-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Oqvhwz453kYCfh8No1FetzV1o4p532Nmgz5kpcOzNjiTCK9L7oTFFTQn9SvA8Vaq V92vcBh/3ydPkvELEHhMPA== 0001010549-03-000268.txt : 20030515 0001010549-03-000268.hdr.sgml : 20030515 20030515173433 ACCESSION NUMBER: 0001010549-03-000268 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: XERION ECOSOLUTIONS GROUP INC CENTRAL INDEX KEY: 0001000686 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MEMBERSHIP SPORTS & RECREATION CLUBS [7997] IRS NUMBER: 841286065 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-26760 FILM NUMBER: 03706235 BUSINESS ADDRESS: STREET 1: 153-1539, NORTH CHINA LAKE BLVD. CITY: RIDGECREST STATE: CA ZIP: 93555 BUSINESS PHONE: 866-668-4433 MAIL ADDRESS: STREET 1: 153-1539, NORTH CHINA LAKE BLVD. CITY: RIDGECREST STATE: CA ZIP: 93555 FORMER COMPANY: FORMER CONFORMED NAME: IMMULABS CORP DATE OF NAME CHANGE: 20001031 FORMER COMPANY: FORMER CONFORMED NAME: NORTH AMERICAN RESORTS INC DATE OF NAME CHANGE: 19950915 10QSB 1 xerion10qsb033103.txt XERION ECOSOLUTIONS GROUP INC. (Formerly IMMULABS CORP) Filing Type: 10QSB Description: Annual Report Filing Date: May 15, 2003 Period End: March 31, 2003 Primary Exchange: Over the Counter Bulletin Board Ticker: XECO UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB (Mark one) XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE - ------- ACT OF 1934 (Fee required) For the quarterly period ended March 31, 2003 -------------- TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934 - ------- For the transition period from ______________ to _____________ Commission File Number: 0-26760 XERION ECOSOLUTIONS GROUP INC. (Formerly IMMULABS CORPORATION) Colorado 84-1286065 - -------------------------- ------------------------- (State of incorporation) (IRS Employer ID Number) Suite 132-3495 Cambie Street Vancouver, BC Canada V5Z 4R3 - -------------------------------------------------------------------------------- (Address of principal executive offices) (604)696-0073 (Issuer's telephone number) - -------------------------------------------------------------------------------- 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. YES X NO --- --- State the number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date: April 15, 2003 5,042,133 common stock. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding filings of the Company at http://www.sec.gov . Transitional Small Business Disclosure Format (check one): YES NO X --- --- 1 TABLE OF CONTENTS ITEM NUMBER PAGE - ----------- ---- PART 1 1. Financial Statements 3 2. Management's Discussion and Analysis or Plan of Operation 12 PART 11 1. Legal Proceedings 13 2. Changes In Securities 13 3. Defaults Upon Senior Securities 13 4. Submission of Matters to a Vote of Security Holders 13 5. Other Information 14 6. Exhibits and Reports on Form 8-K 14 Signatures 15 Exhibit 23.1 - Consent of Independent Certified Public Accountants PART 1 Item 1 - Financial Statements Xerion EcoSolutions Group Inc. (A Development Stage Company) March 31, 2003 Index Balance Sheets..............................................................F-1 Statements of Operations....................................................F-2 Statements of Cash Flows....................................................F-3 Notes to the Financial Statements...........................................F-4 2
Xerion EcoSolutions Group Inc. (A Development Stage Company) Balance Sheets As at As at March 31, December 31, 2003 2002 $ $ (unaudited) (audited) ASSETS Current Assets Cash 25,736 2,997 Prepaid expenses 16,000 -- - -------------------------------------------------------------------------------------------------------- Total Current Assets 41,736 2,997 Mining Claims (Note 3) 25,000 -- Technology Rights (Note 4) 20,000 -- - -------------------------------------------------------------------------------------------------------- Total Assets 86,736 2,997 ======================================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current Liabilities Accounts payable 22,579 41,487 Accrued liabilities 3,750 3,000 Loans from a related party (Note 5) 1,867 1,100 - -------------------------------------------------------------------------------------------------------- Total Liabilities 28,196 45,587 - -------------------------------------------------------------------------------------------------------- Commitments and Contingencies (Notes 1,5,7 and 8) Subsequent Event (Note 9) Stockholders' Equity (Deficit) Preferred stock, 50,000,000 shares authorized, no par value; none issued -- -- Common Stock, 300,000,000 shares authorized, $0.001 par value 5,042,133 shares issued and outstanding (December 31, 2002 - 392,133 shares) 5,042 392 (Note 6(a)) Additional Paid-in Capital 7,743,112 7,594,262 Stock based compensation 1,876,171 1,873,815 Donated Capital (Note 5(b)) 6,000 3,000 Deficit Accumulated During the Development Stage (9,571,785) (9,514,059) - -------------------------------------------------------------------------------------------------------- Total Stockholders' Equity (Deficit) 58,540 (42,590) - -------------------------------------------------------------------------------------------------------- Total Liabilities and Stockholders' Deficit 86,736 2,997 ========================================================================================================
F-1 (The accompanying notes are an integral part of the financial statements)
