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 March 31, 2000
[ ] 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: 1,935,376 shares of common
stock as of March 31, 2000.
Transitional Small Business Disclosure Format Yes [ ] No [X]
<PAGE>
IMMECOR CORPORATION
INDEX
TABLE OF CONTENTS
PART I
FINANCIAL INFORMATION
Item 1. Balance sheets at December 31, 1999 and March 31,
2000 Statements of income for the three months ended
March 31, 1999 and 2000 Statements of cash flows for
the three months ended March 31, 1999 and 2000
Statements of shareholders' equity for the three
months ended March 31, 1999 and 2000
Item 2. Management's Discussion and Analysis or Plan of Operation
PART II
OTHER INFORMATION
Item 1. Legal proceedings
Item 2. Changes in securities
Item 3. Defaults upon senior securities
Item 4. Submission of matters to a vote of security holders
Item 5 Other information
Item 6. Exhibits and Reports on Form 8-K
FORWARD LOOKING STATEMENTS
Immecor Corporation (the "Company") cautions readers that certain
important factors may affect the Company's actual results and could cause such
results to differ materially from any forward-looking statements that may be
deemed to have been made in this Form 10-QSB or that are otherwise made by or on
behalf of the Company. For this purpose, any statement contained in the Form
10-QSB that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the generality of the foregoing,
words such as "may", "expect", "believe", "anticipate", "intend", "could",
"estimate", or "continue" or the negative other variations thereof or comparable
terminology are intended to identify forward-looking statements. Factors that
may affect the Company's results include, but are not limited to, the Company's
limited history of profitability, its dependence on a limited number of
customers and key personnel, its possible need for additional financing and its
dependence on certain industries. The Company is also subject to other risks
detailed herein or detailed from time to time in the Company's filings with the
Securities and Exchange Commission.
PART I
ITEM 1. FINANCIAL INFORMATION
Page
The following Financial Statements are filed as part of this report:
Balance Sheets 3
Statements of Income 4
Statements of Cash Flows 5
Statements of Shareholder Equity 6
Notes to Financial Statements 7
<PAGE>
IMMECOR CORPORATION
Balance Sheets
ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
December 31, March 31,
1999 2000
----- -----
(restated) (unaudited)
Current Assets
Cash $ 57,788 $ 35,131
Accounts receivables
(net of allowance for doubtful amounts of $18,479 in 1999 and $19,500 in 2000 ) 989,972 2,862,938
Inventories 1,159,638 1,501,870
Notes receivable - 8,877
Prepaid and other assets (Note 4) 59,476 42,206
Deferred tax assets 13,681 44,681
--------- ---------
Total current assets 2,280,555 4,495,703
EQUIPMENT AND IMPROVEMENTS -net 125,601 149,056
------- -------
Total Assets $2,406,156 $ 4,644,759
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes payable, due within one year (Note 3) $ 5,318 $ 227,722
Accounts payable 1,380,692 2,729,573
Accrued liabilities 165,214 199,389
Advances from shareholders - 25,000
Other liabilities - 3,562
Sales tax payable - 8,771
Income tax payable - 401,000
Line of credit (Note 3) 350,890 -
-------- ---------
Total current liabilities 1,902,114 3,595,017
Long-term Liabilities
Note payable, due after one year (Note 2) 3,189 7,353
Deferred income taxes 16,536 16,536
-------- ---------
Total long-term liabilities 19,725 23,889
-------- ---------
Total liabilities $ 1,921,839 $ 3,618,906
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 20,000,000 shares authorized; no shares issued
and outstanding Common stock, no par value, 50,000,000 shares authorized;
issued and outstanding, 1999: 2,435,376; 2000: 1,935,376 288,855 288,855
Retained earnings 195,462 736,998
-------- ---------
Total shareholders' equity 484,317 1,025,853
-------- ---------
Total liabilities and shareholders' equity $ 2,406,156 $ 4,644,759
--------- ---------
The accompanying notes are an integral part of these financial statements
<PAGE>
IMMECOR CORPORATION
Statement of Income
Period ended March 31,
1999 2000
------ ------
(restated) (unaudited)
Net sales (Note 5) $ 2,087,886 $ 6,058,638
Cost of sales 1,701,444 4,607,818
--------- ---------
Gross profit 386,442 1,450,820
Selling, general and administrative expenses 344,590 521,832
------- ---------
Depreciation - 4,170
Operating income 41,852 924,818
Interest income 1,056 47
Interest expense 1,947 12,329
----- ---------
Income before income taxes 40,961 912,536
Income taxes 16,400 370,000
------ ---------
NET INCOME $ 24,561 $ 542,536
Net income per share - basic and diluted $ 0.01 $ 0.28
