-----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, UUckqyBhyupVcZqu9/GTEeuPiwp/+hfG6qliysdJRFewpuOmPT31GZwrlRmBO/6u DN7GujG07Bua7iINcOnzBw== 0001039962-01-500008.txt : 20010504 0001039962-01-500008.hdr.sgml : 20010504 ACCESSION NUMBER: 0001039962-01-500008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20010503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMMECOR CORP CENTRAL INDEX KEY: 0001039962 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 680324628 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-06966 FILM NUMBER: 1621160 BUSINESS ADDRESS: STREET 1: 3636 NORTH LAUGHLIN RD. #150 CITY: SANTA ROSA STATE: CA ZIP: 95403 BUSINESS PHONE: 7076362550 MAIL ADDRESS: STREET 1: 100-105 PROFESSIONAL DR CITY: ROHNERT PARK STATE: CA ZIP: 94928 10-Q 1 a3rdqtr2000ascii.txt 3RD QTR 2000 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2000 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from __________ to: _________ Commission File Number: 333-06966 IMMECOR CORPORATION (Name of small business issuer in its charter) California (State or jurisdiction of incorporation or Organization) 68-0324628 (I.R.S. Employer Identification No.) 100 Professional Center Drive, Rohnert Park, California 94928-2137 (Address of principal executive offices) (707) 585-3036 (Issuer's Telephone Number) Securities registered under Section 12(b) of the Exchange Act: None Securities registered under Section 12(g) of the Exchange Act: Common Stock, Without Par Value 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 [] (APPLICABLE ONLY TO CORPORATE ISSUERS) State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. 5,806,128 shares of common stock as of October 30, 2000. Transitional Small Business Disclosure Format Yes [ ] No [X] IMMECOR CORPORATION INDEX TABLE OF CONTENTS PART I FINANCIAL INFORMATION Item 1. Balance sheet at December 31, 1999 and September 30, 2000 Income Statements for the nine months ended September 30, 1999 and 2000 Statements of cash flows for the nine months ended September 30, 1999 and 2000 Item 2. Management's Discussion and Analysis or Plan of Operation PART II OTHER INFORMATION Item 1. Legal proceedings Item 2. Changes in securities Item 3. Defaults upon senior securities Item 4. Submission of matters to a vote of security holders Item 5 Other information Item 6. Exhibits and Reports on Form 8-K FORWARD LOOKING STATEMENTS Immecor Corporation (the "Company") cautions readers that certain important factors may affect the Company's actual results and could cause such results to differ materially from any forward-looking statements that may be deemed to have been made in this Form 10-QSB or that are otherwise made by or on behalf of the Company. For this purpose, any statement contained in the Form 10-QSB that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "may", "expect", "believe", "anticipate", "intend", "could", "estimate", or "continue" or the negative other variations thereof or comparable terminology are intended to identify forward-looking statements. Factors that may affect the Company's results include, but are not limited to, the Company's limited history of profitability, its dependence on a limited number of customers and key personnel, its possible need for additional financing and its dependence on certain industries. The Company is also subject to other risks detailed herein or detailed from time to time in the Company's filings with the Securities and Exchange Commission. PART I ITEM 1. FINANCIAL INFORMATION Page The following Financial Statements are filed as part of this report: Balance Sheets 3 Income Statements 4 Statements of Cash Flows 5 Notes to Financial Statements 6 IMMECOR CORPORATION Balance Sheets ASSETS
Dec. 31, Sep. 30, 1999 2000 CURRENT ASSETS Cash $ 57,788 $ 664,655 Certificate of Deposit 0 300,000 Accounts receivables (net of allowance for doubtful amounts of $18,749 in 1999 and $19,500 in 2000) 989,972 2,736,846 Inventories 1,159,638 3,604,527 Notes receivable - 178,067 Prepaid and other assets 59,476 9,858 Deferred tax assets 13,681 13,199 Total current assets 2,280,555 7,507,151 EQUIPMENT AND IMPROVEMENTS -net 125,601 145,491 Total Assets $ 2,406,156 $7,652,642 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Line of credit $ 350,890 $ 483,639 Notes payable, due within one year 5,318 1,333 Accounts payable 1,380,692 1,443,351 Accrued Liabilities - 1,243,000 Other liabilities 165,214 899,372 Sales tax payable 351,774 Federal income tax payable - 1,100,781 Total current liabilities 1,902,114 5,523,250 Long-term Liabilities Note payable, due after one year 3,189 4,457 Deferred income taxes 16,536 17,812 Total long-term liabilities 19,725 22,269 Total liabilities 1,921,839 5,545,519 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Preferred stock, no par value, 20,000,000 shares authorized; no shares issued and outstanding Common stock, no par value, 50,000,000 shares authorized; issued and outstanding, 1999 and 2000: 5,806,128 288,855 288,855 Retained earnings 195,462 1,818,268 Total shareholders' equity 484,317 2,107,123 Total liabilities and shareholders' equity $2,406,156 $7,652,642
