10QSB 1 f03d10q.txt IMMUNO 03DEC 10QSB 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: December 31, 2003 [ ] 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 50,000,000 -------------------------------- ---------------------------- Title of Class Number of Shares Outstanding as of December 31, 2003 2 PART I -- FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS IMMUNOTECHNOLOGY CORPORATION FINANCIAL STATEMENTS (UNAUDITED) INDEPENDENT ACCOUNTANTS' REVIEW REPORT To the Stockholders of ImmunoTechnology Corporation We have reviewed the accompanying balance sheets of ImmunoTechnology Corporation (a Delaware corporation in the Development Stage) as of December 31, 2003 and June 30, 2003 and the statements of operations for the three months and six months ended December 31, 2003 and 2002 and for the period from inception of the development stage (July 1, 1992) through December 31, 2003, and the statements of stockholder's deficit for the period from inception of the development stage (July 1, 1992) through December 31, 2003, and the statements of cash flows for the six months ended December 31, 2003 and 2002 and for the period from the inception of the development stage (July 1, 1992) through December 31, 2003. These financial statements are the responsibility of the management of ImmunoTechnology Corporation. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 1, certain conditions indicate that the Company may be unable to continue as a going concern. The accompanying financial statements do not include any adjustments to the financial statements that might be necessary should the Company be unable to continue as a going concern. /S/Rose, Snyder & Jacobs Rose, Snyder & Jacobs A Corporation of Certified Public Accountants Encino, California February 20, 2004 3 IMMUNOTECHNOLOGY CORPORATION (A DEVELOPMENT STAGE COMPANY) BALANCE SHEETS ASSETS December 31, June 30, 2003 2003 ----------- ----------- CURRENT ASSETS Cash $ 260 $ - ----------- ----------- TOTAL ASSETS $ 260 $ - =========== =========== LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES Bank overdraft $ - $ 996 Accrued expenses 47,456 59,598 Note payable, note 4 20,000 20,000 Advances from officers, note 3 68,434 20,234 ----------- ----------- TOTAL CURRENT LIABILITIES 135,890 100,828 ----------- ----------- COMMITMENTS AND CONTINGENCIES, note 6 STOCKHOLDERS' DEFICIT, note 5 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; issued and outstanding - 50,000,000 12,068 12,068 Paid in capital 398,976 398,976 Accumulated deficit prior to the development stage (151,332) (151,332) Accumulated deficit during the development stage (395,342) (360,540) ----------- ----------- TOTAL STOCKHOLDERS' DEFICIT (135,630) (100,828) ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 260 $ - =========== =========== Prepared without audit. See independent accountants' review report and notes to the financial statements. 4 IMMUNOTECHNOLOGY CORPORATION (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF OPERATIONS
From Inception of the Development Stage, Three Six Three Six July 1, 1992 months ended months ended months ended months ended through Dec. 31, 2003 Dec. 31, 2003 Dec. 31, 2002 Dec. 31, 2002 Dec. 31, 2003 ----------- ----------- ----------- ----------- ----------- REVENUE $ - $ - $ - $ - $ - COST OF REVENUE - - - - - ----------- ----------- ----------- ----------- ----------- GROSS PROFIT - - - - - OPERATING EXPENSES Professional fees 13,886 19,376 12,360 20,419 258,407 Taxes and licenses - 229 - - 1,866 Transfer Stock 450 500 - - 5,945 Bank fees and service charges 188 346 235 383 4,466 Travel 9,348 9,348 4,132 6,717 92,549 Office expense - 1,787 - - 11,787 Interest expense 1,899 3,216 1,220 2,365 19,923 ----------- ----------- ----------- ----------- ----------- TOTAL OPERATING EXPENSES 25,771 34,802 17,947 29,884 394,943 ----------- ----------- ----------- ----------- ----------- NET LOSS $ (25,771) $ (34,802) $ (17,947) $ (29,884) $ (394,943) =========== =========== =========== =========== =========== BASIC LOSS PER COMMON SHARE $ - $ - $ - $ - =========== =========== =========== =========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES 50,000,000 50,000,000 41,630,855 40,942,255 =========== =========== =========== ===========
Prepared without audit. See independent accountants' review report and notes to the 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 5 69 215,329 - - 215,398 Activity July 1, 1992 through June 30, 2002 - - - (287,773) (287,773) ----------- ----------- ----------- ----------- ----------- Balance at June 30, 2002 11,649 338,081 (151,332) (287,773) (89,375) Issuance of common stock, upon conversion of debt, note 5 19 60,895 - - 60,914 Net Loss - - - (29,884) (29,884) ----------- ----------- ----------- ----------- ----------- Balance at December 31, 2002 11,668 398,976 (151,332) (317,657) (58,345) Stock split under the form of dividend, note 5 400 - - (400) - Net Loss - - - (42,483) (42,483) ----------- ----------- ----------- ----------- ----------- Balance at June 30, 2003 12,068 398,976 (151,332) (360,540) (100,828) Net loss - - - (34,802) (34,802) ----------- ----------- ----------- ----------- ----------- Balance at December 31, 2003 $ 12,068 $ 398,976 $ (151,332) $ (395,342) $ (135,630) =========== =========== =========== =========== ===========