Weighted average shares outstanding - basic and diluted 2,435,376 1,935,376
The accompanying notes are an integral part of these financial statements
<PAGE>
IMMECOR CORPORATION
Statement of Cash Flow
Period ended March 31,
1999 2000
------ ------
(restated) (unaudited)
Increase (decrease) from cash
Cash flows from operating activities:
Net income $ 24,561 $ 542,536
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation 4,361 4,170
Deferred taxes (18,530) (31,000)
Change in assets and liabilities:
Accounts and notes receivable (578,256) (1,872,966)
Inventory 28,281 (342,232)
Prepaids and others 1,925 17,270
Accounts payable 100,282 1,348,881
Accrued liabilities 9,540 (45,508)
-------- ----------
Income taxes payable 104,423 401,000
-------- ----------
Net cash provided by operating activities (323,413) 113,167
Cash flows from Investing activities:
Purchase of fixed assets (5,124) (27,625)
Notes receivable issued - (8,877)
--------- ----------
Net cash used in investing activities (5,124) (36,502)
Cash flows from financing activities
Repayment of Line of CreditLine of Credit - (350,890)
Proceeds from notes payable 70,704 227,722
Payments on note payable - (1,154)
Advances from shareholders - 25,000
--------- ---------
Net cash used in financing activities 70,704 (99,322)
Net (decrease) in cash (257,833) (22,657)
Cash beginning of period 207,040 57,788
-------- ---------
Cash at end of period $ (50,793) $ 35,131
--------- ---------
Supplemental disclosure of cash flow information Cash paid during period for:
Interest $ 1,947 $ -
Income taxes $ 16,400 $ -
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
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, 1999.
The financial statements presented herein as of March 31, 2000 and for
the three months ended March 31, 1999 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 outstanding in each period.
Note 2: Note Payable
Note payable consists of the following as of:
December 31, March 31,
1999 2000
-----------------------
(restated) (unaudited)
Note payable, collaterized by vehicle, payable in
monthly installments of $443 including interest of
10.5% through September 2001 $ 8,507 $ 7,352
Less amount due in one year 5,318 3,987
------------------------
$ 3,189 $ 3,365
Note 3: Line of Credit
The Company has a $1,500,000 line of credit which expires December 20, 2000.
Advances under the line of credit can not exceed 80% of eligible accounts
receivable and is secured by a security interest in all accounts receivable,
inventory and equipment. The line of credit is also personally guaranteed by the
Company's major shareholder. The advance outstanding on the line of credit as of
March 31, 2000 was $227,722.
Note 4: Commitments
The Company leases two premises under a noncancelable operating leases.
Operating lease one expires in January 2001, and operating lease two expires in
April 2002. The Company is obligated to pay its pro-rate share of utilities for
the building on a monthly basis. For lease two the Company is obligated to pay
its own utilities and has set up an account with the local utility company.
Minimum future rental payments under the lease agreements as of March 31, 2000
are as follows:
Quarter ended
March 31, 2000, Lease One Lease Two
City of Rohnert Park City of Santa Clara
2000 $ 56,376 $ 36,711
2001 6,264 36,711
----- -------
$ 62,640 $ 73,422
<PAGE>
IMMECOR CORPORATION
NOTES TO THE INTERIM UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 5: 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 73% and 72% of total sales in 2000, and 1999 respectively. The Company is
attempting to expand its customer base to lessen the effect of having major
customers.
<PAGE>
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.
Three Months Ended
March 31,
-1999- -2000-
------ -------
Statements of Income Data:
Net sales......................................... 100.00% 100.00%
Cost of sales .................................. 80.18 76.06
Gross profit ..................................... 19.81 23.95
Depreciation and amortization .................... 0.00 0.07
Selling, general and administrative expenses ..... 16.50 8.61
Total operating costs and expenses ............... 16.50 8.62
Operating income (loss) .......................... 3.32 15.26
Interest income (loss) ........................... 0.05 0.00
Interest expense.................................. 0.09 0.20
Income (loss) before income taxes................. 3.27 15.07
Income Tax ...................................... 0.79 6.11
Net income (loss) ................................ 2.49 8.96
Net Sales
Net sales increased by $3,970,752 or 190% from $2,087,886 for the three months
ended March 31, 1999 (the "1999 period") to $6,058,638 for the three months
ended March 31, 2000 ("the 2000 period").
