Immunosyn (IMYN) 10-K 2008 FY Annual report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2008

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number 005-82677

IMMUNOSYN CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware	20-5322896
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

4225 Executive Square, Suite 260, La Jolla, CA 92037	92037
(Address of Principal Executive Offices)	(Zip Code)

(888) 853-3663

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  Common Stock

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ¨ No x

Note—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.

Indicate by check mark if the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements  incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of  “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large Accelerated Filer  ¨         Accelerated Filer  x         Non-Accelerated Filer  ¨         Smaller reporting Company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes ¨ No x

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of June 30, 2008 was approximately $140,434,214.  

As of March 12, 2009, the Company had 272,200,976 issued and outstanding shares of Common Stock.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents of the Issuer are incorporated by reference in this Report: NONE

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act.  All statements other than statements of  historical facts included in this report, regarding the Company’s financial position, business strategy,  plans and objectives, are forward-looking statements.  Although the Company believes that the expectations reflected in the forward-looking statements and the assumptions upon which such forward-looking statements are based are reasonable, it can give no assurance that such expectations and assumptions will prove to have been correct.

In addition, from time to time in the future, the Company may publish “forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act or make oral statements that constitute forward-looking statements. These forward-looking statements may relate to such matters as anticipated financial performance, future revenues or earnings, business prospects, projected ventures, new products, anticipated market performance, and similar matters.

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company cautions readers that a variety of factors could cause the Company’s actual results to differ materially from the anticipated results or other expectations expressed in the Company’s forward-looking statements. These risks and uncertainties, many of which are beyond the Company’s control, include, but are not limited to: (i) the Company’s ability to raise financing to fund its development; (ii) the effects of the economy on the Company’s ability to find and maintain financing options and liquidity; (iii) general economic conditions, both domestic and international; (iv) the Company’s ability to obtain FDA and other regulatory approvals for SF-1019 and other products it my acquire or develop; (v) competition from existing pharmaceutical, chemical and biotech companies and other participants in the drug markets; (vi) legal developments affecting the litigation experience of the Company, (vii) the effectiveness of the Company’s efforts to hire qualified personnel, (viii) changes in regulatory requirements which could affect the cost and method of doing business, (ix) the Company’s ability to achieve its business plan, (x) corporate governance issues, (xi) credit, operations, legal and regulatory risks; and (xii) risks related to foreign operations. There can be no assurance that the Company has correctly or completely identified and assessed all of the factors affecting the Company’s business. The Company does not undertake any obligation to publicly update or revise any forward-looking statements. See also Item 1A – Risk Factors.

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PART I

Item 1. Business.

About Immunosyn Corporation; Background and History

Immunosyn Corporation (“Immunosyn” or the “Company”) is a Delaware corporation headquartered in La Jolla, California that owns an exclusive worldwide license to market, distribute and sell a biopharmaceutical drug product, currently referred to as SF-1019, for multiple uses including the treatment of any and all diseases and pathological conditions, subject to receipt of appropriate regulatory approval in each jurisdiction where SF-1019 will be marketed.  Under the terms of its exclusive license, the Company is further granted the rights to any improvement of SF-1019 and other compounds which are developed under the same technology platform and which are chemically similar to SF-1019.  The Company is in the development stage and, to date, has no revenues from SF-1019 or otherwise.

The exclusive license for SF-1019 has been granted to Immunosyn by Argyll Biotechnologies, LLC (“Argyll Biotech”).  Argyll Biotech is a closely-held Delaware limited liability company, headquartered in La Jolla, California, that owns and controls worldwide rights to SF-1019.  SF-1019 has not been approved for human use in any jurisdiction.  Argyll Biotech is preparing to conduct clinical trials, develop manufacturing protocols and, if possible, apply for regulatory approval of SF-1019’s use.  Through a series of private investments, Argyll Biotech and its affiliates and other persons have provided the funding to bring SF-1019 from its inception to preliminary experimental research.  Argyll Biotech intends to continue to manage and fund the process for research, product development, clinical testing and regulatory approval of SF-1019, including refinement for additional uses.  SF-1019 is the first such product that Argyll Biotech hopes to bring into the marketplace through these efforts.  Argyll Biotech received 147,000,000 shares of Common Stock of the Company for its license fee and is the Company’s largest shareholder

Immunosyn’s primary asset is its exclusive worldwide license from Argyll Biotech to market, distribute and sell SF-1019.  The Company also has the right of first offer to enter into additional license agreements for uses of other compounds which are not already covered under the existing license agreement.  Argyll Biotech has also retained Professors Jonathan Heeney, Professor of Comparative Pathology at University of Cambridge, England, and Angus Dalgleish, Chair of Oncology, Gastroenterology and Endocrinology at St. George’s Hospital Medical School, London, England, who are both well known anti-viral researchers and immuno-pathology specialists, as its scientific advisors.  We believe that the combined experience of all of Argyll Biotech’s scientific advisory board members should provide substantial guidance toward achieving approval of SF-1019 for marketing, distribution and sale to the target market.

SF-1019 is an experimental extract from caprine (goat) serum containing a number of unique lipopeptide molecules.  Argyll Biotech’s consultants first identified the precursor to SF-1019 in the mid-1990’s, which they believed to be an effective booster and modulator of an individual’s immune system.  Subsequent research by such consultants revealed that the precursor to SF-1019 had potential efficacy in the regulation and normalization of an individual’s immune system response to multiple viral pathologies, including Human Immunodeficiency Virus (“HIV”).  Argyll Biotech intends to develop SF-1019 for treatment of diabetes and Chronic Inflammatory Demyelinating Polyneuropathy (“CIDP”) first and then other diseases, and Immunosyn will be responsible for commercializing SF-1019 when and as approval for such treatment is procured.

Argyll Biotech is responsible for all research and product development, clinical testing, regulatory approvals, production and product support.  Argyll Biotech anticipates that it will commence clinical trials and studies of SF-1019 and prepare and submit all filings required for regulatory approval of that product for treatment of various diseases including CIDP, RSD, diabetic neuropathy and diabetic ulcers, both in the United States and in other countries that are targeted for distribution and sale of the product.  The Company believes that a limited proof of concept trial began in Europe for treatment of diabetic ulcers with SF-1019.  It is expected that larger-scale independently-managed formal clinical trials will begin in the second half of 2009.  The Company believes that a limited feasibility clinical study of SF-1019 was conducted in the U.S. for treatment of CIDP and RSD as well.  Argyll Biotech has also retained a consulting firm to provide clinical and regulatory consulting services in support of the marketing authorization process by the US FDA.

Immunosyn’s exclusive license agreement with Argyll Biotech shall remain in full force and effect for the later of 10 years from the date when SF-1019 is first commercially sold or the date when the patent coverage for SF-1019 expires, which in most jurisdictions is generally for twenty (20) years from the date of filing.  Either party may terminate the agreement only on account of an uncured material breach by the other party.  Immunosyn may terminate the agreement if a non-rebuttable regulatory or patient safety issue is raised.  Any fees paid prior to termination are non-refundable.

Immunosyn is a development stage company that was incorporated in August 2006 in order to work as Argyll Biotech’s sales, marketing and distribution channel for SF-1019.  Although Immunosyn cannot guarantee that Argyll Biotech will successfully conclude development of SF-1019, Immunosyn is hopeful that its initial product offering based on SF-1019 will be an effective and affordable treatment for the maintenance and enhancement of the quality of life for patients suffering from CIDP, diabetic neuropathy, diabetic ulcers and other diseases.

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As a sales, marketing, and distribution channel for Argyll Biotech’s treatment for various diseases including CIDP, diabetic neuropathy and diabetic ulcers, Immunosyn’s primary business strategy is to build a sales and marketing force and related resources so that if and when SF-1019 is approved for human use it can be sold; and secondly, to increase awareness and acceptance of SF-1019 in the CIDP and diabetes treatment communities.

Business

CIDP is a neurological disorder characterized by slowly progressive weakness and a loss of sensation in the legs and arms.  CIDP is more common in young adults, and it affects men more than women.  Symptoms include tingling or numbness (beginning in the toes and fingers); weakness of the arms and legs; aching pain in the muscles; loss of deep tendon reflexes; fatigue; and abnormal sensation.  CIDP is similar to Guillain-Barré-Strohl-Landry syndrome, which appears suddenly and generally improves spontaneously.  Although CIDP was once called “chronic Guillain-Barré syndrome,” it is now regarded as a related, but distinct condition.  The course of CIDP varies widely among individuals.  Some may have a bout of CIDP followed by spontaneous recovery, while others may have many bouts with partial recovery in between relapses.

Diabetes mellitus refers to a family of diseases featuring high glucose levels caused by the body’s inability to produce and/or utilize insulin.  According to National Diabetes Education Program, the July 2008 estimate of prevalence or total number of cases of diabetes in adults in the U.S. is 23.6 million, or 7.8 percent of the U.S. population, including 5.7 million undiagnosed cases.  According to the same source, it is estimated that an additional 1.6 million adults are diagnosed with diabetes each year.  See http://www.ndep.nih.gov/diabetes/pubs/FS_GenSnapshot.pdf.

One of the most severe complications of diabetes is lower-limb amputation, which is caused by diabetic ulcers.  These ulcers form as a result of diabetic neuropathy, or peripheral neuropathy, a nervous system disease evident in 60% of diabetic patients (Caring For Diabetes Educational Forum;  http://www.caringfordiabetes.com/T&P/MicroComplications/T_P_Neuropathy.cfm).  According to the National Diabetes Education Program, diabetic neuropathy causes micro-vascular damage that can result in loss of protective sensation in the feet, poor circulation and foot ulcers.

According to Diabetes Atlas, third edition © International Diabetes Federation, 2006 and www.diabetes.niddk.nih.gov , globally, an approximated 246 million people have diabetes mellitus, of which an estimated 50% have diabetic neuropathy (DN) and one in six will develop a foot ulcer.

We believe that SF-1019 is a new category of drug that may be characterized as an “Immunomodulator.”  Many disease pathologies that affect individuals are the result of an over-active immune system.  Specifically, when a viral agent begins to adversely affect an individual’s cells, the immune system frequently becomes overactive, which destroys the viral agent but also injures surrounding healthy cell structures.  Other disease pathologies suppress an individual’s immune system, which allows other diseases and agents to kill healthy cells.  We believe that SF-1019 regulates an individual’s immune system to prevent it from both over-reacting and under-reacting to a viral invasion of an individual’s body systems.

We believe that SF-1019 contains a number of unique lipopeptide molecules which neutralize viral pathogens and their inhibitory properties by activation of a cytokine system.  This, in turn, enhances an individual’s cell mediated immunity and augments the individual’s humoral immune system by eliminating negative inhibitory cytokine factors and eliminates pathogenic free-floating organisms, while simultaneously sparing normal and healthy cells.

Argyll Biotech’s core objective is the continued development of SF-1019 and its cognates and variants for treatment of multiple medical conditions.  Rather than detract from its core proficiency, Argyll Biotech’s founders and its scientific and advisory team elected to license the marketing, distribution and sale of SF-1019 and other products to another entity, whose strategy would be to target key markets and demographics for treatment with SF-1019 and its cognates and variants.  The exclusive license agreement between Argyll Biotech, as the licensor, and Immunosyn, as the licensee, is a result of that decision.

The Argyll Biotech License Agreement

The Company is in the development stage and has only engaged in organizational and fundraisingactivities to date.  Its principal asset is the exclusive worldwide license with Argyll Biotech.  The Company intends to develop its operations so that it is in a position to market, distribute and sell SF-1019 as soon as appropriate regulatory approvals are received by Argyll Biotech for SF-1019.  The key terms of the exclusive license agreement with Argyll Biotech are as follows:

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Grant of Rights

Argyll Biotech has granted Immunosyn the exclusive worldwide right to market, sell, distribute and promote SF-1019 in its current form for multiple uses including the treatment of any and all diseases and pathological conditions, including Chronic Inflammatory Demyelinating Polyneuropathy (CIDP), Diabetic Neuropathy (DN) and diabetic ulcers (DU).  Argyll Biotech has also licensed its trademarks to Immunosyn.  Immunosyn is further granted the rights to any improvement of SF-1019 and other compounds, which are developed using the same technology platform and which are chemically similar to SF-1019.  Finally, during the first five years of the term of the exclusive license agreement, Immunosyn has a right to enter into partnering arrangements with Argyll Biotech for development of other novel drug treatment products.

Development and Regulatory Matters

Argyll Biotech expects to commence clinical trials of SF-1019 both in the United States and in selected other countries around the world and in connection therewith to prepare and submit filings necessary to conduct clinical trials at least initially for the treatment of one or more of CIDP, diabetic neuropathy and diabetic ulcers in those countries that are targeted for distribution and sale of the product.  After commencement of a clinical trial, Argyll Biotech expects to provide periodic reports to Immunosyn documenting its efforts toward procuring regulatory approval of SF-1019, as well as clinical budgets and strategic plans for obtaining approval for sale of the product and thereafter for each year during which development efforts are conducted.  Argyll Biotech will remain responsible for preparation and implementation of the clinical trials including trial protocols and regulatory activities, and for costs associated with those activities.

Distribution and Promotion

Immunosyn will assume responsibility for the promotion and sale of SF-1019 for its approved uses.  To accomplish this, Immunosyn expects to establish a sales force and an order processing and distribution network for each country in which Argyll Biotech receives appropriate regulatory approval for the sale of SF-1019.  Immunosyn will also develop marketing plans for sales and distribution of SF-1019 in each such country, although Argyll Biotech will retain a right to participate in all marketing and promotion activities.  Each party is responsible for its own costs associated with these activities.

License Fees

Immunosyn issued 147,000,000 shares of its Common Stock to Argyll Biotech in 2006 which Argyll Biotech has sold or expects to sell to raise funds for product development and regulatory approval for SF-1019 and other uses.  The license fee was earned when paid and there are no restrictions on the release or use of the proceeds received by Argyll Biotech from the sale of Immunosyn’s shares, and these proceeds may be used at Argyll Biotech’s sole discretion for any purpose.  No refund will be owed by Argyll Biotech in the event the cost of development and regulatory approval is substantially less than the fee, nor are there any penalties owed by Argyll Biotech if it fails to complete product development or obtain regulatory approval for its distribution.

Payments and Reports

Argyll Biotech is not obligated to provide to Immunosyn an accounting for its use of proceeds, nor does Immunosyn have any audit rights to inspect Argyll Biotech’s use of the license proceeds.

Manufacture and Supply

Argyll Biotech retains responsibility for manufacturing and supplying all of Immunosyn’s requirements of SF-1019.  Argyll Biotech and Immunosyn have agreed that the purchase price of SF-1019 sold by Argyll Biotech to Immunosyn will be forty percent (40%) of the gross sales price that Immunosyn sells SF-1019 to a third party consumer for.  Argyll Biotech shall also confirm through testing and other programs that the commercial quantities of SF-1019 that it manufactures are fully compliant with all manufacturing and laboratory standards applicable to drug products which are intended for use in humans.

Intellectual Property Ownership

Argyll Biotech retains ownership of its intellectual property either through assignment or exclusive license and, under the exclusive license agreement with Immunosyn, ownership of including intellectual property jointly-developed by the parties.  Argyll Biotech will take reasonable and necessary steps to protect its intellectual property from third-party infringement, and will defend Immunosyn against charges of infringement that refer, relate or pertain to Immunosyn’s marketing, sale and distribution of SF-1019.

Publication and Confidentiality

Argyll Biotech and Immunosyn have agreed to share information on scientific and medical reports relating to the business, operations, research and development and clinical trial results of SF-1019.

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Recall and Indemnification

The exclusive worldwide license agreement provides that Argyll Biotech is to retain responsibility for costs and activities relating to any recall of SF-1019, and will defend, indemnify and hold Immunosyn harmless for, from and against damages associated therewith.

Term and Termination

The exclusive worldwide license agreement provides that, unless sooner terminated, it is to remain in full force and effect for the later of 10 years from the date when SF-1019 is first commercially sold or the date when the patent coverage for SF-1019 expires in any country, which in most jurisdictions is twenty (20) years from the date of filing of a patent application on a country-by-country basis.  Either party may terminate the agreement only on account of an uncured material breach by the other party.  Immunosyn may terminate the agreement if a non-rebuttable regulatory or patient safety issue is raised, in which event all remaining license fee obligations will immediately be cancelled.  

Government Regulations

The United States Federal Food and Drug Administration (the “FDA”) and comparable regulatory agencies in foreign countries, as well as drug regulators in state and local jurisdictions, impose substantial requirements upon clinical development, manufacture and marketing of pharmaceutical products.  These agencies and other federal, state and local entities regulate research and development activities and the human testing, manufacture, quality control, storage, records and reports, conditions of approval and marketing, including claims, labeling, and advertising and promotion of Argyll Biotech’s SF-1019, as well as any other products that either Argyll Biotech or Immunosyn may independently develop or may otherwise license for marketing and distribution.

The process required by the FDA under the drug provisions of the United States Food, Drug, and Cosmetic Act before any initial products may be marketed in the United States generally involves the following:

· Preclinical laboratory and animal tests;

· Submission of an Investigational New Drug Application (“IND”), which must become effective before human clinical trials may begin;

· Adequate and well-controlled human clinical trials to provide substantial evidence of the safety and efficacy of the product candidate for its intended use;

· Submission to the FDA of a New Drug Application (“NDA”); and

· FDA review and approval of a NDA and final product labeling.

