SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark one)
[x] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the Quarter Period Ended November 30, 2000
-----------------
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______ to _______.
Commission File No. 0-26189
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ALLERGY IMMUNO TECHNOLOGIES, INC.
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(Exact name of 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
--------- --------
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 January 12, 2001.
<PAGE>
ALLERGY IMMUNO TECHNOLOGIES, INC.
INDEX
PART I FINANCIAL INFORMATION
ITEM 1. Financial Statements:
Statements of Operations (unaudited) - Six Months and Three Months
Ended November 30, 2000 and 1999.....................................2
Balance Sheet (unaudited) - November 30, 2000....................3 & 4
Statements of Cash Flows (unaudited)
Six Months Ended November 30, 2000 and 1999..........................5
Statement of Changes in Shareholders' Deficit (unaudited) -
Six Months Ended November 30, 2000...................................6
Notes to Financial Statements......................................7-9
Management's Discussion and Analysis of Financial Condition
and Selected Financial Data......................................10-11
PART II. Other Information...................................................12
Signatures..........................................................13
1
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<TABLE>
PART I - FINANCIAL INFORMATION
SUMMARIZED FINANCIAL INFORMATION
ALLERGY IMMUNO TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
<CAPTION>
Six Months Ended Three Months Ended
November 30, November 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net sales .................................. $ 54,912 $ 43,591 $ 21,858 $ 18,692
Cost of sales ......................... 41,078 42,057 18,013 18,884
------------- ------------- ------------- -------------
Gross profit (loss) ................... 13,834 1,534 3,845 (192)
Operating Expenses:
Selling, general and administrative ... 45,212 97,011 20,047 37,307
Research and development .............. 0 0 0 0
------------- ------------- ------------- -------------
Total operating expenses ................... 45,212 97,011 20,047 37,307
Operating Loss ............................. (31,378) (95,477) (16,202) (37,499)
Other income:
Other income, net ..................... 0 (594) 0 (330)
------------- ------------- ------------- -------------
Loss before taxes .......................... (31,378) (94,883) (16,202) (37,169)
Income Taxes ............................... 0 800 0 0
------------- ------------- ------------- -------------
NET LOSS ................................... $ (31,378) $ (95,683) $ (16,202) $ (37,169)
============= ============= ============= =============
Per share data:
Net loss .............................. $ (.00) $ (.01) $ (.00) $ (.00)
============= ============= ============= =============
Weighted average number of common and Common
equivalent shares outstanding .............. 17,170,390 17,170,390 17,170,390 17,170,390
============= ============= ============= =============
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE>
ALLERGY IMMUNO TECHNOLOGIES, INC.
BALANCE SHEET (UNAUDITED)
November 30,
2000
------------
Assets
Current Assets
Cash ......................................................... $ 4,076
Accounts receivable, less allowance for doubtful accounts .... 11,398
Inventory .................................................... 5,225
Prepaid expenses and other current assets .................... 3,155
------------
23,854
Total Current Assets
Land held for investment ......................................... 46,000
Fixed assets, net of accumulated depreciation .................... 426
Patents, net of accumulated amortization ......................... 12,024
------------
Total assets ..................................................... $ 82,304
============
The accompanying notes are an integral part of these statements
3
<PAGE>
ALLERGY IMMUNO TECHNOLOGIES, INC.
BALANCE SHEET, CONTINUED (UNAUDITED)
November 30,
2000
------------
Liabilities and Shareholders' Deficit
Current Liabilities
Accounts payable and accrued expenses ..................... $ 18,196
Due to affiliate .......................................... 304,948
------------
Total Current Liabilities ............................ 323,144
Shareholders' Equity
Common stock, $.001 par value authorized 50,000,000 shares,
Issued and outstanding 17,170,390 ....................... 17,170
Additional paid-in-capital ................................ 1,777,388
Accumulated deficit ....................................... (2,035,398)
------------
Total Shareholders' Deficit .................................... (240,840)
------------
Total Liabilities and Deficit .................................. $ 82,304
============
The accompanying notes are an integral part of these statements.
