is incorporated: (1) Any annual report to security holders; (2) Any
proxy or other information statement; and (3) Any prospectus filed pursuant to
rule 424(b) or (c) under the Securities Act of 1933: NONE
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PART I.
ITEM 1. DESCRIPTION OF BUSINESS
Business in General
-------------------
(a) Initial Business Activities
---------------------------
The Company was incorporated on November 30, 1989, in the state of Delaware.
The Company's predecessor was LJC Corporation, a Utah corporation, organized
on November 8, 1984 ("LJC"). On October 7, 1989, LJC acquired
ImmunoTechnology Laboratories, Inc., a Colorado corporation ("ITL"), by means
of a stock-for-stock exchange with the shareholder of ITL. As a result of
this transaction, ITL became a wholly owned subsidiary of LJC. On October 10,
1989, LJC changed its name to ImmunoTechnology Laboratories, Inc. ("ITL-UT").
At a special meeting of the shareholders of ITL-UT, the shareholders approved
a proposal to redomicile ITL-UT in the state of Delaware, by forming a
Delaware corporation and merging ITL-UT into the Delaware corporation, and
changing the its name to ImmunoTechnology Corporation. The merger was
effective on December 21, 1989. As a result of the merger, ITL-UT no longer
exists.
ITL was formed for the purpose of engaging in the business of operating a
medical test related laboratory. The Company's only business has been the
operation of ITL, whose operations were discontinued in 1992.
(b) Current Business Activities
----------------------------
Since discontinuing the operations of ITL, the Company has been seeking
potential business acquisition or opportunities to enter in an effort to
commence business operations. The Company does not propose to restrict its
search for a business opportunity to any particular industry or geographical
area and may, therefore, engage in essentially any business in any industry.
The Company has unrestricted discretion in seeking and participating in a
business opportunity, subject to the availability of such opportunities,
economic conditions, and other factors.
The selection of a business opportunity in which to participate is complex and
risky. Additionally, as the Company has only limited resources, it may be
difficult to find good opportunities. There can be no assurance that the
Company will be able to identify and acquire any business opportunity which
will ultimately prove to be beneficial to the Company and its shareholders.
The Company will select any potential business opportunity based on
management's business judgment.
The activities of the Company are subject to several significant risks which
arise primarily as a result of the fact that the Company has no specific
business and may acquire or participate in a business opportunity based on the
decision of management which potentially could act without the consent, vote,
or approval of the Company's shareholders. The risks faced by the Company are
further increased as a result of its lack of resources and its inability to
provide a prospective business opportunity with significant capital.
On April 21, 2003, we entered into an Agreement and Plan of Merger with
Ultimate Security Systems Corporation ("Ultimate"), a copy of which was
attached as an exhibit to our Form 8-K filed with the Securities and Exchange
Commission on April 23, 2003 (the "Merger Agreement"). See Merger Agreement
and Forward Stock Split in Management's Discussion and Analysis or Plan of
Operation below.
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Competition
-----------
Until such time as the Company completes an acquisition, the Company will be
unable to evaluate the type and extent of its likely competition. The Company
is aware that there are several other public companies with only nominal
assets that are also searching for operating businesses and other business
opportunities as potential acquisition or merger candidates. The Company is
in direct competition with these other public companies in its search for
business opportunities.
Employees
---------
As of the date hereof, the Company does not have any employees and has no
plans for retaining employees until such time as the Company's business
warrants the expense, or until the Company successfully acquires or merges
with an operating business. The Company may find it necessary to periodically
hire part-time clerical help on an as-needed basis.
Facilities
----------
The Company is currently using as its principal place of business the personal
residence of its President and Director located in Ogden, Utah. Although the
Company has no written agreement and pays no rent for the use of this
facility.
ITEM 2. DESCRIPTION OF PROPERTIES
See "Facilities" under Item 1. above.
