-----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, GzTwJCfPLk5JuFbUBKy8DLEQ8ZDM8NhXKcxKo/+Y41BBJI+IJV8AyuY1mcp8eLvn apIHtuTSfZwJt7fzaXP0+w== 0001039962-03-000009.txt : 20030723 0001039962-03-000009.hdr.sgml : 20030723 20030604112501 ACCESSION NUMBER: 0001039962-03-000009 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030604 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: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 333-06966 FILM NUMBER: 03731600 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 10QSB 1 a10qsb033103.txt 03-31-03 3RD QTR 10QSB UNITED STATES 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 quarterly period ended March 31, 2003 [ ] 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 68-0324628 (State or jurisdiction of incorporation or (I.R.S. Employer Identification No.) Organization) 3636 North Laughlin Rd. Bldg 150 Santa Rosa California, 95403-1027 (Address of principal executive offices) (707) 636-2550 (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 March 31, 2003. Transitional Small Business Disclosure Format Yes [ ] No [X] IMMECOR CORPORATION INDEX TABLE OF CONTENTS PART I FINANCIAL INFORMATION Item 1. Balance sheets at March 31, 2003 (unaudited) and June 30, 2002 Statements of operations for the three and nine months ended March 31, 2003 and 2002 (unaudited) Statements of cash flows for the nine months ended March 31, 2003 and 2002 (unaudited) Notes to condensed financial statements (unaudited) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 statements 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. IMMECOR CORPORATION Balance Sheets ASSETS
March 31, June 30, 2003 2002 (unaudited) (audited) Current assets: Cash $ 472,665 $ 482,855 Accounts receivable (less allowance for doubtful accounts of $22,000 and $22,000) 896,917 740,887 Inventories (less inventory reserves of $220,812 and $439,830) 1,594,869 1,676,993 Notes receivable - current 10,589 26,448 Prepaid and other assets 47,074 41,976 Total current assets 3,022,114 2,969,159 Equipment and improvements, net 266,188 358,665 Notes receivable 137,029 55,191 Total assets $ 3,425,331 $ 3,383,015 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Line of credit $ 499,693 $ 388,627 Note payable -- 34,250 Accounts payable 504,523 368,146 Accrued liabilities 121,171 199,258 Accrued bonuses -- 113,244 Taxes payable 1,069 40,524 Total current liabilities 1,126,456 1,144,049 Stockholders Equity: Common stock, no par value, 50,000,000 shares authorized; 5,806,128 shares issued and outstanding $ 288,855 $ 288,855 Retained earnings 2,010,020 1,950,111 Total stockholders equity _ 2,298,875 2,238,966 Total liabilities and stockholders' equity $ 3,425,331 $ 3,383,015
The accompanying notes are an intergral part of these financial statements IMMECOR CORPORATION Statements of Operations
For the three months ended, For the nine months ended, March 31, March 31, 2003 2002 2003 2002 (unaudited) (unaudited) Net sales $ 1,804,412 $ 1,777,548 $ 6,191,451 $ 6,298,285 Cost of sales 1,232,333 992,317 4,463,343 5,095,979 Gross profit 572,079 785,231 1,728,108 1,202,306 Sales and marketing 52,124 63,599 178,204 60,407 Research and development 3,238 38,070 105,906 113,298 General and administrative 469,393 593,246 1,242,094 1,412,410 Operating income (loss) 47,324 90,316 201,904 (383,809) Other (income) expense Interest expense 10,783 12,823 31,025 200,002 Interest income (2,746) (2,359) (8,656) (9,513) Other (income) expense (242) (188) (220) 25,083 (Loss) income before income taxes 39,485 80,040 179,755 (599,381) Income tax expense (benefit) (0) 20,570 118,224 13,346 Net (loss) income $ 39,485 $ 59,470 $ 61,531 $ (586,035) Net (loss) income per share - basic and diluted $0.006 $0.01 $0.01 $(0.10) Weighted average shares used in computing net income (loss) per share, basic and diluted 5,806,128 5,806,128 5,806,128 5,806,128
IMMECOR CORPORATION Statements of Cash Flows
For the nine months ended, March 31, 2003 2002 (unaudited) Cash flows from operating activities: Net (loss) income $ 61,531 (586,035) Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: Depreciation and amortization 92,477 35,676 Deferred income taxes -- 187,000 Reserve for inventories -- (439,830) Changes in operating assets and liabilities: Accounts receivable (157,172) 82,979 Income tax recoverable -- (359,727) Inventories 82,944 2,433,656 Prepaid and other assets (5,098) (236) Accounts payable 136,378 (282,166) Accrued expenses (192,477) (79,400) Income taxes payable (39,455) (1,300,535) Net cash (used in) provided by operating activities (20,871) (349,758) Cash flows from investing activities: Purchase of property and equipment -- -- Proceeds from notes receivable 16,705 30,093 Increase in notes receivable (82,837) (3,375) Net cash provided by (used in) investing activities (66,132) 26,718 Cash flows from financing activities: Net borrowings (repayments) from line of credit 111,066 245,789 Borrowings from note payable -- - Repayments on note payable (34,250) (386,307) Net cash provided by financing activities 76,816 (140,518) Net change in cash (10,187) (463,558) Cash balance, beginning of period 482,855 498,636 Cash balance, end of period $ 472,665 $ 35,078
