<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended June 30, 1999
-------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________ to __________
Commission File Number 0-24641
-------
IMMUNOTECHNOLOGY CORPORATION
----------------------------
(Exact name of registrant as specified in 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) (Zip Code)
Issuer's telephone number, including area code (801) 399-3632
---------------
Securities registered pursuant to section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None N/A
- ------------------ -----------------------------------------
Securities registered pursuant to section 12(g) of the Act:
Common Stock, par value $0.00001
- --------------------------------
(Title of class)
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. (1) Yes [X]
No [ ] (2) Yes [X] No [ ]
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year: $-0-
<PAGE> 2
State the aggregate market value of the voting stock held by nonaffiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days:
Based on the average bid and asked prices of the common stock at October
11, 1999, of $1.00 share, the market value of shares held by nonaffiliates
would be $1,050,382.
As of June 30, 1999, the Registrant had 4,884,327 shares of common stock
issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and
the part of the form 10-KSB (e.g., part I, part II, etc.) into which the
document is incorporated: (1) Any annual report to security holders; (2) Any
proxy or other information statement; and (3) Any prospectus filed pursuant to
rule 424(b) or (c) under the Securities Act of 1933: NONE
<PAGE>
<PAGE> 3
PART I.
ITEM 1. DESCRIPTION OF BUSINESS
Business in General
- -------------------
(a) Initial Business Activities
---------------------------
The Registrant was incorporated on November 30, 1989, in the state of
Delaware. The Registrant's predecessor was LJC Corporation, a Utah
corporation, organized on November 8, 1984 ("LJC"). On October 7, 1989, LJC
acquired ImmunoTechnology Laboratories, Inc., a Colorado corporation ("ITL"),
by means of a stock-for-stock exchange with the shareholder of ITL. As a
result of this transaction, ITL became a wholly owned subsidiary of LJC. On
October 10, 1989, LJC changed its name to ImmunoTechnology Laboratories, Inc.
("ITL-UT").
At a special meeting of the shareholders of ITL-UT, the shareholders
approved a proposal to redomicile ITL-UT in the state of Delaware, by forming
a Delaware corporation and merging ITL-UT into the Delaware corporation, and
changing the its name to ImmunoTechnology Corporation. The merger was
effective on December 21, 1989. As a result of the merger, ITL-UT no longer
exists.
ITL was formed for the purpose of engaging in the business of operating a
medical test related laboratory. The Registrant's only business has been the
operation of ITL, whose operations were discontinued in 1992.
(b) Current Business Activities
----------------------------
Since discontinuing the operations of ITL, the Registrant has been
seeking potential business acquisition or opportunities to enter in an effort
to commence business operations. The Registrant does not propose to restrict
its search for a business opportunity to any particular industry or
geographical area and may, therefore, engage in essentially any business in
any industry. The Registrant has unrestricted discretion in seeking and
participating in a business opportunity, subject to the availability of such
opportunities, economic conditions, and other factors.
The selection of a business opportunity in which to participate is
complex and risky. Additionally, as the Registrant has only limited resources,
it may be difficult to find good opportunities. There can be no assurance
that the Registrant will be able to identify and acquire any business
opportunity which will ultimately prove to be beneficial to the Registrant and
its shareholders. The Registrant will select any potential business
opportunity based on management's business judgment.
The activities of the Registrant are subject to several significant risks
which arise primarily as a result of the fact that the Registrant has no
specific business and may acquire or participate in a business opportunity
based on the decision of management which potentially could act without the
consent, vote, or approval of the Registrant's shareholders. The risks faced
by the Registrant are further increased as a result of its lack of resources
and its inability to provide a prospective business opportunity with
significant capital.
<PAGE> 4
In August 1999, the Company entered into a letter of intent with Vitrex
Corporation ("Vitrex"), Ogden, Utah (the "Letter of Intent") relating to the
acquisition of Vitrex by the Company through a share exchange. The Letter of
Intent has been approved by the board of directors and is subject to entering
into a definitive acquisition agreement which will then be submitted to the
Company's shareholders for approval. Once the definitive acquisition agreement
has been executed by the parties the Company will submit an information
relating to the calling of a special meeting of shareholders for the purpose
of ratify the terms of the acquisition agreement and electing new directors
consisting of the nominees of Vitrex.