4
<PAGE>
<TABLE>
ALLERGY IMMUNO TECHNOLOGIES, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED NOVEMBER 30, 2000 AND 1999
<CAPTION>
2000 1999
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net loss .............................................. $ (31,378) $ (95,683)
Adjustments to reconcile net loss to net cash (used by)
provided by operating activities:
Depreciation and amortization .................... 60 1,326
Changes in current assets and liabilities:
Accounts Receivable ............................ 606 3,785
Inventory ...................................... (848) 0
Prepaid expenses and other current assets ...... 1,447 1,207
Accounts payable and other accrued liabilities . 8,651 (573)
Other receivable-consulting .................... 0 100,000
---------- ----------
Net cash (used by) provided by operating activities ... (21,462) 10,062
---------- ----------
Cash flows from investing activities:
Purchases of property and equipment .............. 0 (2,642)
---------- ----------
Net cash used in investing activities ................. 0 (2,642)
---------- ----------
Cash flows provided by financing activities:
Advances from affiliate ........................... 22,935 (9,622)
---------- ----------
Net cash provided by (used in) financing activities ... 22,935 (9,622)
---------- ----------
Net change in cash .................................... 1,473 (2,202)
---------- ----------
Cash at beginning of year ............................. 2,603 2,202
---------- ----------
Cash at end of quarter ................................ $ 4,076 $ 0
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
<TABLE>
ALLERGY IMMUNO TECHNOLOGIES, INC.
STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT (UNAUDITED)
FOR THE SIX MONTHS ENDED NOVEMBER 30, 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 - - - (31,378) (31,378)
----------- ----------- ----------- ------------ -----------
Balances at
November 30, 2000 17,170,390 $ 17,170 $ 1,777,388 $(2,035,398) $ (240,840)
=========== ============ ============ ============ ===========
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS
November 30, 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
------------------
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.
The following table illustrates the required disclosure of the
reconciliation of the numerators and denominators of the basic and
diluted EPS computations:
7
<PAGE>
<TABLE>
<CAPTION>
For the Six Months Ended November 30, 2000
---------------------------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
---------------------- ------------------- --------------------
<S> <C> <C> <C>
Basic EPS -
Loss available to common
Shareholders.............................. $(31,378) 17,170,390 ($.00)
====================
Effect of dilutive securities - Options......... - -
---------------------- -------------------
Diluted EPS -
Loss available to common share-
Holders plus assumed conversions.......... $(31,378) 17,170,390 $(.00)
====================== =================== ====================
For the Six Months Ended November 30 , 1999
---------------------------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
---------------------- ------------------- --------------------
Basic EPS -
Loss available to common
Shareholders.............................. $(95,683) 17,170,390 ($.00)
====================
Effect of dilutive securities - Options......... - -
---------------------- -------------------
Diluted EPS -
Loss available to common share-
Holders plus assumed conversions.......... $(95,683) 17,170,390 ($.00)
====================== =================== ====================
For the Three Months Ended November 30, 2000
---------------------------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
---------------------- ------------------- --------------------
Basic EPS -
Loss available to common
Shareholders.............................. $(16,202) 17,170,390 ($.00)
====================
Effect of dilutive securities - Options......... - -
---------------------- -------------------
Diluted EPS -
Loss available to common share-
Holders plus assumed conversions.......... $(16,202) 17,170,390 $(.00)
====================== =================== ====================
8
<PAGE>
For the Three Months Ended November 30, 1999
---------------------------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
---------------------- ------------------- --------------------
Basic EPS -
Loss available to common
Shareholders.............................. $(37,169) 17,170,390 ($.00)
====================
Effect of dilutive securities - Options......... - -
---------------------- -------------------
Diluted EPS -
Loss available to common share-
Holders plus assumed conversions.......... $(37,169) 17,170,390 ($.00)
====================== =================== ====================
</TABLE>
9
<PAGE>
NOTE 5
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
two quarters, a loss of $31,378 (unaudited) and had negative cash flows from
operations of $70,961 and $21,462 for the fiscal year and six months,
respectively. In addition, the Company had substantial working capital and
shareholders' deficits at November 30, 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.