ITEM 3. LEGAL PROCEEDINGS
The Company, Mark Scharmann, our president, and David Knudson, our former
secretary/treasurer, are named as defendants in a lawsuit where the plaintiff
alleges unsolicited fax advertisement violations. The suit was filed by
Wholesale Banners and Sign Supplies, Inc., an Arizona corporation, in the
Maryvale Justice Court of the State of Arizona, Maricopa County on October 8,
2003. The suit demands damages of up to $3,000, plus costs and legal fees.
Management is in the process of hiring a legal counsel regarding this matter,
but believes this lawsuit is frivolous, and the outcome will be immaterial to
the financial statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
Our Board of Directors fixed the close of business on March 31, 2003 as the
record date for the determination of holders of common stock entitled to vote
on the implementation of the Agreement and Plan of Merger with Ultimate
Securities Systems Corporation by written stockholder consent. As of the
record date, we had 10,000,000 shares of common stock outstanding. The
affirmative vote of a majority of the outstanding shares of common stock was
required to approve the Agreement and Plan of Merger. By written consent in
lieu of a meeting, the holders of a majority of the outstanding shares of
common stock approved the Agreement and Plan of Merger. The written consent
of shareholders holding 8,682,568 shares or 86.8% of the issued and
outstanding shares was obtained with no votes opposed.
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PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The table on the following page sets forth, for the respective periods
indicated, the prices for the Company's common stock in the over-the-counter
market as reported by the NASD's OTC Bulletin Board. The bid prices
represent inter-dealer quotations, without adjustments for retail mark-ups,
mark-downs or commissions and may not necessarily represent actual
transactions.
High Bid Low Bid
-------- -------
Fiscal Year Ended June 30, 2001
-------------------------------
First Quarter $ 0.56 $ 0.30
Second Quarter $ 0.34 $ 0.28
Third Quarter $ 0.41 $ 0.28
Fourth Quarter $ 0.41 $ 0.28
Fiscal Year Ended June 30, 2002
-------------------------------
First Quarter $ 0.40 $ 0.12
Second Quarter $ 0.35 $ 0.13
Third Quarter $ 0.15 $ 0.15
Fourth Quarter $ 0.25 $ 0.12
Fiscal Year Ended June 30, 2003
-------------------------------
First Quarter $ 0.12 $ 0.11
Second Quarter $ 0.24 $ 0.10
Third Quarter $ 0.74 $ 0.14
Fourth Quarter* $ 1.80 $ 0.10
*On May 28, 2003, the Company effected a 5 for 1 forward split of its common
stock. The high bid price for the quarter indicated of $1.80 represents the
high bid on May 23, 2003 immediately prior to the forward split. The low bid
price of $0.10 represents the low bid on June 26, 2003, subsequent to the
forward split.
At September 30, 2003, the Company's Common Stock was quoted on the OTC
Bulletin Board ("IMNT") at a bid and asked price of $0.08 and $0.10,
respectively. Due to the late filing of this annual report, an "E" was
appended to the Company's symbol on October 20, 2003, indicating that the
Company is ineligible for listing until it is current in its reporting
obligations, and subject to delisting if it fails to become current within 30
calendar days, or November 19, 2003. Upon the filing of this report, the
Company will apply to have the "E" removed from its symbol.
Since its inception, the Company has not paid any dividends on its Common
Stock, and the Company does not anticipate that it will pay dividends in the
foreseeable future. At June 30, 2003, the Company had approximately 50
shareholders of record based on information provided by the Company's transfer
agent.
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Cautionary Statement Regarding Forward-looking Statements
---------------------------------------------------------
This report may contain "forward-looking" statements. Examples of forward-
looking statements include, but are not limited to: (a) projections of
revenues, capital expenditures, growth, prospects, dividends, capital
structure and other financial matters; (b) statements of plans and objectives
of the Company or its management or Board of Directors; (c) statements of
future economic performance; (d) statements of assumptions underlying other
statements and statements about the Company and its business relating to the
future; and (e) any statements using the words "anticipate," "expect," "may,"
"project," "intend" or similar expressions.
Results of Operations
---------------------
The Company is considered a development stage company with no assets or
capital and with no operations or income since approximately 1992. The
Company's costs and expenses associated with the preparation and filing of
this filing and other operations of the Company have been paid for by
shareholders of the Company, specifically Mark A. Scharmann and David Knudson
(see Item 11. Security Ownership of Certain Beneficial Owners and Management).
It is anticipated that the Company will require only nominal capital to
maintain the corporate viability and necessary funds will most likely be
provided by the Company's existing shareholders or its officers and directors
in the immediate future until the completion of a proposed acquisition.
In the opinion of management, inflation has not and will not have a material
effect on the operations of the Company until such time as the Company
successfully completes an acquisition or merger. At that time, management will
evaluate the possible effects of inflation on the Company as it relates to its
business and operations following a successful acquisition or merger.