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. IMMECOR CORPORATION NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Unaudited) Note 1: Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim financial statements included in this Form 10-QSB have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not contain all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The results of operations for any interim period are not necessarily indicative of results for a full year. These financial 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 June 30, 2002 as filed with the Securities and Exchange Commission. The unaudited financial statements presented herein as of and for the three and nine months ended March 31, 2003 and March 31, 2002 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. The financial data and other information disclosed in these notes to the financial statements related to these periods are unaudited. Net Income (Loss)Per Share Basic earnings (loss) per share amounts are computed using the weighted average number of common stock shares outstanding in each period. There are no potentially dilutive securities. Note 2: Sales to One Major Customer 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 and cash flows. One customer accounted for 60% and 80% of total sales for the three months ended March 31, 2003 and 2002, respectively. One customer accounted for 69% and 85% of total sales in the nine months ended March 31, 2003 and 2002, respectively. The Company is attempting to expand its customer base to lessen the effect of having one major customer. Note 3: Line of Credit The Company has a $1,500,000 line of credit, which expires December 20, 2003. Advances under the line of credit cannot exceed 80% of eligible accounts receivable and is collateralized by all accounts receivable, inventory and equipment. The line of credit is also personally guaranteed by the Company's majority stockholder. The available borrowing base on the line of credit as of March 31, 2003 was approximately $79,200. Note 4: Income Taxes The effective income tax rates for the nine months ended September 30, 2001 and 2000 are based on the federal statutory income tax rate, increased for the effect of state income taxes, and decreased by the effect of nondeductible expenses and other temporary differences. Note 5: Recent Accounting Pronouncements In November 2002, the FASB's Emerging Issues Task Force, or EITF, finalized EITF Issue 00-21, "Revenue Arrangements with Multiple Deliverables." EITF 00-21 addresses how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting. It also addresses how arrangement consideration should be measured and allocated to the separate units of accounting in an arrangement. EITF 00-21 does not apply to deliverables in arrangements to the extent the accounting for such deliverables are within the scope of other existing higher-level authoritative accounting literature. The Company does not believe that the adoption of EITF Issue 00-21 will have a significant effect on its financial statements or operations. In December 2002, the FASB issued SFAS No.148, "Accounting for Stock-Based Compensation Transition and Disclosure, an amendment of FASB Statement No.123. SFAS No.148 provides alternative methods of transition for a voluntary change to the fair market value based method of accounting for stock-based compensation. The Company does not presently expect to make such a voluntary change. In addition, SFAS No.148 amends the disclosure requirements of SFAS No.123 to require 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 and have been reflected in Note 2, Stock Based Compensation. The Company does not believe that the adoption will have an impact on its financial statements. In November 2002, FASB Interpretation No.45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, an Interpretation of FASB Statements No.5, 57, and 107 and Rescission of FASB Interpretation No.34, (FIN 45) was issued. FIN 45 clarifies the requirements of SFAS No.5, Accounting for Contingencies, relating to guarantors accounting for, and disclosure of, the issuance of certain types of guarantees. The disclosure provisions of FIN 45 are applicable to