The following discussion regarding the proposed terms of the acquisition
agreement is subject to, and qualified in its entirety by, the detailed
provisions of the definitive acquisition agreement, which will be attached as
an exhibit to the notice of special meeting of shareholders and related
information statement to be mailed to shareholders of record of the Company
pending final review by the Securities and Exchange Commission.
The proposed acquisition agreement provides that the all of the issued
and outstanding shares of Vitrex common stock held by the Vitrex shareholders
will be exchanged for 9,011,696 shares of the Company's Common Stock pro rata
based on the Vitrex shareholders' percentage ownership of the Vitrex common
stock.
In connection with the proposed acquisition the Company intends to effect
a 1-for-6 reverse stock split (the "Reverse Split") of the Company's common
stock, so that shareholders of the Company prior to such Reverse Split will
receive 1 share of the Company's Common Stock for each six shares of common
stock held on the record date for the Reverse Split.
In addition, the name of the Company would be changed to "Vitrex
Corporation".
Vitrex is a information technology (IT) outsourcing company, providing
full IT outsourcing services, internet services, consulting services, network
services, training services, and software development services to businesses
with complex IT operations. Additional information regarding Vitrex is
available at http://www.vitrex.com
Competition
- -----------
Until such time as the Company completes the proposed acquisition of
Vitrex, the Company will be unable to evaluate the type and extent of its
likely competition. The Company is aware that there are several other public
companies with only nominal assets that are also searching for operating
businesses and other business opportunities as potential acquisition or merger
candidates. The Company is in direct competition with these other public
companies in its search for business opportunities.
Employees
- ---------
As of the date hereof, the Company does not have any employees and has
no plans for retaining employees until such time as the Company's business
warrants the expense, or until the Company successfully acquires or merges
with an operating business. The Company may find it necessary to periodically
hire part-time clerical help on an as-needed basis.
<PAGE> 5
Facilities
- ----------
The Company is currently using as its principal place of business the
personal residence of its Vice President and Director located in Ogden, Utah.
Although the Company has no written agreement and pays no rent for the use
of this facility. The Company believes that Vitrex has adequate existing
facilities and upon completion of the proposed acquisition the Company's
principal offices will be transferred to Vitrex's existing facilities.
ITEM 2. DESCRIPTION OF PROPERTIES
See "Facilities" under Item 1. above.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
No matters were submitted to a vote of shareholders of the Company during
the fourth quarter of the fiscal year ended June 30, 1999.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The table on the following page sets forth, for the respective periods
indicated, the prices for the Company's common stock in the over-the-counter
market as reported by the NASD's OTC Bulletin Board. The bid prices
represent inter-dealer quotations, without adjustments for retail mark-ups,
mark-downs or commissions and may not necessarily represent actual
transactions.
High Bid Low Bid
-------- -------
Fiscal Year Ended June 30, 1999
- -------------------------------
First Quarter $ 0.50 $ 0.25
Second Quarter $ 0.50 $ 0.25
Third Quarter $ 0.50 $ 0.0325
Fourth Quarters $ 0.50 $ 0.0325
Fiscal Year Ended June 30, 1998
- -------------------------------
First, Second, Third and Fourth Quarter N/A N/A
Fiscal Year Ended June 30, 1997
- -------------------------------
First, Second, Third and Fourth Quarter N/A N/A
At October 11, 1999, the Company's Common Stock was quoted on the OTC
Bulletin Board at a bid and asked price of $1.25 and $0.75, respectively.
Since its inception, the Company has not paid any dividends on its Common
Stock, and the Company does not anticipate that it will pay dividends in the
foreseeable future. At June 30, 1999, the Company had approximately 325
shareholders of record based on information provided by the Company's transfer
agent.
