1
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Quarter Ended: December 31, 2003
[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Transition Period from _____________ to ____________
Commission File Number 0-24641
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IMMUNOTECHNOLOGY CORPORATION
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(Name of Small Business Issuer in its 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
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(Address of principal executive offices and Zip Code)
(801) 399-3632
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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
--- --- --- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, Par Value $0.00001 50,000,000
-------------------------------- ----------------------------
Title of Class Number of Shares Outstanding
as of December 31, 2003
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PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
IMMUNOTECHNOLOGY CORPORATION
FINANCIAL STATEMENTS
(UNAUDITED)
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Stockholders of
ImmunoTechnology Corporation
We have reviewed the accompanying balance sheets of ImmunoTechnology
Corporation (a Delaware corporation in the Development Stage) as of December
31, 2003 and June 30, 2003 and the statements of operations for the three
months and six months ended December 31, 2003 and 2002 and for the period from
inception of the development stage (July 1, 1992) through December 31, 2003,
and the statements of stockholder's deficit for the period from inception of
the development stage (July 1, 1992) through December 31, 2003, and the
statements of cash flows for the six months ended December 31, 2003 and 2002
and for the period from the inception of the development stage (July 1, 1992)
through December 31, 2003. These financial statements are the responsibility
of the management of ImmunoTechnology Corporation.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit in
accordance with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying financial statements in order for them to
be in conformity with accounting principles generally accepted in the United
States of America.
As discussed in Note 1, certain conditions indicate that the Company may be
unable to continue as a going concern. The accompanying financial statements
do not include any adjustments to the financial statements that might be
necessary should the Company be unable to continue as a going concern.
/S/Rose, Snyder & Jacobs
Rose, Snyder & Jacobs
A Corporation of Certified Public Accountants
Encino, California
February 20, 2004
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IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
ASSETS
December 31, June 30,
2003 2003
----------- -----------
CURRENT ASSETS
Cash $ 260 $ -
----------- -----------
TOTAL ASSETS $ 260 $ -
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Bank overdraft $ - $ 996
Accrued expenses 47,456 59,598
Note payable, note 4 20,000 20,000
Advances from officers, note 3 68,434 20,234
----------- -----------
TOTAL CURRENT LIABILITIES 135,890 100,828
----------- -----------
COMMITMENTS AND CONTINGENCIES, note 6
STOCKHOLDERS' DEFICIT, note 5
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; issued
and outstanding - 50,000,000 12,068 12,068
Paid in capital 398,976 398,976
Accumulated deficit prior to the development stage (151,332) (151,332)
Accumulated deficit during the development stage (395,342) (360,540)
----------- -----------
TOTAL STOCKHOLDERS' DEFICIT (135,630) (100,828)
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $ 260 $ -
=========== ===========
Prepared without audit. See independent accountants' review report and notes
to the financial statements.
4
IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
From Inception of
the Development
Stage,
Three Six Three Six July 1, 1992
months ended months ended months ended months ended through
Dec. 31, 2003 Dec. 31, 2003 Dec. 31, 2002 Dec. 31, 2002 Dec. 31, 2003
----------- ----------- ----------- ----------- -----------
REVENUE $ - $ - $ - $ - $ -
COST OF REVENUE - - - - -
----------- ----------- ----------- ----------- -----------
GROSS PROFIT - - - - -
OPERATING EXPENSES
Professional fees 13,886 19,376 12,360 20,419 258,407
Taxes and licenses - 229 - - 1,866
Transfer Stock 450 500 - - 5,945
Bank fees and
service charges 188 346 235 383 4,466
Travel 9,348 9,348 4,132 6,717 92,549
Office expense - 1,787 - - 11,787
Interest expense 1,899 3,216 1,220 2,365 19,923
----------- ----------- ----------- ----------- -----------
TOTAL OPERATING
EXPENSES 25,771 34,802 17,947 29,884 394,943
----------- ----------- ----------- ----------- -----------
NET LOSS $ (25,771) $ (34,802) $ (17,947) $ (29,884) $ (394,943)
=========== =========== =========== =========== ===========
BASIC LOSS PER
COMMON SHARE $ - $ - $ - $ -
=========== =========== =========== ===========
WEIGHTED AVERAGE
NUMBER OF
COMMON SHARES 50,000,000 50,000,000 41,630,855 40,942,255
=========== =========== =========== ===========
Prepared without audit. See independent accountants' review report and notes
to the financial statements.
5
IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' DEFICIT
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 5 69 215,329 - - 215,398
Activity July 1, 1992
through June 30, 2002 - - - (287,773) (287,773)
----------- ----------- ----------- ----------- -----------
Balance at
June 30, 2002 11,649 338,081 (151,332) (287,773) (89,375)
Issuance of common stock,
upon conversion of debt,
note 5 19 60,895 - - 60,914
Net Loss - - - (29,884) (29,884)
----------- ----------- ----------- ----------- -----------
Balance at
December 31, 2002 11,668 398,976 (151,332) (317,657) (58,345)
Stock split under the form
of dividend, note 5 400 - - (400) -
Net Loss - - - (42,483) (42,483)
----------- ----------- ----------- ----------- -----------
Balance at
June 30, 2003 12,068 398,976 (151,332) (360,540) (100,828)
Net loss - - - (34,802) (34,802)
----------- ----------- ----------- ----------- -----------
Balance at
December 31, 2003 $ 12,068 $ 398,976 $ (151,332) $ (395,342) $ (135,630)
=========== =========== =========== =========== ===========
Prepared without audit. See independent accountants' review report and notes
to the financial statements.
