-----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, QTC7PvPceR0d3t8rRJ9tyiT6RmIgwtWCKiSN9rriA/ExSVkQ3Nb6MUQtN+lOaYOF iwLzK26UAI8WmNm4We1l5w== 0001039962-99-000014.txt : 19990827 0001039962-99-000014.hdr.sgml : 19990827 ACCESSION NUMBER: 0001039962-99-000014 CONFORMED SUBMISSION TYPE: 10QSB CONFIRMING COPY: PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990826 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: SEC FILE NUMBER: 333-06966 FILM NUMBER: 00000000 BUSINESS ADDRESS: STREET 1: 100-105 PROFESSIONAL CENTER DR CITY: ROHNERT PARK STATE: CA ZIP: 94928-2137 BUSINESS PHONE: 7075853036 MAIL ADDRESS: STREET 1: 100-105 PROFESSIONAL DR CITY: ROHNERT PARK STATE: CA ZIP: 94928 10QSB 1 ANNUAL REPORT 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 THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1999 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE 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) 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. 2,435,376 shares of common stock as of June 30, 1999. Transitional Small Business Disclosure Format Yes [ ] No [X] - 1 - IMMECOR CORPORATION INDEX TABLE OF CONTENTS PART I FINANCIAL INFORMATION Item 1. Balance sheets at June 30, 1998 and 1999 Statements of income for the six months ended June 30, 1998 and 1999 Statements of cash flows for the six months ended June 30, 1998 and 1999 Statements of shareholders' equity for the six months ended June 30, 1998 and 1999 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 Statements of Income 4 Statements of Cash Flows 5 Statements of Shareholder Equity 6 Notes to Financial Statements 7 IMMECOR CORPORATION Balance Sheets Period ended June 30, (unaudited) ASSETS
1998 1999 ---- ---- CURRENT ASSETS Cash $ 99,480 $ 37,307 Accounts receivables (net of allowance for doubtful accounts of $10,478 in 1998 and 18,749 in 1999 ) 775,986 1,105,427 Inventories 188,490 677,540 Notes receivable - 140,801 Prepaid and other assets 9,481 24,538 Deferred taxes 17,683 18,737 -------------- -------------- Total current assets 1,091,120 2,004,350 Misc revenue - (2,762) EQUIPMENT AND IMPROVEMENTS -net 48,176 131,485 ------ ------- Total Assets $ 1,139,296 $ 2,133,073 -------------- -------------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes payable, due within one year $ 3,985 $ 487,424 Accounts payable 203,888 787,367 Accrued liabilities 8,549 3,084 Advances from shareholders 643 - Customer deposits 2,858 - Employee IRA deductions - 2,986 Income taxes 205,546 157,670 -------------- ------------ Total current liabilities 425,469 1,438,531 LONG-TERM LIABILITIES Note payable, due after one year 10,619 11,783 Deferred income taxes 10,822 10,454 -------------- ------------ Total long-term liabilities 21,441 22,237 -------------- ------------ Total liabilities $ 446,910 $ 1,460,768 -------------- ------------ 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, 1998: 2,428,226; 1999: 2,435,376. 297,845 286,573 Retained earnings 394,541 385,732 -------------- ----------- Total shareholders' equity 692,386 672,305 -------------- ----------- Total liabilities and shareholders' equity $ 1,139,296 $ 2,133,073 -------------- -------------- The accompanying notes are an integral part of these financial statements - 3 - IMMECOR CORPORATION Statement of Income Period ended June 30, (unaudited) 1998 1999 ---- ---- Net sales $ 2,503,369 $ 4,280,288 Cost of sales 1,797,114 3,542,070 -------------- -------------- Gross profit 706,255 738,218 Selling, general and administrative expenses 437,320 576,148 -------------- -------------- Operating income 268,935 162,070 Interest income 1,191 202 Other income - 900 Interest expense (4,603) (6,963) --------------- -------------- Income before income taxes 265,523 156,209 Income taxes 104,200 - -------------- -------------- NET INCOME $ 161,323 $ 156,209 -------------- ------------- Net income per share - basic and diluted $ 0.066 $ 0.064 Weighted average shares outstanding - basic and diluted 2,427,730 2,435,376 The accompanying notes are an integral part of these financial statements - 4 - IMMECOR CORPORATION Statement of Cashflows Period ended June 30, (unaudited) 1998 1999 ------ ------ Increase (decrease) from cash Cash from operations: Net income (loss) $ 161,324 $ 156,209 Reconciliation of net income (loss) to net