Plan of Operation
-----------------
Because the Company lacks funds, it may be necessary for the officers and
directors to either advance funds to the Company or to accrue expenses until
such time as a successful business consolidation can be made (see Item 12.
Certain Relationships and Related Transactions).
Management intends to hold expenses to a minimum and to obtain services on a
contingency basis when possible. The Company's directors may receive
compensation for services provided to the Company until such time as an
acquisition or merger can be accomplished. However, if the Company engages
outside advisors or consultants, it may be necessary for the Company to
attempt to raise additional funds. The Company has not made any arrangements
or definitive agreements to use outside advisors or consultants or to raise
any capital.
In the event the Company does need to raise capital most likely the only
method available to the Company would be the private sale of its securities.
It is unlikely that it could make a public sale of securities or be able to
borrow any significant sum from either a commercial or private lender. There
can be no assurance that the Company will be able to obtain additional funding
when and if needed, or that such funding, if available, can be obtained on
terms acceptable to the Company.
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The Company does not intend to use any employees, with the possible exception
of part-time clerical assistance on an as-needed basis. Outside advisors or
consultants will be used only if they can be obtained for minimal cost or on a
deferred payment basis. Management is confident that it will be able to
operate in this manner and to continue its search for business opportunities
during the next twelve months.
Merger Agreement and Forward Stock Split
----------------------------------------
On April 21, 2003, we entered into an Agreement and Plan of Merger with
Ultimate Security Systems Corporation ("Ultimate"), a copy of which was
attached as an exhibit to our Form 8-K filed with the Securities and Exchange
Commission on April 23, 2003 (the "Merger Agreement"). The following
discussion regarding the terms of the Merger Agreement is subject to, and
qualified in its entirety by, the detailed provisions of the Merger Agreement
and any exhibits thereto.
On May 13, 2002, our Board of Directors approved a 5 for 1 stock split of our
issued and outstanding common stock which was effective on May 28, 2003. As a
result of the 5:1 forward split, the our total issued and outstanding stock
increased from 10,000,000 shares issued and outstanding to 50,000,000 shares
issued and outstanding.
The purpose for the stock split was to increase the marketability and
liquidity of the common stock and increase the number of issued and
outstanding shares of our common stock. As a result of the stock split, each
share of our issued and outstanding common stock on May 23, 2003 may be
exchanged for 5 fully paid and nonassessable shares of common stock, $0.0001
par value per share.
Due to the forward split of our stock, certain provisions of the merger were
adjusted per the Merger Agreement which provides for such adjustments due to
the forward split. Pursuant to the amended terms, we will register
approximately 366,666,667 shares of our Common Stock for issuance to the
Ultimate Shareholders in exchange for the shares of Ultimate Common and
Preferred Stock and related warrants.
We will also assume certain obligations related to Ultimate's existing
consulting and advisory service agreements with Shulman & Associates and
Stenton Leigh Business Resources, Inc. These agreements call for the
registration of an aggregate of 3,600,000 shares underlying options for the
purchase of common stock at an exercise price of $0.10 per share, subject to
certain conditions, including minimum financing being obtained following the
effectiveness of the Merger Agreement.
In order to have sufficient authorized capital to be able to reserve enough
shares for the warrants and options outstanding following the effectiveness of
the Merger, and to provide additional shares to be available for sale in
connection with Ultimate's proposed fund raising following the Merger, we will
also increase our capitalization from 50,000,000 authorized common shares to
500,000,000 shares of common stock.
Our operating expenses for the year ended June 30, 2003 totaled $72,367
compared to $57,996 for the prior year period. The increase was due to
additional professional fees and travel expenses related to the negotiation of
the merger agreement with Ultimate. For the year ended June 30, 2003, we were
funded by loans from officers Mark Scharmann and David Knudson, plus a loan
from an unrelated party of $20,000 which bears interest at 7% per year and is
due on demand.
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ITEM 7. FINANCIAL STATEMENTS
The financial statements of the Company are set forth immediately following
the signature page to this form 10-KSB.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
The Company has had no disagreements with its certified public accountants
with respect to accounting practices or procedures or financial disclosure.
See ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
ITEM 8A. CONTROLS AND PROCEDURES
Our principal executive and principal financial officer has participated with
management in the evaluation of effectiveness of the controls and procedures
required by paragraph (b) of Rule 13a-15 or Rule 15d-15 under the Exchange Act
as of the end of the period covered by this report. Based on that evaluation,
our principal executive and principal financial officer believes that our
disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule
15d-15(e) under the Exchange Act) are effective as of the end of the period
covered by the report. There have been no changes in our internal controls
that have materially affected, or are reasonably likely to materially affect,
our internal controls over financial reporting during the period covered by
this report.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The following table sets forth as of June 30, 2003, the name, age, and
position of each executive officer and director and the term of office of each
director of the Company.
Name Age Position Director or Officer Since
---- --- -------- -------------------------
Mark A. Scharmann 45 President and Director February 1997
David Knudson 43 Secretary/Treasurer and
Director February 1997 to May 2003
Dan O. Price 49 Director May 2001
The term of office of each director is one year and until his successor is
elected at the Company's annual shareholders' meeting and is qualified,
subject to removal by the shareholders. The term of office for each officer
is for one year and until a successor is elected at the annual meeting of the
board of directors and is qualified, subject to removal by the board of
directors.
Biographical Information
------------------------
Set forth below is certain biographical information with respect to each of
the Company's officers and directors.
Mark Scharmann is the principal shareholder of Troika Capital Investments, a
business consulting company founded in 1981. He has rendered business
consulting services to numerous private and public companies since then. He
graduated from Weber State University, Ogden, Utah, in 1997, with a Bachelors
of Integrated Studies emphasizing Business, Psychology and Health Promotion.
Mr. Scharmann is also the President and a Director of Pacific Alliance
Corporation (OTBCC:PALC).
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David Knudson has worked as a business consultant since 1985. From 1992 to
1995 he was employed as a computer information systems consultant at Weber
State University, and an adjunct professor in the Information Systems &
Technologies department from 1994 to 1996. He earned his BS Degree in Finance
at Weber State College, Ogden, Utah, in 1984 and a BS Degree in Information
Systems & Technologies at Weber State University in 1995. Mr. Knudson is also
Secretary/Treasurer and Director of Nightingale, Inc., and Secretary/Treasurer
and Director of Pacific Alliance Corporation (OTCBB:PALC). Mr. Knudson
resigned as an officer and director effective May 16, 2003.
Dan O. Price has been a director of the Company since May 2001. From 1993 to
1998, Mr. Price served as vice president for corporate development of Troika
Capital, Inc., Ogden, Utah, a financial consulting company. From October 1998
to October 2000, Mr. Price worked as an evaluator at Learning Technics,
Kirkland, WA and Salt Lake City, UT. Since February 2001, Mr. Price has been
working as an Enrollment Counselor for the University of Phoenix in Salt Lake
City. Mr. Price is also Vice President and Director of Pacific Alliance
Corporation (OTCBB:PALC).
The term of office of each director is one year and until his successor is
elected and qualified at the Company's annual meeting, subject to removal by
the Shareholders. The term of office for each Officer is one year and until a
successor is elected at the annual meeting of the Board of Directors and is
qualified, subject to removal by the Board of Directors. The Company will
reimburse Directors for their expenses associated with attending Directors'
meetings. However, Directors have not, nor is it anticipated they will,
receive any additional compensation for attending Directors' meetings.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
-------------------------------------------------
The Company believes that under the SEC's rules for reporting of securities
transactions by directors and executive officers, all required reports have
been timely filed.
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ITEM 10. EXECUTIVE COMPENSATION
The following tables set forth certain summary information concerning the
compensation paid or accrued for each of the Company's last three completed
fiscal years to the Company's chief executive officer and each of its other
executive officers that received compensation in excess of $100,000 during
such period (as determined at June 30, 2003, the end of the Company's last
completed fiscal year):
Summary Compensation Table
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
Other Restricted
Name and Annual Stock Options LTIP All other
Principal Position Year Salary Bonus($) Compensation Awards /SARs Payout Compensation
------------------ ---- ------ -------- ------------ ------ ------- ------ ------------
Mark Scharmann, 2003 $ -0- -0- -0- -0- -0- -0- -0-
President 3/01 2002 $ -0- -0- -0- -0- -0- -0- -0-
until present 2001 $ -0- -0- -0- -0- -0- -0- -0-
John A. Wise, Pres. 2001 $ -0- -0- -0- -0- -0- -0- -0-
and Chairman
until 3/01
Employment Agreements and Benefits: None.
Compensation of Directors: None.