Prepared without audit. See independent accountants' review report and notes to the financial statements. 6 IMMUNOTECHNOLOGY CORPORATION (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS From Inception of the Development Stage Six Six July 1, 1992 months ended months ended through Dec. 31, 2003 Dec. 31, 2002 Dec. 31, 2003 ----------- ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (34,802) $ (29,884) $ (394,942) Adjustment to reconcile net loss to net cash used in operating activities Increase/(Decrease) in accrued expenses (12,142) 5,733 42,779 ----------- ----------- ----------- NET CASH USED IN OPERATING ACTIVITIES (46,944) (24,151) (352,163) ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Advances from an officer - - (10,000) Repayment of advances to an officer - - 10,000 ----------- ----------- ----------- NET CASH PROVIDED BY INVESTING ACTIVITIES - - - ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Bank Overdraft (996) (23) - Advances from an officer 48,200 24,264 345,431 Repayments of advances to an officer - - (20,508) Proceeds from notes payable - - 27,500 ----------- ----------- ----------- NET CASH PROVIDED BY FINANCING ACTIVITIES 47,204 24,241 352,423 ----------- ----------- ----------- NET INCREASE IN CASH 260 90 260 CASH AT BEGINNING OF PERIOD - - - ----------- ----------- ----------- CASH AT END OF PERIOD $ 260 $ 90 $ 260 =========== =========== =========== Supplementary disclosures: Interest paid $ - $ - $ 2,211 =========== =========== =========== Prepared without audit. See independent accountants' review report and notes to the financial statements. 7 IMMUNOTECHNOLOGY CORPORATION (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS 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 December 30, 2003, the Company did not generate any revenue, and has a net capital deficiency. These factors among others may indicate that the Company will be unable to continue as a going concern for a reasonable period of time. For the six months ended December 31, 2003, the Company funded its disbursements by loans from an officer. 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 December 31, 2003 total approximately $500,000 and expire between June 30, 2004 and June 30, 2023. The use of loss carry forwards is limited in accordance with the rules of change in ownership. Deferred tax benefit resulting from these loss carryforwards are subject to a 100% valuation allowance due to the uncertainty of realization. 8 IMMUNOTECHNOLOGY CORPORATION (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS 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 six months ended December 31, 2003, one officer advanced a total of $48,200. The unpaid balance of advances was $68,434 and $20,234 at December 31, 2003 and June 30, 2003, respectively. An officer of the Company (who resigned in May 2003) is a principal in a consulting firm to which the Company paid professional fees totaling $17,484 and $9,019 during the six months ended December 31, 2003 and 2002, respectively. Professional fees owed to this firm totaled $12,713 and $23,004 at December 31, 2003 and June 30, 2003, respectively. 4. NOTE PAYABLE During the three months ended March 31, 2003, an unrelated individual advanced $20,000 to fund the Company's expenses. This advance bears interest at 7% and is due on demand. 5. COMMON STOCK On March 31, 1999, the Company converted its advances from an officer, notes payable to minority shareholders and related accrued interest totaling $116,448 into 3,726,331 shares of common stock (18,631,655 after stock split) or $0.03125 per share. On June 21, 2000, the Company converted its advances from another officer and related accrued interest totaling $34,864 into 1,115,673 shares of common stock (5,578,365 after stock split) 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 (10,253,655 after stock split) or $0.03125 per share. During the year ended June 30, 2003, the Company converted $60,914 of loans from officers and accrued interest into 1,949,269 shares of common stock (9,746,345 after stock split) or $0.03125 per share. On May 13, 2003, the Board of Directors approved a 5 for 1 stock split of the outstanding common stock in the form of dividend. Weighted average member of shares used in the calculation of earnings per share has been retroactive restated to consider this stock split. 6. COMMITMENTS AND CONTINGENCIES The Company accrued $17,000 for legal services performed prior to the development stage. Should this balance accrue interest, the liability could increase by approximately $26,000. The Company is a defendant in a lawsuit where the plaintiff alleges unsolicited fax advertisement violations. Management believes this lawsuit is frivolous, and the outcome will be immaterial to the financial statements. 9 IMMUNOTECHNOLOGY CORPORATION (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS 7. SUBSEQUENT EVENT Merger On April 21, 2003, the Company entered into an agreement and plan of merger with Ultimate Security System Corporation ("Ultimate"). Ultimate is the manufacturer of the Power Lock(TM) vehicle security system, and is located in Irvine, California. Upon approval of the merger by both parties, the Company will issue shares of common stock to Ultimate. According to the terms of the agreement, the total common stock authorized will increase to 500,000,000. Please refer to Form 8-K filed with the SEC on April 23, 2003. The Company is still negotiating the details of the transaction. 