10QSB 1 f01sep10q.txt SEPTEMBER 30, 2001 1 SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-QSB [X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended: September 30, 2001 [ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period from _____________ to ____________ Commission File Number 0-24641 ------- IMMUNOTECHNOLOGY CORPORATION ---------------------------------------------- (Name of Small Business Issuer in its charter) Delaware 84-1016435 ------------------------------- -------------------------- (State or other jurisdiction of (I.R.S. Employer I.D. No.) incorporation or organization) 1661 Lakeview Circle, Ogden, Utah 84403 ------------------------------------------------------ (Address of principal executive offices and Zip Code) (801) 399-3632 ---------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. (1) Yes X No (2) Yes X No --- --- --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, Par Value $0.00001 8,050,731 -------------------------------- ---------------------------- Title of Class Number of Shares Outstanding as of September 30, 2001 2 PART I -- FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS IMMUNOTECHNOLOGY CORPORATION FINANCIAL STATEMENTS (UNAUDITED) The financial statements included herein 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. However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the periods presented have been made. These financial statements should be read in conjunction with the accompanying notes, and with the historical financial information of the Company. 3 IMMUNOTECHNOLOGY CORPORATION (A DEVELOPMENT STAGE COMPANY) BALANCE SHEET ASSETS (Unaudited) September 30, June 30, 2001 2001 ----------- ----------- CURRENT ASSETS Cash $ - $ - ----------- ----------- TOTAL ASSETS $ - $ - =========== =========== LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES Bank overdraft $ - $ 2,596 Accrued expenses 43,864 37,012 Advances from officer 2,119 55,857 ----------- ----------- TOTAL CURRENT LIABILITIES 45,983 95,465 ----------- ----------- STOCKHOLDERS' DEFICIT Preferred stock, par value $.00001 per share Authorized - 5,000,000 shares Issued - none Common stock, par value $.00001 per share Authorized - 50,000,000 shares Outstanding - 8,050,731 (6,000,000 at June 30, 2001) 11,649 11,628 Paid in capital 338,081 274,016 Accumulated deficit prior to the development stage (151,332) (151,332) Accumulated deficit during the development stage (244,381) (229,777) ----------- ----------- TOTAL STOCKHOLDERS' DEFICIT (45,983) (95,465) ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ - $ - =========== =========== The accompanying notes are an integral part of these financial statements. 4 IMMUNOTECHNOLOGY CORPORATION (A DEVELOPMENT STAGE COMPANY) STATEMENT OF OPERATIONS (Unaudited) From Inception of the Development Quarter Ended Stage, July 1, 1992 September 30, through 2001 2000 Sept. 30, 2001 ------------ ------------ --------------- REVENUE $ - $ - $ - COST OF REVENUE - - - ------------ ------------ --------------- GROSS PROFIT - - - OPERATING EXPENSES Professional fees 8,852 3,923 155,134 Taxes and licenses - - 1,637 Bank fees and service charges 129 41 2,788 Meals and entertainment - - 300 Travel 4,645 - 63,609 Office expense 130 - 8,430 Interest expense 848 254 12,483 ------------ ------------ --------------- TOTAL OPERATING EXPENSES $ 14,604 $ 4,218 $ 244,381 ------------ ------------ --------------- NET LOSS $ (14,604) $ (4,218) $ (244,381) ============ ============ =============== BASIC LOSS AND DILUTED PER COMMON SHARE $ - $ - ------------ ------------ WEIGHTED AVERAGE NUMBER OF COMMON SHARES 6,869,332 6,000,000 ============ ============ The accompanying notes are an integral part of these financial statements. 5 IMMUNOTECHNOLOGY CORPORATION (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF STOCKHOLDERS' DEFICIT
Accumulated Common Additional Deficit Prior Accumulated Stock Paid-in to Deficit After Par Value Capital July 1, 1992 July 1, 1992 Total ------------ ------------ ------------ ------------ ------------ Balance at July 1, 1992 $ 11,580 $ 122,752 $ (151,332) $ - $ (17,000) Issuance of common stock upon conversion of debt, note 4 37 116,411 - - 116,448 Activity July 1, 1992 through June 30, 1999 - - - (119,267) (119,267) ------------ ------------ ------------ ------------ ------------ Balance at June 30, 1999 11,617 239,163 (151,332) (119,267) (19,819) Issuance of common stock upon conversion of debt, note 4 11 34,853 - - 34,864 Net loss - - - (45,508) (45,508) ------------ ------------ ------------ ------------ ------------ Balance at June 30, 2000 11,628 274,016 (151,332) (164,775) (30,463) Net loss - - - (65,002) (65,002) ------------ ------------ ------------ ------------ ------------ Balance at June 30, 2001 $ 11,628 $ 274,016 $ (151,332) $ (229,777) $ (95,465) Net loss - - - (14,604) (14,604) Issuance of common stock, upon conversion of debt, note 4 21 64,065 - - 64,086 ------------ ------------ ------------ ------------ ------------ Balance at September 30, 2001 (Unaudited) $ 11,649 $ 338,081 $ (151,332) $ (344,381) $ (45,983) ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements. 