Termination of Employment and Change of Control Arrangement: None.
Options/SAR Grants in Last Fiscal Year: None.
Bonuses and Deferred Compensation: None.
Compensation Pursuant to Plans: None.
Pension Table: Not Applicable.
Other Compensation: None
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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of September 30, 2003, the name and the
number of shares of the Company's Common Stock, par value $0.00001 per share,
held of record or beneficially by each person who held of record, or was known
by the Company to own beneficially, more than 5% of the Company's 50,000,000
shares of Common Stock issued and outstanding, and the name and shareholdings
of each director and of all officers and directors as a group.
Title of Name and Address Amount and Nature of Percent
Class Of Beneficial Owner Beneficial Ownership of Class
-------- ------------------- --------------------- --------
Common Mark A. Scharmann 29,218,510(1) 58.44
1661 Lakeview Circle
Ogden, UT 84403
Common David Knudson 13,439,475 26.88
1661 Lakeview Circle
Ogden, Utah 84403
Officers and Directors
----------------------
Common Mark A. Scharmann,
President and Director -------See Above-------
Common Dan O. Price, Director - -
All Officers and Directors
as a Group (2 Persons) 29,218,510 58.44
=========== =====
--------------------------------
(1) Represents 28,873,760 shares held directly by Mr. Scharmann, 7,250 shares
beneficially held of record by Troika Capital Investment, of which Mr.
Scharmann is the principal owner and shareholder, and 337,500 shares held in
Mr. Scharmann's IRA.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mark A. Scharmann, an officer and director of the Company advanced money to
the Company during the year ended June 30, 1999. The advances bear interest at
a rate of 10% per annum and have no maturity date. At March 31, 1999, the
Company converted its advances from the officer, notes payable to minority
shareholders and related accrued interest totaling $116,448 into 3,726,331
shares of common stock or $0.03125 per share.
On April 2, 1999, the Company loaned Mr. Scharmann $10,000. The advance was
evidenced by a demand note with interest at the rate of 10% per annum. This
advance was paid in full in August 1999.
On June 21, 2000, the Company's board of directors approved the issuance of
1,115,673 shares of the Company's common stock to David Knudson, the
Secretary/Treasurer of the Company, in exchange for the conversion of
$34,864.78 in principal and accrued interest pursuant to the terms of a
Promissory Note between the Company and Mr. Knudson. Prior to the conversion
of the Promissory Note, the Company had 4,884,327 shares of its common stock
issued and outstanding. After giving effect to the issuance of the conversion
shares to Mr. Knudson, the Company had 6,000,000 shares of common stock issued
and outstanding. The shares issued to Mr. Knudson constitute restricted
securities issued pursuant to section 4(2) of the Securities Act of 1933, as
amended.
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David Knudson, a former officer and director of the Company, is a principal in
a consulting firm to which the Company has paid professional fees totaling
$17,313 and $13,475 during the years ended June 30, 2003 and 2002,
respectively. Additional fees in the amount of $23,004 had not yet been paid
at June 30, 2003 and were included in accrued expenses.
On August 22, 2001, our board of directors approved the issuance of an
aggregate of 2,050,731 shares of our common stock to Mark A. Scharmann, our
President and David Knudson, our Secretary/Treasurer. Mr. Scharmann was issued
1,036,789 shares in exchange for the conversion of $32,399.67 in principal and
accrued interest under a demand note. Mr. Knudson was issued 1,013,942 shares
in exchange for the conversion of $31,685.79 in principal and accrued interest
under a demand note. Prior to the conversion of the demand note we had
6,000,000 shares of its common stock issued and outstanding. After giving
effect to the issuance of the conversion shares, we had 8,050,731 shares of
common stock issued and outstanding. The shares issued in the foregoing
transaction constitute restricted securities issued pursuant to section 4(2)
of the Securities Act of 1933, as amended.
During the year ended June 30, 2003, we issued an aggregate of 1,949,269
shares of our common stock to Mark A. Scharmann, our President, and David
Knudson, our former Secretary/Treasurer. Mr. Scharmann was issued 1,292,989
shares in exchange for the conversion of $40,405.91 in principal and accrued
interest under a demand note. Mr. Knudson was issued 656,280 shares in
exchange for the conversion of $20,508.74 in principal and accrued interest
under a demand note. Prior to the issuance of the conversion shares to
Messrs. Scharmann and Knudson, we had 8,050,731 shares of common stock issued
and outstanding. After giving effect to the issuance of the conversion shares,
we had 10,000,000 shares of common stock issued and outstanding. The shares
issued in the foregoing transaction constitute restricted securities issued
pursuant to section 4(2) of the Securities Act of 1933, as amended.