<PAGE> 6
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Cautionary Statement Regarding Forward-looking Statements
- ---------------------------------------------------------
This report may contain "forward-looking" statements. The Company is
including this cautionary statement for the express purpose of availing itself
of the protections of the safe harbor provided by the Private Securities
Litigation Reform Act of 1995 with respect to all such 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.
Year 2000 Disclosure
- --------------------
The Company is working to resolve the potential impact of the year 2000
on the ability of the Company's computerized information systems to accurately
process information that may be date-sensitive. Any of the Company's programs
that recognize a date using "00" as the year 1900 rather than the year 2000
could result in errors or system failures. The Company utilizes a minimum
number of computer programs in its operations. The Company has not completed
its assessment, but currently believes that costs of addressing this issue
will not have a material adverse impact on the Company's financial position.
However, if the Company and third parties upon which it relies are unable to
address this issue in a timely manner, it could result in a material financial
risk to the Company. In order to assure that this does not occur, the Company
plans to devote all resources required to resolve any significant year 2000
issues in a timely manner.
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 (see Item 11,
Security Ownership of Certain Beneficial Owners and Management). 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 the proposed acquisition of Vitrex.
However, unless the Company is able to complete the acquisition of Vitrex or
obtain outside financing, there is substantial doubt about its ability to
continue as a going concern.
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.
<PAGE> 7
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. As of the date hereof, 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.
ITEM 7. FINANCIAL STATEMENTS
The financial statements of the Company are set forth immediately
following the signature page to this form 10-KSB.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
The Company has had no disagreements with its certified public
accountants with respect to accounting practices or procedures or financial
disclosure. See ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
<PAGE>
<PAGE> 8
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The following table sets forth as of June 30, 1999, the name, age, and
position of each executive officer and director and the term of office of each
director of the Company.
Name Age Position Director or Officer Since
---- --- -------- -------------------------
John A. Wise 59 President and Director October 1989
Mark A. Scharmann 40 Vice President and Director February 1997
David Knudson 39 Secretary/Treasurer and
Director February 1997
Gerald M Haase 52 Director November 1989
The term of office of each director is one year and until his successor
is elected at the Registrant's annual shareholders' meeting and is qualified,
subject to removal by the shareholders. The term of office for each officer
is for one year and until a successor is elected at the annual meeting of the
board of directors and is qualified, subject to removal by the board of
directors.
Biographical Information
Set forth below is certain biographical information with respect to each
of the Registrant's officers and directors.
John A. Wise has been director of the Company since October 1989. Since
1991, Mr. Wise has been the Vice-President of Research and Development at
Natural Alternatives International, Inc. [NASDAQ: NAII], San Marcos,
California, a biotechnology company that formulates and produces vitamins and
related nutritional supplements.
Mark A. Scharmann has been vice-president and a director of the Company
since February 1997. Since 1979, Mr. Scharmann has been the principal owner
of Troika Capital, Inc., Ogden, Utah, a financial consulting company.
David Knudson has been the secretary/treasurer of the Company since
February 1997. From September 1994 to June 1996, Mr. Knudson was an adjunct
professor of Computer Information Systems at Weber State University, Ogden,
Utah. Since 1985, Mr. Knudson has been the principal of Twelve O Eight, a
business and computer consulting company, located in Layton, Utah.
Gerald M. Haase 52 has been a director of the Company since November
1989. Since 1979, Gerald M. Haase, has been a surgeon at Denver Pediatric
Surgeons, P.C., Denver, Colorado.
The term of office of each director is one year and until his successor
is elected and qualified at the Company's annual meeting, subject to removal
by the Shareholders. The term of office for each Officer is one year and
until a successor is elected at the annual meeting of the Board of Directors
and is qualified, subject to removal by the Board of Directors. The Company
will reimburse Directors for their expenses associated with attending
Directors' meetings. However, Directors have not, nor is it anticipated they
will, receive any additional compensation for attending Directors' meetings.
<PAGE>
<PAGE> 9
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
- -------------------------------------------------
The Company believes that under the SEC's rules for reporting of
securities transactions by directors and executive officers, all required
reports have been timely filed.
