FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended August 31, 2000 Commission File No. 0-26189
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ALLERGY IMMUNO TECHNOLOGIES, INC.
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(Small business issuer as specified in its charter)
Delaware 95-3937129
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1531 Monrovia Avenue, Newport Beach, California 92663
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (949) 645-3703
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(Not applicable)
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(Former name, former address and former fiscal year, if changed since last
report.)
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.
Yes X No
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 17,170,390 shares of common
Stock as of October 1, 2000.
<PAGE>
ALLERGY IMMUNO TECHNOLOGIES, INC.
INDEX
PART I Financial Statements:
Statements of Operations (Unaudited) - Three Months
Ended August 31, 2000 and 1999.......................................2
Balance Sheet (Unaudited) - August 31, 2000......................3 & 4
Statements of Cash Flows (Unaudited)
Three Months Ended August 31, 2000 and 1999..........................5
Statement of Changes in Shareholders' Deficit (Unaudited) -
Three Months Ended August 31, 2000...................................6
Notes to Financial Statements......................................7&8
Management's Discussion and Analysis of Financial Condition
and Selected Financial Data..........................................9
PART II Other Information...................................................10
Signatures..........................................................11
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PART I - FINANCIAL INFORMATION
SUMMARIZED FINANCIAL INFORMATION
ALLERGY IMMUNO TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended
August 31,
2000 1999
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Net sales .................................... $ 33,054 $ 24,899
Cost of sales ........................... 23,065 23,173
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Gross profit ............................ 9,989 1,726
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Operating Expenses:
Selling, general and administrative ..... 25,165 59,704
Research and development ................ 0 0
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Total operating expenses ..................... 25,165 59,704
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Operating Loss ............................... (15,176) (57,978)
Other Expense:
Other income, net ....................... 0 (264)
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Loss before taxes ............................ (15,176) (57,714)
Income Taxes ................................. 0 800
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Net (Loss) ................................... $ (15,176) $ (58,514)
============= =============
Per share data (basic and diluted):
Net loss ................................ $ .00 $ .00
============= =============
Weighted average number of common and common
equivalent shares outstanding:
17,170,390 17,170,390
============= =============
The accompanying notes are an integral part of these statements
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<PAGE>
ALLERGY IMMUNO TECHNOLOGIES, INC.
BALANCE SHEET (UNAUDITED)
August 31,
2000
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Assets
Current Assets
Cash ...................................................... $ 8,932
Accounts receivable, net .................................. 16,779
Inventory ................................................. 4,815
Prepaid expenses and other current assets ................. 2,876
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Total Current Assets ................................ 33,402
Land held for investment ...................................... 46,000
Fixed assets, net of accumulated depreciation ................. 9
Patents, net of accumulated amortization ...................... 12,114
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$91,525
========
The accompanying notes are an integral part of these statements
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<PAGE>
ALLERGY IMMUNO TECHNOLOGIES, INC.
BALANCE SHEET (UNAUDITED)
August 31,
2000
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Liabilities and Shareholders' Deficit
Current Liabilities
Accounts payable and accrued expenses .................... $ 20,501
Due to affiliate .......................................... 295,662
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Total Current Liabilities ............................ 316,163
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Shareholders' Deficit
Common stock, $.001 par value authorized 50,000,000 shares,
issued and outstanding 17,170,390 in 2000 ............... 17,170
Additional paid-in-capital ................................ 1,777,388
Accumulated deficit ....................................... (2,019,196)
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Total Shareholders' Deficit .................................... (224,638)
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Total Liabilities and Deficit .................................. $ 91,525
============
The accompanying notes are an integral part of these statements.
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ALLERGY IMMUNO TECHNOLOGIES, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED AUGUST 31, 2000 AND 1999
2000 1999
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Cash flows from operating activities:
Net (loss) .......................................... $ (15,176) $ (58,514)
Adjustments to reconcile net (loss) to net cash
used by operating activities:
Depreciation and amortization .................. 387 866
Changes in current assets and liabilities:
Accounts Receivable .......................... (4,775) 3,065
Inventory .................................... (438) 0
Prepaid expenses and other current assets .... 1,726 2,018
Accounts payable and other accrued liabilities 10,956 2,627
Other receivable-consulting .................. 0 100,000
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Net cash used by operating activities ............... (7,320) 50,062
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Cash flows from investing activities:
Purchases of property and equipment ............ 0 (1,700)
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Net cash used in investing activities ............... 0 (1,700)
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Cash flows provided by financing activities:
Advances from affiliate ......................... 13,649 (46,811)
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Net cash provided by financing activities ........... 13,649 (46,811)
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Net change in cash .................................. 6,329 1,551
Cash at beginning of year ........................... 2,603 2,202
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Cash at end of quarter .............................. $ 8,932 $ 3,753
========== ==========
The accompanying notes are an integral part of these statements.
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<TABLE>
ALLERGY IMMUNO TECHNOLOGIES, INC.
STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT (UNAUDITED)
FOR THE THREE MONTHS ENDED AUGUST 31, 2000
<CAPTION>
Common Stock
--------------------------- Additional Accumu-
Number of Paid-In Lated
Shares Amount Capital Deficit Total
---------- ------------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C>
Balances at
May 31, 2000 17,170,390 $ 17,170 $ 1,777,388 $ (2,004,020) $ (209,462)
Net loss (15,176) (15,176)
---------- ------------- ------------ -------------- ------------
Balances at
August 31, 2000 17,170,390 $ 17,170 $ 1,777,388 $ (2,019,196) $ (224,638)
========== ============== ============ ============== =============
</TABLE>
Note: The Company's authorized equity capitalization consists of 50,000,000
shares of voting common stock, par value $.001 and 100,000 shares of
preferred stock, par value $1.00 per share. As of August 31, 2000,
there were 17,170,390 shares of common stock issued and outstanding.