Xerion EcoSolutions Group Inc. (A Development Stage Company) Statements of Operations Accumulated from November 1, 1985 For the Three Months (Date of Inception) Ended to March 31, March 31 2003 2003 2002 $ $ $ (unaudited) (unaudited) (unaudited) Revenue -- -- -- - --------------------------------------------------------------------------------------------------------------- Expenses General and Administrative Accounting and audit 33,600 2,925 500 Amortization 2,833 -- -- Donated services 6,000 3,000 -- Financial services 56,266 -- -- Investor relations 170,786 -- -- Legal 1,019,355 6,348 -- Management fees 763,000 -- 90,000 Office 3,689 213 372 Salaries 229,730 26,000 33,000 Stock based compensation 1,876,171 2,356 -- Transfer agent and regulatory 17,225 884 500 Travel and promotion 7,111 -- -- - --------------------------------------------------------------------------------------------------------------- 4,185,766 41,726 124,372 - --------------------------------------------------------------------------------------------------------------- Selling and Marketing Advertising 89,238 -- -- Marketing 29,500 16,000 -- Option agreement written-off 15,000 -- -- - --------------------------------------------------------------------------------------------------------------- 133,738 16,000 -- - --------------------------------------------------------------------------------------------------------------- Total Expenses 4,319,504 57,726 124,372 - --------------------------------------------------------------------------------------------------------------- Income (Loss) from Continuing Operations (4,319,504) (57,726) (124,372) - --------------------------------------------------------------------------------------------------------------- Income (Loss) from Discontinued Operations (5,252,281) -- -- - --------------------------------------------------------------------------------------------------------------- Net Income (Loss) For the Period (9,571,785) (57,726) (124,372) =============================================================================================================== Net Income (Loss) Per Share - Basic (0.02) (0.32) =============================================================================================================== Weighted Average Shares Outstanding 2,605,000 391,000 ===============================================================================================================
F-2 (Diluted loss per share has not been presented as the result is anti-dilutive) Xerion EcoSolutions Group Inc. (A Development Stage Company) Statements of Cash Flows For the Three Months Ended March 31, 2003 2002 $ $ (unaudited) (unaudited) Cash Flows to Operating Activities Net loss for the period (57,726) (124,372) Adjustment to reconcile net loss to cash: Donated services 3,000 -- Stock based compensation 2,356 -- Change in non-cash working capital items: Increase in prepaid expenses (16,000) -- Increase in accounts payable and accrued liabilities 342 124,026 - -------------------------------------------------------------------------------- Net Cash Used in Operating Activities (68,028) (346) - -------------------------------------------------------------------------------- Cash Flows from Financing Activities Proceeds from subscriptions receivable 20,000 -- Proceeds from shares issued 90,000 -- Advances from a related party 767 -- - -------------------------------------------------------------------------------- Net Cash From Financing Activities 110,767 -- - -------------------------------------------------------------------------------- Cash Flows to Investing Activities Purchase of mining claims (20,000) -- - -------------------------------------------------------------------------------- Net Cash Used in Investing Activities (20,000) -- - -------------------------------------------------------------------------------- Decrease in Cash 22,739 (346) Cash - Beginning of Period 2,997 2,276 - -------------------------------------------------------------------------------- Cash - End of Period 25,736 1,930 ================================================================================ Non-Cash Financing Activities Forgiveness of debt to related party 18,500 Shares issued for acquisition of mining claims 5,000 -- Shares issued for acquisition of technology rights 20,000 -- ================================================================================ Supplemental Disclosures Interest paid -- -- Income tax paid -- -- ================================================================================ F-3 (The accompanying notes are an integral part of the financial statements) 1. Nature of Operations and Continuance of Business Xerion EcoSolutions Group Inc., formerly Immulabs Corporation (the "Company"), was initially incorporated as Gemini Ventures, Inc. on November 1, 1985 under the laws of the State of Colorado. The Company changed its name to Solomon Trading Company, Limited in July 1989; The Voyageur, Inc. in November 1994; The Voyageur First, Inc. in December 1994; North American Resorts, Inc. in March 1995; and Immulabs Corporation in September 2000. Effective March 28, 2003, the Company changed its name to Xerion EcoSolutions Group Inc. The shares of the Company currently trade on the Over the Counter Bulletin Board under the ticker symbol "XECO". From 1995 through 1998, the Company was in the business of selling vacations in Florida and the sale of time share memberships to the Ocean Landings and Cypress Island Preserve facilities in Florida which were then controlled by the Company and the operation of Cypress Island Preserve as a tourist destination. During the fourth quarter of 1998, the Company liquidated its holdings in these ventures and discontinued all operations. With the disposition of all operations, the Company became fully dependent upon the support of its controlling shareholders for the maintenance of its corporate status and to provide all working capital. On December 6, 2002, the Company's Board of Directors affected a 1 new for 100 old reverse split of the issued and outstanding shares. The effect of this split is reflected in the financial statements as of the first day of the first period presented. With the acquisition of sixty-seven mineral claims in California and the rights to certain ore and waste processing technologies, the Company has entered the business of mine reclamation and environmental remediation with a focus on serving the mining and coal fired power plant industries. Refer to Notes 3 and 4. These financial statements are prepared using generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does not have significant cash or other material assets, nor does it have an established source of revenues needed to cover its operating costs and to allow it to continue as a going concern. The Company has ongoing overhead expenses and will require significant capital to complete its business acquisition and then execute upon its business plan. The Company's ability to meet those obligations and continue as a going concern is dependent upon raising new capital through issuing debt and/or equity securities and then to generate revenues and profits. Until these funding sources materialize the controlling shareholders intend to continue the funding of necessary expenses to sustain operations. In April the Company completed a private placement offering consisting of 89,000 shares of common stock at a price of $1.00 per share for a total cash consideration of $89,000. 