The accompanying notes are an integral part of these financial statements IMMECOR CORPORATION Income Statement Nine months ended September 30, (unaudited)
1999 2000 (restated) (unaudited) Net sales $ 6,809,709 $ 19,680,581 Cost of sales 5,767,021 13,853,296 Gross profit 1,042,688 5,827,285 Selling, general and administrative expenses 882,915 2,536,973 Operating income 159,773 3,290,312 Interest income 549 3,500 Other income (6,854) - Interest expense (20,510) (59,345) Income before income taxes 132,958 3,234,467 Income taxes 7,810 1,611,661 NET INCOME $ 125,148 $1,622,806 Net income per share - basic and diluted $0.02 $0.28 Weighted average shares outstanding - basic and diluted 5,806,128 5,806,128
The accompanying notes are an integral part of these financial statements IMMECOR CORPORATION Statement of Cash Flow Period Ending September 30,
1999 2000 (restated) (unaudited) Increase (decrease) from cash Cash from operations: Net income $ 125,148 $ 1,622,806 Reconciliation of net income to net cash provided by operating activities: Depreciation 39,045 28,501 Changes in current assets and liabilities (594,138) (1,259,341) Net cash provided by operating activities 429,945 683,491 Cash flows from investing activities: Additions to property and equipment (85,381) (48,391) Net cash used in investing activities (85,381) (48,391) Cash flows from financing activities Line of Credit, net 216,493 132,749 Proceeds from issuance of common stock (3,983) - Notes Receivable (136,565) (158,266) Net cash provided by (used in) financing activities 75,945 (28,234) Net (decrease) increase in cash and cash equivalents (439,381) 606,866 Cash and cash equivalents at beginning of period 207,040 57,788 Cash and cash equivalents at end of period $(232,341) $664,654 Supplemental disclosure of cash flow information: Cash paid during the period for interest $20,510 $59,345
The accompanying notes are an integral part of these financial statements IMMECOR CORPORATION NOTES TO THE INTERIM UNAUDITED CONDENSED FINANCIAL STATEMENTS Note 1: Summary of Significant Accounting Policies Basis of Presentation The financial statements included in this Form 10-QSB have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted, pursuant to such rules and regulations, although management believes the disclosures are adequate to make the information presented not misleading. The results of operations for any interim period are not necessarily indicative of results for a full year. These statements should be read in conjunction with the financial statements and related notes included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 1999. The financial statements presented herein as of December 31, 1999 and September 30, 2000 and for the nine months ended September 30, 1999 and 2000 reflect, in the opinion of management, all material adjustments consisting only of normal recurring adjustments necessary for a fair presentation of the financial position, results of operations and cash flow for the interim periods. Earnings per share amounts are based on the weighted average number of common stock shares outstanding in each period, as adjusted for a 2:1 stock split in 2000. Note 2: Certificate of Deposit A certificate of deposit was opened with Westamerica Bank for a term of 6 months. The certificate supports a non-revocable standby letter of credit that expires on 01-13-01. The CD allows Immecor to establish trade credit history with a key foreign supplier.
Note 3: Receivables consist of the following as of : December 31, September 30, 1999 2000 Accounts receivable $ 1,008,721 $ 2,756,346 Less allowance for doubtful accounts 18,749 19,500 $ 989,972 $ 2,736,846 Note 4: Inventory Inventories consist of the following as of : December 31, September 30, 1999 2000 Purchased parts $ 904,518 $ 2,162,716 Finished systems 255,120 1,441,811 $ 1,159,638 $ 3,604,527 Note 5: Notes Receivable Notes receivable consists of the following as of : December 31, September 30, 1999 2000 Employee Bonus Plan $ - $ 158,266 Customer and Employee Notes - 19,801 Total $ - $ 178,067
IMMECOR CORPORATION NOTES TO THE INTERIM UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 6: Equipment and Improvements Equipment and improvements consist of the following as of : December 31, September 30, 1999 2000 Equipment and Furniture $ 126,001 $ 181,698 Transportation equipment 68,649 68,649 194,650 250,347 Less accumulated depreciation 69,049 104,856 $ 125,601 $ 145,491
Note 7: Line of Credit The Company has a $1,500,000 line of credit which expires December 20, 2000. Advances under the line of credit can not exceed 80% of eligible accounts receivable and is secured by a security interest in all accounts receivable, inventory and equipment. The line of credit is also personally guaranteed by the Company's major shareholder. The advance outstanding on the line of credit as of September 30, 2000 was $483,639.