The testing and approval process requires substantial time.  Preclinical tests include laboratory evaluation of the product candidate, its chemistry, formulation and stability, as well as animal studies to assess the potential safety and efficacy of the product candidate.  Certain preclinical tests must be conducted in compliance with good laboratory practice regulations.  Failure to conduct preclinical studies not in accord with good laboratory practice regulations can, in some circumstances, lead the FDA to require such studies to be replicated.  Often, long-term preclinical studies required for NDA approval are conducted while clinical studies are ongoing.

Argyll Biotech must submit the results of preclinical tests, together with manufacturing information and analytical data and a complete clinical investigational plan, to the FDA as part of an IND, which must become effective before any clinical trials can begin in the United States.  Analogous requirements are in place in the countries of the European Union and in the United Kingdom, where Argyll Biotech is preparing to conduct preclinical and clinical studies.  If the FDA or its foreign equivalent raises questions about an IND within a certain period of time after its submission, that regulatory body may impose a clinical hold, thereby delaying the initiation of the study.  In such a case, the IND sponsor and the regulatory authority must resolve any outstanding scientific questions before clinical trials can begin.  All clinical trials must be conducted under the supervision of a qualified investigator in accordance with good clinical practice regulations for the protection of human subjects.  These regulations include the requirement that all subjects be provided with adequate information for informed consent.  Further, an independent Institutional Review Board (“IRB”) must review and approve any clinical investigational plan prior to study initiation.  The IRB also continues to monitor the study and must be kept aware of the study’s progress, particularly as to adverse events and changes in the research program.  Certain adverse events that may occur in an on-going clinical trial must be reported promptly to the FDA and progress reports detailing the status and results of the clinical trials, and any new information of which the sponsor becomes aware, must be submitted at least annually to the FDA or its foreign equivalent.

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Clinical trials are typically conducted in three sequential phases that may overlap:

· Phase I:  The drug is initially introduced into healthy human subjects or patients and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion.

· Phase II:  The drug is studied in a limited patient population to identify possible adverse effects and safety risks, to determine the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.

· Phase III:  When Phase II evaluations demonstrate that a dosage range of the drug is effective and has an acceptable safety profile, Phase III trials are undertaken to further evaluate dosage and clinical efficacy and to further test for safety in an expanded patient population, often at geographically dispersed clinical study sites.

Concurrent with preclinical studies and clinical trials, Argyll Biotech must develop information about the chemistry and physical characteristics of SF-1019 and must finalize a process for manufacturing this product in accordance with current good manufacturing practice (“cGMP”) requirements.  The manufacturing process must be capable of consistently producing quality batches of SF-1019 and Argyll Biotech must develop validated methods for testing the identity, quality, purity and potency of the drug candidate.  Additionally, appropriate packaging must be selected and tested and chemistry stability studies must be conducted to demonstrate that the SF-1019 product does not undergo unacceptable deterioration over its shelf life.

In August 2008, the Company announced that it had elected to delay pursuit of agreements for the administration and distribution of SF-1019 in the State of Utah.  In addition, the Company subsequently elected to delay the pursuit of agreements for the administration and distribution of SF-1019 to all populations in Malaysia.

In November 2008, a physician submitted a physician-sponsored IND application to the US Food and Drug Administration for a Phase II clinical trial for Multiple Sclerosis utilizing SF-1019.  If the submitting doctor is successful in gaining approval for his clinical trial, Argyll Biotech intends to supply SF-1019 at no cost to the physician for use in the trial.

We understand that Argyll Biotech intends to submit the results of SF-1019 product development, pre-clinical studies and clinical studies to the FDA or its foreign equivalent as part of an NDA for approval of the marketing and commercial shipment of the product.  The appropriate regulatory authority will review each NDA submitted and may request additional information, rather than accept the NDA for filing.  In this event, the application must be resubmitted with additional information.  The resubmitted application is also subject to review before the regulatory body accepts it for filing.  Once the NDA is accepted, the regulatory agency begins an in-depth review of the NDA.  Regulatory agencies have substantial discretion in the approval process and may disagree with Argyll Biotech’s interpretation of the data submitted in the NDA.  The review process may be significantly extended by the regulatory agency’s requests for additional information or clarification regarding information already provided.  Also, as part of the review, the regulatory agency may refer the application to an appropriate advisory committee, typically a panel of clinicians, for review, evaluation and a recommendation.  Manufacturing establishments also are often subject to inspections prior to NDA approval to assure compliance with GMPs and with manufacturing commitments made in relevant marketing applications.

In the United States, under the Prescription Drug User Fee Act (“PDUFA”), submission of an NDA with clinical data requires payment of a user fee.  For fiscal year 2008, that fee was $1,178,000 for applications requiring clinical data.  Similar fees and requirements are in place in foreign jurisdictions.  In return, the relevant regulatory agencies assign time goals for reviewing NDAs prior to issuing a “complete response” in which an NDA may be approved, or denied if the regulatory agency’s criteria are not satisfied, or require additional clinical data.  Even if these data are submitted, the regulatory agency may ultimately decide that the NDA does not satisfy the criteria for approval.  If the regulatory agency approves the NDA, the product becomes available for physicians to prescribe, but even after approval, a regulatory agency may later decide to withdraw product approval if compliance with regulatory standards is not maintained or if safety problems occur after the product reaches the market.  A regulatory agency may also require post-marketing studies, known as Phase IV studies, as a condition to approval to develop additional information regarding the safety of a product.  In addition, a regulatory agency can require surveillance programs to monitor approved products that have been commercialized, and such agencies have the power to require changes in labeling or to prevent further marketing of a product based on the results of these post-marketing programs.

Regulatory agencies also regulate drug labeling and promotion activities.  As marketing and distribution will be the primary and substantial business function of Immunosyn, the Company anticipates that it will experience a significant burden as a result of these regulatory activities.  Regulatory agencies actively enforce regulations prohibiting the marketing of products for unapproved or “off-label” uses.  Further regulations on certain pharmaceutical marketing practices are imposed in the United States by the United States Federal Trade Commission and Office of the Inspector General of the United States Department of Health and Human Services.  Reimbursement practices and HHS coverage of medicine will be important to the success of procurement and utilization of Argyll Biotech’s SF-1019 and other products and product candidates, if they are ever approved for marketing.

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European Regulations

The initial preclinical trials and clinical studies of SF-1019 are expected to be conducted by Argyll Biotech under European auspices and jurisdiction.  Prior regulatory approval in order to initiate Phase I (human volunteer) studies is required in many of the European Union member states.  Following successful completion of Phase I studies, data must be submitted in a summarized format to the applicable regulatory authority in the member state in respect of applications for the conduct of later Phase II and Phase III studies.  It is expected that the first submission for clinical trial approval will be made in the United Kingdom to the Medicines and Healthcare products Regulatory Agency (MHRA) which acts on behalf of the European Medicines Agency (EMEA) to ensure uniformity amongst the member states and that the first set of clinical trials will take place under their jurisdiction. European Union regulatory authorities typically are required to raise objections within one to three months after receipt of a proposal for a study, but they often have a right to extend this review period at their discretion.  In addition, one or more independent ethics committees, which typically operate similarly to an Institutional Review Board in the United States, will review the research proposal, prior to authorizing its commencement.

            In order to gain marketing approval in the European Union, Argyll Biotech must submit a comprehensive dossier to the relevant authority for review, which, in the European Union, is known as a Marketing Authorization Application (“MAA”).  The format of the MAA is specific and is laid out by each applicable regulatory authority, although in general it will contain information on the quality of the chemistry, manufacturing and pharmaceutical aspects of the product as well as non-clinical and clinical data.

For many products, the European Union provides a choice of a centralized or decentralized authorization route.  Under the centralized route, one marketing authorization is granted for the entire European Union, while under the decentralized route, a series of national marketing authorizations are granted.  In the centralized system, an application will be reviewed by the members of the Committee for Proprietary Medicinal Products (“CPMP”), on behalf of the European Medicines Agency (“EMEA”). The EMEA will, based upon the review of the CPMP, provide an opinion to the European Commission on the safety, quality and efficacy of the product.  The decision to grant or refuse an authorization is made by the European Commission.  In circumstances where use of the centralized route is not mandatory, Argyll Biotech can choose to use the decentralized route, in which case an application will be reviewed by each member state’s regulatory agency.  If a regulatory agency grants authorization, other member states’ regulatory agencies and authorities are asked to “mutually recognize” the authorization granted by the first member state’s regulatory agency.

Failure to comply with the terms of the license after obtaining marketing approval can, among other things, result in the suspension of regulatory approval, as well as possible civil and criminal sanctions.  The European Union will require Argyll Biotech to participate in the "Yellow Card" system which enables the rapid and efficient reporting of adverse events and side effects. If any major events are reported, this may result in the license being withdrawn.  Regulators have the authority if they fail to comply with the license to revoke, suspend or withdraw approvals of previously-approved products and can also prevent companies and individuals from participating in the drug approval process. They are permitted to seize products which are in breach of the license and close manufacturing plants not operating in conformity with the licensed manufacturing agreements, storage, or distribution protocols and stop the shipment of such products.

Pricing Controls

Before a pharmaceutical product may be marketed and sold in certain foreign countries the proposed pricing for the product must be approved.  The requirements governing product pricing vary widely from country to country and can be implemented disparately at a national level.

The European Union generally provides options for its member states to control the prices of medicinal products for human use.  A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market.  For example, the regulation of prices of pharmaceuticals in the United Kingdom is generally designed to provide controls on the overall profits that pharmaceutical companies may derive from their sales to the United Kingdom National Health Service.  The United Kingdom system is generally based on profitability targets or limits for individual companies which are normally assessed as a return on capital employed by the company in servicing the National Health Service market, comparing capital employed and profits.

In comparison, Italy generally establishes prices for pharmaceuticals based on a price monitoring system.  The reference price is the European average price calculated on the basis of the prices in four reference markets: France, Spain, Germany and the United Kingdom.  Italy generally establishes the price of medicines belonging to the same therapeutic class on the lowest price for a medicine belonging to that category.  Spain generally establishes the selling price for new pharmaceuticals based on the prime cost, plus a profit margin within a range established each year by the Spanish Commission for Economic Affairs.

Third Party Reimbursements

In the United States, European Union, and elsewhere, sales of therapeutic and other pharmaceutical products are dependent in part on the availability and adequacy of reimbursement to the consumer or the health care provider from third party payors, such as government and private insurance plans.  Third party payors are increasingly challenging the prices charged for medical products and services and new products that are more expensive than existing treatments may have difficulty finding ready acceptance unless there is a clear therapeutic benefit.

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Patent Restoration and Marketing Activity

The Drug Price Competition and Patent Term Restoration Act of 1984, known as the Hatch-Waxman Amendments (“Hatch-Waxman”), permits the FDA to approve an abbreviated NDA for generic versions of innovator drugs, as well as NDAs with less original clinical data.  Hatch-Waxman also provides certain patent restoration and exclusivity protections to innovator drug manufacturers.

The abbreviated NDA process permits competitor companies to obtain marketing approval for a drug with the same active ingredient for the same uses as an innovator drug but does not require the conduct and submission of clinical studies demonstrating safety and efficacy for that product.  Instead of safety and efficacy data, a competitor could make a copy of any of Argyll Biotech’s drugs and only submit data demonstrating that the copy is a bioequivalent to the SF-1019 product, which may allow the competitor to obtain marketing approval from the FDA.

Hatch-Waxman also provides competitors with the ability to market copies of innovator products with the submission of significantly less clinical data outside of the abbreviated NDA context.  Such applications are known as “505(b)(2) NDAs,” or “paper NDAs.”  They may rely on clinical investigations not conducted by or for that applicant and for which the applicant has not obtained a right of reference or use.  Such products are subject to the same patent notification procedures as for abbreviated NDAs.

Hatch-Waxman also provides for the restoration of a portion of a product’s United States patent term that is lost during a drug’s clinical development and NDA review by the FDA, and further provides for the statutory protection, known as exclusivity, against the FDA’s approval or acceptance of certain competitor applications.  Patent term restoration can return up to five years of a patent term for a patent that covers a new product or its use to compensate for time lost during product development and the regulatory review process.  This period is generally one-half the time between the effective date of an IND and the submission date of an NDA, plus the time between the submission date of the NDA and the approval of that application, subject to a maximum extension of five years.  No extension can extend the patent life beyond fourteen years after the drug approval date.  The application for patent term restoration is subject to approval by the United States Patent and Trademark Office in conjunction with the FDA.

Hatch-Waxman also provides for differing periods of statutory protection for new drugs approved under an NDA.  Among the types of exclusivity are those for a new chemical entity and those for a new formulation or a new indication for a previously-approved drug.  Marketing exclusivity in the United States for the type of product that Immunosyn intends to market and distribute, if granted by the FDA, would prohibit that agency from approving the application of another company that submits an abbreviated NDA or a paper NDA for five years.  This marketing exclusivity protection does not prohibit the FDA from approving a full NDA.

Competition

Competition in the biotechnology industry is intense.  Potential competitors in the United States and Europe are numerous and include pharmaceutical, chemical and biotechnology companies, most of which have substantially greater capital resources, marketing experience, research and development staffs and facilities than Immunosyn.  Among others, Eli Lilly & Company and Wyeth Pharmaceuticals, Inc. market antidepressants, and Pfizer, Inc. markets anticonvulsants that are prescribed for treating diabetic neuropathy.  In addition, Daval International Limited, a United Kingdom company (“Daval”), is also testing a caprine serum product, called Aimspro, for treating multiple sclerosis and other neurological disorders.  GTC Biotherapeutics, Inc., a Nasdaq company, develops, supplies and commercializes therapeutic proteins produced through transgenic animal technology.  GTC’s clot busting biotherapeutic, ATyrn®, produced in goats, was recently approved by the FDA for the prevention of peri-operative and peri-partum thromboembolic events in hereditary antithrombin deficient patients.

Argyll Biotech intends to seek to limit potential sources of competition by developing products that are eligible for orphan drug designation and approval or other forms of protection.  Specifically, Argyll Biotech intends to target CIDP as a potential candidate for treatment with SF-1019 and to seek orphan drug status for SF-1019 in the treatment of CIDP.  CIDP is listed by the National Organization for Rare Disorders ( http://www.rarediseases.org /) as an orphan disease with less than 200,000 cases in the United States.  The only available treatment is IVIG (intravenous gamma globulin) at a cost of $2,000-$6,000 per month depending on dosage.  The mechanism of action of IVIG is to block release of inflammatory cytokines directly and therefore lasts only about 1-2 weeks.  However, due to their substantially greater resources, competitors may develop similar technologies and products more rapidly or may market them more effectively.  Competing technologies or products may be more effective than any of those that are being or will be developed by Argyll Biotech.  In addition, existing competitors enjoy the strategic advantages of existing brand recognition, marketing and distribution networks, thus enabling them to introduce new products much more rapidly than Immunosyn.

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Employees

As of December 31, 2008, we had two executive officers, Mr. Stephen D. Ferrone, President and CEO, and Mr. Douglas McClain, Jr., our Chief Financial and Accounting Officer and Corporate Secretary.  Stephen D. Ferrone is currently our only full-time employee.   The Company expects to hire additional executive staff and employees, including potentially a full-time CFO, as needed.

Where You Can Find More Information

Our annual report on Form 10-K,  quarterly reports on Form 10-Q,  current reports on Form 8-K  and all amendments to those reports are available without charge from us on our website at http://www.immunosyn.com,  as soon as reasonably practicable following the time they are filed with or furnished to the SEC. Reports filed with the SEC may also be viewed at www.sec.gov or obtained at the SEC Public Reference Room in Washington, D.C. Information regarding the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.

Item 1A. Risk Factors

The risks and uncertainties described below are not the only ones we may face.  The following risks, together with additional risks and uncertainties not currently known to us or that we currently deem immaterial, could impair our business, financial condition and results of operation.

Risks Related to the Company’s Business

Our independent auditor has issued a going concern opinion which raises doubts about our ability to continue as a going concern.

Our independent auditor has expressed doubt about our ability to continue as a going concern.  Note 2 to our financial statements includes an explanatory paragraph expressing doubt about our ability to continue as a going concern.  Our ability to continue as a going concern is dependent on our ability to implement our business plan, raise capital and generate revenues.  Since inception, we have borrowed $893,663from Argyll Equities, LLC and Argyll Biotech who together own approximately 60% of Immunosyn’s Common Stock.  These advances are unsecured and are to be repaid on demand.  In addition, the Company had accounts payable and accrued expenses of $320,352 and $14,268, respectively, as of December 31, 2008. 

As of December 31, 2008, Immunosyn had an accumulated deficit of $1,934,939 and a working capital deficit of $1,219,881 which is considered insufficient to fund operations over the next 12 months.

Immunosyn or Argyll Biotech may not be able to secure financing, which in turn could affect Immunosyn’s and Argyll Biotech’s respective abilities to operate as a going concern.

As of December 31, 2008, Argyll Biotech had an accumulated deficit of approximately $1,722,504 and a working capital deficit of approximately $1,331,497.  Argyll Biotech does not anticipate any revenues in the foreseeable future but continues to incur significant losses from operations.  This raises substantial doubt about Argyll Biotech’s ability to continue as a going concern.  Argyll will require substantial additional financing to bring SF-1019 to market.  If adequate financing is not available to Argyll Biotech, it may be required to delay, scale back or eliminate some of its research and development programs or the proposed clinical trials of SF-1019, to relinquish rights to certain technologies or products or to license third parties to commercialize technologies and products that Immunosyn might otherwise seek to license.  Argyll Biotech’s inability to obtain financing, if required, would have a material adverse effect on the value of Immunosyn’s exclusive license and Immunosyn’s ability to develop its operations and implement its business plan.

