U.S. SECURITIES AND EXCHANGE COMMISSION Washington,
D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-24641
IMMUNOTECHNOLOGY CORPORATION
(Name of Small Business Issuer as specified in its charter)
Delaware 84-1016435
------------------------------- ------------------
(State or other jurisdiction of (I.R.S.employer
incorporation or organization identificationNo.)
1661 Lakeview Circle, Ogden, UT 84403
-------------------------------------
(Address of principal executive offices)
Registrant's telephone no., including area code: (801) 399-3632
N/A
Former name, former address, and former fiscal year, if
changed since last report.
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act: None
Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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. Yes X No.
Indicate by check mark whether the registrant is an accelerated filer (as
defined in rule 12b-2 of the Exchange Act). Yes___ No X
Common Stock outstanding at May 26, 2004 - 50,000,000 shares of $.00001 par
value Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
FORM 10-QSB
FINANCIAL STATEMENTS AND SCHEDULES
IMMUNOTECHNOLOGY CORPORATION
For the Quarter ended March 31, 2004
The following financial statements and schedules of the registrant are
submitted herewith:
PART I - FINANCIAL INFORMATION
Page of
Form 10-QSB
-----------
Item 1. Financial Statements:
Independent Accountants' Review Report 3
Balance Sheets 4
Unaudited Statements of Operations 5
Unaudited Statements of Stockholders' Deficit 6
Unaudited Statements of Cash Flows 7
Notes to Financial Statements 8 - 9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10
Item 3. Controls and Procedures 12
PART II - OTHER INFORMATION
Page
----
Item 1. Legal Proceedings 12
Item 2. Changes in the Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Results of Votes of Security Holders 12
Item 5. Other Information 12
Item 6(a). Exhibits 12
Item 6(b). Reports on Form 8-K 13
2
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 March 31,
2004 and June 30, 2003 and the statements of operations for the three months and
nine months ended March 31, 2004 and 2003 and for the period from inception of
the development stage (July 1, 1992) through March 31, 2004, the statements cash
flows for the nine months ended March 31, 2004 and 2003 and for the period from
inception of the development stage (July 1, 1992) through March 31, 2004, and
the statements of stockholders' deficit for the period from inception (July 1,
1992) through March 31, 2004. These financial statements are the responsibility
of the management of ImmunoTechnology Corporation.
We conducted our reviews in accordance with the standards of the Public
Company Accounting Oversight Board (United States). A review of interim
financial information consists principally of applying analytical procedures and
making inquiries of persons responsible for financial and accounting matters. It
is substantially less in scope than an audit in accordance with the standards of
the Public Company Accounting Oversight Board, 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
A Corporation of Certified Public Accountants
Encino, California
May 20, 2004
3
IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
March 31, June 30,
2004 2003
---------- ----------
CURRENT ASSETS
Cash $ 717 $ -
---------- ----------
TOTAL ASSETS $ 717 $ -
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Bank overdraft $ - $ 996
Accrued expenses 47,126 59,598
Note payable, note 4 20,000 20,000
Advances from officers, note 3 89,184 20,234
---------- ----------
TOTAL CURRENT LIABILITIES 156,310 100,828
---------- ----------
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 (415,305) (360,540)
---------- ----------
TOTAL STOCKHOLDERS' DEFICIT (155,593) (100,828)
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $ 717 $ -
========== ==========
Prepared without audit.
See independent accountants' review report and notes to financial statements
4
IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED STATEMENTS OF OPERATIONS
From
Inception of
the
Development
Stage, July
Three Nine Three Nine 1, 1992
months ended months ended monthsended months ended through
March 31, March 31, March 31, March 31, March 31,
2004 2004 2003 2003 2004
----------- ----------- ----------- ----------- ----------
REVENUE $ - $ - $ - $ - $ -
COST OF REVENUE - - - - -
----------- ----------- ----------- ----------- ----------
GROSS PROFIT - - - - -
OPERATING EXPENSES
Professional fees 7,185 27,061 14,658 35,077 271,536
Taxes and licenses - 229 - - 1,866
Bank fees and
service charges 83 429 165 548 4,549
Travel 10,215 19,563 2,418 9,135 102,764
Office expense 250 2,037 - - 12,037
Interest expense 2,230 5,446 (607) 1,758 22,153
----------- ----------- ----------- ----------- ----------
TOTAL OPERATING
EXPENSES 19,963 54,765 16,634 46,518 414,905
----------- ----------- ----------- ----------- ----------
NET LOSS $ (19,963) $ (54,765) $ (16,634) $ (46,518) $ (414,905)
=========== =========== =========== =========== ==========
BASIC LOSS PER
COMMON SHARE $ - $ - $ - $ -
=========== =========== =========== ===========
WEIGHTED AVERAGE
NUMBER OF
COMMON SHARES 50,000,000 50,000,000 50,000,000 43,917,425
=========== =========== =========== ===========
Prepared without audit.
See independent accountants' review report and notes to financial statements.
5
IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED STATEMENTS OF STOCKHOLDERS' DEFICIT
Accumulated Accumulated
Common Deficit Deficit
Stock Additional Prior to After
Par Paid-in July 1, July 1,
Value Capital 1992 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)
Net loss - - - (19,963) (19,963)
------- -------- --------- --------- ---------
Balance at
March 31, 2004 $12,068 $398,976 $(151,332) $(415,305) $(155,593)
======= ======== ========= ========= =========
Prepared without audit.
See independent accountants' review report and notes to financial statements.