2. Summary of Significant Accounting Policies Year End The Company's fiscal year end is December 31. Cash and Equivalents For the purpose of the statements of cash flows, all highly liquid investments with the maturity of three months or less are considered to be cash equivalents. Use of Estimates and Assumptions The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods. Actual results could differ from those estimates. Basic and Diluted Net Income (Loss) per Share The Company computes net income (loss) per share in accordance with SFAS No. 128, "Earnings per Share" (SFAS 128). SFAS 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. Loss per share information does not include the effect of any potential common shares, as their effect would be anti-dilutive. 2. Summary of Significant Accounting Policies (continued) Accounting for Stock Based Compensation The Company has adopted SFAS No. 123 "Accounting for Stock Based Compensation" which requires that stock awards granted to employees and non-employees are recognized as compensation expense based on the fair market value of the stock award or fair market value of the goods and services received whichever is more reliably measurable. Interim Financial Statements These interim unaudited financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company's financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. Income Taxes Income taxes are provided for using the liability method of accounting in accordance with Statements of Financial Accounting Standards No. 109 "Accounting for Income Taxes". A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Due to the provisions of Internal Revenue Code Section 338, the Company will have no net operating loss carryforwards available to offset financial statement or tax return taxable income in future periods as a result of changes in control in both 2000 and 1999, respectively, involving 50 percentage points or more of the issued and outstanding securities of the Company. Financial Instruments The fair value of the Company's current assets and current liabilities were estimated to approximate their carrying values due to the immediate short-term maturity of these financial instruments. As the Company operates in Canada, virtually all of its assets and liabilities are giving rise to significant exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company's operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk. Management does not believe the Company is exposed to significant credit or interest rate risks. Comprehensive Loss SFAS No. 130, "Reporting Comprehensive Income," establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at January 31, 2003, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements. Recent Accounting Pronouncements In June, 2002, FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities". The provisions of this Statement are effective for exit or disposal activities that are initiated after December 31, 2002, with early application encouraged. This Statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)". This Statement requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. The Company adopted SFAS No. 146 on January 1, 2003 and its impact did not have a material effect on its financial position or results of operations. In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure", which amends SFAS No. 123 to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 expands the disclosure requirements of SFAS No. 123 to require more prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The transition provisions of SFAS No. 148 are effective for fiscal years ended after December 15, 2002. The disclosure provisions of SFAS No. 148 are effective for financial statements for interim periods beginning after December 15, 2002. The Company adopted SFAS No. 148 on January 1, 2003 and its impact did not have a material effect on its financial position or results of operations. 2. Summary of Significant Accounting Policies (continued) FASB has also issued SFAS No. 145 and 147 but they will not have any relationship to the operations of the Company therefore a description of each and their respective impact on the Company's operations have not been disclosed. Interim Financial Statements These interim unaudited financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company's financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. 3. Mining Claims The Company entered into an agreement to acquire 67 mining claims located in California from an arms-length vendor. Consideration was $20,000 and 500,000 shares of the Company valued at $0.01 per share. These shares were issued on March 21, 2003. The Vendor may cancel this transaction if the Company does not raise $1,000,000 by September 17, 2003. The Company may cancel this transaction for any sound business reason. In the event of cancellation the shares will be returned to treasury and cancelled. 4. Technology Rights The Company entered into an agreement to acquire an option-to-purchase certain ore and waste processing technologies (the "Technologies") from the President of the Company for one (1) dollar. The Company subsequently exercised that option-to-purchase and issued 2,000,000 common shares of the Company in total consideration to the three original arms-length owners of the Technologies. The 2,000,000 shares issued by the Company have been valued at $0.01 per share or $20,000 in total. These shares were issued on March 21, 2003. The technologies are protected by patent and is to be used to extract valuable and/or hazardous elements from the soil or water. The vendors may cancel this transaction if the Company does not raise $1,000,000 by September 17, 2003. The Company may cancel this transaction if it is proven that the vendors misrepresented the potential of the Technologies. In the event of cancellation the shares will be returned to treasury and cancelled. 