Argyll Biotech and Immunosyn have no operating history, which makes it impossible to evaluate their business and to predict any future operating results.

To date, Immunosyn’s founders and Argyll Biotech have been primarily engaged in organizational and fundraisingactivities, including obtaining various consulting agreements for the development of products and technologies and developing and testing products.  Immunosyn has not generated any revenues to date and does not anticipate generating any revenues until such time as SF-1019 is approved for distribution by applicable regulatory authorities.  Accordingly, neither Argyll Biotech nor the Company has any operating history upon which an evaluation of their performance and prospects can be made.

Immunosyn expects to incur substantial losses for the foreseeable future and may never achieve profitability.

Immunosyn anticipates that it will continue to incur significant operating losses for the foreseeable future.  We may never generate revenues or achieve profitability and, if we ever achieve profitability, we may not be able to maintain profitability.

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Immunosyn and Argyll Biotech have no experience in completing development, obtaining regulatory approval or marketing a novel biopharmaceutical product and, to be successful, both organizations will need qualified personnel to complete development, successfully complete trials and launch SF-1019 in the marketplace.

Both Argyll Biotech and Immunosyn are recently formed entities and, consequently, lack the requisite personnel, facilities, equipment or experience to execute their product development, testing, regulatory approval and marketing objectives.  Argyll Biotech will be required to hire additional qualified scientific and technical personnel as well as personnel with expertise in clinical testing and government regulation, to expand various research and development programs and to pursue product development, regulatory approval and marketing plans.  Immunosyn will also have to hire marketing and administrative personnel to promote its presence in the portion of the medical community that treats maladies associated with CIDP and diabetes.  There is intense competition for qualified personnel in the areas of Argyll Biotech’s and the Company’s respective activities, and there can be no assurances that Argyll Biotech or the Company will be able to attract and retain the qualified personnel necessary for the development of its and their respective businesses.

The Company and Argyll Biotech face competition for qualified individuals from numerous pharmaceutical and biotechnology companies, universities and research institutions.  The failure to attract and retain key scientific, marketing and technical personnel would have a material adverse effect on the development of the Company’s and Argyll Biotech’s respective businesses and our and their abilities to develop, market and sell products.

The Company may not be successful in identifying and attracting executive officers, and even if it were to do so, it may not be successful in retaining such individuals.

The Company intends to identify and attract individuals to fill permanent key executive positions.  Based on its current cash balance, management believes the Company cannot attract individuals to fill permanent key management positions and cannot build its operations.  There is intense competition of qualified personnel in the Company’s field and there can be no assurances that the Company will be able to attract and retain the qualified personnel necessary for the development of its business.  Instead, the Company may chose to retain executives with other backgrounds, including persons previously or currently affiliated with its affiliates, which could have a material adverse effect on the development of the Company’s business.  The failure to attract and retain executive officers would have a material adverse effect on the development of the Company’s business.

The Company and its affiliates, including Argyll Biotech, are recipients of several subpoenas issued by the United States Securities and Exchange Commission to investigate their business practices and the offering of investments in the Company’s predecessor.

Pursuant to a subpoena dated January 20, 2006 issued by the Securities and Exchange Commission (“SEC”) to an affiliate of Argyll Biotech in proceedings captioned In the Matter of Directors Financial Group, Ltd. and In The Matter of Prime Bank Securities, and pursuant to subpoenas issued by the SEC to affiliates of Argyll Biotech on March 30, 2006 and to Immunosyn on December 15, 2006 in a proceeding captioned In The Matter of The Argyll Group, LLC, the Company and its affiliates have been asked to produce all documents concerning a wide variety of topics including many related directly to a prior licensee of SF-1019, Nurovysn Merger Corporation, and the Company.  Pursuant to a third subpoena, dated December 15, 2006, issued by the SEC to the Company, the Company has been asked to produce documents concerning private placements of the Company’s stock and other matters disclosed in this report.  The Company and Argyll Biotech’s affiliates actively cooperated with the SEC and produced documents responsive to these subpoenas, completing their responses in early August 2007.  The Directors Financial Group matter was resolved in June 2006 through a settlement between the SEC and the parties to the proceeding and, accordingly, Immunosyn will not be required to respond further to that subpoena.  The Company has had no further communication with the SEC regarding the subpoenas since January 2007.  Although Immunosyn and its affiliates believe they have complied with the SEC’s subpoenas, there can be no assurance that the Company and its affiliates will not receive additional subpoenas from the SEC or be found liable for one or more violations of law which could expose the Company and its affiliates, including Argyll Biotech, to liability for fines and penalties, as well as injunctive or other sanctions that might prohibit or restrict the Company’s or Argyll Biotech’s ability to proceed with financing its operations.  Even if the Company and its affiliates are fully in compliance with all of their legal obligations, the existence of these proceedings may delay or otherwise negatively impact their ability to conduct their operations.  Furthermore, the existence of these proceedings may discourage future investors from acquiring the securities of the Company or Argyll Biotech.

Litigation involving Argyll Biotech and its research scientists could have an adverse effect on the development of SF-1019 and the Company.

On or about July 27, 2006, Daval International Ltd. filed suit in the High Court of Justice, Chancery Division in London, England against Argyll Biotech and five of Argyll Biotech’s research scientists and others, including Douglas McClain, Sr., seeking an injunction and damages or an account of profits based on allegations of breach by the scientists and Mr. McClain of confidentiality agreements with Daval, breaches by such persons of their fiduciary duties and conspiracy by Argyll Biotech and certain of its shareholders to wrongfully disclose and use Daval’s alleged trade secrets.  These proceedings do not allege infringement of any Daval patent whether by Argyll Biotech or any of the other defendants.  Argyll Biotech has filed its defenses and continues to investigate the merits of the suit and the basis of its defenses including, among other grounds, that one of the active ingredients in SF-1019 disclosed in Argyll Biotech’s 603 Application is based on independent research by Argyll Biotech’s research scientists, and the method of producing SF-1019 is materially different from Daval’s process.  The action had been listed for trial in the UK in January 2009 but, in December 2008, the High Court in London ordered that the trial be rescheduled for a later date likely to be late 2009 or early 2010.  Immunosyn is not involved in this litigation.  Even if Daval’s claims are found to have no merit, these proceedings may delay or otherwise negatively impact Argyll Biotech’s ability to conduct its operations, which could have a negative impact on the development of SF-1019, which would adversely affect the Company.

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SF-1019 has not been approved for any human use nor for treatment of any particular disease, and such approval may never be obtained.

The Company is entirely dependent upon Argyll Biotech’s sole experimental drug, SF-1019, which has not been tested in any clinical trials.  Argyll Biotech is the assignee of a number of issued patents and pending patent applications filed in selected countries around the world.  Argyll Biotech has no issued patent on SF-1019 and the rights which Argyll Biotech has received from its pending patents and patent applications may not offer sufficient protection to allow it to manufacture, market and/or sell its products.  Argyll Biotech has not received regulatory approval of SF-1019’s use in clinical trials.  Argyll Biotech and the Company cannot guarantee that SF-1019 will ever receive regulatory approval for the uses for which it may be licensed to Immunosyn, namely, treatment of various diseases including, without limitation, CIDP, diabetic neuropathy and diabetic ulcers.  No clinical trials have been conducted anywhere and following commencement of any clinical trials, completion and evaluation of those trials may not occur or a substantial period of time may elapse before Immunosyn has a product that may be sold and distributed for human use.

Even if a new drug product is well along the path of a clinical trial and the trial is close to completion, regulatory authorities have the ability to shut down any trials due to safety, efficacy or other concerns; to request additional trials or data to verify results; or to force any portion or all of a trial to be repeated for any number of reasons.  Any such action by the regulatory authorities or any delay of a clinical trial could materially and adversely affect the Company’s exclusive license from Argyll Biotech.  Even if Argyll Biotech is successful in bringing SF-1019 into a clinical trial for treatment of various diseases including, without limitation, CIDP, diabetic neuropathy or diabetic ulcers, there can be no assurances that those trials will successfully demonstrate that SF-1019 is efficacious against various diseases including, without limitation, CIDP, diabetic neuropathy or diabetic ulcers.  Unless and until the appropriate regulatory authority provides a final approval for the use of SF-1019 for treating various diseases including, without limitation, CIDP, diabetic neuropathy or diabetic ulcers, the licensed rights will be of no value.

Immunosyn has been informed that Argyll Biotech is implementing controls to prevent unregulated use of SF-1019 but if Argyll Biotech is unable to do so or the FDA takes any action to prevent the export or experimental use of unapproved drugs such as SF-1019, the Company’s licensed rights will be of diminished value.

Prior to Argyll Biotech’s development of SF-1019, caprine serum had been the subject of unregulated use by parties unrelated to Argyll Biotech and the Company.  In 2007, the Company learned that research samples of SF-1019 have been used by several individuals in the United States and Mexico, and such uses have been publicized as “testimonials” on a shareholder’s web site.  To the extent unapproved research samples of SF-1019 have been exported from the United States or used in the United States, the FDA may issue cease and desist letters and take other action to prevent any further export, use or promotion within the United States although no such letters or action have been received or taken to date.  Such actions by the FDA, if any, may delay or affect Argyll Biotech’s ability to obtain FDA approval for SF-1019 and will have a material adverse effect on the Company’s exclusive license from Argyll Biotech.

The Company has been informed that Argyll Biotech has taken steps to prevent distribution or export of SF-1019 for unapproved human use in any country, including the United States.  In addition, the Company has informed all of its shareholders to discontinue all further promotion of SF-1019 that does not comply with FDA regulations.  The Company’s Board of Directors has assumed responsibility for coordinating these controls with Argyll Biotech and monitoring their implementation. However, there can be no assurance that the Company or Argyll Biotech will be able to effectively monitor and control the activities of third-party shareholders of the Company.

The Company depends on Argyll Biotech’s ongoing research and growing intellectual property portfolio to develop and protect technologies and products.

Argyll Biotech is developing pharmaceutical compositions directed to a new class of biological response modifiers it refers to as immune cell proliferating factors (“ICPF”).  These factors, derived from mammalian cells, have shown preliminary promise in laboratory testing by stimulating the immune system of otherwise healthy, but infected test animals.  SF-1019 is believed by Argyll Biotech to contain one or more such factors and Argyll Biotech is currently performing research to confirm this.  Argyll Biotech is working closely with one of the original developers of ICPF therapy, Professor Kenneth Willeford, of Mississippi State University (“MSU”).  Dr. Willeford is a named inventor of a number of Argyll Biotech’s pending patent applications, all of which are exclusively licensed by MSU to Argyll Biotech.  US Patent Application No. 10/825,603 (the “603 Application”), entitled “ Prophylactic and therapeutic benefits of a new class of immune stimulating peptides ,” has recently been allowed by the United States Patent and Trademark Office, and issued in April 2008.

13

Argyll Biotech has transferred its worldwide rights to market and distribute SF-1019 to Immunosyn by way of an exclusive licensing agreement.  Argyll Biotech and Immunosyn together intend to pursue regulatory approval for SF-1019 and related technologies in the United States.  Neither Immunosyn nor Argyll can guarantee that any applications for additional patents will be granted in the United States Patent and Trademark Office or in any other patent offices, or that their proprietary compositions and/or treatments will receive regulatory approval from the United States Food and Drug Administration or any other regulatory body either within or outside the United States.

The pharmaceutical industry places considerable importance on obtaining patent and trade secret protection for new technologies, products and processes.  Argyll Biotech’s vigorous pursuit of patent protection will be balanced with a prudent preservation of trade secrets, assertive enforcement of intellectual property, and a sensible respect for the proprietary rights of others.  Predictions cannot be made at this time about results that future research may yield with regard to SF-1019 and related treatments, or about the viability of the prospective patent portfolio surrounding this technology.  Nevertheless, the Company’s success in the biological response modifiers market will depend on Argyll Biotech’s ability to obtain and enforce its intellectual property rights in the United States and abroad for the products and treatments that the Company is continually developing and that it intends to market and distribute.

Immunosyn’s exclusive license from Argyll Biotech is the Company’s primary asset and the exclusive license agreement, including, without limitation, the fee established in that agreement, is between related entities and does not bear any relationship to established or traditional methods of valuing such fees and, as such, may be unfair to the Company.

Pursuant to our exclusive license agreement with Argyll Biotech, the Company issued 147,000,000 shares of Common Stock to Argyll Biotech at par value of $0.0001 per share in payment of the exclusive world-wide license rights to SF-1019 for a term that will last for the later of 10 years from the date when SF-1019 is first commercially sold or the date when the patent covering SF-1019 expires, which in most jurisdictions is twenty years from the date of filing.  On October 25, 2007, Immunosyn entered into an Amended and Restated License Agreement with Argyll Biotech.  The amended license agreement expands the grant of rights to Immunosyn to include the exclusive worldwide right to market, sell, distribute and promote SF-1019 in its current form for multiple uses including the treatment of any and all diseases and pathological conditions (not just Chronic Inflammatory Demyelinating Polyneuropathy (CIDP), Diabetic Neuropathy (DN) and diabetic ulcers (DU)).  Immunosyn is further granted the rights to any improvement of SF-1019 and other compounds, which are developed under the same technology platform and which are chemically similar to SF-1019.  In conjunction, Immunosyn also obtained an exclusive, worldwide license to all intellectual property owned by or assigned to Argyll Biotechnologies, LLC for the purpose of marketing, distribution, sale and promotion of SF-1019.  Immunosyn continues to have the right of first offer to enter into additional license agreements for uses of other compounds that are developed and which are not already covered under the amended license agreement.  The exclusive license agreement is between related entities, was not negotiated in an arms-length transaction, and does not bear any relationship to established or traditional methods of valuing such fees.  Instead, the license rights were recorded at Argyll Biotech’s cost basis of the underlying patents licensed to Immunosyn.

Argyll Biotech may use the proceeds from the sale of our Common Stock for purposes other than the development and regulatory approval of SF-1019; the terms of Immunosyn’s exclusive license agreement do not provide the Company with any oversight or right to control Argyll Biotech’s use of such license fees.

Argyll Biotech reserves the right to use the cash and other proceeds it receives from the sale of the Company’s stock received as payment of its license fee for purposes other than development and regulatory approval of SF-1019, including corporate purposes of its other affiliates.  Furthermore, under the terms of the exclusive license agreement between Argyll Biotech and Immunosyn, the license fee was deemed earned by Argyll Biotech when Immunosyn issued its shares of Common Stock and non-refundable, regardless of the true cost of completing development and obtaining regulatory approval of SF-1019.  The Company has no right to control the proceeds received by Argyll Biotech from its sale of the Company’s stock, and the Company has no audit or other rights to require that all of these proceeds be applied solely to the development and regulatory approval of SF-1019.  If the amount required to achieve these goals is less than the amount of the proceeds received from Argyll Biotech’s sale of the Company’s stock, the Company will not be entitled to any refund.  In the event Argyll Biotech is unsuccessful in completing product development or obtaining regulatory approval, the Company has no right to make any claim with respect to Argyll Biotech’s use of the proceeds.

Argyll Biotech will be our sole supplier of SF-1019; the exclusive license agreement provides that the cost of SF-1019 to Immunosyn shall be equal to 40% of the “gross sale price” (as defined) of SF-1019 as sold to a third party customer by Immunosyn.  In the event Argyll Biotech succeeds in obtaining regulatory approval for distribution and sale of SF-1019, Argyll Biotech will be the sole supplier of SF-1019 to the Company.  In the event of any disruption in the manufacturing process of Argyll Biotech and its contractors, the Company will have no other source for purchasing SF-1019 and satisfying its customer commitments.  Argyll Biotech will determine the purchase price for SF-1019 in its reasonable discretion based on its manufacturing costs, development expenses, overhead and customary industry mark-up.

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The safety and efficacy profiles for SF-1019 that emerge from controlled clinical trials may be substantially less favorable than in prior uncontrolled observations of SF-1019’s precursors which may materially and adversely affect our business.

Argyll Biotech’s only data regarding the safety and efficacy of SF-1019 is based on uncontrolled observations of a precursor to SF-1019 among a small group of individuals, not SF-1019 itself.  If and when formal and controlled clinical trials are conducted using SF-1019 over broad populations and geographic areas, it is possible that heretofore unknown adverse safety and unfavorable efficacy effects may be observed, in which case the Company’s ability to market SF-1019 for its intended use may be materially and substantially reduced or eliminated.  Moreover, formal clinical trials are expensive and Argyll Biotech may have severely underestimated the cost of conducting and concluding such trials.  If the Company is unable to commence the marketing, distribution and sale of SF-1019 because formal clinical trials reveal adverse safety or lack of efficacy information, or if the clinical trials last longer or sustain substantially higher costs than are currently projected, the Company’s business will be severely and adversely diminished.

A decrease in the projected prices that Immunosyn may charge for SF-1019 and the level of third party reimbursement that Immunosyn may receive from third party payors may adversely impact our business.

To the extent that SF-1019 becomes approved for distribution in the United States or in any foreign markets, Immunosyn’s ability to commercialize SF-1019 successfully will depend in part on the price Immunosyn may charge for that product and on the extent to which reimbursement for the cost of that product will be available from government health administration authorities, private health insurance and other third-party payers.  Government officials and private health insurers are increasingly challenging the price of medical products and services.  Significant uncertainty exists as to the pricing flexibility which distributors will have with respect to newly approved health care products as well as their reimbursement.  There can be no assurance that the Company’s assumptions concerning product pricing will be achieved.