ITEM 10. EXECUTIVE COMPENSATION
The following tables set forth certain summary information concerning the
compensation paid or accrued for each of the Company's last three completed
fiscal years to the Company's chief executive officer and each of its other
executive officers that received compensation in excess of $100,000 during
such period (as determined at June 30, 1999, the end of the Company's last
completed fiscal year):
<TABLE>
<CAPTION> Summary Compensation Table
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
Other Restricted
Name and Annual Stock Options LTIP All other
Principal Position Year Salary Bonus($) Compensation Awards /SARs Payout Compensation
- ------------------ ---- ------ -------- ------------ ------ ------- ------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John A. Wise, Pres. 1999 $ -0- -0- -0- -0- -0- -0- -0-
and Chairman 1998 -0- -0- -0- -0- -0- -0- -0-
1997 -0- -0- -0- -0- -0- -0- -0-
</TABLE>
Employment Agreements and Benefits
None.
Compensation of Directors
None.
Termination of Employment and Change of Control Arrangement
None.
Options/SAR Grants in Last Fiscal Year
None.
Bonuses and Deferred Compensation
None.
Compensation Pursuant to Plans
None.
Pension Table
Not Applicable.
Other Compensation
None.
<PAGE> 10
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of June 30, 1999, the name and the
number of shares of the Company's Common Stock, par value $0.00001 per share,
held of record or beneficially by each person who held of record, or was known
by the Company to own beneficially, more than 5% of the 4,884,327 issued and
outstanding shares of the Company's Common Stock, and the name and
shareholdings of each director and of all officers and directors as a group.
Title of Name and Address Amount and Nature of Percent
Class Of Beneficial Owner Beneficial Ownership of Class
- -------- ------------------- --------------------- --------
Common Mark A. Ledoux 138,832 Direct 2.84
1185 Linda Vista Drive 143,592 Indirect (1) 2.94
San Marcos, CA 92069
Common Mark A. Scharmann 3,478,015 Direct 71.21
1661 Lakeview Circle 86,850 Indirect (2) 1.78
Ogden, UT 84403
Officers, Directors and Nominees
Common John A. Wise, President
and Director 189,541 Direct 3.88
Common Mark A. Scharmann, Vice
President and Director -------See Above-------
Common David Knudson, Secretary/
Treasurer and Director 2,000 Direct 0.04
Common Gerald M Haase, Director 77,539 Direct 1.59
All Officers, Directors, and
Nominees as a Group (4 Persons) 3,747,095 Direct 76.72
86,850 Indirect 1.78
--------- -----
3,833,945 Total Beneficial 78.50
========= =====
- --------------------------------
(1) Shares beneficially held of record by Natural Alternatives, of which Mr.
Ledoux is the controlling principal.
(2) Shares beneficially held of record by Troika Capital Investment, of which
Mr. Scharmann is the principal owner and shareholder.
<PAGE>
<PAGE> 11
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mark A. Scharmann, an officer and director of the Company has advanced
money to the Company during the year ended June 30, 1999. The advances bear
interest at a rate of 10% per annum and have no maturity date. At March 31,
1999, the Company converted its advances from the officer and a note payable
to a minority shareholders and related accrued interest of $116,448 into
3,726,331 shares of common stock or $0.03125 per share.
On April 2, 1999, the Company loaned Mr. Scharmann $10,000. The advance
is evidenced by a demand note and bears interest at the rate of 10% per annum.
At June 30, 1999, the advance to the officer had been reduced to $3,696.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a)(1)FINANCIAL STATEMENTS. The following financial statements are included
in this report:
Title of Document Page
- ----------------- ----
Independent Auditors' Report of Rose, Snyder & Jacobs 13
Balance Sheet as of June 30, 1999 14
Statements of Operations for the years ended June 30, 1999
and 1998 and from inception of the development stage, July 1, 1992
through June 30, 1999 15
Statements of Stockholders' Equity for the years ended June 30, 1999
and 1998 16
Statements of Cash Flows for the years ended June 30, 1999
and 1998 and from inception of the development stage, July 1, 1992
through June 30, 1999 17
Notes to Financial Statements 18
(a)(2)FINANCIAL STATEMENT SCHEDULES. The following financial statement
schedules are included as part of this report:
None.