cash used by operating activities: Depreciation and amortization 25,472 40,145 Changes in current assets and liabilities 713,827 694,542 Net cash used by operating activities 900,623 773,840 Cash flows from investing activities: Additions to property and equipment - 94,131 Net cash used by investing activities - 94,131 Cash flows from financing activities: Proceeds from common stock - - Increase in loan payable - 487,189 Repayments on capital lease 11,784 10,619 Net cash provided by financing activities 11,784 497,808 Net increase in cash and cash equivalents 1,398,766 2,649,102 Cash and cash equivalents at beginning of period 99,480 38,359 Cash and cash equivalents at end of period $ 1,299,286 $ 2,610,743 ---------------- -------------- Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 0.80 $ 6,961 The accompanying notes are an integral part of these financial statements
- 5 - IMMECOR CORPORATION Statement of Shareholders' Equity Period ended June 30, (unaudited)
Number of Retained Outstanding Common Earnings Shares Stock (Deficit) Total Balance-December 31, 1998 2,435,376 $ 288,855 $ 278,838 $ 567,693 Six months ended June 30, 1999 (unaudited) Offering costs (2,282) (2,282) Adjustments to net income (49,315) (49,315) Net income - - 156,209 156,209 ---------- ------------- ------------ ---------- Balance, June 30, 1999 2,435,376 $ 286,573 $ 385,732 $ 672,305 ---------- ------------- ------------ ----------
The accompanying notes are an integral part of these financial statements - 6 - 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 generally accepted accounting principles 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, 1998. The financial statements presented herein as of June 30, 1999 and for the six months June 30, 1999 and 1998 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. Note 2: Receivables consist of the following as of June 30:
1998 1999 ----- ----- Accounts receivable $ 484,644 $ 1,124,176 Less allowance for doubtful accounts 18,749 18,749 ------------ -------------- $ 465,895 $ 1,105,427 Note 3: Inventory Inventories consist of the following as of June : 1998 1999 ----- ----- Purchased parts $ 259,225 $ 528,481 Finished systems 102,598 149,059 ------------- ------------- $ 361,823 $ 677,540 Note 4: Equipment and Improvements Equipment and improvements consist of the following as of June 30: 1998 1999 ---- ------ Equipment and Furniture $ 52,490 $ 102,981 Transportation equipment 24,814 68,649 ------------ ------------- 77,304 171,630 Less accumulated depreciation 25,472 40,145 ------------ ------------- $ 51,832 $ 131,485 - 7 - 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 generally accepted accounting principles 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, 1998. The financial statements presented herein as of June 30, 1999 and for the six months June 30, 1999 and 1998 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. Note 2: Receivables consist of the following as of June 30: 1998 1999 ------ ------ Accounts receivable $ 484,644 $ 1,124,176 Less allowance for doubtful accounts 18,749 18,749 ------------ ------------- $ 465,895 $ 1,105,427 Note 3: Inventory Inventories consist of the following as of June : 1998 1999 ------ ----- Purchased parts $ 259,225 $ 528,481 Finished systems 102,598 149,059 ------------- ------------- $ 361,823 $ 677,540 Note 4: Equipment and Improvements Equipment and improvements consist of the following as of June 30: 1998 1999 ---- ------ Equipment and Furniture $ 52,490 $ 102,981 Transportation equipment 24,814 68,649 ------------ ------------- 77,304 171,630 Less accumulated depreciation 25,472 40,145 ------------ ------------- $ 51,832 $ 131,485 - 7 - IMMECOR CORPORATION NOTES TO THE INTERIM UNAUDITED CONDENSED FINANCIAL STATEMENTS Note 8: 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 68% and 67% of total sales in 1998 and 1997 respectively. The Company is attempting to expand its customer base to lessen the effect of having major customers. Note 9: Income Taxes The provision for income taxes consists of the following for the years ended December 31: 1998 1999 ----- ----- Currently payable: Federal $ 16,905 $ 116,157 State 8,130 19,468 Deferred taxes 5,526 10,454 ------------ ------------ $ 30,561 $ 146,079
- 9 - 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.