The accompanying notes are an integral part of these statements
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<PAGE>
NOTES TO FINANCIAL STATEMENTS
August 31, 2000
(1) Reference is made to Note 1 of the Notes to Financial Statements
contained in the Company's Annual Report on Form 10-KSB for the fiscal
year ended May 31, 2000, for a summary of significant accounting policies
utilized by the Company.
(2) The information set forth in these statements is unaudited. The
information reflects all adjustments which, in the opinion of management,
are necessary to present a fair statement of results of operations of
Allergy Immuno Technologies, Inc., for the periods indicated. It does not
include all information and footnotes necessary for a fair presentation
of financial position, results of operations, and cash flow in conformity
with generally accepted accounting principles.
(3) Results of operations for the interim periods covered by this Report may
not necessarily be indicative of results of operations for the full
fiscal year.
(4) Earnings Per Share
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In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards (SFAS) No. 128,
EARNINGS PER SHARE ("EPS"). SFAS No. 128 requires dual presentation of
basic EPS and diluted EPS on the face of all income statements issued
after December 15, 1997 for all entities with complex capital structures.
Basic EPS is computed as net income divided by the weighted average
number of common shares outstanding for the period. Diluted EPS reflects
the potential dilution that could occur from common shares issuable
through stock options, warrants and other convertible securities. All
periods presented have been restated to adopt the provisions of SFAS No.
128.
The following table illustrates the required disclosure of the
reconciliation of the numerators and denominators of the basic and
diluted EPS computations:
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<TABLE>
<CAPTION>
For the Three Months Ended August 31, 2000
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Income Shares Per Share
(Numerator) (Denominator) Amount
------------- ------------- -------------
<S> <C> <C> <C>
Basic EPS -
Loss available to common
Shareholders.................................. $ (15,176) 17,170,390 ($.00)
=============
Effect of dilutive securities - Options............. - -
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Diluted EPS -
Loss available to common share-
Holders plus assumed conversions.............. $ (15,176) 17,170,390 ($.00)
============= ============= =============
For the Three Months Ended August 31, 1999
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Income Shares Per Share
(Numerator) (Denominator) Amount
------------- ------------- -------------
Basic EPS -
Loss available to common
Shareholders.................................. $ (58,514) 17,170,390 ($.00)
=============
Effect of dilutive securities - Options............. - -
------------- -------------
Diluted EPS -
Loss available to common share-
Holders plus assumed conversions.............. $ (58,514) 17,170,390 ($.00)
============= ============= =============
</TABLE>
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND SELECTED FINANCIAL DATA
THE STATEMENTS IN THIS REPORT ON FORM 10-QSB AND OTHER STATEMENTS MADE BY
ALLERGY IMMUNO TECHNOLOGIES, INC. THAT RELATE TO FUTURE PLANS, EVENTS OR
PERFORMANCE ARE FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND
UNCERTAINTIES. ACTUAL RESULTS, EVENTS OR PERFORMANCE MAY DIFFER MATERIALLY FROM
THOSE ANTICIPATED IN ANY FORWARD-LOOKING STATEMENTS AS A RESULT OF A VARIETY OF
FACTORS, INCLUDING, BUT NOT LIMITED TO, COMPETITION, WHICH HAS AND WILL CONTINUE
TO PUT PRICE PRESSURE ON THE COMPANY'S THIRD PARTY COLLECTION RECEIVABLES, AND
OVERALL MACRO-ECONOMIC CONDITIONS.
RESULTS OF OPERATIONS
Net sales for Allergy Immuno Technologies were $33,054 for the first
quarter of fiscal 2000 as compared to $24,899 for the same period in the
previous year. This represents an increase of $8,155, or 33% which was primarily
due to testing services the Company provided for a large company with respect to
a research project they were conducting. Cost of sales as a percentage of sales
decreased from 93% to 70% due to higher sales in relation to fixed costs.
Selling, general and administrative costs decreased from $59,704 in fiscal
2000 to $25,165 in the current quarter. This represents a decrease of $34,539,
all of which was due to decreased legal and accounting costs associated with the
filing of the Company's Form 10-SB in the prior fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
As of August 31, 2000, the Company had cash of $8,932 as compared to $3,753
in the previous year. Its current working capital deficit was $282,761 as
compared to a deficit of $149,588 for the previous year.
The Company has been experiencing losses and has had to rely on borrowings
from Biomerica, Inc., which owns approximately 74.6% of the outstanding stock of
AIT. Management believes that losses will continue during this fiscal year. As
of August 31, 2000 the Company owed Biomerica $295,662. Biomerica is not
charging the Company interest on the advances and has not determined any date of
repayment. In the past Biomerica has taken the Company's stock as repayment for
cash advanced.
GOING CONCERN
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. During the year ended May 31, 2000
("Fiscal 2000"), the Company experienced a net loss of $177,786 and during the
current quarter, a loss of $15,614 (unaudited) and had negative cash flows from
operations of $70,961and $7,320 for the fiscal year and current quarter,
respectively. In addition, the Company had substantial working capital and
shareholders' deficits at August 31, 2000. These factors, among others, raise
substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
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There can be no assurances that the Company will be able to successfully
implement its plans, including generating profitable operations, generating
positive cash flows from operations and obtaining additional debt and equity
capital to meet present and future working capital demands.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS. Inapplicable.
Item 2. CHANGES IN SECURITIES. Inapplicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES. Inapplicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Inapplicable.
Item 5. OTHER INFORMATION. Inapplicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K. None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has fully caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: October 9, 2000
BIOMERICA, INC.
By: /S/ Zackary S. Irani
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Zackary Irani
President, Chief Executive Officer
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