(a)(3)EXHIBITS. The following exhibits are included as part of this report:
SEC
Exhibit Reference
Number Number Title of Document Location
- ------- --------- ----------------- ------------
10 10.01 Letter of Intent with Vitrex Corporation This Filing
27 27 Financial Data Schedule This Filing
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed with the Commission during the
quarter ended June 30, 1999.
<PAGE>
<PAGE> 12
SIGNATURES
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 Registrant and in the capacities and on the dates indicated:
IMMUNOTECHNOLOGY CORPORATION
Date: October 12, 1999 By /S/ John A. Wise,
President and Chairman
Date: October 12, 1999 By /S/ Mark A. Scharmann,
Vice-President and Director
Date: October 12, 1999 By /S/ David Knudson
Secretary/Treasurer and Director
<PAGE>
<PAGE> 13
INDEPENDENT AUDITORS' REPORT
To the Stockholders of
ImmunoTechnology Corporation
Ogden, Utah
We have audited the accompanying balance sheet of ImmunoTechnology
Corporation (a Delaware Corporation in the Development Stage), as of June 30,
1999, and the related statements of operations, stockholders' deficit, and
cash flows for the years ended June 30, 1999 and 1998 and the period from
inception of the development stage (July 1, 1992) through June 30, 1999. These
financial statements are the responsibility of the Corporation's management.
Our responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of ImmunoTechnology
Corporation (a Development Stage Company) as of June 30, 1999, and the results
of its operations and its cash flows for the years ended June 30, 1999 and
1998 and the period from the inception of the development stage (July 1, 1992)
through June 30, 1999, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company does not generate revenue and has a new
capital deficiency that raises substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also
described in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Rose, Snyder & Jacobs
A Corporation of Certified Public Accountants
Encino, California
August 30, 1999
<PAGE>
<PAGE> 14
IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
JUNE 30, 1999
ASSETS
1999
-----------
CURRENT ASSETS
Cash $ 991
Advance to officer 3,696
-----------
TOTAL ASSETS $ 4,687
-----------
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accrued expenses $ 24,506
-----------
TOTAL CURRENT LIABILITIES 24,506
-----------
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 - 4,884,327 11,617
Paid in capital 239,163
Accumulated deficit prior to the development stage (151,332)
Accumulated deficit during the development stage (119,267)
-----------
TOTAL STOCKHOLDERS' DEFICIT (19,819)
-----------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $ 4,687
===========
See independent auditors' report and notes to financial statements.
<PAGE>
<PAGE> 15
IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
From inception of
the development
stage, July 1, 1992
through
1999 1998 June 30, 1999
------------ ------------ ---------------
REVENUE $ - $ - $ -
COST OF REVENUE - - -
------------ ------------ ---------------
GROSS PROFIT - - -
OPERATING EXPENSES
Professional fees 32,802 27,828 74,333
Taxes and licenses 144 50 1,482
Bank fees and service charges 125 1,524 1,719
Meals and entertainment - 300 300
Travel 10,827 15,591 26,418
Office expense 1,488 5,963 7,451
Interest expense, net 4,955 2,609 7,564
------------ ------------ ---------------
TOTAL OPERATING EXPENSES $ 50,341 $ 53,865 $ 119,267
------------ ------------ ---------------
NET LOSS $ (50,341) $ (53,865) $ (119,267)
============ ============ ===============
BASIC LOSS PER COMMON SHARE$ (.02) $ (.05)
============ ============
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES 2,087,026 1,157,996
============ ============
See independent auditors' report and notes to financial statements.