Years Ende Six months Ended December 31, June 30, -1997- -1998- -1998- -1999- ------- -------- ------- ------ Statements Net sales......................................... 100.00% 100.00% 100.00% 100.00% Cost of sales .................................. 76.43 78.12 71.80 82.75 Gross profit ..................................... 23.57 21.88 28.21 17.24 Depreciation and amortization .................... 0.25 0.38 0 .03 0.99 Selling, general and administrative expenses ..... 14.90 20.14 11.52 9.06 Total operating costs and expenses ............... 15.15 20.52 6.07 4.53 Operating income (loss) .......................... 8.67 1.73 10.67 3.62 Interest income (loss) ........................... 0.07 0.05 0 .02 0.01 Interest expense.................................. (0.05) (0.12) - 0.16 Income (loss) before income taxes................. 8.69 1.67 10.60 3.63 Income Tax ...................................... 3.37 0.67 4.20 2.71 Net income (loss) ................................ 5.32 1.00 6.44 3.64
Net Sales Net sales increased by $1,775,321or 70.87 % from $2,504,966 for the six months ended June 30, 1998 (the "1998 period") to $4,280,287 for the six months ended June 30, 1999 ("the 1999 period"). The net sales increase resulted primarily from increased demand from major customers responsible for the majority of the Company's sales. Sales to the major customers for high-end specialty computers have continued to increase steadily since the Company has been able to meet strict shipping deadlines and to maintain high quality control standards. Orders on the books of the Company indicate that this trend will continue during the third quarter of 1999. Nevertheless, the loss of the major customers would have a material adverse effect on the Company's financial position and results of operations. Gross Profit As a percentage of net sales, gross profits decreased from $265,524 in the 1998 period to $156,209 in the 1999 period because of an increase in expenses for existing and additional warehouse and assembly space, and additional equipment. Selling, General and Administrative Expenses Selling, general and administrative expenses decreased as a percentage of net sales from 11.52 % in the 1998 period to 9.06 % in the 1999 period. The decrease in expenses as a percentage of net sales was primarily due to the increase in revenue. Liquidity and Capital Resources On June 30, 1998 and June 30, 1999 the Company had net working capital of $659,456 and $415,382, respectively. The $244,074 decrease in working capital from 1998 to 1999 was primarily due to an increase in payables and inventory in order to sustain the Company's accelerated growth. The Company had net cash provided by operating activities of $900,623 in the 1998 period compared to net cash provided by operating activities of $773,840 in the 1999 period. The $126,783 difference relates primarily to an increase in accounts receivables and inventory levels. The Company had net cash provided by financing activities of $11,784 in the 1998 period compared to net cash used by financing activities of $497,808 in the 1999 period. The $486,024 difference relates primarily to financing of new products and higher inventory levels for the new products. - 10 - Dates following December 31, 1999 and beyond ( the "year 2000 Problem") Many existing computer systems and applications, and other devices, use only two digits to identify a year in the date field, without considering the impact of the upcoming change in the century. Such systems and applications could fail or create erroneous results unless corrected. The Company relies on its internal financial systems and external systems of business enterprises such as customers, suppliers, creditors, and financial organizations both domestically and globally, directly and indirectly for accurate exchange of data. The Company has evaluated such systems and believes the cost of addressing the Y2K Problem will not have a material adverse affect on the result of operations or financial position of the Company. However, even though the internal systems of the Company are not materially affected by the Y2K Problem the Company could be affected through disruption in the operation of the enterprises with which the Company interacts. PART II. OTHER INFORMATION Item 1. Legal Proceedings 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. In addition, the Company is seeking the return of funds it believes were embezzled and taken through fraud during 1994 by the three defendants. The Company and its legal counsel are rigorously pressing this litigation and the case has been set for trial in September of 1999. There is no assurance of the outcome of the litigation. Although the Company is the Plaintiff and does not incur the risk of an adverse judgment, the litigation costs of the action may be material to any individual interim period or fiscal year and may be material to the outstanding share balance. 