Note 8: Note Payable Note payable consists of the following as of December 31, September 30, 1999 2000 Note payable, collateralized by vehicle, payable in monthly installments of $443 including interest of 10.5% through September 2001 $ 8,507 $ 5,790 Less amount due in one year 5,318 1,333 $ 3,189 $ 4,457
Note 9: Accrued Liabilities Due to recent shortages for components used in the Company's products destined for the semiconductor industry, the Company entered a procurement agreement as follows: components from various manufacturers are delivered to the Company's warehouse in quantities matching the Company's book of orders. Upon inspection, testing, and certification, the accepted components are used in production. The accrued liability shown on the Company's interim balance sheet is current an estimate of the value of components received before acceptance. Accepted components are payable within 120 days of billing date without a discount. The amount currently carried by the Company is $1,149,611. The Company has also accrued a total of $93,389 for sales commissions due to the Executive Vice President of Sales and Marketing. The accrual is subordinated to Deutche Financial Services and is due for release first quarter of 2001. IMMECOR CORPORATION NOTES TO THE INTERIM UNAUDITED CONDENSED FINANCIAL STATEMENTS Note 10: Sales to Major Customers A material part of the Company's business is dependent upon sales to major customers, the loss of which would have a material adverse effect on the Company's financial position and results of operation. One customer accounted for 72% and 83% of total sales for nine months ended September 30,2000. The Company is attempting to expand its sales force to increase the customer base to lessen the effect of having major corporate customers. Note 11: Income Taxes
Income taxes consists of the following for period ended: December 31, September 30, 1999 2000 Currently payable: Federal $ (21,960) $ 1,100,781 State 800 351,774 Deferred taxes (6,412) (17,812) Total $ (27,572) $ 1,434,743
Note 12: Number of Shares of Common Stock Outstanding The following adjusts the number of outstanding shares of common stock for the nine months ended September 30, 2000 to reflect the following: 1) The Company filed a lawsuit against three shareholders who were formerly officers and directors of the Company seeking rescission of the issuance of 500,000 shares of common stock in the acquisition of Advanced Network Communications, Inc., in 1994. The litigation was settled effective August 31, 1999, resulting in the return of 500,000 shares of common stock to the Treasury of the Company, reducing the number of outstanding shares of Common Stock from 2,435,376 to 1,935,376. 2) On October 13, 1999, the Company held a special meeting of stockholders in which they voted for the approval of a three for one forward split of the outstanding shares of common stock of the Company. The Board of Directors approved the split and requested the stock transfer agent of the Company to distribute the additional shares to the Company's stockholders effective May 1, 2000. 3) Number of shares outstanding June 30, 1999: 2,435,376 Number of shares outstanding August 31, 1999: 1,935,376 Number of shares outstanding June 30, 2000: 5,806,128 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Financial Condition and Results of Operations: The following table sets forth, as a percentage of sales, certain items included in the Company's financial statements. Nine Months Ended September 30, -1999- -2000- Net sales........................................ 100.0 100.0 Cost of sales .................................... 84.6 70.3 Gross profit ..................................... 15.3 29.6 Selling, general and administrative expenses ..... 13.0 12.8 Operating income ................................ 2.3 16.7 Interest income and other income ................. (0.1) - Interest expense.................................. (0.3) (0.3) Income before income taxes........................ 1.9 16.4 Income Tax ...................................... 0.1 8.1 Net income (loss) ................................ 