5. Related Party Transactions/Balances a) On March 20, 2003, the Company entered into a five-year contract to retain the current President of the Company. b) The Company recognized $3,000 as donated services to the President of the Company for services rendered during the three months ended March 31, 2003. c) The Company received notification from the President of the Company that all amounts owing to him are forgiven as of March 13, 2003. Therefore $18,500 is included in Additional Paid In Capital for the period ended March 31, 2003 representing the extinguishment of the debt owing to the President of the Company. Due to his relationship to the Company as principal stockholder, the forgiveness of this debt has been treated as contributed capital in accordance with the provisions of Staff Accounting Bulletin Topic 5T "Accounting for Expense of Liabilities Paid by Principal Stockholders". It is treated as contributed capital because the forgiveness of debt maintained the value of the principal stockholder's investment in the Company. d) The amounts due to a related party represent cash loans and are non-interest bearing, unsecured and without specific terms of repayment. e) The Company received $20,000 and released 2,000,000 shares at $0.01 per share to the President of the Company pursuant to a private placement. These shares were issued into a lawyer's trust account on December 13, 2002 pending receipt of funds. 6. Share Capital (a) Common Stock On March 14, 2003, the Company received $20,000 and released 2,000,000 shares at $0.01 per share to the President of the Company pursuant to a private placement. These shares were issued into a lawyer's trust account on December 13, 2002 pending receipt of funds. (b) Stock options On March 24, 2003, the Company filed a Form S-8 Registration Statement with the U.S. Securities and Exchange Commission to register 1,000,000 shares of common stock pursuant to the Company's 2003 Nonqualifying Stock Option Plan ("2003 NQPlan"). This 2003 NQPlan is for persons employed or associated with the Company, including without limitation any employee, director, general partner, officer, attorney, accountant, consultant or advisor, is intended to advance the best interests of the Company by providing additional incentive to those persons who have a substantial responsibility for its management, affairs, and growth by increasing their proprietary interest in the success of the Company, thereby encouraging them to maintain their relationships with the Company. The determination of those eligible to receive options under the 2003 NQPlan, and the amount, price, type and timing of each Stock option and the terms and conditions shall rest at the sole discretion of the Company's Board of Directors, subject to the provisions of the 2003 NQPlan; On March 24, 2003, the Company granted options to purchase 150,000 shares at an exercise price of $0.60 per share under the 2003 NQPlan to officers and directors of the Company. These options were exercised on March 28, 2003. On March 24, 2003, the Company granted options to purchase 325,000 shares at an exercise price of $4.00 per share under the 2003 NQPlan to officers and directors of the Company. Weighted Shares Average Under Option Option Price # $ Beginning of period -- -- Granted 475,000 2.93 Exercised (150,000) 0.65 ---------------------------------------------------------------------- End of period 325,000 4.00 ====================================================================== Additional information regarding options outstanding as at March 31, 2003 is as follows:
Outstanding Exercisable ------------------------------------------------- -------------------------------- Exercise prices Weighted average Weighted Weighted remaining average average Number of contractual exercise price Number of exercise price $ shares life(years) $ shares $ 4.00 325,000 .98 4.00 325,000 4.00 ------------------------------------------------ --------------------------------- 325,000 .98 4.00 325,000 4.00 ================================================ =================================
Stock based compensation was calculated using the Black-Scholes Option Pricing method with the following assumptions: expected volatility - 95%; expected life - 1.0 years; and risk-free rate - 1.18%. 7. Commitment The Company entered into employment agreements with four officers of the Company, in which signing bonuses of $26,000 has been paid. 8. Contingent Liability The Company is in dispute over the purchase of a shuttle bus in 1998. The owners of the bus lost the vehicle in bankruptcy and are looking to recoup $97,509 due to their losses, however, the title of the bus was never transferred to the Company and the Company is looking to recoup approximately $15,000 in payments made towards the purchase. The Company is now relying on former directors of the Company as well as the estate of the Company's former attorney to cover the costs. These parties had signed a Hold Harmless Agreement indemnifying the Company from any costs arising from this matter. It is not possible at this time for the Company to predict with any certainty the outcome of this claim. However, management is of the opinion, based upon information presently available, that it is unlikely that any liability would be material in relation to the Company's financial position. 9. Subsequent Event In April 2003, the Company completed a private placement offering consisting of 89,000 shares of common stock at a price of $1.00 per share to net the Company proceeds of $89,000. Item 2 - Management's Discussion and Analysis or Plan of Operation (1) Caution Regarding Forward-Looking Information This quarterly report contains certain forward-looking statements and information relating to the Company that are based on the beliefs of the Company or management as well as assumptions made by and information currently available to the Company or management. When used in this document, the words "anticipate", "believe", "estimate", "expect" and "intend" and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. Such statements reflect the current view of the Company regarding future events and are subject to certain risks, uncertainties and assumptions, including the risks and uncertainties noted. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. In each instance, forward-looking information should be considered in light of the accompanying meaningful cautionary statements herein. (2) Results of Operations, Liquidity and Capital Resources As of the date of this filing, the Company has just over $100,000 in cash, 100% ownership of technology for use in non-toxic processing of ore and waste, sixty-seven mining claims and liabilities totaling just over $25,000. Management recognizes that additional funds through additional private sales of Company stock, capital contributions from existing significant shareholders and/or loans from existing significant shareholders will be required in the future. However, there can be no assurance that the Company will be able to obtain additional funds to support the Company's liquidity requirements or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company. During the recent quarter the Company modified its business purpose to enter into the `non-toxic" ore processing, mine reclamation and environmental remediation business with a focus on serving the mining and coal-fired power plant industries. The Company is in discussions with several parties for ore processing and/or mine reclamation contracts. Negotiations have been positive thus far and management believes that it will sign one or more contracts in the very near future that could result in significant revenues. On March 17, 2003 the Company acquired ownership of sixty-seven mining claims in the Randsburg Mining District of California as well as certain ore and waste processing technologies for use in ore processing, mine reclamation and environmental remediation. The Company's primary objective over the next year is to lay a foundation for significant expansion. It is anticipated that this will include: creating significant streams of positive cash flow, developing internal systems and infrastructure, recruiting senior executives and support staff, creating credibility with the mainstream mining and coal-fired power plant industries, generating sufficient financing systems and market capitalization to support the Company's aggressive internal growth and acquisition plans. CORE TECHNOLOGY The Company owns a proprietary ore processing and waste management technology known as the `Xerion Reaction System' or `XRS'. The XRS has the ability to release and recover any targeted element from the earth including: gold, silver, platinum, palladium, rare earth elements such as neodymium and scandium, strategic metals such as tungsten, and other valuable elements. XRS can also neutralize or remove elements that are harmful to the environment, including zinc, lead, mercury, arsenic, germanium, cyanide and other deleterious elements. GENERAL BUSINESS OVERVIEW Xerion offers Mine Reclamation and Environmental Remediation services to the Mining and Coal-Fired Power Plant Industries. Tailings and waste dumps from these industries scatter the world. They can be hazardous to the environment and there are few economic solutions for their remediation. It is a little known fact that traditional recovery methods often leave these dumps with a considerable percentage of their original elements, such as gold and platinum, still intact. In some cases the Company may provide remediation services at little or even no cost to government or industry - since costs can be partially or entirely met through the recovery of valuable elements. A patent application for the XRS has recently been filed and Xerion is in the start-up phase of its business cycle. The Company is in the process of building the infrastructure necessary to perform its first reclamation project. The company intends to acquire contracts for the reclamation of toxic mining sites. In addition to mining, there are numerous applications of XRS technology including remediation of toxic waste produced by the Coal Fired Power Plant industry. OUTLOOK ON USE OF CYANIDE BY THE MINING INDUSTRY The mining industry is facing many regulatory pressures regarding the use of cyanide, which is an industry standard method to economically recover gold from ore. Cyanide has resulted in a number of environmental disasters in recent history. There is growing concern about the use of cyanide in mining operations. Already some States have outlawed the use of cyanide altogether and other States could soon be following in their footsteps. The Xerion Reaction System offers an environmentally friendly alternative to cyanide. Several tests were carried out under the auspices of the Arizona Department of Environmental Quality for a placer mine operation, using an earlier process developed by Xerion's Chief Scientific Officer. (The XRS is more efficient and just as non-toxic as this earlier process). Due to its non-toxic nature, the government granted the technology a negative declaration, `no permit required' for the State of Arizona. This type of `negative declaration' could shorten the time-to-production for any mine using the XRS in Arizona. The Company intends to apply for similar `Negative Declarations' in all States. Aside from the dangers of environmental impact, cyanide is only effective in leaching gold from certain types of ores. Sulphides, in particular, are not amenable to economic cyanide leaching. It is well known in the industry that cyanide recovers less than half of the gold from Sulphides. XRS, however, is effective in leaching very high percentages of gold and other elements from sulphides. The future of cyanide is questionable and the industry is being forced to consider other alternatives. The potential for XRS to become an industry standard replacement for cyanide is very real. ENVIRONMENTAL REMEDIATION - COAL-FIRED POWER PLANT INDUSTRY There are over one thousand coal-fired power plants in the United States. These power plants generate approximately half of all electricity consumed in the United States and produce a growing supply of toxic and semi-toxic waste. An independent laboratory has conducted tests on this waste and determined that it contains an extraordinarily high content of valuable elements. Analyses done on fly ash were carried out at the Argonne National Laboratory in Illinois by the United States Geological Survey, using a DC Arc Atomic Emission Spectrograph, indicates gross value of all elements exceeds $700.00 per ton of waste. (This value was based on the element prices as readily available off the Internet and values are expected to fluctuate with market prices of recoverable elements). In addition to significant existing stockpiles, coal-fired power plants in the United States produce over one hundred and fifteen million (115,000,000) new tons of waste every year. Due to the apparent lack of technology capable of recovering the inherent