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 The Company filed one (1) report on Form 8-K during this period, announcing the leasing of additional office and warehouse space in the City of Santa Clara. 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 CORPRATION Date: August 6, 1999 By: /s/ Wil. L. Lindgren ----------------------- Wil L. Lindgren Chief Financial Officer Date: August 6, 1999 By: /s/ Heinot H. Hintereder ----------------------- Heinot H. Hintereder President & CEO - 11 - LEGEND IMMECOR CORPORATION
MULTIPLIER 1 CURRENCY 1 TABLE S C C PERIOD-TYPE YEAR YEAR FISCAL-YEAR-END DEC-31-1998 DEC-31-1999 PERIOD-START JAN-1-1998 JAN-1-1999 PERIOD-END JUN-30-1998 JUN-30-1999 EXCHANGE-RATE 1 1 CASH 99480 37307 SECURITIES 0 0 RECEIVABLES 796464 1105427 ALLOWANCES 20478 18749 INVENTORY 188490 677540 CURRENT-ASSETS 1091120 2004350 PP&E 77519 156023 DEPRECIATION 29343 40145 TOTAL-ASSETS 1139296 2133073 CURRENT-LIABILITIES 425469 1438531 BONDS 0 0 PREFERRED-MANDATORY 0 0 PREFERRED 0 0 COMMON 297845 286573 OTHER-SE 394541 385732 TOTAL-LIABILITY-AND-EQUITY 1139296 2133073 SALES 2503369 4280288 TOTAL-REVENUES 2503369 4280288 CGS 1797114 3542070 TOTAL-COSTS 2234434 4118218 OTHER-EXPENSES 0 0 LOSS-PROVISION 0 0 INTEREST-EXPENSE 4603 6963 INCOME-PRETAX 265523 156209 INCOME-TAX 104200 0 INCOME-CONTINUING 161323 156209 DISCONTINUED 0 0 EXTRAORDINARY 0 0 CHANGES 0 0 NET-INCOME 161323 156209 EPS-PRIMARY .066 .064 EPS-DILUTED .066 .064
- 12 - IMMECOR CORPORATION Shareholder Information Period ended June 30, (unaudited) Management's Discussion and Analysis of Financial Condition and Results of Operations. Net Sales - Net sales increased by $1,775,321or 70.87 % from $2,504,966 for the six months ended June 30, 1998 (the "1998 period") to $4,280,287 for the six months ended June 30, 1999 ("the 1999 period"). The net sales increase resulted primarily from increased demand from major customers responsible for the majority of the Company's sales. Sales to the major customers for high-end specialty computers have continued to increase steadily since the Company has been able to meet strict shipping deadlines and to maintain high quality control standards. Orders on the books of the Company indicate that this trend will continue during the third quarter of 1999. Nevertheless, the loss of the major customers would have a material adverse effect on the Company's financial position and results of operations. Gross Profit - As a percentage of net sales, gross profits decreased from $265,524 in the 1998 period to $156,209 in the 1999 period because of an increase in expenses for existing and additional warehouse and assembly space, and additional equipment. Selling, General and Administrative Expenses - Selling, general and administrative expenses decreased as a percentage of net sales from 11.52 % in the 1998 period to 9.06 % in the 1999 period. The decrease in expenses as a percentage of net sales was primarily due to the increase in revenue. Liquidity and Capital Resources - On June 30, 1998 and June 30, 1999 the Company had net working capital of $659,456 and $415,382, respectively. The $244,074 decrease in working capital from 1998 to 1999 was primarily due to an increase in payables and inventory in order to sustain the Company's accelerated growth. The Company had net cash provided by operating activities of $900,623 in the 1998 period compared to net cash provided by operating activities of $773,840 in the 1999 period. The $126,783 difference relates primarily to an increase in accounts receivables and inventory levels. The Company had net cash provided by financing activities of $11,784 in the 1998 period compared to net cash used by financing activities of $497,808 in the 1999 period. The $486,024 difference relates primarily to financing of new products and higher inventory levels for the new products. -----END PRIVACY-ENHANCED MESSAGE-----