<PAGE>
<PAGE> 16
IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
<TABLE>
<CAPTION>
Accumulated
Common Additional Deficit Prior Accumulated
Stock Paid-in to Deficit After
Par Value Capital July 1, 1992 July 1, 1992 Total
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Balance at July 1, 1992 $ 11,580 $ 122,752 $ (151,332) $ - $ (17,000)
Activity July 1, 1992
through June 30, 1997 - - - (15,061) (15,061)
------------ ------------ ------------ ------------ ------------
Balance at July 1, 1997 11,580 122,752 (151,332) (15,061) (32,061)
Net loss - - - (53,865) (53,865)
------------ ------------ ------------ ------------ ------------
Balance at June 30, 1998 11,580 122,752 (151,332) (68,926) (85,926)
Issuance of common stock upon
conversion of debt, note 5 37 116,411 - - 116,448
Net loss - - - (50,341) (50,341)
------------ ------------ ------------ ------------ ------------
Balance at June 30, 1999 $ 11,617 $ 239,163 $ (151,332) $ (119,267) $ (19,819)
============ ============ ============ ============ ============
</TABLE>
See independent auditors' report and notes to financial statements.
<PAGE>
<PAGE> 17
IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
From Inception
of the
Development
Stage, July 1
1992 through
1999 1998 June 30, 1999
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (50,341) $ (53,865) (119,267)
Adjustment to reconcile net loss to
net cash used in operating
activities
Increase (decrease) in accrued
expenses (1,450) 9,147 14,213
----------- ----------- -----------
NET CASH USED IN OPERATING ACTIVITIES (51,791) (44,718) (105,054)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Advance to an officer (10,000) - (10,000)
Repayment of advance to an officer 6,304 - 6,304
----------- ----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (3,696) - (3,696)
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from officer 55,125 40,566 102,241
Proceeds from notes payable - 5,000 7,500
----------- ----------- -----------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 55,125 45,566 109,741
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH (362) 848 991
CASH AT BEGINNING OF YEAR 1,353 505 -
----------- ----------- -----------
CASH AT END OF YEAR $ 991 $ 1,353 $ 991
=========== =========== ===========
Supplementary disclosures:
Interest paid in cash $ 1,000 $ 660 $ 1,660
=========== =========== ===========
See independent auditors' report and notes to financial statements.
<PAGE>
<PAGE> 18
IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
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. Presently, the Company
has no operations.
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 year ended June 30, 1999, 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 year ended June 30, 1999, the Company
funded its disbursements by loans from an officer and other individuals.
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.
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 (see note 7).
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 amount 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 June 30,1999 total approximately $270,000 and expire
between June 30, 2004 and June 30, 2014. Loss carryforwards are limited in
accordance with the rules of change in ownership.
3. RELATED PARTY TRANSACTIONS
An officer of the Company advanced money to the Company during the year ending
June 30, 1999. The advances are bearing interest at a rate of 10%. At March
31, 1999, the advances and related accrued interest were converted into shares
of common stock (see Note 5).
See Independent Auditors' Report
<PAGE> 19
IMMUNOTECHNOLOGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
3. RELATED PARTY TRANSACTIONS (Continued)
On April 2, 1999, the Company loaned an officer of the Company $10,000. This
advance is interest bearing at 10%. The balance of this advance at June 30,
1999 is $3,696.
4. NOTES PAYABLE
The Company had notes payable with minority shareholders for a total of
$7,500. These notes were bearing interest at 10%. At March 31, 1999 these
notes payable and related accrued interest were converted into shares of
common stock (see Note 5).
5. COMMON STOCK
In January 1998, the Company recorded a reverse split on a 1-for-10 basis of
its outstanding shares. The total of 11,579,960 outstanding shares of common
stock was converted to 1,157,996.
On March 31, 1999, the Company converted its advances from the officer, notes
payable to minority shareholders and related accrued interest totaling
$116,448 into 3,726,331 shares of common stock at $0.03125 per share.
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 $15,000.
7. SUBSEQUENT EVENT
On August 9, 1999, Vitrex Corporation approved a letter of intent with
ImmunoTechnology Corporation, which provides for a merger transaction between
Vitrex and the Company. Upon completion of the proposed merger transaction,
the Company will change its name to Vitrex Corporation.
Under the proposed terms of the merger transaction, the Company would acquire
all of the issued and outstanding shares of capital stock of Vitrex
Corporation in exchange for 9,011,696 shares of the Company's common stock,
calculated after a 1 for 6 reverse stock split. This split would result in
the existing shareholders owning 814,054 shares before the merger.