values, the power plants currently sell a portion of their waste to the cement industry as an inexpensive ingredient, and disposes of, or stockpiles the rest. COAL-FIRED POWER PLANT INDUSTRY OUTLOOK There is growing concern among environmental groups and government agencies regarding the problem of toxic waste produced by this industry. Although they have made Herculean efforts and have spent billions of dollars on controls to reduce particulates, sulfur dioxide and carbon dioxide emissions, the industry has yet to adequately address the problems associated with its solid waste. Further environmental restrictions may be imposed on this industry unless it is able to solve its waste remediation problem. Test results indicate the Xerion Reaction System may provide an economical method of remediating this industry's waste, with the added financial benefit of being able to recover valuable elements currently left behind. The Company anticipates performing recovery and remediation tests for the industry in the very near future. RANDSBURG MINING CLAIMS Xerion owns sixty-seven mining claims covering an area of 16.75 square miles in the Randsburg Mining District of California. The Company plans to implement a full-scale, environmentally friendly mining operation at these claims to demonstrate the efficiency of using the XRS from start of production, right through to reclamation. Many assays have been completed, indicating several mining targets with production potential. The initial production target on the claims is a residual placer deposit known as the Floyd Mine. The Floyd is a pluton area that has a quartz-weathered zone 7,000 feet long by 3,000 feet wide. Twenty-five trenches, each 16-feet deep, have been bulk-tested every 4-feet of depth. Sample results by certified labs show gold mineralization over the entire zone (XRAL, ACTIVATION LABS, JACOBS ASSAY OFFICE, SKYLINE, AND ACT LABS). A feasibility study is required and is the next step before proceeding into production. RISK FACTORS AND FORWARD LOOKING STATEMENTS Certain statements herein, including those regarding production, joint venture contracts, patents, industry outlooks and realized metals prices constitute "forward looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such forward looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by those forward looking statements. These risks, uncertainties and other factors include, but are not limited to, difficulties in successfully raising capital (given the Company's lack of operating history, lack of profitable operations and limitations on the market for the Company's securities), in developing and commercializing its products and mining claims (including the ability to overcome technical hurdles that may arise), in meeting applicable existing or new regulatory standards, in receiving required regulatory approvals, in obtaining necessary patents and licenses, in defending against third party infringement of patents and licenses, in protecting itself from costly, unforeseen legal disputes, in producing gold and other elements in commercial quantities at reasonable costs, in competing successfully against other companies and in marketing itself successfully and in successfully addressing the concerns and/or obtaining the support of lobbies in various States. There can be no assurance that the Company will be successful in its efforts to develop and commercialize XRS or its mining claims. Most importantly at this stage, the Company's success and each step required to achieve such success depends on its ability to raise significant further financing on an ongoing basis and there is no guarantee it will be able to do so. The company is still in the development stage and has no revenues. Additionally, funds may be raised through the issuance of equity shares and such securities might have rights, preferences or privileges senior to its common stock and will likely result in dilution to existing shareholders. The Company is therefore subject to a number of known and unknown risks and uncertainties that could cause actual operations or results to differ materially from those that are anticipated. The entire executive management team has agreed to work for the company on substantially reduced salaries, or in most cases, no salary whatsoever. There is no guarantee that they will continue to work for the company under such favorable conditions. The recent mining claim and technology acquisitions require the Company to raise one million dollars within six months to avoid notice of cancellation from Sellers. Part of Seller's motivation in selling the XRS technology to Company was to avoid significant dilution in their ownership. There is no guarantee that the Company will be able to raise this capital and if the Company fails to raise this capital the Sellers are expected to sell the technology to another party. If the Company loses its technology and mining claims, it will have no significant assets on which to base its current business plan and will fail. To be successful in implementing its business plan the Company will require the services of numerous other executives with varied technical and professional backgrounds in environmental engineering, ore processing and financial management and the company's ability to recruit such executives is entirely dependant upon its access to working capital and there is no guarantee that such capital will be available. The Registrant is highly dependent upon management and/or significant shareholders to provide sufficient working capital to preserve the integrity of the corporate entity during this phase of early development and there is no assurance that the Registrant will be able to finance its planned operations. There is no guarantee that contracts for ore processing, mine reclamation or environmental remediation will be forthcoming and the economic success of such contracts are subject to many known and unknown risks including; availability of adequate capital, availability of qualified staff, successful negotiations with mining and power plant companies, protection of the proprietary qualities of XRS technology, successful economic implementation of XRS, availability of raw materials or specialized equipment. There is no guarantee that the Company will be able to put its mining claims into production and the economic success of such production is subject