6
IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED STATEMENTS OF CASH FLOWS
From Inception of
the Development
Nine Nine Stage, July 1,
months ended months ended 1992 through
March 31, 2004 March 31, 2003 March 31, 2004
-------------- -------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (54,765) $ (46,518) $ (414,905)
Adjustment to reconcile net loss to net cash
used in operating activities:
Increase (decrease) in accrued expenses (12,472) 5,772 42,449
-------------- -------------- --------------
NET CASH USED IN
OPERATING ACTIVITIES (67,237) (40,746) (372,456)
-------------- -------------- --------------
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 68,950 20,975 366,181
Repayments of advances to an officer - - (20,508)
Proceeds from notes payable - 20,000 27,500
-------------- -------------- --------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 67,954 40,952 373,173
-------------- -------------- --------------
NET INCREASE IN CASH 717 206 717
CASH AT BEGINNING OF PERIOD - - -
-------------- -------------- --------------
CASH AT END OF PERIOD $ 717 $ 206 $ 717
============== ============== ==============
Supplementary disclosures:
Interest paid $ 2,560 $ - $ 4,771
============== ============== ==============
Prepared without audit.
See independent accountants' review report and notes to financial statements.
7
IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2004
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.
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all normal
recurring adjustments considered necessary for a fair presentation have
been included. Operating results for the nine-month period ended March 31,
2004 are not necessarily indicative of the results that may be expected for
the year ending June 30, 2004. For further information refer to the
financial statements and footnotes thereto included in the Company's Form
10-KSB for the year ended June 30, 2003. 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 quarter ended March 31, 2004, 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 nine months ended March
31, 2004, 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 March 31, 2004 total approximately
$550,000 and expire between June 30, 2004 and June 30, 2024. Loss
carry-forwards are 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.
Prepared without audit.
See independent accountants' review report.
8
3. RELATED PARTY TRANSACTIONS
An officer of the Company advanced money to fund the Company's expenses.
All advances bear interest at 10% and are due on demand. During the nine
months ended March 31, 2004, an officer advanced $68,950.
The unpaid balance of advances was $89,184 and $20,234 at March 31, 2004
and June 30, 2003, respectively.
A former officer of the Company is a principal in a consulting firm to
which the Company paid professional fees totaling $21,245 and $14,227
during the nine months ended March 31, 2004 and 2003, respectively.
Professional fees owed to this firm totaled $10,328 and $23,004 at March
31, 2004 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, 2002, 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.
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
number 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.
7. SUBSEQUENT EVENT
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
at Irvine, California. Upon approval of the merger by both parties, the
Company will issue shares of common stock to Ultimate, and warrants to
Troika Capital Investment, the majority shareholder of the company.
Following the transaction, the Company will increase its capitalization
from 50,000,000 to 500,000,000 authorized shares of common stock. Please
refer to Form 8-K filed with the SEC on April 23, 2003. The Company is
still negotiating the details of the transaction.
Prepared without audit.
See independent accountants' review report.
9
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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.
General
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.
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.
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.
10
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, 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.
Financial Condition
Total assets at March 31, 2004 were $717. As of June 30, 2003, the Company
had no assets and liabilities $100,828.
The Company's total liabilities as of March 31, 2004 were $156,310. The
Company's liabilities include, but are not limited to; $89,184 loans from
officers, $47,126 accrued expenses and $20,000 note payable.
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 nine months ended December 31, 2004, Mark Scharmann advanced a total
of $68,950. David Knudson, a former officer of the Company, is a principal in a
consulting firm to which the Company paid professional fees totaling $21,245
during the nine months ended March 31, 2004. Professional fees owed to this firm
totaled $10,328 at March 31, 2004.
Results of Operations
The Company generated no revenues in 2003 or 2004 since the Confirmation
Date of its Bankruptcy Reorganization. The Company will not generate any
revenues, if ever, until and unless it merges with an operating company or
raises additional capital for its own operations. There can be no assurance that
either of such events will happen.
11
The Company had a net loss of $19,963 for the three months ended March 31,
2004. This compares to a net loss of $16,634 for the three months ended March
31, 2003. The Company's expenses for the quarter ended March 31, 2004 consisted
of travel, professional fees, interest and other expenses.
The Company had a net loss of $54,765 for the nine months ended March 31,
2004 and $46,518 for the nine months ended March 31, 2003.
ITEM 3. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
Based on their evaluations as of March 31, 2004, the principal executive
officer and principal financial officer of the Company have concluded that the
Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act) are effective to ensure that
information required to be disclosed by the Company in reports that the Company
files or submits under the Securities Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the SEC.
(b) Changes in Internal Controls
There were no significant changes in the Company's internal controls over
financial reporting or in other factors that could significantly affect these
internal controls subsequent to the date of their most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Item 2. Changes in the Rights of the Company's Security Holders. None.
Item 3. Defaults by the Company on its Senior Securities. None.
Item 4. Submission of Matters to Vote of Security Holders. No matter
was submitted to a vote of the Company's security holders for
the quarter ended March 31, 2004.
Item 5. Other Information.
Item 6(a). Exhibits. 31 Certification of Chief Executive Officer and Chief
Financial Officer Pursuant to Section 302 of the Sarbanes
Oxley Act of 2002.
32 Certification of Chief Executive Officer and Chief
Financial Officer Pursuant to Section 906 of the Sarbanes
Oxley Act of 2002.
12
Item 6(b). Reports on Form 8-K. None.
SIGNATURE
In accordance with the requirements of the Exchange Act, the Company has
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
Dated: May 26, 2004 IMMUNOTECHNOLOGY CORPORATION
By /s/ Mark A. Scharmann
Chief Executive Officer and
Chief Financial Officer
13