During the year ended June 30, 2003, we repaid $20,508 to Mark Scharmann, our
president, for funds loaned to us.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a)(1)FINANCIAL STATEMENTS. The following financial statements are included
in this report:
Title of Document Page
----------------- ----
Independent Auditors' Report of Rose, Snyder & Jacobs 14
Balance Sheet as of June 30, 2003 15
Statements of Operations for the years ended June 30, 2003
and 2002 and from inception of the development stage, July 1, 1992
through June 30, 2003 16
Statements of Stockholders' Equity for the years ended June 30, 2003
and 2002 17
Statements of Cash Flows for the years ended June 30, 2003
and 2003 and from inception of the development stage, July 1, 1992
through June 30, 2003 18
Notes to Financial Statements 19
(a)(2)FINANCIAL STATEMENT SCHEDULES. The following financial statement
schedules are included as part of this report:
None.
13
(a)(3)EXHIBITS. The following exhibits are included as part of this report:
Exhibit No. Description
----------- -----------
31 Certification of Principal Executive and Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32 Certification of Principal Executive and Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted, pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K.
Current Report on Form 8-K filed April 23, 2003 reporting on the signing of
the Merger Agreement with Ultimate Security Systems Corporation.
Current Report on Form 8-K filed May 20, 2003 reporting on the 5 for 1 forward
split of the Company's common stock.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information required by Item 9(c) of Schedule 14A
1) Audit Fees - The aggregate fees billed us for each of the last two fiscal
years for professional services rendered by our principal accountant for the
audit of our annual financial statements and review of our quarterly financial
statements is $10,500 and $10,735, respectively.
2) Audit-Related Fees - None.
3) Tax Fees. The aggregate fees billed to us for each of the last two fiscal
years for professional services rendered by our principal accountant for tax
related services is $600 and $600, respectively.
4) All Other Fees. None.
5) Not applicable.
6) Not Applicable.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
IMMUNOTECHNOLOGY CORPORATION
Date: November 10, 2003 By /S/ Mark A. Scharmann,
President, Principal Financial Officer
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Date: November 10, 2003 By /S/ Mark A. Scharmann, Director
Date: November 10, 2003 By /S/Dan O. Price, Director
14
INDEPENDENT AUDITORS' REPORT
To the Stockholders of
ImmunoTechnology Corporation
We have audited the accompanying balance sheet of ImmunoTechnology Corporation
(a Delaware Corporation in the Development Stage), as of June 30, 2003, and
statements of operations, stockholders' deficit, and cash flows for the years
ended June 30, 2003 and 2002 and the period from inception of the development
stage (July 1, 1992) through June 30, 2003. These financial statements are
the responsibility of the Corporation's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ImmunoTechnology Corporation
(a Development Stage Company) as of June 30, 2003, and the results of its
operations and its cash flows for the years ended June 30, 2003 and 2002 and
the period from inception of the development stage (July 1, 1992) through June
30, 2003, in conformity with accounting principles generally accepted in the
United states of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company does not generate revenue and has a net
capital deficiency that raises substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also
described in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/S/Rose, Snyder & Jacobs
Rose, Snyder & Jacobs
A Corporation of Certified Public Accountants
Encino, California
October 21, 2003, except for note 7, for which the date is October 28, 2003
15
Immunotechnology Corporation
(A Development Stage Company)
Balance Sheet
June 30, 2003
ASSETS
CURRENT ASSETS
Cash $ -
------------
TOTAL ASSETS $ -
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Bank overdraft $ 996
Accrued expenses 59,598
Note payable 20,000
Loans from officer, note 3 20,234
------------
TOTAL CURRENT LIABILITIES 100,828
------------
COMMITMENTS AND CONTINGENCIES, notes 6 and 7
STOCKHOLDERS' DEFICIT
Preferred stock, par value
$.00001 per share
Authorized - 5,000,000 shares
Issued - none -
Common stock, par value
$.00001 per share
Authorized - 50,000,000 shares
Outstanding - 50,000,000 shares 12,068
Paid in capital 398,976
Accumulated deficit prior to the development stage (151,332)
Accumulated deficit during the development stage (360,540)
------------
TOTAL STOCKHOLDERS' DEFICIT (100,828)
------------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $ -
============
See independent auditors' report and notes to financial statements.