Third-party payers may attempt to control costs further by selecting exclusive providers of their pharmaceuticals products.  If third-party payers were to make this type of arrangement with one or more of Immunosyn’s competitors, those payers would not reimburse patients for purchasing SF-1019.

Argyll Biotech may not apply for or be successful in receiving orphan/special drug status on any products.

Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition.  A disease or condition that affects populations of fewer than 200,000 people in the United States generally constitutes a rare disease or condition.  Argyll Biotech may seek orphan drug approval for certain aspects or treatment modalities of SF-1019 in an attempt to get SF-1019 into the marketplace more quickly and competitively.  There can be no assurances that SF-1019 is entitled to orphan drug status, that Argyll Biotech will proceed with this strategy or that, if it does proceed, any orphan drug designation will be approved or authorized.

If Argyll Biotech fails to keep up with rapid technological change and evolving therapies, the proprietary technologies that form the substance of SF-1019 could become less competitive or obsolete.

The pharmaceutical industry is characterized by rapid and significant technological change.  Immunosyn expects that pharmaceutical technology will continue to develop rapidly and the Company’s future success will depend on Argyll Biotech’s ability to develop and maintain a competitive position.  Technological development by others may result in products developed by Argyll Biotech or the Company, both branded or generic, becoming obsolete before they are marketed or before Immunosyn or Argyll Biotech recover any portion of their expenses incurred with respect to such product.  Alternative therapies or new medical treatments could alter existing treatment regimes, and thereby reduce the need for one or more of the products developed by Argyll Biotech, which would adversely affect Immunosyn’s business.

Many of Immunosyn’s competitors have substantially greater capabilities and resources and may be able to market products more effectively, which would limit Immunosyn’s ability to generate revenue and cash flow.

Competition in Immunosyn’s industry is intense.  Potential competitors in the United States and Europe are numerous and include pharmaceutical, chemical and biotechnology companies, most of which have substantially greater capital resources, marketing experience, research and development staffs and facilities than does Immunosyn.  Among others, Eli Lilly & Company and Wyeth Pharmaceuticals, Inc. market antidepressants, and Pfizer, Inc. markets anticonvulsants that are prescribed for treating diabetic neuropathy.  In addition, Daval is also testing a caprine serum product, called Aimspro, for treating multiple sclerosis and other neurological disorders

Argyll Biotech intends to seek to limit potential sources of competition by developing products that are eligible for orphan drug designation and NDA approval or other forms of protection, but Argyll Biotech’s and Immunosyn’s competitors may develop similar technologies and products more rapidly or may market them more effectively.  Competing technologies or products may be more effective than any of those that are being or will be developed by Argyll Biotech.

15

Immunosyn will depend on Argyll Biotech and other third parties for clinical testing of SF-1019.  Any disruption in such third party relationship could delay the Company’s ability to distribute and market products on a timely basis or at all.

Neither Immunosyn nor Argyll Biotech currently has any internal product testing capabilities.  Argyll Biotech’s inability to retain third parties for the clinical testing of products on acceptable terms, or at all, would adversely affect their ability to develop, distribute and market products.  It will be Argyll Biotech’s responsibility to arrange for and supervise clinical testing.  Any failures by third parties to adequately perform their responsibilities may delay the submission of products for regulatory approval, impair Immunosyn’s ability to deliver products on a timely basis or otherwise impair Immunosyn’s competitive position.  The Company’s dependence on third parties for the development of products may adversely affect its potential profit margins and its ability to deliver products on a timely basis.

Argyll Biotech and Immunosyn will depend on others to manufacture their products and any disruption in manufacturing could have a material adverse effect on our business.

Argyll Biotech and Immunosyn have never manufactured any products and SF-1019 may not be suitable for commercial manufacturing in a cost-effective manner.  Manufacturers of products developed by Argyll Biotech will be subject to current good manufacturing practices prescribed by the FDA and other rules and regulations prescribed by applicable regulatory authorities.  Argyll Biotech may not be able to enter into or maintain relationships either domestically or abroad with manufacturers whose facilities and procedures comply or will continue to comply with current good manufacturing practices or applicable foreign requirements.  Failure by a manufacturer to comply with current good manufacturing practices or applicable foreign requirements could result in significant time delays or Immunosyn’s inability to commercialize or continue to market a product and could have a material adverse effect on Immunosyn’s sales of products and, therefore, its cash flow.

In the United States, failure to comply with current good manufacturing practices or other applicable legal requirements can lead to federal seizure of violating products, injunctive actions brought by the federal government and potential criminal and civil liability on part of a company and its officers and employees.  Argyll Biotech’s or Immunosyn’s failure to satisfy any of these legal requirements prior to attempting to market or distribute any products will place the Company and its resources and assets at substantial risk.

Immunosyn has limited sales and marketing capability and may not be successful in selling or marketing any products.

Immunosyn currently has no sales and marketing capability.  The creation of infrastructure to commercialize medical products is a difficult, expensive and time-consuming process.  Immunosyn may not be able to establish direct or indirect sales and distribution capabilities anywhere in the world or be successful in gaining market acceptance for any products, including SF-1019.

Some of the concepts that are inherent in Argyll Biotech’s technologies have been known, in various forms, for several years, and at least one other party is developing similar drug products based on those concepts which, if approved for human use, may adversely affect Immunosyn’s exclusive license from Argyll Biotech.

Some of the basic biochemistry behind SF-1019, specifically the concept of using extracts from caprine serum, is in the public domain.  Because the basic biochemistry may be in the public domain, third parties may be developing similar technologies and techniques which would compete with SF-1019.  Argyll Biotech is aware of at least one potential competitor, Daval, which is developing and/or marketing a product extracted from caprine serum in the United Kingdom.  Neither Argyll Biotech nor Immunosyn can determine whether any other entities have made similar progress with this biochemistry or if another competitor is currently poised to enter the market with a competing product.  In the event that this does occur, the value of Immunosyn’s exclusive license from Argyll Biotech may be severely diminished.

Third parties may assert claims against Argyll Biotech and the Company for infringement of patents and other intellectual property rights, which could harm our business.

Parties not affiliated with either Immunosyn or Argyll Biotech have obtained or may obtain United States or foreign patents or possess or may possess proprietary rights relating to products being developed or to be developed by Immunosyn or Argyll Biotech.  Patents now in existence or hereafter issued to others may adversely affect the development or commercialization of products developed or to be developed by Immunosyn or Argyll Biotech.  Further, Immunosyn’s or Argyll Biotech’s activities may infringe patents owned by others.  Under its exclusive license agreement, Argyll Biotech is obligated to defend Immunosyn against charges of infringement that refer, relate or pertain to Immunosyn’s marketing, sale and distribution of SF-1019.  Immunosyn and Argyll Biotech could incur substantial costs in defending infringement suits brought against them or in asserting any infringement claims against others, which they may not have the funds or insurance to cover.

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The concept of using extracts from caprine serum to treat Acquired Immune Deficiency Syndrome (AIDS), as well as other diseases, was pioneered by the late Dr. Gary R. Davis.  A number of applications and provisional applications for patents have been filed on his behalf, including at least two provisional applications whose status as of the date of this report is undetermined.  The late Dr. Davis executed a Technology Assignment Agreement in favor of Argyll Biotech that purportedly transfers all of his rights in his intellectual property related to the development of treatments for AIDS.  However, Argyll Biotech is also aware of previous assignments by the late Dr. Davis to third parties covering his intellectual property, and Argyll Biotech has not determined to what extent those assignments conflict with or render the late Dr. Davis’ agreement with Argyll Biotech invalid.

Argyll Biotech is aware of the existence of several pending patent applications by a prospective competitor, Daval, based on work previously conducted by some of Argyll Biotech’s scientific consultants.  It is the Company’s belief that the invention disclosed in U.S. Patent Application No. 10/825,603 (the “603 Application”) licensed by Argyll Biotech is different from what is described in these disclosures, regardless of whether these disclosures describe patentable inventions.  As of the date of this report, Argyll Biotech has not received an opinion of non-infringement with respect to these patent claims nor has any analysis been conducted to determine whether any of these disclosures, or the prior work by the late Dr. Davis, cover Argyll Biotech’s development, manufacture or sale of SF-1019.

On or about July 27, 2006, Daval filed suit in the High Court of Justice, Chancery Division in London, England against Argyll Biotech and five of Argyll Biotech’s research scientists and others, including Douglas McClain, Sr., seeking an injunction and damages or an account of profits based on allegations of breach by the scientists and Mr. McClain of confidentiality agreements with Daval, breaches by such persons of their fiduciary duties and conspiracy by Argyll Biotech and certain of its shareholders to wrongfully disclose and use Daval’s alleged trade secrets.  These proceedings do not allege infringement of any Daval patent whether by Argyll Biotech or any of the other defendants.  Argyll Biotech has filed its defenses and continues to investigate the merits of the suit and the basis of its defenses including, among other grounds, that one of the active ingredients in SF-1019 disclosed in Argyll Biotech’s 603 Application is based on independent research by Argyll Biotech’s research scientists, and the method of producing SF-1019 is materially different from Daval’s process.  The action had been listed for trial in the UK in January 2009 but, in December 2008, the High Court in London ordered that the trial be rescheduled for a later date likely to be late 2009 or early 2010.  Immunosyn is not involved in this litigation.

Immunosyn could incur substantial costs in connection with any suits relating to matters for which it may agree to indemnify Argyll Biotech.  An adverse outcome in any litigation could have a material adverse effect on Immunosyn’s ability to market and distribute products or on Argyll Biotech to utilize relevant patents in the future.  In addition, Argyll Biotech or Immunosyn could be required to obtain licenses under patents or other proprietary rights of third parties.  These licenses may not be made available on terms acceptable to Argyll Biotech and Immunosyn, or at all.  If Argyll Biotech or Immunosyn is required to, and does not obtain any required licenses, Argyll Biotech or Immunosyn could be prevented from, or encounter delays in, developing, manufacturing or marketing SF-1019 or other products.

SF-1019 and other products which may be marketed and distributed by the Company may be subject to recall which would likely harm our business.

If SF-1019 is approved for distribution and Immunosyn is successful in marketing SF-1019, product recalls may be issued at Immunosyn’s or Argyll Biotech’s discretion or by the FDA, the Federal Trade Commission or other government agencies having regulatory authority over distribution and sales of pharmaceutical products.  The Company’s products may need to be recalled due to disputed labeling claims, manufacturing issues, quality defects, or other reasons.  Under its exclusive license agreement, Argyll Biotech is responsible for costs and activities relating to any recall of SF-1019, and must defend, indemnify and hold Immunosyn harmless for, from and against damages associated with those recalls.  Product recalls, if any in the future, may harm Argyll Biotech and Immunosyn’s reputations and cause Argyll Biotech and Immunosyn to lose opportunities or customers, or force Argyll Biotech and Immunosyn to pay refunds.  Immunosyn does not carry any insurance to cover the risk of potential product recall.  Any product recall will have a material adverse affect on Argyll Biotech and Immunosyn, their prospects, financial condition and results of operations.

Argyll Biotech and Immunosyn may face exposure from product liability claims and product liability insurance may not be available or may not be sufficient to cover the costs of liability claims related to their technologies or products.

If Immunosyn has a product in distribution, Argyll Biotech and Immunosyn will face exposure to product liability claims if the use of SF-1019 is alleged to have resulted in adverse effects to users of such products related to those technologies.  Product liability claims may also be brought by clinical trial participants, although to date, no such claims have been brought against Argyll Biotech and neither Argyll Biotech nor Immunosyn have any knowledge of any such pending claims.  If any such claims were brought against Immunosyn or Argyll Biotech, the cost of defending such claims may adversely affect Immunosyn’s or Argyll Biotech’s business.

Regulatory approval for commercial sale of SF-1019 or any other products that the Company intends to market and distribute does not mitigate product liability risks.  Any precautions that Argyll Biotech or Immunosyn takes may not be sufficient to avoid significant product liability exposure.  Although Argyll Biotech anticipates obtaining product liability and clinical trials insurance on their technologies and products at levels with which their management deems reasonable, no assurance can be given that this insurance will cover any particular claim or that Argyll Biotech has or will have obtained an appropriate level of liability insurance coverage for development activities.

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If SF-1019 is brought to market, Argyll Biotech and Immunosyn intend to seek up to $3 million per year, claims-made product liability insurance coverage.  However, such coverage may not be adequate.  In the future, adequate insurance coverage or indemnification by collaborative partners may not be available in sufficient amounts, or at acceptable costs, if at all.

To the extent that product liability insurance, if available, does not cover potential claims, Argyll Biotech and Immunosyn will be required to self-insure the risks associated with those claims.  The successful assertion of an uninsured product liability or other claim against Argyll Biotech or Immunosyn could limit their ability to market and distribute any products or could cause monetary damages.  In addition, future product labeling may include disclosure of additional adverse effects, precautions and contra indications, which may adversely impact product sales.

If Argyll Biotech loses key management or scientific staff, or if Immunosyn or Argyll Biotech are unable to protect their respective rights in their trade secrets, the Company’s business will suffer.

Immunosyn is entirely dependent on Argyll Biotech’s scientific consultants for continuation and completion of all testing and development of SF-1019.  Argyll Biotech’s scientific consultants and advisory staff members have accepted profit and incentive packages and formal consulting arrangements have been either accepted or are under negotiation.  Such persons maintain positions of management and are responsible for all drug development activities relating to SF-1019 and have been instrumental in the development and maintenance of key relationships within the scientific research and medical communities as well as with inventors, co-development partners and others.  Nonetheless, Immunosyn has no management or other control over those persons or any of their activities, and their failure to accomplish any goals established for Argyll Biotech or Immunosyn will substantially and adversely affect Immunosyn’s business prospects.

Immunosyn and Argyll Biotech also rely upon the maintenance of trade secret protection for confidential and proprietary information.  Others may independently develop substantially equivalent proprietary information and techniques or gain access to both our trade secrets or disclose Argyll Biotech’s proprietary technology.  Immunosyn and Argyll Biotech may not be able to meaningfully protect their trade secrets, which could limit Immunosyn’s ability to benefit from its exclusive license to market and distribute SF-1019 for its intended uses.

Immunosyn requires, and has been informed that Argyll Biotech requires, their respective employees, consultants, members of the scientific advisory board and parties to collaborative agreements to execute confidentiality agreements upon the commencement of employment or consulting relationships.  These agreements may not provide meaningful protection of relevant trade secrets or adequate remedies in the event of unauthorized use or disclosures of confidential and proprietary information.

The Company’s management and internal systems might be inadequate to handle its potential growth.

The Company’s success will depend in significant part on the development of its operations and the effective management of growth.  Any growth will place a significant strain on the Company’s systems and resources.  To manage future growth, the Company’s management must build operational and financial systems and expand, train, retain and manage its employee base.  The Company’s management may not be able to manage its growth effectively if its systems, procedures, controls and resources are inadequate to support operations.  In such case, the Company’s expansion would be halted or delayed and the Company may lose its opportunity to gain significant market share or the timing with which it would otherwise gain significant market share.  Any inability to manage growth effectively may harm the Company’s ability to institute its current or any subsequent business plans.  The strain on the Company’s systems, procedures, controls and resources is further heightened by the fact that its executive offices and the operational development facilities of Argyll Biotech are located in separate time zones, namely, San Diego, California, Chicago, Illinois, Hardwick, Massachusetts, and London, England.

To the extent that Argyll Biotech and the Company have international operations, it will be subject to risks associated with conducting business in foreign countries.

The Company expects to have rights to market, distribute and sell SF-1019 in territories outside of the United States to the extent that SF-1019 will be approved by local regulatory authorities for distribution in such territories.  Approval for SF-1019 is being sought in Malaysia, for example.  To the extent that it develops these international operations, the Company and Argyll Biotech will be subject to the risks of conducting business in foreign countries including:

· difficulty in establishing or managing distribution relationships;

· different standards for the development, use, packaging, pricing and marketing of products and technologies;

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· inability to locate qualified local employees, partners, distributors and suppliers;

· the potential burden of complying with a variety of foreign laws, trade standards and regulatory requirements, including the regulations of pharmaceutical products and treatment and foreign intellectual property laws and regulations; and

· general geopolitical risks, such a political and economic instability, changes in diplomatic and trade relations, and foreign currency risks.

The Company does not expect to engage in forward currency transactions, which means that the Company may be susceptible to fluctuations in the United States dollar against foreign currencies.

Clinical trials for SF-1019 will be expensive and time consuming, and their outcome is uncertain.  Any delay or other factor which negatively affects Argyll Biotech’s ability to fund clinical trials will adversely affect the Company’s operations and revenues.

Before obtaining regulatory approval for the commercial sale of a product, Argyll Biotech must demonstrate through pre-clinical testing and clinical trials that SF-1019 is safe and effective for use in humans.  Conducting clinical trials is a lengthy, time-consuming and expensive process.  The proceeds received by Argyll Biotech from sale of the Common Stock issued by Immunosyn in payment for the exclusive license are anticipated to pay only a minor part of these expenses, and it is almost certain that those proceeds will not be adequate to cover the entire amount of testing and trials that will be required.  In addition, we cannot assure that such license fees will be utilized to pay for clinical trials for SF-1019.  In addition, regulatory authorities may require additional clinical trials, which could result in increased costs and significant development delays.