1.8 8.2 Net Sales Net sales increased by $12,870,872 or 189.7% from $6,809,709 for the nine months ended September 30, 1999 (the "1999 period") to $19,680,581 for the nine months ended September 30, 2000 ("the 2000 period"). The Company's sales of high end specialty servers increased by $1,496,769 or 26.1% from $5,730,959 for the first six months of 2000 to $7,227,728 for the first nine months ended September 30, 2000. The Company also experienced a decrease in desktop sales by $(154,084) or -29.3% from $524,794 for the six months of 2000 to $370,713 for the nine months ended September 30,2000. Sales to corporate accounts remain steady while sales of individual systems have declined. Corporate systems include servers, processors, and managers. The Company has increased sales to its primary customer, and acknowledges that this may have a material effect on the Company's financials. Currently the Company is expanding its sales force and while also increasing additional distribution channels. The primary customer is a billion dollar company that purchases corporate systems and utilizes Immecor's system integration services. Gross Profit Gross profits increased by $4,784,597 or 458% from $1,042,688 for the nine months ended September 30,1999 ("the 1999 period") to $19,680,581 for the nine months ended September 30, 2000 ("the 2000 period"). The increase in Company's gross profits is due to the Company's current product line reaching maturity and the abi8lity of the Company's purchasing department to acquire components using cost effective measures. The Company is looking to expand its product lines and will expect to decrease gross profits for upcommin quarter as more Research and Development pursues additional products. Selling, General and Administrative Expenses Selling, general, and administrative expenses increased $1,654,058 or 187.34% frin $882,915 in the 1999 period to $2,536,973 in the 2000 period. As a percentage of sales, SG&A decreased by .07% from 12.96 for the nine months ended September 30, 1999 to 12.89% for the nine months ended September 30, 2000. The increase in total expenses is proportionate to the increase in sales while management has been able to manage operating expenses. The Company continues to invest in developintg efficient procurement, manufacturing, and distribution processes. The Company belives that its ability to manage operating expenses is an important factor in its ability to remain competitive and successful. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, Continued... Liquidity and Capital Resources On December 31, 1999 and September 30, 2000 the Company had net working capital of $378,441 and $1,983.901 respectively. The $1,605,460 increase in working capital from 1999 to 2000 was primarily due to an increase in accounts receivables, inventory levels and an increase in cash. All areas are in direct relationship to the increase in sales for 2000. The Company had net cash used by operating activities of $429,945 for 1999 period compared to net cash provided by operating activities of $683,491 in the nine month period of 2000. The $258,086 difference relates primarily to an increase in net income, accounts receivable, inventory levels and better cash management. The Company has net cash provided by financing activities of $79,945 in the 1999 period compared to net cash used in financing activities of $(28,234)for the 2000 period. The $104,179 difference relates to better AR turnover, improved cash management,and lesser reliance of debt for cash flow. PART II. OTHER INFORMATION Item 1. Legal Proceedings There were no legal proceedings against the Company. Item 2. Changes in Securities There were no changes in rights of securities holders. Item 3. Defaults upon Senior Securities There were no defaults upon senior securities. Item 4. Submission of Matters to a Vote of Security-Holders There were no matters submitted to the vote of securities holders. Item 5. Other Information There were no major contracts signed during the period. Item 6. Exhibits and Reports on Form 8-K There were no reports filed on form 8-K. SIGNATURES In accordance with the requirements of the Securities and Exchange Commission the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. IMMECOR CORPORATION Date: October 30, 2000 By: /s/ Wil. L. Lindgren ----------------------- Wil L. Lindgren Chief Financial Officer ------------------------- Date: October 30, 2000 By: /s/ Heinot H. Hintereder Chief Executive Officer LEGEND IMMECOR CORPORATION MULTIPLIER 1 CURRENCY 1 TABLE S C C PERIOD-TYPE YEAR YEAR FISCAL-YEAR-END DEC-31-1999 DEC-31-2000 PERIOD-START JAN-1-1999 JAN-1-2000 PERIOD-END SEP-30-1999 SEP-30-2000 EXCHANGE-RATE 1 1 CASH 57788 964655 SECURITIES 0 0 RECEIVABLES 1082702 2756346 ALLOWANCES 18750 19500 INVENTORY 989972 3604527 CURRENT-ASSETS 2280555 7507151 PP&E 125601 250347 DEPRECIATION 0 104856 TOTAL-ASSETS 2406156 7652642 CURRENT-LIABILITIES 1902114 BONDS 0 0 PREFERRED-MANDATORY 0 0 PREFERRED 0 0 COMMON 288855 288855 OTHER-SE 195462 1818268 TOTAL-LIABILITY-AND-EQUITY 2133402 7652642 SALES 6809709 19680581 TOTAL-REVENUES 6809709 19680581 CGS 5586316 13853296 TOTAL-COSTS 6469231 16390269 OTHER-EXPENSES 0 0 LOSS-PROVISION 0 0 INTEREST-EXPENSE 20510 59345 INCOME-PRETAX 132958 3234467 INCOME-TAX 7810 1611661 INCOME-CONTINUING 125148 1622806 DISCONTINUED 0 0 EXTRAORDINARY 0 0 CHANGES 0 0 NET-INCOME 125148 1622806 EPS-PRIMARY .02 0.28 EPS-DILUTED .02 0.28 -----END PRIVACY-ENHANCED MESSAGE-----