interim or annual periods that end after December 15, 2002, and did not have an impact on the March 31, 2003 financial statements. The provisions for initial recognition and measurement under FIN 45 are effective on a prospective basis for guarantees that are issued or modified after December 31, 2002. The initial recognition and measurement provisions under FIN 45 did not have any impact on the Company's financial statements. On January 17, 2003, the Financial Accounting Standards Board (FASB or the Board) issued FASB Interpretation No.46, (FIN 46), Consolidation of Variable Interest Entities. The provisions will be the guidance that determines (1)whether consolidation is required under the controlling financial interest model of Accounting Research Bulletin No. 51 (ARB 51), Consolidated Financial Statements 51 (or other existing authoritative guidance) or, alternatively, (2)whether the variable interest model under FIN 46 should be used to account for existing and new entities. At this time, the Company does not have any entities that would be covered under FIN 46. RESULTS OF OPERATIONS FOR THE Three and Nine Months ended March 31,2003 and 2002 Net Sales Net sales increased by $26,864 or 1.5% from $1,777,548 for the three months ended March 31, 2002 to $1,804,412 for the three months ended March 31, 2003 and net sales decreased by $106,834 or 1.7% from $6,298,285 for the nine months ended March 31, 2002 to $6,191,451 for the nine months ended March 31, 2003 respectively. The decline in sales is primarily due to the lower demand for systems as a result of the general economic slowdown and weaker demand for technology related products. This decrease reflected the overall sluggishness of the United States economy in the first three months of 2003 causing customers and prospective customers to defer technology purchases. Gross Profit Gross profits decreased from $785,231 for the three months ended March 31, 2002 to $572,079 for the three months ended March 31, 2003. As a percentage of net sales, gross profits decreased from 44% for the three months ended March 31, 2002 to 32% for the three months ended March 31, 2003. The decrease in gross profit as a percentage of net sales was primarily due to sales of lower margin products while the company develops new products and certain fixed costs being spread over lower revenues. Gross profits increased from $1,202,306 for the nine months ended March 31, 2002 to $1,728,108 for the nine months ended March 31, 2003. As a percentage of net sales, gross profits increased from 19% for the nine months ended March 31, 2002 to 30% for the nine months ended for March 31, 2003. The increase in gross profit as a percentage of sales was primarily due to new customers and new products that were developed during the nine months. The Company acknowledges that pricing pressures due to the competitive market, changes in sales volume, and changes in customer demand due to the slow economy, may adversely impact our gross profits in upcoming quarters. Selling, General and Administrative Expenses Sales and marketing expenses decreased $11,475 from $63,599 for the three months ended March 31, 2002 to $52,124 for the three months ended March 31, 2003. The decrease in expenses is primarily due to the reductions in promotional expenses. Sales and marketing expenses increased $117,797 from $60,407 for the nine months ended March 31, 2002 to $178,204 for the nine months ended March 31, 2003. The increase was due to commissions for the nine month period. Research and development expense for the three months ended March 31, 2002 and March 31, 2003 was approximately $113,298 and $105,906, respectively. The Company expenses all of research and development costs as they are incurred. The Company expects to continue to invest in system design, and other research and development initiatives. Research and development expenses consist of payroll and related expenses for certification, fabrication, and cost of materials for prototyping and testing units. General and administrative expenses decreased $123,853 from $593,246 for the three months ended March 31, 2002 to $469,393 for the three months ended March 31, 2003. General and administrative expenses decreased $170,316 from $1,412,410 for the nine months ended March 31, 2002 to $1,242,094 for the nine months ended March 31, 2003. The decrease is primarily due to staff reductions and the company controlling expenses. Liquidity and Capital Resources On March 31, 2002 and 2003 the Company had net working capital of $2,238,966 and $2,298,875, respectively. The increase in working capital from 2002 to 2003 was primarily due to increased accounts receivable and long term notes receivable for the