Completion of clinical trials for any product, including SF-1019, will generally take several years or more.  The length of time varies substantially according to the type, complexity, novelty and intended use of the product candidate.  Argyll Biotech’s commencement and rate of completion of clinical trials may be delayed or affected by many factors, including:

· inability of vendors to manufacture sufficient quantities of materials for use in clinical trials;

· slower than expected rate of patient recruitment of variability in the number and types of patients in a study;

· inability to adequately follow patients after treatment;

· safety issues, side effects or other adverse effects;

· lack of efficacy during the clinical trials; and

· government or regulatory delays.

Any delay in the commencement or completion of testing and trials will result in additional delays in Immunosyn’s ability to market and distribute SF-1019, which will adversely affect Immunosyn’s ability to generate any revenues.

SF-1019 or its variants may never be successfully commercialized.

SF-1019 or its variants are not expected to be available for commercial sale for at least two years, if at all.  Potential products that appear to be promising at early stages of development may not reach the market for a number of reasons, including:

· discovery during pre-clinical testing or clinical trials that the products are ineffective or cause harmful side effects;

· failure to receive necessary regulatory approvals;

· inability to manufacture on a large or economically feasible scale;

· failure to achieve market acceptance; and

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· preclusion from commercialization due to proprietary rights of third parties.

Any products and technologies, including SF-1019, developed by Argyll Biotech will require extensive additional development, including pre-clinical testing and clinical trials, as well as regulatory approvals, prior to commercialization.  Argyll Biotech’s product development efforts may not be successful; may fail to receive required regulatory approvals from United States or foreign authorities for any indication; and any products, if introduced, may not be capable of being produced in commercial quantities at reasonable costs or being successfully marketed.  The failure of Argyll Biotech’s research and development activities to result in any commercially viable products or technologies would materially adversely affect Immunosyn’s future prospects, as those prospects are linked entirely to Argyll Biotech’s success through the exclusive license between the two companies.

The industry in which we operate is subject to extensive government regulation and SF-1019 requires regulatory approvals, which makes it more expensive for us and Argyll Biotech to operate our businesses.

Virtually all aspects of Immunosyn’s and Argyll Biotech’s business are regulated by federal and state statutes and governmental agencies in the United States and other countries.  Failure to comply with applicable statutes and government regulations could have a material adverse affect on Immunosyn’s and Argyll Biotech’s ability to develop and sell SF-1019, which will have a negative impact on Immunosyn’s cash flow.  The development, testing, manufacturing, processing, quality, safety, efficacy, packaging, labeling, record-keeping, distribution, storage and advertising of pharmaceutical products, and disposal of waste products arising from these activities, are subject to regulation by one or more federal agencies.  These activities are also regulated by similar state and local agencies and equivalent foreign authorities.  Even if regulatory approval is obtained, a marketed product, its manufacturer and its manufacturing facilities are subject to continual review and periodic inspections.  Subsequent discovery of previously unknown problems with a product, manufacturer or facility may result in restrictions on the product or manufacturer, including withdrawal of the product from the market.

The regulatory requirements applicable to any product may be modified in the future.  Immunosyn cannot determine what effect changes in regulations or statutes or legal interpretations may have on its or Argyll Biotech’s business in the future.  Regulatory changes could require modifications to manufacturing methods, expanded or different labeling, the recall, replacement or discontinuation of certain products, additional record keeping and expanded documentation of the properties of certain products and scientific substantiation.  Any changes or new legislation could have a material adverse effect on Argyll Biotech’s or Immunosyn’s ability to develop and sell SF-1019 and therefore, generate revenue and cash flow.

Even after Argyll Biotech expends substantial resources on research, clinical development and the preparation and processing of regulatory applications, it may not be able to obtain regulatory approval for any of the products that Immunosyn intends to license from it.  Moreover, regulatory approval for marketing a proposed pharmaceutical product in any jurisdiction may not result in similar approval in other jurisdictions.  The failure to obtain and maintain regulatory approvals for SF-1019 would have a material adverse effect on Immunosyn’s ability to distribute and sell products and, therefore, generate revenue and cash flow.

The Company may be exposed to potential risks relating to our internal controls over financial reporting and our ability to have the operating effectiveness of our internal controls attested by our independent auditors.

As directed by Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX 404”), the SEC adopted rules requiring public companies to include a report of management on the company’s internal controls over financial reporting in their annual reports, including in their Form 10-K.  We are subject to this requirement commencing with our fiscal year ending December 31, 2007 and a report of our management is included under Item 9A of this Annual Report on Form 10-K.  In addition, SOX 404 requires the independent registered public accounting firm auditing a company’s financial statements to also attest to and report on the operating effectiveness of such company’s internal controls.  This annual report includes an attestation report under Item 8 of this Annual Report on Form 10-K.  Such report indicates the Company had material weaknesses resulting in a conclusion that our control over financial reporting as of December 31, 2008 was not effective.

Risks Related to the Company’s Securities

There is not now nor may there ever be an active market for the Company’s Common Stock.

The Company’s Common Stock is currently quoted on the Over-The-Counter Bulletin Board.  Trading of the Company’s Common Stock on such exchange has been light and sporadic.  Further, although the Company intends to seek to have its Common Stock listed on the NASDAQ Capital Market in the future, it can make no representation nor provide any assurance that its Common Stock will ever be able to meet the initial listing standards of this or any other stock exchange.  Even if the Company’s Common Stock becomes listed on the NASDAQ Capital Market, at any given time, several days or weeks may elapse with no trading whatsoever of the Common Stock.  The Company is providing no assurances of any kind or nature whatsoever that an active market for its Common Stock will ever develop.  Any investor in the Company should understand that there may be no alternative exit strategy for them to recover or liquidate their investments in the Common Stock.  Accordingly, investors must be prepared to bear the entire economic risk of an investment in the Common Stock for an indefinite period of time.

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Additional uncertainty will be experienced with respect to the price of the Common Stock because the Company is a biotechnology entity and the market price of the securities of biotechnology companies is especially volatile.  The Company is in the development stage.  If the Company’s operations do not develop and its revenues do not grow or grow more slowly than the Company anticipates, if operating or capital expenditures exceed the Company’s expectations and cannot be adjusted accordingly or if some other event adversely affects the Company, the market price of its Common Stock will decline.

Even if the Company were to become a NASDAQ Capital Market company, it may not be able to attract the attention of major brokerage firms or securities analysts.

Security analysts and major brokerage houses may not provide coverage of the Company.  The Company may also not be able to attract any brokerage houses to conduct secondary offerings and other capital raising transactions with respect to its securities.  The Company’s business and ability to continue as a going concern would be adversely affected if it is unable to raise funds.

Our Common Stock is a penny stock. Trading of our Common Stock may be restricted by the SEC’s penny stock regulations and FINRA’s sales practice requirements, which may limit a stockholder’s ability to buy and sell our Common Stock.

Our Common Stock is a penny stock. The Securities and Exchange Commission has adopted Rule 3a51-1 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, including Rule 15g-9, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors.”  The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth, or joint net worth with the person’s spouse, that exceeds $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our Common Stock, and some investors may perceive our securities to be less attractive because they are traded in the over-the-counter market.

In addition to the “penny stock” rules promulgated by the Securities and Exchange Commission, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our Common Stock, which may limit your ability to buy and sell our stock.

Immunosyn has never paid dividends and has no plans to pay dividends at any time in the near or distant future.

Immunosyn has never paid dividends on its capital stock, and the Company does not anticipate paying any dividends for the foreseeable or distant future.  The Company’s present business plan does not include, for the foreseeable future and beyond, any payments of dividends to stockholders.  Stockholders’ sole strategy for any return on their investments will be the potential for the increase in the value of their stock and the possibility of liquidating their stock positions.

Item 1B. Unresolved Staff Comments.

None.

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Item 2. Properties.

The Company has been provided with rent-free office space for two executive offices under a monthly oral agreement with no specific term from its affiliate and shareholder, Argyll Equities LLC (“Argyll Equities”).  It is uncertain how long Argyll Equities will continue providing office space or on what terms space will continue to be provided to the Company in the future.  At present, we do not require dedicated office space.  We believe that our existing facilities are adequate for our current needs and that additional space will be available as needed.

Item 3. Legal Proceedings.

Pursuant to a subpoena dated January 20, 2006 issued by the Securities and Exchange Commission (“SEC”) to an affiliate of Argyll Biotech in proceedings captioned In the Matter of Directors Financial Group, Ltd. and In The Matter of Prime Bank Securities, and pursuant to subpoenas issued by the SEC to affiliates of Argyll Biotech on March 30, 2006 and to Immunosyn on December 15, 2006 in a proceeding captioned In The Matter of The Argyll Group, LLC, the Company and its affiliates have been asked to produce all documents concerning a wide variety of topics including many related directly to the Company.  Pursuant to a third subpoena dated December 15, 2006 issued by the SEC to the Company, the Company has been asked to produce documents concerning private placements of the Company’s stock and other matters disclosed in this report.  The Company and Argyll Biotech’s affiliates actively cooperated with the SEC and produced documents responsive to these subpoenas, completing their responses in early August 2007.  The Directors Financial Group matter was resolved in June 2006 through a settlement between the SEC and the parties to the proceeding and, accordingly, Immunosyn will not be required to respond further to that subpoena.  Immunosyn has had no further communication with the SEC regarding the subpoenas since January 2007.  Although Immunosyn and its affiliates believe they have complied with the SEC’s subpoenas, there can be no assurance that the Company or the Company’s affiliates will not receive additional subpoenas from the SEC or be found liable for one or more violations of law which could expose the Company or the Company’s affiliates, including Argyll Biotech, to liability for fines and penalties, as well as injunctive or other sanctions that might prohibit or restrict the Company’s or Argyll Biotech’s ability to proceed with financing its operations or listing its Common Stock.

On or about July 27, 2006, Daval filed suit in the High Court of Justice, Chancery Division in London, England against Argyll Biotech and five of Argyll Biotech’s research scientists and others, including Douglas McClain, Sr., seeking an injunction and damages or an account of profits based on allegations of breach by the scientists and Mr. McClain of confidentiality agreements with Daval, breaches by such persons of their fiduciary duties and conspiracy by Argyll Biotech and certain of its shareholders to wrongfully disclose and use Daval’s alleged trade secrets.  These proceedings do not allege infringement of any Daval patent whether by Argyll Biotech or any of the other defendants.  Argyll Biotech has filed its defenses and continues to investigate the merits of the suit and the basis of its defenses including, among other grounds, that one of the active ingredients in SF-1019 disclosed in Argyll Biotech’s 603 Application is based on independent research by Argyll Biotech’s research scientists, and the method of producing SF-1019 is materially different from Daval’s process.  The action had been listed for trial in the UK in January 2009 but, in December 2008, the High Court in London ordered that the trial be rescheduled for a later date likely to be late 2009 or early 2010.  Immunosyn is not involved in this litigation.

On March 16, 2007, Frank Bramante and Salvatore Bramante commenced an action in the United Stated District Court for the Southern District of California against various defendants including Immunosyn seeking amongst other relief an injunction to prevent the transfer and/or sale of the patents and/or proprietary information relating to SF-1019 to third parties.  The case was stayed by Order dated January 17, 2008 pending resolution of a largely duplicative action filed in the United Stated District Court for the Western District of Texas, San Antonio Division, by the same plaintiffs against the same defendants excludingImmunosyn on July 28, 2006.  The Texas action was dismissed with prejudice in September 2008 and a formal dismissal in the California action is in the process of being submitted to the Court in order to formally close this case.  The Company does not have any liability in this matter.

On December 19, 2007, a shareholder of the Company, Leon S. Segen, commenced an action in the U.S. District Court for the Southern District of New York derivatively on behalf of the Company to recover alleged short-swing profits from several alleged statutory insiders of the Company, including Company officer and director Douglas A. McClain, Jr.  This action is in the discovery phase.  The action includes the Company as a nominal defendant only and does not allege any claims of liability against the Company.

On March 19, 2008, a shareholder of the Company, Deborah Donoghue, commenced two actions – one in the U.S. District Court for the Southern District of California and the other in the U.S. District Court for the Southern District of New York — derivatively on behalf of the Company to recover alleged short-swing profits from several alleged statutory insiders of the Company, including Company office and director Douglas A. McClain, Jr.  The actions include the Company as a nominal defendant only and do not allege any claims of liability against the Company.  Donoghue withdrew the New York action in April 2008 and the California action has been stayed pending resolution of the related earlier-filed action by shareholder Leon Segen currently pending in the Southern District of New York.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

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PART II

Item 5. Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities.

Market for Common Equity

Our Common Stock began trading on the Over-The-Counter Bulletin Board (the “OTCBB”) on Friday, October 26, 2007, under the symbol “IMYN.”  

The following tables set forth the high and low bid prices of our Common Stock on the OTCBB during the 2007 and 2008 fiscal years according to Yahoo! Finance.

	High		Low
2008
Fourth Quarter	$	1.00	$	0.12
Third Quarter		2.63		0.55
Second Quarter		4.40		1.80
First Quarter		5.10		1.40
2007
Fourth Quarter(1)	$	6.69	$	2.55

 (1) From October 26, 2007 to December 31, 2007

These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.  Prior to October 26, 2007, there was no public trading market for our securities.

As of March 12, 2009, 425,000,000 shares of our Common Stock were authorized for issuance, 272,200,976 shares of Common Stock were issued and outstanding and there were approximately 300 holders of record of our Common Stock.  As of March 12, 2009, 25,000,000 shares of our Preferred Stock were authorized for issuance and no shares of Preferred Stock were issued and outstanding.  No options or warrants to purchase Common Stock have been granted.

Dividends

The Company has not paid any dividends on its capital stock and does not expect to pay dividends for the foreseeable future.

Securities Authorized for Issuance Under Equity Compensation Plans

The Company has established the 2006 Stock Option Plan (the “Plan”) under which the Board of Directors of the Company may grant options to purchase Common Stock to employees, directors and consultants of the Company.  The Company has reserved 7,450,000 shares of Common Stock for issuance under this Plan.  No such options have been granted to date.  The Plan is described in Note 6 to the Company’s consolidated financial statements.

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The following table provides information as of December 31, 2008 relating to the Plan, the only compensation plan under which equity securities of the Company are authorized for issuance:

EQUITY COMPENSATION PLAN INFORMATION

	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders		0		0		7,450,000
Equity compensation plans not approved by security holders		0		0		0
Total		0		0		7,450,000

Recent Sales of Unregistered Securities

On October 12, 2007, Immunosyn agreed to pay The Blaine Group, Inc. $1,500 per month in restricted stock.  As a result, a total of  20,976 shares of Immunosyn Common Stock were allocated to be issued to The Blaine Group, Inc. in 2008. Pursuant to a contract with Basic Investors, Inc., dated October 15, 2007, Immunosyn allocated 10,000 shares of restricted Immunosyn Common Stock to Basic Investors in 2007.  On April 23, 2008, Immunosyn agreed to issue 150,000 shares of restricted Common Stock to First Montauk Securities Corp. or its designated affiliates.  Such shares were issued in August 2008.  On September 29, 2008, Immunosyn entered into an agreement with Bear Creek Advisors, LLC which called for Immunosyn to pay Bear Creek Advisors, LLC a total of 30,000 shares of restricted Common Stock of Immunosyn.  Immunosyn issued 10,000 of these shares to Bear Creek on September 29, 2008 and allocated another 10,000 shares to be issued on November 28, 2008.  See Note 6 to the consolidated financial statements.

In issuing these securities, we relied on the exemptions from registration provided in Regulation D and Section 4(2) under the Securities Act.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

There were no purchases made by or on behalf of the Company or any “affiliated purchaser,” as defined, of shares of Common Stock of the Company in 2008.

Share Performance Graph

The following graph shows changes over the fourteen month period of US $100 invested in (1) the Company’s Common Stock, (2) the S&P 500 Index and (3) the S&P Biotechnology Index.

  

Item 6. Selected Financial Data.

This Item 6 is not applicable to us as, pursuant to Item 301(c) of Regulation S-k, a smaller reporting company is not required to provide the information required by Item 301 of Regulation S-K.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

Immunosyn is a development stage company that was formed in August 2006 and is headquartered in La Jolla, California.  In September 2006, it executed an exclusive license agreement with an affiliated company, Argyll Biotech, in exchange for 147,000,000 shares of its Common Stock or approximately 54% of the outstanding shares of the Company’s Common Stock.  The license agreement was amended and restated in October 2007.  Pursuant to the terms of the license agreement, as amended, the Company has an exclusive worldwide license to market, distribute and sell a biopharmaceutical drug product, currently referred to as SF-1019, for multiple uses including the treatment of a variety of diseases, subject to the receipt of appropriate regulatory approval in each jurisdiction where SF-1019 will be marketed.  Under the terms of its exclusive license, Immunosyn also has a right of first offer to extend its exclusive license to include variants of SF-1019 that may be approved by various regulatory authorities for treatment of other diseases and pathologies.  Argyll Biotech is responsible for all research and product development, clinical testing, regulatory approvals, production and product support.  In accordance with the amended license agreement, the parties agreed that the cost of SF-1019 to the Company will be 40% of the gross sales price of SF-1019 as sold to a third party customer by the Company.

As a sales, marketing, and distribution channel for SF-1019, Immunosyn’s primary business strategy is to build a sales and marketing force and related resources so that if SF-1019 is approved for human use it can be sold; and secondly, to increase awareness and acceptance of SF-1019 in the medical community.