to many known and unknown risks including; availability of adequate capital, availability of qualified staff, successful negotiations with regulatory bodies for necessary permitting, access to ore with sufficient grades as to make production economical, results of feasibility studies, satisfactory weather conditions and availability of subcontractors, water, power and equipment. The Company may, from time to time, make oral forward-looking statements. The Company strongly advises investors to carefully read the above paragraph and the risk factors described in its Annual Reports and other documents filed with the United States Securities and Exchange Commission for a description of certain factors that could cause the actual results of the Company to materially differ from those in the oral or written forward-looking statements. The Company disclaims any intention or obligation to update or revise any oral or written forward-looking statements whether as a result of new information, future events or otherwise. During the quarter ended March 31, 2003, the Company added the following executives to its management team. Richard F. Hewlett, Chief Scientific Officer. Mr. Hewlett has previously put four mines into production, including a mercury mine in partnership with Placer Dome. Mr. Hewlett is a graduate in Chemical Engineering from Iowa State University with a Masters degree in Mining Engineering from the University of Arizona. He completed his course work and Dissertation in Geological Engineering under a Doctoral Fellowship sponsored b the U.S. Bureau of Mines while on the teaching faculty of the University of Arizona. An alumnus from the teaching faculty at the Colorado School of Mines, Mr. Hewlett has 45 years experience working with and consulting to the world's major mining companies including Place Development (Dome), Noranda, Texas Gulf Sulphur, Kennecott Copper Corp., American Metal Climax, Occidental Petroleum (Minerals) and ASARCO Transvaal Consolidated Goldfields. Mr. Hewlett was inducted into the Metallurgical and Mining Society of the AIME and has presented many technical papers at annual meetings of the Society of Mining, Metallurgical, and Petroleum Engineers. He was also elected into Sigma Xi, an honorary research fraternity. Mr. Hewlett is the inventor of the Xerion Reaction System (XRS) and has recently sold this technology to the Company. He has joined the executive team to facilitate its implementation into the market place. Bryon Knelson, Vice President, Corporate Development Mr. Knelson is recognized worldwide as being a foremost authority on the recovery of freegold. He is the holder of multiple patents and is the inventor of the Knelson Concentrator, with over four thousand installations at mining sites worldwide, including Placer Dome's Porgera Dome (Papua New Guinea), Musselwhite, and Campbell Red Lake as well as Barrick Gold's Est-Malarctic, Eskay Creek and Bulyhanhulu (Mali). Byron built his company, Knelson Concentrators, into a growing company of $15,000,000.00 in annual sales before handing over the responsibilities of day-to-day management to others. He has been nominated twice in the National Entrepreneur of the Year Awards and is the holder of the Canadian Citizens Award, bestowed upon him by the Prime Minister of Canada. Mr. Knelson was presented with the Export Development Award by the Federal Government and continues to serve on the Board of Knelson Concentrators. David Thomas, Senior Strategic Coordinator Mr. Thomas formerly served as President of a venture capital company, incubating start-up public companies. Prior to that he was Executive Vice President of a mining company, Vice President Finance of a development stage pharmaceutical company and Senior Vice President and Fund Manager of a futures based Mutual Fund Management Company. He has successfully worked with Xerion's President on several important projects over the past nine years, including the launch of an internet startup which achieved market capitalization of $240,000,000.00.. He has a strong background in corporate finance, regulatory compliance, strategic planning and general management. Ryan Jones, Vice President, Operations Mr. Jones is a mining technologist with many years experience in mining exploration across North America and West Africa. He has also operated his own mining operations in BC and the Yukon. As a consultant, Mr. Jones has installed and commissioned mining equipment for such notable operations as the famous Sixteen to One Mine in Alleghany, CA, Cal Sierra's Dredge 21 on the Yuba River, Marysville, CA and the Golconda Mine underground alluvial operation near Quartzsite, AZ. For the past 12 years Mr. Jones has worked closely with Xerion's VP Byron Knelson in the development and marketing of the Knelson concentrator. Mr. Jones brings with him an in-depth knowledge of mining operations and is capable of calculating ore reserves, producing feasibility studies and overseeing production of Xerion's own mining claims. Part II - Other Information Item 1 - Legal Proceedings To the best of knowledge of the Officers and Directors of the Company, neither the Company nor any of its Officers and Directors are parties to any legal proceeding or litigation other than as described below. Further, the Officers and Directors know of no threatened or contemplated legal proceedings or litigation other than as described below The current company management learned in late 2002 that the Company is in dispute over the purchase of a shuttle bus in 1998. The owners of the bus lost the vehicle in bankruptcy and are looking to recoup $97,508.58 plus associated costs due to their losses, however, the title of the bus was never transferred to the Company and the Company was looking to recoup some $15,000 in payments made towards the purchase. The Company is now relying on former directors of the Company as well as the estate of the Company's former attorney to cover any costs which arise. These parties have signed a Hold Harmless Agreement indemnifying the Company from any costs arising from this matter. An attorney representing a former Director of the Company has informed the Company that they have worked out a potential alternative settlement with the Claimants which would absolve the Company of any liability. That attorney is waiting for his legal fees to be paid to complete these transactions