16
Immunotechnology Corporation
(A Development Stage Company)
Statements of Operations
For the Years Ended June 30, 2003 and 2003
From Inception
of the
Development
Stage, July 1
1992 through
2003 2002 June 30, 2003
------------ ------------ -------------
REVENUE $ - $ - $ -
COST OF REVENUE - - -
GROSS PROFIT - - -
OPERATING EXPENSES
Professional fees 54,572 38,176 239,030
Transfer agent 1,245 4,200 5,445
Taxes and licenses - - 1,637
Bank fees and service charges 710 751 4,120
Travel 13,371 10,566 83,201
Office expense 15 1,685 10,000
Interest expense 2,454 2,618 16,707
------------ ------------ -------------
TOTAL OPERATING EXPENSES 72,367 57,996 360,140
------------ ------------ -------------
NET LOSS $ (72,367) $ (57,996) $ (360,140)
============ ============ =============
BASIC AND DILUTED LOSS PER
COMMON SHARE $ (0.00) $ (0.00)
============ ============
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES 45,433,905 38,764,770
============ ============
See independent auditors' report and notes to financial statements.
17
Immunotechnology Corporation
(A Development Stage Company)
Statements of Stockholders' Deficit
For the Years Ended June 30, 2003 and 2002
Accumulated
Common Additional Deficit Prior Accumulated
Stock Paid-in to Deficit After
Par Value Capital July 1, 1992 July 1, 1992 Total
----------- ----------- ----------- ----------- -----------
Balance at
July 1, 1992 $ 11,580 $ 122,752 $ (151,332) $ - $ (17,000)
Issuance of common
stock upon conversion
of debt, note 4 48 151,264 - - 151,312
Activity July 1, 1992
through June 30, 2001 11,628 274,016 (151,332) (229,777) (95,465)
----------- ----------- ----------- ----------- -----------
Issuance of common
stock upon conversion
of debt, note 4 21 64,065 - - 64,086
Net Loss - - - (57,996) (57,996)
----------- ----------- ----------- ----------- -----------
Balance at
June 30, 2002 11,649 338,081 (151,332) (287,773) (89,375)
Issuance of common
stock upon conversion
of debt, note 4 19 60,895 - - 60,914
Stock split under the form
of a dividend, note 5 400 - - (400) -
Net Loss - - - (72,367) (72,367)
----------- ----------- ----------- ----------- -----------
Balance at
June 30, 2003 $ 12,068 $ 398,976 $ (151,332) $ (360,540) $ (100,828)
=========== =========== =========== =========== ===========
See independent auditors' report and notes to financial statements.
18
Immunotechnology Corporation
(A Development Stage Company)
Statements of Cash Flows
For the Years Ended June 30, 2003 and 2002
From Inception
of the
Development
Stage, July 1
1992 through
2003 2002 June 30, 2003
----------- ----------- -----------
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $ (72,367) $ (57,996) $ (360,140)
Adjustment to reconcile net loss
to net cash used in
operating activities
Increase in accrued expenses 12,902 14,019 54,921
----------- ----------- -----------
NET CASH USED IN
OPERATING ACTIVITIES (59,465) (43,977) (305,219)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Advance to an officer - - (10,000)
Repayment of advance to an officer - - 10,000
----------- ----------- -----------
NET CASH PROVIDED BY
INVESTING ACTIVITIES - - -
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Bank overdraft 973 (2,573) 996
Advances from an officer 59,000 46,550 297,231
Proceeds from notes payable 20,000 - 27,500
Repayments of advances to an officer (20,508) - (20,508)
----------- ----------- -----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 59,465 43,977 305,219
----------- ----------- -----------
NET INCREASE IN CASH - - -
CASH AT BEGINNING OF YEAR - - -
----------- ----------- -----------
CASH AT END OF YEAR $ - $ - $ -
=========== =========== ===========
Supplementary disclosures:
Interest paid in cash $ 475 $ - $ 2,211
=========== =========== ===========
See independent auditors' report and notes to financial statements.