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As of the date of this report, we have no revenue and limited operations.  Our ability to obtain additional funding will determine our ability to continue as a going concern.  We have one principal asset, our exclusive license from Argyll Biotech, and one full-time and one part-time employee.  We do not expect to commence full scale operations or generate revenues unless and until Argyll Biotech completes development and obtains regulatory approval for SF-1019.  Since incorporation, we have not made any significant purchases or sale of assets, nor have we been involved in any mergers, acquisitions or consolidations.

Results of Operations

At December 31, 2008, the Company had an accumulated deficit of $1,934,939 and a working capital deficit of $1,219,881.  Currently, an affiliated company provides general support services to the Company, without charge.  In addition, since inception, Immunosyn has borrowed $893,663 from Argyll Equities, LLC and Argyll Biotech who together own approximately 60% of Immunosyn’s Common Stock.  These advances are unsecured and will be repaid on demand.  In October 2007, the Company hired a Chief Executive Officer.  The Company has advances from the CEO as well.  The Company needs additional financing to continue its operations and may raise funds in the future privately or publicly.  The Company has listed its Common Stock on the Over-The-Counter Bulletin Board and trading commenced on October 26, 2007.

Liquidity and Capital Resources

The Company intends to raise working capital through one or more financings to meet the following requirements:

· Paying current administrative staff;

· hiring staff, a full-time controller and five sales and marketing personnel;

· purchasing capital equipment, including securing its principal offices, both executive and sales, and distribution facilities;

· monitoring the progress of the research and development effort conducted by Argyll Biotech;

· developing a marketing plan for the sale and distribution of SF-1019;

· hiring industry consultants to assist in developing a channel strategy for sales and marketing of SF-1019, including direct sales, third party distributors, and strategic partnerships;

· developing market awareness in the patient and medical community and educating those effected with various diseases including CIDP, diabetic neuropathy and diabetic ulcers and other diseases; and

· selecting and compensating board members.

The Company requires substantial future sources of capital in order to meet such anticipated expenditures and to continue its operations during the period Argyll Biotech seeks regulatory approval from the United States Food and Drug Administration (the “FDA”) and foreign regulatory authorities.  The Company currently anticipates this process to be between three and five years and the amount of funds required to be between $14 million and $24 million.

The Company believes that significant funding will be required to provide adequate sources of working capital during that period.  There can be no assurance that the Company will be able to raise any or all the capital required for its operations.  Failure to obtain future financing will require the Company to delay or substantially curtail its operations or close its business, resulting in a material adverse effect on the Company.

Off Balance Sheet Arrangements

None.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We do not presently enter into any transactions involving derivative financial instruments for risk management or other purposes.

Our available cash balances are held in our corporate bank account which is non-interest bearing but is insured by the FDIC. We do not currently have any cash flows that arise outside of the United States and today we are not subject to market risk associated with changes in foreign exchange rates.

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Item 8. Financial Statements and Supplementary Data.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

 Immunosyn Corporation

 La Jolla, California

(A Development Stage Company)

We have audited Immunosyn Corporation (“Immunosyn” or the “Company”) internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Immunosyn management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express an opinion on the effectiveness of Immunosyn’s internal control over financial reporting based upon our audit.

We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii)

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weaknesses have been identified at December 31, 2008 and included in management’s assessment:

1. The control environment, which is the responsibility of senior management, sets the tone of the organization, influences the control consciousness of its people, and is the foundation for all other components of internal control over financial reporting. The Company did not maintain an effective control environment due to the aggregate effect of multiple deficiencies in internal controls, which affect the Company’s control environment, including:

a) the ineffective implementation and enforcement of the limits on the delegation of authority for expenditure from the Board of Directors to management, including the failure by management to obtain the requisite Board of Director’s approvals for certain expenditures; b) the lack of an effective process for identification of fraud risks; c) a failure to implement and ensure consistent acknowledgment of the Company’s Code of Ethics; d) the lack of an internal audit function or other effective mechanism for ongoing monitoring of the effectiveness of internal controls; and e) lack of documentation and communication of Immunosyn’s accounting policies and procedures.

2. Limited number of qualified accounting personnel with expertise with SEC reporting and generally accepted accounting principles.

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3. Lack of effective segregation of duties, resulting in the inability of the Chief Financial Officer and the Chief Executive Officer to perform an independent review and quality assurance function within the accounting and financial reporting group. Additionally, management and accounting personnel have widespread access to create and post entries within the Company’s accounting system without the appropriate level of review.

These material weaknesses were considered in determining the nature, timing and extent of audit tests applied in our audit of the financial statements as of and for the year ended December 31, 2008, and this report does not affect our report dated March 16, 2009 on those financial statements.

In our opinion, because of the effects of the material weaknesses described above on the achievement of the criteria established in Internal Control-Integrated Framework issued by COSO, Immunosyn’s control over financial reporting as of December 31, 2008 was not effective.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the balance sheets of Immunosyn Corporation as of December 31, 2008 and 2007, and the related statements of income, changes in stockholders’ equity and cash flows for the years ended December 31, 2008 and 2007 and for the period from August 3, 2006 (inception) through December 31, 2008 and our report dated March 16, 2009 expressed an unqualified opinion thereon.

/s/ Malone & Bailey, P.C.

www.malone-bailey.com

 Houston, TX

 March 16, 2009

28

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

 Immunosyn Corporation

 La Jolla, California

(A Development Stage Company)

We have audited the accompanying balance sheets of Immunosyn Corporation (a development stage company) as of December 31, 2008 and 2007 and the related statements of expenses, changes in shareholders’ equity (deficit), and cash flows for the years then ended and for the period from August 3, 2006 (inception) through December 31, 2008. These financial statements are the responsibility of Immunosyn Corporation’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide 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 Immunosyn Corporation as of December 31, 2008 and 2007, and the results of operations and cash flows for the years then ended and for the period from August 3, 2006 (inception) through December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 16, 2009 expressed an adverse opinion.

The accompanying financial statements have been prepared assuming that Immunosyn Corporation will continue as a going concern. As discussed in Note 2 to the financial statements, Immunosyn Corporation suffered losses from operations and has a working capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters also are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Malone & Bailey, P.C.

www.malone-bailey.com

 Houston, TX

 March 16, 2009

29

Immunosyn Corporation

(A Development Stage Company)

Balance Sheets

	December 31, 2008			December 31, 2007
ASSETS
Current Assets
Cash	$	2,052		$	24,115
Prepaid expenses		41,455			51,480
Total Current Assets		43,507			75,595
Property and equipment		6,433			6,433
Accumulated depreciation		(2,466	)		(1,179	)
License rights		400,000			400,000
Deposits		2,825			4,642
Total Assets	$	450,299		$	485,491
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
Note payable	$	35,105		$	-
Accounts payable		320,352			151,693
Accrued expenses		-			16,717
Accrued compensation		14,268			-
Advances from affiliates		893,663			640,708
Total Current Liabilities		1,263,388			809,118
Shareholders’ Equity (Deficit)
Common stock, $0.0001 par value, 425,000,000 shares authorized, 272,200,976 and 272,000,000 shares issued and outstanding at December 31, 2008 and 2007, respectively		27,220			27,200
Additional paid-in capital		1,094,630			477,773
Deficit accumulated during the development stage		(1,934,939	)		(828,600	)
Total Shareholders’ Deficit		(813,089	)		(323,627	)
Total Liabilities and Shareholders’ Deficit	$	450,299		$	485,491

See accompanying summary of accounting policies

 and notes to financial statements.

30

Immunosyn Corporation

(A Development Stage Company)

Statements of Expenses

	Year Ended December 31, 2008			Year Ended December 31, 2007			August 3, 2006 (inception) Through December 31, 2008
EXPENSES
General & administrative	$	1,045,013		$	646,777		$	1,847,553
Interest expense		61,326			26,060			87,386
NET LOSS	$	(1,106,339	)	$	(672,837	)	$	(1,934,939	)
Net loss per share, basic and diluted	$	-		$	-
Weighted average number of common shares outstanding		272,112,566			272,000,000

See accompanying summary of accounting policies

 and notes to financial statements.

31

Immunosyn Corporation

(A Development Stage Company)

Statements of Cash Flows

	Year Ended December 31, 2008			Year Ended December 31, 2007			August 3, 2006 (inception) through December 31, 2008
Cash flows from operating activities:
Net loss	$	(1,106,339	)	$	(672,837	)	$	(1,934,939	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1,287			1,179			2,466
Imputed interest on advances from affiliates		61,326			26,060			87,386
Services rendered for stock		555,551			66,413			62,964
Changes in:								-
Prepaid expenses		10,025			(51,480	)		(41,455	)
Other assets		1,817			(2,500	)		(2,825	)
Accounts payable		195,072			151693			346,765
Accrued expenses		(2,449	)		2,671			14,268
Net cash used in operating activities		(283,710	)		(478,801	)		(906,370	)
Cash flows from investing activities:
Purchase of property and equipment		-			(6,433	)		(6,433	)
Net cash used in investing activities		-			(6,433	)		(6,433	)
Cash flows from financing activities:
Net advances from affiliates		261,647			500,117			902,355
Sale of common stock		-			-			12,500
Net cash provided by financing activities		261,647			500,117			914,855
Net change in cash		(22,063	)		14,883			2,025
Cash at beginning of period		24,115			9,232			-
Cash at end of period	$	2,05215		$	24,115		$	2,052
Supplemental Disclosures
Cash paid for interest	$	-		$	-		$	-
Cash paid for income taxes	$	-		$	-		$	-
Non-Cash Investing and Financing Activities
Stock issued for license rights	$	-		$	-		$	400,000

See accompanying summary of accounting policies

 and notes to financial statements.

32

Immunosyn Corporation

(A Development Stage Company)

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

For The Period From August 3, 2006 (Inception) through December 31, 2008

	Common Stock
	Shares		Par Value		Additional Paid-in Capital		Development Stage Accumulated Deficit			Total
Balance at August 3, 2006 (Inception)		-	$	-	$	-	$	-		$	-
Stock issued		125,000,000		12,500		-		-			12,500
Stock issued for license agreement		147,000,000		14,700		385,300		-			400,000
Net loss								(155,763	)		(155,763	)
Balance at December 31, 2006		272,000,000		27,200		385,300		(155,763	)		256,737
Imputed interest on advances from affiliate		-		-		26,060		-			26,060
Shares issued for services		-		-		66,413		-			66,413
Net loss		-		-		-		(672,837	)		(672,837	)
Balance at December 31, 2007		272,000,000		27,200		477,773		(828,600	)		(323,627	)
Imputed interest on advances from affiliate		-		-		61,326		-			61,326
Shares issued for services		200,976		20		555,531		-			555,551
Net loss		-		-		-		(1,106,339	)		(1,106,339	)
Balance at December 31, 2008		272,200,976	$	27,220	$	1,094,630	$	(1,934,939	)	$	(813,089	)

See accompanying summary of accounting policies

 and notes to financial statements.

33

Immunosyn Corporation

(A Development Stage Company)

Notes To Financial Statements

Note 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Background

Immunosyn Corporation is a Delaware corporation formed on August 3, 2006 and headquartered in La Jolla, California that has been granted an exclusive worldwide license to market, distribute and sell a biopharmaceutical drug product, currently referred to as SF-1019, in its current form.  Its current form has multiple uses including the treatment of any and all diseases and pathological conditions (not just Chronic Inflammatory Demyelinating Polyneuropathy (CIDP), Diabetic Neuropathy (DN) and diabetic ulcers (DU)). This license was granted from an affiliated company, Argyll Biotechnologies, LLC (“Argyll Biotech”).  Immunosyn is further granted the rights to any improvements of SF-1019 and other compounds, which are developed under the same technology platform and which are chemically similar to SF-1019.

Cash and Cash Equivalents

For purposes of the statement of cash flows, Immunosyn considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Long-Lived Assets

Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying amount is not recoverable, an impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its fair value.  Impairment testing was conducted as of December 31, 2008 with no impairment found.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight –line method over the estimated useful lives of the respective assets, generally five years.

Income Taxes

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amount of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Stock-Based Compensation

Stock based compensation is accounted for under SFAS No. 123R, “Share-Based Payment.” SFAS No. 123R requires recognition in the financial statements of the cost of employee services received in exchange for an award of equity instruments over the period the employee is required to perform the services in exchange for the award (presumptively the vesting period). SFAS No. 123R also requires measurement of the cost of employee services received in exchange for an award based on the grant-date fair value of the award. We account for non-employee share-based awards in accordance with EITF No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquisition, or in Conjunction with Selling, Goods or Services.”

Basic and Diluted Net Loss per Share

Basic and diluted net loss per share calculations are presented in accordance with Financial Accounting Standards Statement 128, and are calculated on the basis of the weighted average number of common shares outstanding during the year. They include the dilutive effect of common stock equivalents in years with net income. Basic and diluted loss per share are the same due to the absence of common stock equivalents.

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Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements

Immunosyn does not expect any recent accounting pronouncements to have a material effect on its financial position or results of operations.

Note 2.  GOING CONCERN UNCERTAINTY

The accompanying financial statements have been prepared assuming that Immunosyn will continue as a going concern. Immunosyn was formed in August 2006 with an initial source of financing from issuance of common stock and an advance from an affiliate. As shown in the financial statements, Immunosyn had an accumulated deficit of $1,934,939 and a working capital deficit of $1,219,881 as of December 31, 2008 which is considered insufficient to fund operations over the next 12 months. Management is trying to raise additional capital through sales of common stock and is seeking financing from third parties. These conditions raise substantial doubt about Immunosyn’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.

Note 3.  LICENSE RIGHTS

Grant of Rights

Under the terms of the license agreement executed on September 28, 2006, Immunosyn was granted the exclusive worldwide right to market, distribute, sell and promote SF-1019 for treatment of Chronic Inflammatory Demyelinating Polyneuropathy (CIDP), diabetic neuropathy (DN) and diabetic ulcers (DU) by Argyll Biotech, in exchange for 147,000,000 shares of the common stock of the Company. On October 25, 2007, Immunosyn and Argyll Biotech amended the license agreement to expand the grant of rights to Immunosyn to include the exclusive worldwide right to market, sell, distribute and promote SF-1019 in its current form for multiple uses including the treatment of any and all diseases and pathological conditions (not just CIDP, DN and DU).  Immunosyn is further granted the rights in this amended license agreement to any improvements of SF-1019 and other compounds, which are developed under the same technology platform and which are chemically similar to SF-1019. Argyll Biotech purchased a group of patents for $5,000,000 which, along with other intellectual property, is included in the license agreement. Also, during the first five years of the term of the license agreement, Immunosyn has the right to enter into partnering arrangements with Argyll Biotech for development of other novel drug treatment products.

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License Fees

As consideration to Argyll Biotech for the rights granted to Immunosyn under the agreement, Immunosyn issued 147,000,000 shares of common stock to Argyll Biotech.

Payments and Reports

Argyll Biotech is not obligated to provide any accounting for its use of proceeds, nor does Immunosyn have any audit rights to inspect Argyll Biotech’s use of the license proceeds. Immunosyn is required to submit periodic sales reports to Argyll Biotech.

Manufacture and Supply

Argyll Biotech retains responsibility for manufacturing and supplying all of Immunosyn’s requirements of SF-1019. Argyll Biotech and Immunosyn have agreed that the cost of SF-1019 to Immunosyn shall be equal to forty percent (40%) of the gross sales price of SF-1019 as sold to a third party customer by Immunosyn.  Argyll Biotech shall also confirm through testing and other programs that the commercial quantities of SF-1019 that it manufactures are fully compliant with all manufacturing and laboratory standards applicable to drug products which are intended for use in humans.

Ownership, Patents and Trademarks

Argyll Biotech retains full ownership of its intellectual property, including intellectual property that is jointly-developed by the parties. Argyll Biotech must take reasonable steps to protect its intellectual property from third-party infringement, and to defend Immunosyn against charges of infringement that refer, relate or pertain to Immunosyn’s marketing, sale and distribution of SF-1019.

Publication and Confidentiality

Argyll Biotech and Immunosyn must collaborate on all publications of scientific or medical reports relating to either company’s business, operations, research and development or clinical trial results.

Recall and Indemnification

Argyll Biotech retains full responsibility for costs and activities relating to any recall of SF-1019, and is required to defend, indemnify and hold Immunosyn harmless for, from and against damages associated with those recalls.

Term and Termination

The license agreement is in full force and effect for as long as any patent coverage remains in place for SF-1019 in any country. Either party may terminate the agreement only on account of an uncured material breach by the other party. Immunosyn may terminate the agreement if a non-rebuttable regulatory or patient safety issue is raised, in which event all remaining license fee obligations will immediately be cancelled. Any fees paid prior to termination are non-refundable.

Valuation

The license rights are recorded at Argyll Biotech’s cost basis of the underlying patents licensed to Immunosyn due to Argyll Biotech being a related party. The cost basis was determined using a discounted cash flow model prepared by a third party valuation firm at the time the license was granted and such valuation is updated annually to determine whether the carrying value exceeds the estimated fair value of the license.  No impairment was recorded in 2008 or 2007.