nine months ended March 31, 2003. The Company had net cash used in operating activities of $20,871 for the nine months ended March 31, 2003 compared to net used in operating activities of $349,758 for the nine months ended March 31, 2002. The $328,887 difference is primarily due to the net loss for the nine months ended March 31, 2002 and reduction in income taxes recoverable. The Company had net cash used by investing activities of $66,132 for the nine months ended March 31, 2003 compared to net cash provided by investing activities of $26,718 for the nine months ended March 31, 2002. The $92,850 difference relates primarily to an increase in long term notes. The Company had net cash provided by financing activities of $76,816 for the nine months ended March 31, 2003 compared to net cash used by financing activities of $140,518 for the nine months ended March 31, 2002. The $217,334 difference relates primarily to an decrease in borrowings on line of credit and decrease in notes payable. At present, management believes that future cash flows from operations and its existing institutional financing will be sufficient to fund all of the Company's cash requirements for the remaining three months of 2003. There were no substantial commitments for purchase orders outside the normal purchase orders used to secure product as of March 31, 2003. PART II. OTHER INFORMATION Item 1. Legal Proceedings In October 2002, the Company received a lawsuit from R.G. Technical for approximately $63,000, stating that the R.G. Technical had a contractual agreement with Immecor for services performed on behalf of Genex, a vendor to Immecor. The Company disputes the lawsuit and believes that there is not a basis for the current lawsuit, or that Immecor had a contractual obligation to R.G. Technical. Immecor is requesting that the lawsuit be dismissed and if the lawsuit is not dismissed, the Company will proceed with full legal action against R.G. Technical for malicious prosecution. In January 2003, the Company received a lawsuit from Sarah Aasved for a complaint for damages relating to sexual discrimination and pregnancy discrimination. The Company disputes the lawsuit and believes that there isn't a basis for the lawsuit, and that the Company is requesting the matter to be dismissed and that the Company will proceed with full legal action against Sarah Aasved for malicious prosecution. In January 2003, the Company received a small claims lawsuit from Maintenance Alternatives Corporation for approximately $3,000, stating that the Company owed Maintenance Alternatives Corporation money for services performed. The Company disputes the small claims case, and will defend itself in small claims court against the action. There were no other legal proceedings pending against the Company during the period ending March 31, 2003. Item 2. Changes in Securities There were no changes in rights of securities holders during the period ending March 31, 2003. Item 3. Defaults upon Senior Securities There were no defaults upon senior securities during the period ending March 31, 2003. Item 4. Submission of Matters to a Vote of Security-Holders There were no matters submitted to the vote of securities holders during the period ending March 31, 2003. Item 5. Other Information There were no major contracts signed during the period ending March 31, 2003. Item 6. Exhibits and Reports on Form 8-K There were no exhibits or Form 8-K filed during the period ended March 31, 2003. 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. SIGNATURES In accordance with Section 13 or 15 (d) of the Exchange Act and Certification Pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934, as amended, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. I, Heinot H. Hintereder, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Immecor Corporation; 2. Based on my 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 my 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; Date: May 15, 2003 By: /s/ Heinot H. Hintereder ------------------------------------------- Heinot H. Hintereder Chief Executive Officer SIGNATURES In accordance with Section 13 or 15 (d) of the Exchange Act and Certification Pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934, as amended, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. I, William L. Lindgren, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Immecor Corporation; 2. Based on my 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 my 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; Date: May 15, 2003 By: /s/ William L. Lindgren ------------------------------------------- William L. Lindgren Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----