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.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND SELECTED FINANCIAL DATA
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 PROVIDES A "SAFE
HARBOR" FOR FORWARD-LOOKING STATEMENTS. CERTAIN INFORMATION CONTAINED HEREIN (AS
WELL AS INFORMATION INCLUDED IN ORAL STATEMENTS OR OTHER WRITTEN STATEMENTS MADE
OR TO BE MADE BY ALLERGY IMMUNO TECHNOLOGIES) CONTAINS STATEMENTS THAT ARE
FORWARD-LOOKING, SUCH AS STATEMENTS RELATING TO ANTICIPATED FUTURE REVENUES OF
THE COMPANY AND SUCCESS OR CURRENT PRODUCT OFFERINGS. SUCH FORWARD-LOOKING
INFORMATION INVOLVES IMPORTANT RISKS AND UNCERTAINTIES THAT COULD SIGNIFICANTLY
AFFECT ANTICIPATED RESULTS IN THE FUTURE, AND ACCORDINGLY, SUCH RESULTS MAY
DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS MADE BY
OR ON BEHALF OF ALLERGY IMMUNO TECHNOLOGIES. THE POTENTIAL RISKS AND
UNCERTAINTIES INCLUDE, AMONG OTHERS, THE CONTINUED DEMAND FOR THE COMPANY'S
SERVICES, COMPETITIVE AND ECONOMIC FACTORS OF THE MARKETPLACE, HEALTH CARE
REGULATIONS AND THE STATE OF THE ECONOMY. READERS ARE CAUTIONED NOT TO PLACE
UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE
DATE HEREOF, AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE THESE
FORWARD-LOOKING STATEMENTS.
RESULTS OF OPERATIONS
Net sales for Allergy Immuno Technologies were $54,912 for the six
months ended November 30, 2000 as compared to $43,591 for the same period in the
previous year. This represents an increase of $11,321, or 26%. For the three
months then ended sales were $21,858 as compared to $18,692 in fiscal 2000. This
represents an increase of $3,166, or 17%. Cost of sales for the six months
decreased from $42,057 to $41,078, or $979 (2%). Cost of sales for the quarter
ended November 30, 2000 decreased from $18,884 to $18,013, or $871 (5%). Sales
increased for the first six months due to testing services provided by the
Company for a large company with respect to a research project they were
conducting. Cost of sales as a percentage of sales decreased from 96.5% to 74.8%
for the six months and from 101% to 82.4% for the quarter ended November 30,
2000 due to higher sales in relation to fixed costs.
10
<PAGE>
Selling, general and administrative costs for the six months ended
November 30, decreased from $97,011 in fiscal 2000 to $45,212 in fiscal 2001.
This represents a decrease of $51,799 (53%). For the quarter then ended selling,
general and administrative costs decreased from $37,307 to $20,047, or $17,260
(46%), 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.
During the first quarter of the prior fiscal year the Company received
a payment of $100,000 (which was recorded as income in the prior fiscal year)
for consulting services and an option to purchase 10,000 Class A Units of
Hollister-Stier LLC at a purchase price of $10 per unit.
LIQUIDITY AND CAPITAL RESOURCES
As of November 30, 2000, the Company had a cash balance of $4,076 as
compared to a zero cash balance in the previous year. Its current working
capital deficit is $299,290 as compared to a deficit of $187,239 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 November 30, 2000 the Company owed Biomerica $304,948.
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
two quarters, a loss of $31,378 (unaudited) and had negative cash flows from
operations of $70,961 and $21,462 for the fiscal year and six months,
respectively. In addition, the Company had substantial working capital and
shareholders' deficits at November 30, 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.
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.
11
<PAGE>
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.
The Annual Meeting of the Company's Stockholders was held on November
8, 2000. The only matter voted on was the election of directors. The following
summarizes the voting on that matter:
Name Number of Votes For
---- -------------------
Dr. Robert Orlando 13,817,458
Zackary S. Irani 13,817,458
Janet Moore 13,817,458
Item 5. OTHER INFORMATION. Inapplicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K. None.
12
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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: January 12, 2001
ALLERGY IMMUNO TECHNOLOGIES, INC.
By: /S/ Zackary S. Irani
-----------------------------
Zackary Irani,
President, Chief Executive Officer
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