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Note 4.  ADVANCES FROM AFFILIATES

Since inception, Immunosyn was advanced $885,105 from Argyll Equities, LLC and Argyll Biotech who together own approximately 60% of Immunosyn’s common stock. These advances are unsecured and are to be repaid on demand. Interest expense in the amount of $87,386 since inception, $61,326 in 2008 and $26,060 in 2007 was accrued using an annual rate of 7.5%. Advances from Stephen D. Ferrone, CEO and President of Immunosyn, in the amount of $8,559 as of December 31, 2008 and $7,936 as of December 31, 2007 are due and payable as of December 31, 2008 are included in advanced from affiliates.

Note 5.  NOTE PAYABLE

During October 2008, Immunosyn entered into an agreement with First Insurance Funding Corp. of California to finance $44,000 of the annual insurance premium.  The note is due August 26, 2009, carries an interest rate of 6.15% and has monthly payments of principal and interest of $5,015.

Note 6.  STOCKHOLDERS’ EQUITY

Between August 3, 2006 and August 31, 2006, Immunosyn sold a total of 125,000,000 shares of Common Stock, at a purchase price of $0.0001 per share, to various investors, resulting in gross proceeds to the Company of $12,500.

In September 2006, a total of 147,000,000 shares of Common Stock were issued to Argyll Biotech as a non-refundable payment of the license fee for Immunosyn's exclusive license to SF-1019.

Immunosyn entered into a 12 month contract with The Blaine Group, Inc. (TBG) on October 12, 2007 for TBG to undertake a national financial public relations and investors relations campaign for Immunosyn.  As part of this contract, TBG agreed to handle all public relations matters for Immunosyn.  This contract shall continue until terminated by either party with thirty days written notice.  Immunosyn agreed to pay TBG $1,500 per month in restricted stock.  As a result, a total of 743 and 20,213 shares of common stock were earned by TBG in 2007 and 2008, respectively, and a total of 20,976 shares of common stock were issued to TBG in 2008.

Immunosyn entered into a contract with Basic Investors, Inc. (Basic) on October 15, 2007 to engage Basic to provide management and financial consulting services to Immunosyn.  The term of this contract was from October 15, 2007 through October 15, 2008.  Pursuant to this contract, Immunosyn issued 10,000 shares of common stock to Basic on April 29, 2008.

Immunosyn issued 150,000 shares of common stock on August 14, 2008 to First Montauk Securities Corp. or its designated affiliates pursuant to an advisory agreement entered into on April 23, 2008 for First Montauk to provide financial advisory services to Immunosyn.  The total value of such shares is $524,750.

On September 29, 2008, Immunosyn agreed to a 6 month contract with Bear Creek Advisors, LLC (Bear Creek) to provide consulting services for Immunosyn.  Immunosyn agreed to pay Bear Creek Advisors 30,000 shares of common stock for these services. Immunosyn issued 20,000 of these 30,000 restricted shares during 2008.

Stock Options

Immunosyn has adopted a stock option plan for employees, outside consultants, and directors. There are 7,450,000 common shares available for grant under the plan. The plan allows for incentive options with exercise prices of at least 100% of the fair market value of Immunosyn’s common stock and nonqualified options with exercise prices of at least 85% of the fair market value of Immunosyn’s common stock.

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Immunosyn accounts for stock options using the fair value method. Fair value is determined at the date of grant for employee options and at the date at which the grantee’s performance is complete for non-employee options. Compensation cost is recognized over the vesting period based on the fair value of the options. The fair value of the options is calculated using the Black-Scholes option pricing model.

No options had been granted as of December 31, 2008.

Note 7.  INCOME TAXES

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amount of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.  Since inception, Immunosyn has incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $1,900,000 at December 31, 2008 and will expire beginning 2026.

Deferred tax assets consisted of the following as of December 31:

		2008			2007
Net Operating Losses	$	$657,879		$	281,724
Less:  valuation allowance		(657,879	)		(281,724	)
Net deferred tax asset		-			-

Note 8.  COMMITMENTS AND CONTINGENT LIABILITIES

On October 12, 2007, Immunosyn entered into a 12 month contract with The Blaine Group, Inc. (TBG) for TBG to undertake a national financial public relations and investors relations campaign for Immunosyn.  As part of this contract, TBG agreed to handle all public relations matters for Immunosyn.  This contract shall continue until terminated by either party with thirty days written notice.  Immunosyn agreed to pay TBG $10,000 as a monthly retainer fee.  $8,500 of this retainer is payable in cash and $1,500 in restricted stock to be valued at current market value on the date of issue. See Note 6 for details.

Pursuant to a subpoena dated January 20, 2006 issued by the Securities and Exchange Commission to an affiliate of Argyll Biotech in proceedings captioned In the Matter of Directors Financial Group, Ltd. and In The Matter of Prime Bank Securities, and pursuant to subpoenas issued by the SEC to affiliates of Argyll Biotech on March 30, 2006 and to Immunosyn on December 15, 2006 in a proceeding captioned In The Matter of The Argyll Group, LLC, Immunosyn and its affiliates have been asked to produce all documents concerning a wide variety of topics including many related directly to Immunosyn. Immunosyn and Argyll Biotech’s affiliates actively cooperated with the SEC and produced documents responsive to these subpoenas, completing their responses in early August 2007.  The Directors Financial Group matter was resolved in June 2006 through a settlement between the SEC and the parties to the proceeding, and, accordingly, Immunosyn will not be required to respond further to that subpoena.  Immunosyn has had no further communication with the SEC regarding the remaining subpoenas since January 2007.

On March 16, 2007, Frank Bramante and Salvatore Bramante commenced an action in the United Stated District Court for the Southern District of California against various defendants including Immunosyn seeking amongst other relief an injunction to prevent the transfer and/or sale of the patents and/or proprietary information relating to SF-1019 to third parties.  The case was stayed by Order dated January 17, 2008 pending resolution of a largely duplicative action filed in the United Stated District Court for the Western District of Texas, San Antonio Division, by the same plaintiffs against the same defendants excludingImmunosyn on July 28, 2006.  The Texas action was dismissed with prejudice in September 2008 and a formal dismissal in the California action is in the process of being submitted to the Court in order to formally close this case.  The Company does not have any liability in this matter.

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On December 19, 2007, a shareholder of Immunosyn, Leon S. Segen, commenced an action in the Southern District of New York derivatively on behalf of Immunosyn to recover alleged short-swing profits from several alleged statutory insiders of Immunosyn, including Immunosyn officer and director Douglas A. McClain Jr. This action is in the discovery phase.  The action includes Immunosyn as a nominal defendant only and does not allege any claims of liability against Immunosyn.

On March 19, 2008, a shareholder of the Company, Deborah Donoghue, commenced two actions — one in the U.S. District Court for the Southern District of California and the other in the U.S. District Court for the Southern District of New York – derivatively on behalf of the Company to recover alleged short-swing profits from several alleged statutory insiders of the Company, including Company officer and director Douglas A. McClain Jr.  The actions include the Company as a nominal defendant only and do not allege any claims of liability against the Company.  Donoghue withdrew the New York action in April 2008 and the California action has been stayed pending resolution of the related earlier-filed action by shareholder Leon Segen currently pending in the Southern District of New York.

On or about July 27, 2006, Daval filed suit in the High Court of Justice, Chancery Division in London, England against Argyll Biotech and five of Argyll Biotech’s research scientists and others, including Douglas McClain, Sr., seeking an injunction and damages or an account of profits based on allegations of breach by the scientists and Mr. McClain of confidentiality agreements with Daval, breaches by such persons of their fiduciary duties and conspiracy by Argyll Biotech and certain of its shareholders to wrongfully disclose and use Daval’s alleged trade secrets.  These proceedings do not allege infringement of any Daval patent whether by Argyll Biotech or any of the other defendants.  Argyll Biotech has filed its defenses and continues to investigate the merits of the suit and the basis of its defenses including, among other grounds, that one of the active ingredients in SF-1019 disclosed in Argyll Biotech’s 603 Application is based on independent research by Argyll Biotech’s research scientists, and the method of producing SF-1019 is materially different from Daval’s process. The action had been listed for trial in the UK in January 2009 but, in December 2008, the High Court in London ordered that the trial be rescheduled for a later date likely to be late 2009 or early 2010. Immunosyn is not involved in this litigation.

Immunosyn has been provided with rent-free office space for two executive offices under a monthly oral agreement with no specific term from its affiliate and shareholder, Argyll Equities LLC. It is uncertain how long Argyll Equities will continue providing office space or on what terms space will continue to be provided to Immunosyn in the future. At present, Immunosyn does not require dedicated office space.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed by the Company in reports it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial and Accounting Officer, as appropriate, to allow timely decisions regarding required disclosures.  In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.  As of the end of the period covered by this report, and under the supervision and with the participation of management, including its Chief Executive Officer and Chief Financial and Accounting Officer, who are responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, such persons conducted an evaluation of the effectiveness of the design and operation of these disclosure controls and procedures. Based on this evaluation and subject to the foregoing, the Company’s Chief Executive Officer and Chief Financial and Accounting Officer concluded that these controls are not effective because there are material weaknesses in our internal control over financial reporting. To address the material weakness, we performed additional analysis and other post-closing procedures in an effort to ensure our consolidated financial statements included in this annual report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

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Immunosyn recognizes the importance of internal controls.  As Immunosyn is currently a development stage company with limited ongoing financial operations, management is making an effort to mitigate this material weakness to the fullest extent possible.  At present this is done by having the Chief Executive Officer review Immunosyn’s financial statements, account reconciliations and accounts payable reports that have been prepared by Chief Financial Officer for reasonableness.  All unexpected results are investigated.  At any time, if it appears that any control can be implemented to continue to mitigate such weakness, it will be immediately implemented.  As Immunosyn grows in size and as its finances allow, management will hire sufficient accounting staff and implement appropriate procedures for monitoring and review of work performed by our Chief Financial Officer.

Management’s Annual Report on Internal Control over Financial Reporting

Section 404 of the Sarbanes-Oxley Act of 2002 requires that management document and test the Company’s internal control over financial reporting and include in this Annual Report on Form 10-K a report on management’s assessment of the effectiveness of our internal control over financial reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Securities Exchange Act of 1934, as amended.  Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  

In order to evaluate the effectiveness of our internal control over financial reporting as of December 31, 2008, as required by Section 404 of the Sarbanes-Oxley Act of 2002, our management conducted an assessment, including testing, based on the criteria set forth in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO Framework”).  A material weakness is a control deficiency, or a combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of our annual or interim financial statements will not be prevented or detected.  In assessing the effectiveness of our internal control over financial reporting, management identified the following material weaknesses in internal control over financial reporting as of December 31, 2008:

1. Deficiencies in the Company’s Control Environment.  The Company’s control environment did not sufficiently promote effective internal control over financial reporting throughout the organization. This material weakness exists because of the aggregate effect of multiple deficiencies in internal control which affect the Company's control environment, including: a) a failure to effectively implement, follow, and enforce the limits on the delegation of authority for expenditure from the Board of Directors to management, including the failure by management to obtain the required Board approvals for certain expenditures; b) the lack of an effective risk assessment process for the identification of fraud risks; c) a failure to implement and ensure the consistent and timely completion of employee acknowledgments of the Company's Code of Ethics; d) the lack of an internal audit function or other effective mechanism for ongoing monitoring of the effectiveness of internal controls; and e) insufficient documentation and communication of our accounting policies and procedures.

2. Deficiencies in the staffing of our financial accounting department.  The number of qualified accounting personnel with experience in public company SEC reporting and GAAP is limited.  This weakness does not enable us to maintain adequate controls over our financial accounting and reporting processes regarding the accounting for non-routine and non-systematic transactions. There is a risk that a material misstatement of the financial statements could be caused, or at least not be detected in a timely manner, by this shortage of qualified resources.  

3. Deficiencies in Segregation of Duties.  The Chief Executive Officer and the Chief Financial Officer are actively involved in the preparation of the financial statements, and therefore cannot provide an independent review and quality assurance function within the accounting and financial reporting group.  The limited number of qualified accounting personnel discussed above results in an inability to have independent review and approval of financial accounting entries.  Furthermore, management and financial accounting personnel have wide-spread access to create and post entries in the Company’s financial accounting system.  There is a risk that a material misstatement of the financial statements could be caused, or at least not be detected in a timely manner, due to insufficient segregation of duties.

Based on the material weaknesses described above and the criteria set forth by the COSO Framework, we have concluded that our internal control over financial reporting at December 31, 2008 was not effective.

The Company's independent registered public accounting firm, Malone & Bailey, PC, has issued an attestation report on the Company's internal control over financial reporting. That report appears on page 27.

Changes in Internal Controls

In our efforts to continuously improve our internal controls, management intends to take steps, when funding permits, to enchance controls and procedures subsequent to December 31, 2008 as part of our remediation efforts in addressing the material weaknesses above. One of the steps management intends to take is to increase documentation around certain authorization and review controls.

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers, and Corporate Governance.

Set forth below is information regarding the Company’s current directors and executive officers.  There are no family relationships between any of our directors or executive officers.  The directors are elected annually by stockholders.  The executive officers serve at the pleasure of the Board of Directors.

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Name	Age	Title
Stephen D. Ferrone	58	President and Chief Executive Officer, Director
Douglas A. McClain, Jr.	34	Chairman of the Board, Chief Financial and Accounting Officer, Secretary, Director
Myron W. Wentz	68	Director

STEPHEN D. FERRONE, President and Chief Executive Officer, Director

Mr. Ferrone was appointed by the Company to serve as the President and Chief Executive Officer of the Company and a member of the Board of Directors effective the opening of business on October 15, 2007.  Mr. Ferrone is an attorney with more than 20 years of experience in the investment industry, having held senior leadership and management roles in marketing and sales with a number of publicly traded financial services companies including Morningstar, Inc., ABN-AMRO and Charles Schwab & Co., Inc.  From August 2005 to October 2007, Mr. Ferrone was the founder and principal of SF Consulting, a private business consulting company.  From May 2005 to August 2005, Mr. Ferrone served as the Director of Distribution and National Sales of Morningstar, Inc. and Morningstar Investment Services.  From August 1996 to April 2005, Mr. Ferrone had various roles at ABN-AMRO Asset Management and ABN-AMRO Investment Fund Services including Senior Managing Director and National Sales Director.  From May 1991 to August 1996, Mr. Ferrone served as a Regional Marketing Director of Charles Schwab & Co., Inc. and Schwab Institutional.  In addition, from September 1977 to May 1983, Mr. Ferrone served as an Assistant State’s Attorney and felony trial prosecutor in the Cook County State’s Attorney’s Office in Chicago, Illinois.  He holds a JD degree from Loyola University School of Law and a BA from Northwestern University.  He is also a licensed securities broker holding series 7, 24 and 63 licenses.

Mr. Ferrone is not currently a director of any other reporting company.  There are no family relationships between Mr. Ferrone and any of the other directors or executive officers of the Company.  Mr. Ferrone, through SF Consulting, was previously a party to a consulting arrangement with the Company which called for payments aggregating $150,000.  Mr. Ferrone served as a director and officer of a predecessor of the Company, Nurovysn Merger Corporation, which was dissolved in August 2006.

DOUGLAS A. MCCLAIN, JR., Chairman of the Board, Chief Financial and Accounting Officer, Secretary, Director

Mr. McClain is a financial executive with 10 years of experience.  In 2002, Mr. McClain co-founded Argyll Equities, LLC and its affiliates (including Argyll Biotech), a boutique private equity investment banking and corporate finance firm, where he serves as an executive officer and director.  In 1999, he joined International Profit Associates, a business consulting firm, as a Senior Executive responsible for mergers and acquisitions and corporate finance, where he was employed until 2001.  From 2001 to 2002, Mr. McClain was a business consultant.  Mr. McClain graduated with a Bachelor of Business Administration in Finance from Mercer University’s Stetson School of Business and Economics in 1996.  Mr. McClain was a founder of the Company and has been a director and officer since inception in August 2006.  Mr. McClain resigned as Chief Financial Officer and Chief Accounting Officer of the Company effective the close of business on Friday, October 19, 2007, but resumed such positions on February 1, 2008.  He is also Chairman of the Board of Directors and Secretary of the Company.

MYRON W. WENTZ, Director

Myron W. Wentz became a director of the Company on March 14, 2008.  Dr. Wentz is Chairman of the Board of USANA Health Sciences, Incorporated (NASDAQ: USNA).  Dr. Wentz founded USANA in 1992 and has been the Chairman and, until 2008,  CEO since its inception.  USANA is a public company that develops and manufactures nutritional and personal care products that are sold directly to preferred customers and associates throughout the world.  In 1974, Dr. Wentz founded Gull Laboratories (the former parent company of USANA) and served as President and Chairman from 1974 to 1994 during which time Gull developed, manufactured and marketed medical diagnostic test kits designed to detect infectious diseases, particularly those caused by viruses, and used in private and hospital laboratories around the world.  Gull was sold to Fresenius, a German medical products company, in 1994 although Dr. Wentz continued as Chairman until 1998.  In 1998, Dr. Wentz founded Sanoviv Medical Institute, a holistic medical facility located on the Pacific Coast near Rosarito Beach, Mexico.  Dr. Wentz received his doctorate from North Central College in Illinois.

As part of the Stock Purchase and Option Agreement dated March 13, 2008 between Dr. Wentz and Argyll Biotech, the Company’s largest shareholder, Argyll Biotech agreed to nominate and/or cause Dr. Wentz (or his designees) to be elected to the Company’s Board of Directors at each annual meeting of stockholders for so long as Dr. Wentz owns at least 200,000 shares of the Company’s Common Stock and Argyll Biotech agreed to vote all, or cause (to the extent within its control) to be voted all, shares of the Company’s Common Stock owned or controlled by Argyll Biotech, directly or indirectly, to be voted to elect Dr. Wentz or his designee to serve on the Company’s Board of Directors for so long as Dr. Wentz owns at least 200,000 shares of the Company’s Common Stock.  Dr. Wentz agreed to serve on the Company’s Board of Directors if elected.