See independent auditors' report.
<PAGE> 1
EXHIBIT 10.01 - LETTER OF INTENT WITH VITREX CORPORATION
ImmunoTechnology Corporation
1661 Lakeview Circle
Ogden, UT 84403
July 22, 1999
Board of Directors
Vitrex Corporation
127 - 24th Street, Suite #1
Ogden, Utah 84402
Re: Letter of Intent to Acquire all Issued and Outstanding Stock of Vitrex
Corporation
Gentlemen:
The Board of Directors of ImmunoTechnology Corporation (hereafter "Immuno"),
hereby proposes to acquire all of the issued and outstanding stock of Vitrex
Corporation (hereafter referred to as "Vitrex"), a privately held Utah
corporation, upon the following terms:
1. Stock Exchange. Immuno will acquire all of the issued and outstanding
shares of capital stock of Vitrex in exchange for 9,011,696 shares of Immuno
Common Stock, calculated after a 1 for 6 reverse stock split, pursuant to the
provisions of Section 368(a)(1)(B) of the Internal Revenue Code, in connection
with a tax free reorganization. The shares will be issued pursuant to Section
4(2) of the Securities Act of 1933, as amended, and under corresponding
applicable state law. The parties acknowledge that it is their intent,
subject to the provisions hereof, for Immuno to acquire all of the issued and
outstanding stock of Vitrex.
2. Management. At the time of closing, the current officers and directors of
Immuno will resign and the designates of Vitrex will be appointed as officers
and directors of Immuno.
3. Definitive Agreement. This Letter of Intent is a non-binding indication
of the parties' proposal to effect an acquisition of Vitrex by Immuno.
Subject to the fulfillment of all conditions set forth herein, the parties
intend to enter into a definitive Agreement and Plan of Reorganization setting
forth all applicable terms of the acquisition with standard representations
and warranties. Either party hereto may, without incurring obligation or
liability to the other party, terminate this Letter of Intent at any time
prior to the signing of a definitive Agreement and Plan of Reorganization.
Any termination of this Letter of Intent, except by its own terms, must be in
writing and mailed to the other party by first class US mail.
4. Change of Name. The name of Immuno will be changed to "Vitrex
Corporation," or such other name as is selected by the parties and approved by
the shareholders of Immuno.
5. Reverse Stock Split. Immuno will effect a 1 for 6 reverse stock split in
connection with the acquisition of Vitrex.
6. Conditions Precedent. The acquisition of Vitrex by Immuno proposed herein
is subject to the following conditions:
<PAGE> 2
A. The approval of the proposed acquisition and related transactions by the
shareholders of Immuno. A special meeting of the shareholders of Immuno will
be called for as soon as practical to consider the proposed acquisition, a
change of Immuno's name, and the election of directors as designated by
Vitrex.
B. The approval of the proposed acquisition and related transactions by the
owners of all issued and outstanding shares of Vitrex.
C. Compliance with all applicable federal and state securities laws.
D. The delivery to Immuno by Vitrex of financial statements of Vitrex and
its predecessors for the last three (3) fiscal years and for a period ending
within 60 days from the date hereof, and such other financial statements of
Vitrex as are necessary to comply with the requirements of the Securities and
Exchange Commission.
E. The delivery of such documents and information as are reasonably
requested by each party.
F. The execution of a definitive Agreement and Plan of Reorganization
containing all representations contained herein and other representations and
warranties which are standard in similar transactions.
7. Representations.
A. Immuno and Vitrex will be duly organized and in good standing in their
respective states of organization at the time of closing.
B. All certificates evidencing shares of Immuno issued to the shareholders
of Vitrex will be legended as restricted under rule 144 as promulgated under
the Securities Act of 1933, as amended.
C. Each company shall deliver such documents and financial statements to
the other company as is reasonably requested prior to closing of the
transaction.
D. All shares of Immuno Common Stock issued in connection with the proposed
acquisition will be fully paid and non-assessable.