and has advised the Company that a payment of $10,000 will clear the matter within thirty days. The Company will be pursuing former Directors for payment in this matter. Item 2 - Changes in Securities On March 25, 2003 the Company filed a Form S-8 Registration Statement with the U.S. Securities and Exchange Commission to register 1,000,000 shares of common stock pursuant to the Company's 2003 Nonqualifying Stock Option Plan ("2003 NQPlan"). This 2003 NQPlan is for persons employed or associated with the Company, including without limitation any employee, director, general partner, officer, attorney, accountant, consultant or advisor, is intended to advance the best interests of the Company by providing additional incentive to those persons who have a substantial responsibility for its management, affairs, and growth by increasing their proprietary interest in the success of the Company, thereby encouraging them to maintain their relationships with the Company. The determination of those eligible to receive options under the 2003 NQPlan, and the amount, price, type and timing of each Stock option and the terms and conditions shall rest at the sole discretion of the Company's Board of Directors, subject to the provisions of the 2003 NQPlan; During the quarter ending March 31, 2003 the Company: a) granted 475,000 stock options under the 2003 NQPlan to various directors, officers and consultants of the Company at the following prices: 150,000 shares at a price of $0.60 per share; 325,000 shares at a price of $4.00 per share; b) issued 150,000 shares upon the exercise of stock options at a price of $0.60 per share to net the Company proceeds of $90,000 The Company granted 25,000 stock options to David Thomas with an exercise price of $0.60 per share and 50,000 options with an exercise price of $4.00 per share; 50,000 stock options to Ben Traub with an exercise price of $0.60 per share and 100,000 options with an exercise price of $4.00 per share; 25,000 stock options to Richard Hewlett with an exercise price of $0.60 per share and 50,000 options with an exercise price of $4.00 per share; 25,000 stock options to Ryan Jones with an exercise price of $0.60 per share and 50,000 options with an exercise price of $4.00 per share; 25,000 stock options to Byron Knelson with an exercise price of $0.60 per share and 50,000 options with an exercise price of $4.00 per share; 15,000 stock options to Ellen Luthy with an exercise price of $4.00 per share; 10,000 stock options to Warren Gacsi with an exercise price of $4.00 per share. SALES OF SECURITIES: In December, 2002 the Company issued 2,000,000 shares to be held in trust, in the name of "Race & Co.". These shares were subsequently issued to the President of the Company pursuant to a private placement on March 17, 2003, for proceeds in the amount of $20,000. On March 17, 2003 the Company authorized the issuance of 500,000 restricted shares (and $20,000 in cash) in consideration for the acquisition of 67 mining claims. On March 17, 2003 the Company authorized the issuance of 2,000,000 restricted shares in consideration for the acquisition of ore and waste processing technology. Subsequent to December 31, 2002 the Company granted 475,000 stock options under the 2003 NQPlan to various directors, officers and consultants of the Company at the following prices: 150,000 shares at a price of $0.60 per share; 325,000 shares at a price of $4.00 per share. On March 28, 2003 the Company issued 150,000 shares upon the exercise of stock options by officers at a price of $0.60 per share to net the Company proceeds of $90,000. Subsequent to March 31, 2003 the Company completed a private placement for 89,000 shares at a price of $1.00 for proceeds totaling $89,000. Item 3 - Defaults Upon Senior Securities None Item 4 - Submission Of Matters To A Vote Of Security Holders None Item 5 - Other Information The Company is in discussions with several parties for ore processing and/or mine reclamation contracts. Negotiations have been positive thus far and management believes that it will sign one or more contracts in the very near future that could result in significant revenues. ITEM 6 - EXHIBITS AND REPORTS ON FROM 8-K (DOCUMENTS INCORPORATED BY REFERENCE) (a) Form S-8 Registration Statement filed with the U.S. Securities and Exchange Commission March 24, 2003 to register 1,000,000 shares of common stock pursuant to the Company's 2003 Nonqualifying Stock Option Plan ("2003 NQPlan"). (b) Reports on Form 8-K: i. Filed March 31, 2003 reporting the sale of two million shares in a private placement and the change of control of the Company by way of issuing 500,000 and 2,000,000 shares, respectively, for the acquisition of 67 mining claims and the acquisition of certain non-toxic ore and waste processing technologies. SIGNATURES In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized. Xerion EcoSolutions Group Inc. (Formerly Immulabs Corporation) By /s/ Ben Traub Dated: May 15, 2003 --------------------------------- Ben Traub, President By /s/ Ellen Luthy Dated: May 15, 2003 --------------------------------- Ellen Luthy, Secretary CERTIFICATION OF PERIODIC REPORT We, Ben E. Traub and Ellen M. Luthy certify that: 1. We have reviewed this quarterly report on Form 10-QSB of Xerion EcoSolutions Group Inc. (the "Registrant") for the period ended March 31, 2003. 2. Based on our knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on our knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. We are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. We have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. We have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Dated: May 15, 2003 By: /s/ Ben Traub --------------- Ben Traub Chief Executive Officer By: /s/Ellen Luthy ----------------- Ellen Luthy Principal Financial Officer CERTIFICATION OF PERIODIC REPORT I, Ben E. Traub, Principal Executive Officer of Xerion EcoSolutions Group Inc. (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Okley Act of 2002, 18 U.S.C. Section 1350, that; (1) the report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) information contained in the report fairly presents, in all material respects, the financial condition and results of operation of the company. Dated: May 15, 2003 /s/ Ben Traub ---------------------- Ben Traub Principal Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----