19
Immunotechnology Corporation
(A Development Stage Company)
Notes to Financial Statements
June 30, 2003
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Going Concern
ImmunoTechnology Corporation was incorporated on November 30, 1989 under the
laws of the State of Delaware. ImmunoTechnology Corporation operated a
medical test laboratory until 1992, when it ceased operations. Presently, the
Company has no operations.
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. As shown in the financial
statements during the year ended June 30, 2003, the Company did not generate
any revenue, and has a net capital deficiency. These factors among others may
indicate that the Company will be unable to continue as a going concern for a
reasonable period of time. For the year ended June 30, 2003, the Company
funded its disbursements by loans from officers and an individual.
The financial statements do not include any adjustments relating to the
recoverability of assets and classification of liabilities that might be
necessary should the Company be unable to continue as a going concern.
The Company is not operating, and will attempt to locate a new business
(operating company), and offer itself as a merger vehicle for a company that
may desire to go public through a merger rather than through its own public
stock offering (see note 7).
Cash Flows
Cash consists of balances in a demand account at a bank.
Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results may differ from those
estimates.
Fair Value of Financial Instruments
The carrying amounts of the Company's advances approximate fair value.
2. INCOME TAXES
The Company has loss carryforwards available to offset future taxable income.
The loss carryforwards at June 30, 2003 total approximately $500,000 and
expire between June 30, 2004 and June 30, 2023. Loss carryforwards are
limited in accordance with the rules of change in ownership. A valuation
allowance for 100% of deferred tax benefits has been recorded due to the
uncertainty of realizing these potential future benefits.
20
Immunotechnology Corporation
(A Development Stage Company)
Notes to Financial Statements
June 30, 2003
3. RELATED PARTY TRANSACTIONS
During the years ended June 30, 2003 and 2002, two officers advanced money to
the Company for a total of $59,000 and $46,550, respectively. On August 22,
2001, $64,086 of advances, including related interest was converted into
shares of common stock (see note 4). On December 19, 2002, $60,915 of
advances, including related interest was converted into shares of common stock
(see note 4). During the year ended June 30, 2003, the Company repaid $20,508
to one of the officers. All advances bear interest at a rate of 10%.
An officer of the company (who resigned in May 2003) is a principal in a
consulting firm to which the company paid professional fees totaling $17,313
and $13,475 during the years ended June 30, 2003 and 2002, respectively.
Additional fees in the amount of $23,004 had not yet been paid at June 30,
2003 and were included in accrued expenses.
4. COMMON STOCK
On March 31, 1999, the Company converted its advances from an officer, notes
payable to minority shareholders and related accrued interest totaling
$116,448 into 3,726,331 shares of common stock (18,631,655 after stock split)
or $0.03125 per share. On June 21, 2000, the Company converted its advances
from another officer and related accrued interest totaling $34,864 into
1,115,673 shares of common stock (5,578,365 after stock split) or $0.03125 per
share. On August 22, 2001, the Company converted $64,086 of loans from
officers and related accrued interest into 2,050,731 shares of common stock
(10,253,655 after stock split) or $0.03125 per share. During the year ended
June 30, 2003 the Company converted $60,914 of loans from officers and accrued
interest into 1,949,269 shares of common stock (9,746,345 after stock split)
or $0.03125 per share.
5. STOCK SPLIT
On May 13, 2003, the Board of Directors approved a 5 for 1 stock split of the
outstanding common stock in the form of a dividend.
6. COMMITMENTS AND CONTINGENCIES
The Company accrued $17,000 for legal services performed prior to the
development stage. Should this balance accrue interest, the liability could
increase by approximately $24,000.
7. SUBSEQUENT EVENTS
Merger
On April 21, 2003, the Company entered into an agreement and plan of merger
with Ultimate Security System Corporation ("Ultimate"). Ultimate is the
manufacturer of the Power Lock(tm) vehicle security system, and is located in
Irvine, California. Upon approval of the merger by both parties, the Company
will issue shares of common stock to Ultimate. According to the terms of the
agreement, the total common stock authorized will increase to 500,000,000, and
the par value will change to $.001. Please refer to Form 8-K filed with the
SEC on April 23, 2003.
21
Immunotechnology Corporation
(A Development Stage Company)
Notes to Financial Statements
June 30, 2003
Litigation
The Company is a defendant in a lawsuit where the plaintiff alleges
unsolicited fax advertisement violations. Management is in the process of
hiring a legal counsel regarding this matter, but believes this lawsuit is
frivolous, and the outcome will be immaterial to the financial statements.