6 IMMUNOTECHNOLOGY CORPORATION (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS (Unaudited) From Inception of the Development Stage, Quarter Quarter July 1, 1992 ended ended through Sept. 30, Sept. 30, Sept. 30, 2001 2000 2001 ----------- ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (14,604) $ (4,218) $ (244,381) Adjustment to reconcile net loss to net cash used in operating activities Increase in accrued expenses 6,852 1,479 34,852 ----------- ----------- ---------- NET CASH USED IN OPERATING ACTIVITIES (7,752) (2,739) (209,529) ----------- ----------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES Advance from an officer - - (10,000) Repayment of advances to officer - - 10,000 ----------- ----------- ---------- NET CASH PROVIDED BY INVESTING ACTIVITIES - - - ----------- ----------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Bank Overdraft (2,596) - - Advances from an officer 10,348 2,800 202,029 Proceeds from notes payable - - 7,500 ----------- ----------- ---------- NET CASH PROVIDED BY FINANCING ACTIVITIES 7,752 2,800 209,529 ----------- ----------- ---------- NET INCREASE (DECREASE) IN CASH - 61 - CASH AT BEGINNING OF PERIOD - 74 - ----------- ----------- ---------- CASH AT END OF PERIOD $ - $ 135 $ - =========== =========== ========== Supplementary disclosures: Interest paid $ - $ - $ 1,736 =========== =========== ========== The accompanying notes are an integral part of these financial statements. 7 IMMUNOTECHNOLOGY CORPORATION (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS (Unaudited) SEPTEMBER 30, 2001 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Going Concern ------------------------------ ImmunoTechnology Corporation was incorporated on November 30, 1989 under the laws of the State of Delaware. ImmunoTechnology Corporation operated a medical test laboratory until 1992, when it ceased operations. The Company is no longer operating, and will attempt to locate a new business (operating company), and offer itself as a merger vehicle for a company that may desire to go public through a merger rather than through its own public stock offering. In the opinion of management, all normal recurring adjustments considered necessary for fair presentation have been included. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the financial statements during the three months ended September 30, 2001, the Company did not generate any revenue, and has a net capital deficiency. These factors among other may indicate that the Company will be unable to continue as a going concern for a reasonable period of time. For the three months ended September 30, 2001, the Company funded its disbursements by loans from officers. The financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Cash Flows ---------- Cash consists of balances in a demand account at a bank. Estimates --------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. Fair Value of Financial Instruments ----------------------------------- The carrying amounts of the Company's advances approximate fair value. 2. INCOME TAXES The Company has loss carryforwards available to offset future taxable income. The loss carryforwards at September 30, 2001 total approximately $395,000 and expire between June 30, 2004 and June 30, 2015. Loss carryforwards are limited in accordance with change in ownership rules of the Internal Revenue Code. Deferred tax benefit resulting from these loss carryforwards are subject to 100% valuation allowance due to the uncertainty of realization. 8 IMMUNOTECHNOLOGY CORPORATION (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS (Unaudited) SEPTEMBER 30, 2001 3. RELATED PARTY TRANSACTIONS Officers of the Company advance money to fund the Company's expenses. All advances bear interest at 10%, and are due on demand. During the three months ended September 30, 2000, an officer advanced $2,800. During the three months ended September 30, 2001, two officers advanced a total of $10,348 (including $848 of accrued interest). In August 2001, advances and related accrued interest for a total of $64,086 were converted into common stock (see note 4). The unpaid balance of advances was $2,119 and $55,857 at September 30, 2001 and June 30, 2001, respectively. An officer of the Company is a principal in a consulting firm to which the Company paid professional fees totaling $0 and $2,168 during the three months ended September 30, 2001 and 2000, respectively. Professional fees owed to this firm total $17,907 and $12,174 at September 30, 2001 and June 30, 2001, respectively. 4. COMMON STOCK On March 31, 1999, the Company converted its advances from an officer, notes payable to minority shareholders and related accrued interest of $116,448 into 3,726,331 shares of common stock or $0.03125 per share. On June 21, 2000, the Company converted its advances to another officer and related accrued interest totaling $34,865 into 1,115,673 shares of common stock or $0.03125 per share. On August 22, 2001 the Company converted $64,086 of loans from officers and accrued interest into 2,050,731 shares of common stock or $0.03125 per share. 6. COMMITMENTS AND CONTINGENCIES The Company accrued $17,000 for legal services performed prior to the development stage. Should the balance accrue interest, the liability could increase by approximately $20,000. 