E. The total number of shares of Immuno to be issued and outstanding
immediately prior to closing will not exceed 1,000,000, taking into effect a 1
for 6 reverse stock split, exclusive of shares to be issued for finder's fees.
8. Information. Vitrex agrees to cooperate in providing and explaining the
following information with respect to the transaction contemplated herein:
A. History and business background of Vitrex and any subsidiary
corporations. This shall include a general discussion of the business of
the Company, including plans for future business, market for products, and
a brief historical background of the formation or acquisition of the company
and business involved.
B. Detailed business biographical information for the last five years for
each of the proposed new members of Immuno management.
C. Financial statements of Vitrex as referred to in Paragraph 6(D) of this
Letter of Intent.
<PAGE> 3
9. Closing. Immediately after the shareholders meeting of Immuno, provided
that the shareholders of Immuno approve this transaction, a closing shall be
held with regard to this transaction, wherein a detailed Agreement and Plan
of Reorganization shall be executed along with the appropriate change of
domicile documentation. At the Closing, Immuno shall deliver minutes of a
meeting of the Board of Directors and stockholders of Immuno authorizing and
approving the transactions set forth herein along with appointment of new
management and such other matters as are deemed necessary to consummate this
transaction. At the closing, all assets, bank accounts and other records
and information of Immuno shall be turned over to new management.
10. News Releases and Communications. As soon as practicable, after the
date of execution hereof, Immuno and Vitrex may issue a press release to
their shareholders, the financial community, and other interested parties
describing this agreement and the proposed transaction.
11. Conduct of Business. The parties hereto hereby agree to conduct their
business in accordance with the usual and normal course of business heretofore
conducted by the companies. Thus, there will be no material adverse changes
in the business of either company from the date hereof until the closing of
this transaction and there will be no changes in either company's Articles of
Incorporation or Bylaws.
12. Capital Stock. Immuno hereby represents that it has two types of
authorized stock, its $.00001 par value voting Common Stock, of which
50,000,000 shares are authorized and 6,000,000 are issued and outstanding,
and its $.00001 par value non-voting Preferred Stock, of which 5,000,000
shares are authorized and 0 are issued and outstanding. Immuno will in
connection with the acquisition proposed herein, effect a 1 for 6 reverse
stock split reducing the number of shares issued and outstanding to 1,000,000.
13. Responsibility and Costs. Immuno agrees to pay for all legal and other
work in connection with its part of the proposed acquisition, the
stockholders meeting, and other corporate proceedings up through and including
the closing. It is estimated that Immuno's expense will be approximately
$20,000. Vitrex will pay for all of its costs in connection with the proposed
acquisition.
14. Options. Immuno will in connection with the acquisition proposed herein
grant Troika Capital, Inc. an option to purchase 200,000 shares of Immuno
Common Stock, calculated after a 1 for 6 reverse stock split, at an exercise
price of $0.50 per share. Such options shall expire five years after the
closing date of the acquisition proposed herein.
15. Assistance. All parties hereto agree to take whatever reasonable steps
are required to facilitate the consummation of the transaction contemplated
herein, including discussing the matter with members of the financial
community, stockholders and other interested parties and including the
exchange of corporate records, documents and filings.
16. Termination. The Letter of Intent shall automatically terminate ten
(10) days after the date hereof unless accepted by you and, after acceptance,
shall terminate on August 20, 1999, unless extended by the written agreement
of the parties hereto. Upon termination, neither party shall have any further
obligation to the other under this agreement.
<PAGE>
<PAGE> 4
This letter sets forth our understanding of the proposed terms of the
transaction and is not a binding agreement on either party. If it represents
your understanding of the terms of our preliminary agreement, please sign on
the below-designated line and send us a copy.
ImmunoTechnology Corporation
By /S/ [Sic]
- ---------------------------
Its Duly Authorized Officer
The undersigned, president and director of Vitrex Corporation, hereby agrees
this Letter of Intent sets forth our preliminary agreement regarding the
matters set forth herein.
Dated: August [Sic], 1999
Vitrex Corporation
By /S/Jerry Ropaleto
- --------------------------
President
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