The net sales increase resulted primarily from new products and increased demand
from major customers responsible for the majority of the Company's sales. Sales
to the major customers have continued to increase steadily due to a new product
line of high-end servers and processors. Firm orders on the books as of May 1,
2000 for $3,400,000 indicate that this trend will continue during the remainder
of 2000. Nevertheless, the loss of one or more major customer 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 increased form $386,442 or 19% in
the 1999 period to $1,450,820 or 24% in the 2000 period. All the Company's
product lines contributed to the increase in gross margin and the Company was
able to improve operating efficiencies, while the company released new products,
due to greater volume of sales.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $177,242 or 51% form
$344,590 in the 1999 period to $521,832 in the 2000 period. As a percentage of
sales, these expenses were 17% in 1999 and 9% in 2000. The decrease in the
percentage was due to an increased volume of sales with higher prices and a
large amount of the costs remaining fairly fixed. The dollar increase is due to
higher payroll costs associated with new employees.
Liquidity and Capital Resources
On March 31, 1999 and March 31, 2000 the Company had net working capital of
$497,139 and $901,686 respectively. The increase in working capital from 1999 to
2000 was primarily due to an increased level of accounts receivables, short term
notes and prepaids due to increased sales levels, partly offset with higher
accounts payable.
The Company had used cash in operating activities of $(323,413) in 1999 period
compared to net cash provided by operating activities of $113,167 in the 2000
period. The difference relates primarily to higher net income.
The Company had net cash provided by financing activities of $70,704 in the 1999
period compared to net cash used in financing activities of $(99,322) in the
2000 period. The $(99,322) relates primarily to additional asset purchases and
an increase in financing notes for customers.
<PAGE>
PART II.
OTHER INFORMATION
Item 1. Legal Proceedings
There are no legal proceedings pending against the Company during the period
ending March 31, 2000.
Item 2. Changes in Securities
There were no changes in rights of securities holders during the period ending
March 31, 2000.
Item 3. Defaults upon Senior Securities
There were no defaults upon senior securities during the period ending March 31,
2000.
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, 2000.
Item 5. Other Information
There were no major contracts signed during the period during the period ending
March 31, 2000.
Item 6. Exhibits and Reports on Form 8-K
There were no filings of Exhibits and Reports on Form 8-K during the period
ending March 31, 2000.
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: May 12, 2000 By: /s/ Wil. L. Lindgren
-----------------------
Wil L. Lindgren
Chief Financial Officer
Date: May 12, 1999 By: /s/ Heinot H. Hintereder
-----------------------
Heinot H. Hintereder
President & Chief Executive Officer
<PAGE>
LEGEND IMMECOR CORPORATION
MULTIPLIER 1
CURRENCY 1
TABLE
S C C
PERIOD-TYPE YEAR YEAR
FISCAL-YEAR-END DEC-31-1999 DEC-31-2000
PERIOD-START JAN-1-1999 JAN-1-2000
PERIOD-END MAR-31-1999 MAR-31-2000
EXCHANGE-RATE 1 1
CASH 57788 35131
SECURITIES 0 0
RECEIVABLES 1008721 2882438
ALLOWANCES 18749 19500
INVENTORY 1159638 1501870
CURRENT-ASSETS 2280555 4495703
PP&E 124915 42206
DEPRECIATION 39045 4170
TOTAL-ASSETS 2406156 4644759
CURRENT-LIABILITIES 1902114 3595017
BONDS 0 0
PREFERRED-MANDATORY 0 0
PREFERRED 0 0
COMMON 288855 288855
OTHER-SE 195462 736998
TOTAL-LIABILITY-AND-EQUITY 2406156 4644759
SALES 2087886 6058638
TOTAL-REVENUES 2087886 6058638
CGS 1701444 4607818
TOTAL-COSTS 2046034 5129650
OTHER-EXPENSES 0 0
LOSS-PROVISION 0 0
INTEREST-EXPENSE 1947 12329
INCOME-PRETAX 40961 912536
INCOME-TAX 16400 370000
INCOME-CONTINUING 24561 542536
DISCONTINUED 0 0
EXTRAORDINARY 0 0
CHANGES 0 0
NET-INCOME 24561 542536
EPS-PRIMARY .01 .028
EPS-DILUTED .01 .028