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Cautionary Statement Regarding Forward-looking Statements --------------------------------------------------------- This report may contain "forward-looking" statements. Examples of forward- looking statements include, but are not limited to: (a) projections of revenues, capital expenditures, growth, prospects, dividends, capital structure and other financial matters; (b) statements of plans and objectives of the Company or its management or Board of Directors; (c) statements of future economic performance; (d) statements of assumptions underlying other statements and statements about the Company and its business relating to the future; and (e) any statements using the words "anticipate," "expect," "may," "project," "intend" or similar expressions. Results of Operations --------------------- The Company is considered a development stage company with no assets or capital and with no operations or income since approximately 1992. The Company's costs and expenses associated with the preparation and filing of this filing and other operations of the Company have been paid for by shareholders of the Company, specifically Mark A. Scharmann and David Knudson. It is anticipated that the Company will require only nominal capital to maintain the corporate viability and necessary funds will most likely be provided by the Company's existing shareholders or its officers and directors in the immediate future until the completion of a proposed acquisition. The Company's financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the financial statements during the three months ended September 30, 2001, the Company did not generate any revenue, and has a net capital deficiency. These factors among other may indicate that the Company will be unable to continue as a going concern for a reasonable period of time. For the three months ended September 30, 2001, the Company funded its disbursements by loans from officers. As indicated above Officers of the Company have advance money to fund the Company's expenses. All advances bear interest at 10%, and are due on demand. During the three months ended September 30, 2000, an officer advanced $2,800. During the three months ended September 30, 2001, two officers advanced a total of $10,348 (including $848 of accrued interest). In August 2001, advances and related accrued interest for a total of $64,086 were converted into common stock (see note 4 to the Company's financial statements). The unpaid balance of advances was $2,119 and $55,857 at September 30, 2001 and June 30, 2001, respectively. In the opinion of management, inflation has not and will not have a material effect on the operations of the Company until such time as the Company successfully completes an acquisition or merger. At that time, management will evaluate the possible effects of inflation on the Company as it relates to its business and operations following a successful acquisition or merger. 10 Plan of Operation ----------------- Because the Company lacks funds, it may be necessary for the officers and directors to either advance funds to the Company or to accrue expenses until such time as a successful business consolidation can be made. Management intends to hold expenses to a minimum and to obtain services on a contingency basis when possible. The Company's directors may receive compensation for services provided to the Company until such time as an acquisition or merger can be accomplished. However, if the Company engages outside advisors or consultants, it may be necessary for the Company to attempt to raise additional funds. The Company has not made any arrangements or definitive agreements to use outside advisors or consultants or to raise any capital. In the event the Company does need to raise capital most likely the only method available to the Company would be the private sale of its securities. It is unlikely that it could make a public sale of securities or be able to borrow any significant sum from either a commercial or private lender. There can be no assurance that the Company will be able to obtain additional funding when and if needed, or that such funding, if available, can be obtained on terms acceptable to the Company. The Company does not intend to use any employees, with the possible exception of part-time clerical assistance on an as-needed basis. Outside advisors or consultants will be used only if they can be obtained for minimal cost or on a deferred payment basis. Management is confident that it will be able to operate in this manner and to continue its search for business opportunities during the next twelve months. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None. ITEM 2. CHANGES IN SECURITIES None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. 11 ITEM 5. OTHER INFORMATION On August 22, 2001, our board of directors approved the issuance of an aggregate of 2,050,731 shares of our common stock to Mark A. Scharmann, our President and David Knudson, our Secretary/Treasurer. Mr. Scharmann was issued 1,036,789 shares in exchange for the conversion of $32,399.67 in principle and accrued interest under a demand note. Mr. Knudson was issued 1,013,942 shares in exchange for the conversion of $31,685.79 in principle and accrued interest under a demand note. Prior to the conversion of the demand note we had 6,000,000 shares of its common stock issued and outstanding. After giving effect to the issuance of the conversion shares to Messrs. Scharmann and Knudson, we have 8,050,731 shares of common stock issued and outstanding. The shares issued in the foregoing transaction constitute restricted securities issued pursuant to section 4(2) of the Securities Act of 1933, as amended. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. --------- None. (b) Reports on Form 8-K. -------------------- On September 6, 2001, the Company filed an Current Report on Form 8-K with the Commission reporting the issuance of shares to Mr. Scharmann and Mr. Knudson for conversion of debt, as described above in ITEM 5. OTHER INFORMATION. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. IMMUNOTECHNOLOGY CORPORATION [Registrant] Dated: November 14, 2001 By/S/ David Knudson [Principal Accounting Officer]