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IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
From Inception of
the Development
Stage
Six Six July 1, 1992
months ended months ended through
Dec. 31, 2003 Dec. 31, 2002 Dec. 31, 2003
----------- ----------- -----------
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $ (34,802) $ (29,884) $ (394,942)
Adjustment to reconcile net loss
to net cash used in operating
activities
Increase/(Decrease) in accrued
expenses (12,142) 5,733 42,779
----------- ----------- -----------
NET CASH USED IN
OPERATING ACTIVITIES (46,944) (24,151) (352,163)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Advances from an officer - - (10,000)
Repayment of advances to an officer - - 10,000
----------- ----------- -----------
NET CASH PROVIDED BY
INVESTING ACTIVITIES - - -
----------- ----------- -----------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Bank Overdraft (996) (23) -
Advances from an officer 48,200 24,264 345,431
Repayments of advances
to an officer - - (20,508)
Proceeds from notes payable - - 27,500
----------- ----------- -----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 47,204 24,241 352,423
----------- ----------- -----------
NET INCREASE IN CASH 260 90 260
CASH AT BEGINNING OF PERIOD - - -
----------- ----------- -----------
CASH AT END OF PERIOD $ 260 $ 90 $ 260
=========== =========== ===========
Supplementary disclosures:
Interest paid $ - $ - $ 2,211
=========== =========== ===========
Prepared without audit. See independent accountants' review report and notes
to the financial statements.
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IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
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. The Company is
no longer 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.
In the opinion of management, all normal recurring adjustments considered
necessary for fair presentation have been included.
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 three months ended December 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 six months ended
December 31, 2003, the Company funded its disbursements by loans from an
officer.
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.
Cash Flows
Cash consists of balances in a demand account at a bank.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles 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 December 31, 2003 total approximately $500,000 and
expire between June 30, 2004 and June 30, 2023. The use of loss carry
forwards is limited in accordance with the rules of change in ownership.
Deferred tax benefit resulting from these loss carryforwards are subject to a
100% valuation allowance due to the uncertainty of realization.
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IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
3. RELATED PARTY TRANSACTIONS
Officers of the Company advance money to fund the Company's expenses. All
advances bear interest at 10%, and are due on demand. During the six months
ended December 31, 2003, one officer advanced a total of $48,200. The unpaid
balance of advances was $68,434 and $20,234 at December 31, 2003 and June 30,
2003, respectively.
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 $17,484
and $9,019 during the six months ended December 31, 2003 and 2002,
respectively. Professional fees owed to this firm totaled $12,713 and $23,004
at December 31, 2003 and June 30, 2003, respectively.
4. NOTE PAYABLE
During the three months ended March 31, 2003, an unrelated individual advanced
$20,000 to fund the Company's expenses. This advance bears interest at 7% and
is due on demand.
5. 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 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.
On May 13, 2003, the Board of Directors approved a 5 for 1 stock split of the
outstanding common stock in the form of dividend. Weighted average member of
shares used in the calculation of earnings per share has been retroactive
restated to consider this stock split.
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 $26,000.
The Company is a defendant in a lawsuit where the plaintiff alleges
unsolicited fax advertisement violations. Management believes this lawsuit is
frivolous, and the outcome will be immaterial to the financial statements.
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IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
7. SUBSEQUENT EVENT
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.
Please refer to Form 8-K filed with the SEC on April 23, 2003. The Company is
still negotiating the details of the transaction.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION OR PLAN OF OPERATION
Cautionary Statement Regarding Forward-looking Statements
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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.
Plan of Operation
-----------------
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.
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. The
Company's 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 three and six months ended
December 31, 2003, the Company did not generate any revenue, and has a net
capital deficiency. These factors among other may indicate that the Company
will be unable to continue as a going concern for a reasonable period of time.
For the three and six months ended December 31, 2003, the Company funded its
disbursements by loans from officer Mark Scharmann.
As indicated officers of the Company have advanced money to fund the Company's
expenses. All advances bear interest at 10%, and are due on demand. During the
six months ended December 31, 2003, Mark Scharmann advanced a total of
$48,200. The unpaid balance of advances was $68,434 at December 31, 2003.
David Knudson, a former officer of the Company, is a principal in a consulting
firm to which the Company paid professional fees totaling $17,484 during the
six months ended December 31, 2003. Professional fees owed to this firm
totaled $12,713 at December 31, 2003.
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.
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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. 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.
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.
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, $0.00001
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.
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.
12
Our operating expenses for the three and six months ended December 31, 2003
totaled $25,771 and $34,802 compared to $17,947 and $29,884 for the prior
year periods. The expenses were due primarily to professional fees, travel
expenses related to due diligence for the proposed merger with Ultimate, and
interest expense on loans.
ITEM 3. 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 II - OTHER INFORMATION
ITEM 1. 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 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of our shareholders during the quarter
ended December 31, 2003.
ITEM 5. OTHER INFORMATION
None.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
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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 Section 906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K.
--------------------
None.
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf
of the Company and in the capacities and on the dates indicated:
IMMUNOTECHNOLOGY CORPORATION
Date: March 16, 2004 By /S/ Mark A. Scharmann,
President and Director
Principal Executive and Financial Officer