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION 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. Plan of Operation ----------------- 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 and six months ended December 31, 2003, 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 and six months ended December 31, 2003, the Company funded its disbursements by loans from officer Mark Scharmann. As indicated officers of the Company have advanced money to fund the Company's expenses. All advances bear interest at 10%, and are due on demand. During the six months ended December 31, 2003, Mark Scharmann advanced a total of $48,200. The unpaid balance of advances was $68,434 at December 31, 2003. David Knudson, a former officer of the Company, is a principal in a consulting firm to which the Company paid professional fees totaling $17,484 during the six months ended December 31, 2003. Professional fees owed to this firm totaled $12,713 at December 31, 2003. 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. 11 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. Merger Agreement and Forward Stock Split ---------------------------------------- On April 21, 2003, we entered into an Agreement and Plan of Merger with Ultimate Security Systems Corporation ("Ultimate"), a copy of which was attached as an exhibit to our Form 8-K filed with the Securities and Exchange Commission on April 23, 2003 (the "Merger Agreement"). The following discussion regarding the terms of the Merger Agreement is subject to, and qualified in its entirety by, the detailed provisions of the Merger Agreement and any exhibits thereto. On May 13, 2002, our Board of Directors approved a 5 for 1 stock split of our issued and outstanding common stock which was effective on May 28, 2003. As a result of the 5:1 forward split, the our total issued and outstanding stock increased from 10,000,000 shares issued and outstanding to 50,000,000 shares issued and outstanding. The purpose for the stock split was to increase the marketability and liquidity of the common stock and increase the number of issued and outstanding shares of our common stock. As a result of the stock split, each share of our issued and outstanding common stock on May 23, 2003 may be exchanged for 5 fully paid and nonassessable shares of common stock, $0.00001 par value per share. Due to the forward split of our stock, certain provisions of the merger were adjusted per the Merger Agreement which provides for such adjustments due to the forward split. Pursuant to the amended terms, we will register approximately 366,666,667 shares of our Common Stock for issuance to the Ultimate Shareholders in exchange for the shares of Ultimate Common and Preferred Stock and related warrants. In order to have sufficient authorized capital to be able to reserve enough shares for the warrants and options outstanding following the effectiveness of the Merger, and to provide additional shares to be available for sale in connection with Ultimate's proposed fund raising following the Merger, we will also increase our capitalization from 50,000,000 authorized common shares to 500,000,000 shares of common stock. 12 Our operating expenses for the three and six months ended December 31, 2003 totaled $25,771 and $34,802 compared to $17,947 and $29,884 for the prior year periods. The expenses were due primarily to professional fees, travel expenses related to due diligence for the proposed merger with Ultimate, and interest expense on loans. ITEM 3. CONTROLS AND PROCEDURES Our principal executive and principal financial officer has participated with management in the evaluation of effectiveness of the controls and procedures required by paragraph (b) of Rule 13a-15 or Rule 15d-15 under the Exchange Act as of the end of the period covered by this report. Based on that evaluation, our principal executive and principal financial officer believes that our disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act) are effective as of the end of the period covered by the report. There have been no changes in our internal controls that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting during the period covered by this report. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company, Mark Scharmann, our president, and David Knudson, our former secretary/treasurer, are named as defendants in a lawsuit where the plaintiff alleges unsolicited fax advertisement violations. The suit was filed by Wholesale Banners and Sign Supplies, Inc., an Arizona corporation, in the Maryvale Justice Court of the State of Arizona, Maricopa County on October 8, 2003. The suit demands damages of up to $3,000, plus costs and legal fees. Management is in the process of hiring a legal counsel regarding this matter, but believes this lawsuit is frivolous, and the outcome will be immaterial to the financial statements. ITEM 2. CHANGES IN SECURITIES None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of our shareholders during the quarter ended December 31, 2003. ITEM 5. OTHER INFORMATION None. 13 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. --------- Exhibit No. Description ----------- ----------- 31 Certification of Principal Executive and Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32 Certification of Principal Executive and Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (b) Reports on Form 8-K. -------------------- None. Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated: IMMUNOTECHNOLOGY CORPORATION Date: March 16, 2004 By /S/ Mark A. Scharmann, President and Director Principal Executive and Financial Officer