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Advisors and Consultants

The following person is serving as an advisor to the Company:

FRED G. JAGER – Mr. Jager is founder, president and chief executive officer of Hunter Wise Financial Group, LLC and Hunter Wise Securities, LLC.  For three decades he has represented public and privately held companies throughout North America, and a successful advisor in middle-market corporate finance.  Formerly president of Geneva Corporate Finance, Inc., Mr. Jager also founded Denver-based Jager & Company, Inc., which was the largest corporate finance firm of its kind in the Rocky Mountain region.  He also was executive vice president of an investment banking firm in Northern California, and chief operating officer of one of the largest vocational educational companies in the world.  A former intelligence officer, Mr. Jager has been a director on numerous public and private companies, is experienced business speaker and author of numerous published articles.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act, as amended, requires our executive officers, directors and persons who beneficially own more than 10% of our shares of Common Stock to file reports of their beneficial ownership and changes in ownership (Forms 3, 4 and 5, and any amendment thereto) with the SEC.  Executive officers, directors, and greater-than-ten percent holders are required to furnish us with copies of all Section 16(a) forms they file.

Based solely upon a review of Forms 3, 4 and 5 furnished to us for the fiscal year ended December 31, 2008, we have determined that our directors, officers and greater than 10% beneficial owners, except as provided below, complied with all applicable Section 16 filing requirements.

Padmore Holdings, Ltd., Argyll Equities, James T. Miceli and Douglas A. McClain Jr. were late in filing one or more transactions on Form 4.  We have informed the above individuals and entities of the status of their filings and understand that appropriate filings will be made.

Code of Ethics

The Company has adopted a code of ethics that applies to the Company’s principal executive officer, principal financial and accounting officer, or persons performing similar functions.  This code of ethics is available, free of charge, on our website at  www.immunosyn.com.

Corporate Governance

Nominating Process

The Company’s Board of Directors has no nominating committee.  When the Company develops its operations, it will create a nominating committee.  In the meantime, the entire Board of Directors is acting as the Company’s nominating committee.  There are no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors.

Audit Committee Financial Expert

The Company does not have an audit committee or a compensation committee of its Board of Directors.  In addition, the Company’s Board of Directors has determined that the Company does not have an audit committee financial expert serving on the Board.  When the Company develops its operations, it will create an audit and a compensation committee and will seek an audit committee financial expert for its Board and audit committee.  Until it has such committees and such an expert, the Company will not be able to list its stock on the Nasdaq or the major securities exchanges.  In the meantime, the entire Board of Directors is acting as the Company’s audit committee.

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Item 11. Executive Compensation.

Compensation Discussion and Analysis

We do not have a compensation committee; all decisions regarding compensation are made by our Directors.

In 2008, Stephen D. Ferrone, our President and Chief Executive Officer was paid an annual salary of $3,000 per month pursuant to an amended Employment Agreement with the Company.  Mr. Ferrone agreed to allow the Company to accrue his compensation after August 19, 2008.   Mr. Ferrone does not receive any non-cash compensation. We believe that this salary is below the market salary for someone of Mr. Ferrone’s qualifications; however in negotiations between the Company and Mr. Ferrone, this amount was considered appropriate given the developmental status of the Company. We believe that Mr. Ferrone’s equity holdings in the Company provide him with an incentive to improve the Company’s performance.

Douglas A. McClain, Jr., our Chief Financial and Accounting Officer, did not receive compensation from the Company in 2008 and does not currently receive any such compensation. We believe that this is appropriate given the developmental status of the Company and in light of the Mr. McClain’s significant indirect equity stake in the Company through Argyll Equities and Argyll Biotech.

We do not currently believe that it is appropriate to issue equity based compensation, although the Company has established a stock option plan for employees, directors and consultants and reserved 7,450,000 shares for issuance under such plan.

The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named executive officers during the 2007 and 2008 fiscal years:

Summary Compensation Table – 2008

Name and Position (a)	Year (b)		Salary ($) (c)		Bonus ($) (d)		Stock Awards ($) (e)		Option Awards ($) (f)		Non-Equity Incentive Plan Compensation ($) (g)		Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (h)		All Other Compensation ($) (i)		Total ($) (j)
D. Kent Norton, President and CEO (1)	2007			0		0		0		0		0		0		0		0
Stephen D. Ferrone, President and CEO (2)		2007 2008		7,696 22,500		0 0		0 0		0 0		0 0		0 0		0 0		7,696 22,500
Douglas A. McClain, Jr., Chief Financial and Accounting Officer (3)		2007 2008		0 0		0 0		0 0		0 0		0 0		0 0		0 0		0 0
G. David Criner, Chief Financial and Accounting Officer (4)		2007 2008		7,043 3,000		0 0		0 0		0 0		0 0		0 0		0 0		7,043 3,000

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(1) Mr. Norton resigned his positions as President and Chief Executive Officer of the Company and a member of the Board of Directors effective the close of business on Friday, October 12, 2007.

(2) Stephen D. Ferrone was appointed by the Company to serve as the President and Chief Executive Officer of the Company and a member of the Board of Directors effective the opening of business on October 15, 2007 to fill the vacancy created by the resignation of Mr. Norton from such positions.

(3) Douglas A. McClain, Jr. resigned as Chief Financial Officer and Chief Accounting Officer of the Company effective the close of business on Friday, October 19, 2007.  He remained as a member of the Board of Directors and as Secretary of the Company.  Mr. McClain was appointed by the Company to serve as the Chairman of the Board of the Company effective the opening of business on October 22, 2007.  Mr. McClain resumed his role as Chief Financial and Accounting Officer of the Company effective February 1, 2008 upon the resignation of Mr. Criner.

(4) G. David Criner was appointed by the Company to serve as the Chief Financial Officer and Chief Accounting Officer of the Company effective the opening of business on October 22, 2007 to fill the vacancy created by the resignation of Mr. McClain from such positions.  Mr. Criner resigned his position effective February 1, 2008.

Narrative Disclosure to Summary Compensation Table

D. Kent Norton, the Company’s President and Chief Executive Officer until October 12, 2007, was not a party to an employment agreement with the Company.

Effective October 15, 2007, Stephen D. Ferrone and the Company entered into an Employment Agreement (the “Ferrone Employment Agreement”) pursuant to which Mr. Ferrone is employed by the Company as its President and Chief Executive Officer, as described below.  In addition, Argyll Biotechnologies, LLC has agreed to nominate and/or cause Mr. Ferrone to be elected to the Company’s Board of Directors at each annual meeting of stockholders during the Term.  The term of the Ferrone Employment Agreement began on October 15, 2007 and will terminate on December 31, 2009, unless earlier terminated, and will automatically extend for each succeeding one year period unless either party provides the other with a written notice at least 30 days prior to the end of the then current Term advising that the party providing the notice shall not agree to so extend the Term (the “Term”).

On November 15, 2007, Mr. Ferrone and the Company entered into a First Amendment to the Ferrone Employment Agreement pursuant to which the parties agreed to change the base compensation Mr. Ferrone is to receive from the Company under the Ferrone Employment Agreement to a base salary equal to $3,000 per month (or pro rata portion thereof) payable semi-monthly (less applicable taxes and withholdings).  Under this Amendment, Mr. Ferrone’s base salary continues to be subject to annual review by the Company’s Board or the Compensation Committee thereof for discretionary periodic increases but not decreases.

Under the Ferrone Employment Agreement, Mr. Ferrone is to receive a bonus for each year of the Term equal to (1) one half of one percent (0.5%) on gross revenues (GR) less the Company’s cost of product of $0-$500 million dollars, (2) three quarters of one percent (0.75%) on GR of $500 million to one billion dollars and (3) one percent (1%) on GR above one billion dollars, paid between January 1 and March 15 of the following year (“Bonus”).

Mr. Ferrone is to participate in all of the Company’s employee benefit and incentive compensation plans and arrangements made available during the Term to its other senior executives, including health insurance, and is entitled to four weeks of paid vacation per year and five sick days per year.  The Company is to promptly reimburse Mr. Ferrone for his reasonable out-of-pocket expenses incurred in connection with his employment by the Company.  To date, Mr. Ferrone has advanced these amounts to the Company.

Under the Ferrone Employment Agreement, additional amounts are payable to Mr. Ferrone by the Company under certain circumstances upon the termination of the Ferrone Employment Agreement.  If the termination is on account of Mr. Ferrone’s death or “Disability” (all as defined in the Ferrone Employment Agreement), no additional amount (other than payment of Base Salary and/or Bonus accrued and due through the date of Mr. Ferrone’s death or termination for Disability) shall be payable to Mr. Ferrone.  If the termination is on account of the Company’s termination of Mr. Ferrone’s employment “For Cause” or Mr. Ferrone’s resignation “Without Good Reason” (all as defined in the Ferrone Employment Agreement), no additional amount (other than payment of Base Salary through the date of termination) shall be payable to Mr. Ferrone.  If the termination is on account of Mr. Ferrone’s resignation “For Good Reason,” or the Company’s termination of Mr. Ferrone’s employment “Without Cause,” Mr. Ferrone shall receive, subject to his continued compliance with his confidentiality and nonsolicitation obligations under the Ferrone Employment Agreement, continued payments in an amount equal to the greater of (1) 12 months of his then current monthly Base Salary or (2) $400,000, payable in accordance with the Company’s normal payroll practices and policies,  accrued Bonus and benefit plan payments, accrued vacation and continued coverage under the Company’s medical, dental and life insurance benefits for the 12-month period immediately following Mr. Ferrone’s resignation or termination, as applicable.

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Under the Ferrone Employment Agreement, the Company is required to maintain directors’ and officers’ liability insurance for Mr. Ferrone during the Term. The Company is also required to indemnify Mr. Ferrone in certain circumstances.

Under the Ferrone Employment Agreement, Mr. Ferrone is eligible to participate in the Company’s Stock Option Plan; otherwise Mr. Ferrone is to be granted options subject to approval by the Compensation Committee of the Board of Directors and in a manner customary for like companies in the industry (such option exercise price being equal to the fair market value of the stock on December 31 st  of the Term year for which they are being granted).  No such options have yet been granted to Mr. Ferrone by the Company.

There has not been and there is currently no arrangement with Mr. McClain to provide compensation for his executive services to the Company as Chief Financial and Accounting Officer.

Effective October 22, 2007, G. David Criner and the Company entered into an Employment Agreement (the “Criner Employment Agreement”) pursuant to which Mr. Criner was employed by the Company as its Chief Financial Officer and Chief Accounting Officer, as described below.  The term of the Criner Employment Agreement began on October 22, 2007 and will terminate on December 31, 2009, unless earlier terminated, and will automatically extend for each succeeding one (1) year period unless either party provides the other with a written notice at least 30 days prior to the end of the then current Term advising that the party providing the notice shall not agree to so extend the Term (the “Term”).  Mr. Criner resigned his position on February 1, 2008 for personal reasons.

On November 15, 2007, Mr. Criner and the Company entered into a First Amendment to the Criner Employment Agreement pursuant to which the parties agreed to change the base compensation Mr. Criner is to receive from the Company under the Criner Employment Agreement to a base salary equal to $3,000 per month (or pro rata portion thereof) payable semi-monthly (less applicable taxes and withholdings).  Mr. Criner’s base salary is subject to annual review by the Company’s Board or the Compensation Committee thereof for discretionary periodic increases but not decreases.

Under the Criner Employment Agreement, Mr. Criner is to receive a bonus for each year of the Term as determined by the Board of Directors, paid between January 1 and March 15 of the following year (“Bonus”).

Mr. Criner is to participate in all of the Company’s employee benefit and incentive compensation plans and arrangements made available during the Term to its other senior executives, including health insurance, and is entitled to 4 weeks of paid vacation per year and 5 sick days per year.  The Company is to promptly reimburse Mr. Criner for his reasonable out-of-pocket expenses incurred in connection with his employment by the Company.

Under the Criner Employment Agreement, additional amounts are payable to Mr. Criner by the Company under certain circumstances upon the termination of the Criner Employment Agreement.  If the termination is on account of Mr. Criner’s death or “Disability” (all as defined in the Criner Employment Agreement), no additional amount (other than payment of Base Salary and/or Bonus accrued and due through the date of Mr. Criner’s death or termination for Disability) shall be payable to Mr. Criner.  If the termination is on account of the Company’s termination of Mr. Criner’s employment “For Cause” or Mr. Criner’s resignation “Without Good Reason” (all as defined in the Criner Employment Agreement), no additional amount (other than payment of Base Salary through the date of termination) shall be payable to Mr. Criner.  If the termination is on account of Mr. Criner’s resignation “For Good Reason,” or the Company’s termination of Mr. Criner’s employment “Without Cause,” Mr. Criner shall receive, subject to his continued compliance with his confidentiality and nonsolicitation obligations under the Criner Employment Agreement, continued payments in an amount equal to the lesser of (1) 12 months of his then current monthly Base Salary or (2) $450,000, payable in accordance with the Company’s normal payroll practices and policies, accrued Bonus and benefit plan payments, accrued vacation and continued coverage under the Company’s medical, dental and life insurance benefits for the 12-month period immediately following Mr. Criner’s resignation or termination, as applicable.

Under the Criner Employment Agreement, the Company is required to maintain directors’ and officers’ liability insurance for Mr. Criner during the Term. The Company is also required to indemnify Mr. Criner in certain circumstances.

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Outstanding Equity Awards at Fiscal Year-End

We did not award any stock options or other equity incentive plan awards to any above named executive officer during fiscal 2007 or 2008 and there are no stock options or other equity incentive plan awards outstanding as of the end of fiscal 2008.

Non-Employee Director Compensation

For fiscal 2008, we did not pay any compensation to any of our directors.  The Company has no formal plan for Director compensation, but anticipates that it will reimburse the reasonable and customary expenses of any non-employee Directors associated with their service on the Board, including travel expenses and standard fees for attending board and committee meetings.  In addition, the Company has established the Immunosyn 2006 Stock Option Plan (the “Plan”) for employees, directors and consultants and reserved 7,450,000 shares for issuance under the Plan.  At the date hereof, no options have been issued under this Plan.

Compensation Committee Interlocks and Insider Participation

We do not have a compensation committee.  Various members of our Board of Directors participated in deliberations concerning executive officer compensation. Douglas McClain, Jr., a member of our Board and our Chief Financial and Accounting Officer, is a shareholder and officer of Argyll Equities and Argyll Biotech. For more information regarding this relationship, please see Item 13-Certain Relationships and Related Transactions, and Director Independence.

Compensation Committee Report

We do not have a compensation committee. Our Board of Directors has reviewed and discussed the Compensation Discussion and Analysis above with management and, based on such review and discussion, has determined that the Compensation Discussion and Analysis should be included in this Annual Report on Form 10-K.

Stephen D. Ferrone Douglas A. McClain, Jr.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Securities Authorized for Issuance Under Equity Compensation Plans

The Company has adopted an employee stock option plan, which acts as an incentive stock and stock option plan, under which the Company’s employees, directors and consultants will be eligible to receive, in relevant part, either securities or stock options exercisable for the Company’s securities.  The Company has reserved 7,450,000 shares of Common Stock for issuance under this Plan.  No options have been issued under this Plan.

Plan Category	Number of Securities to be issued upon exercise of outstanding options warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c)
Equity compensation plans approved by security holders		0		0		0
Equity compensation plans not approved by security holders		0		0		7,450,000
Total		0		0		7,450,000

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Security Ownership of Certain Beneficial Owners and Management

The following table lists stock ownership of our Common Stock as of March 12, 2009.  The information includes beneficial ownership by (i) holders of more than 5% of our Common Stock, (ii) each of our directors and executive officers and (iii) all of our directors and executive officers as a group.  Except as noted below, to our knowledge, each person named in the table has sole voting and investment power with respect to all shares of our Common Stock beneficially owned by them.

Name and Address of Beneficial Owner	Director/Officer	Amount and Nature of Beneficial Ownership (1)		Percentage of Class
Argyll Biotechnologies LLC (2) 4225 Executive Square, Suite 260 La Jolla, CA 92037			145,363,798		53.41	%
Padmore Holdings, Ltd. (3) 1100 N.W. Loop 410, Suite 207 San Antonio, TX 78213			13,880,550		5.10	%
Clairsvelle Holdings, Ltd. (4) 1100 N.W. Loop 410, Suite 207 San Antonio, TX 78213			19,740,000		7.25	%
Argyll Equities LLC (5) 4225 Executive Square, Suite 260 La Jolla, CA 92037			14,708,287		5.40	%
James T. Miceli (7) 4225 Executive Square, Suite 260 La Jolla, CA 92037			92,782,290		34.09	%
Douglas A. McClain, Jr. (6) 4225 Executive Square, Suite 260 La Jolla, CA 92037	Chief Financial and Accounting Officer and Secretary, Director		110,122,290		40.46	%
Stephen D. Ferrone (8)  220 Savanna Court Lake Forest, IL 60045	President and Chief Executive Officer, Director		1,450,000		0.53	%
Myron W. Wentz, Ph.D 2602C Transportation Avenue National City, CA 91950	Director		400,000		0.15	%
All directors and officers as a group (three persons)			111,972,290		41.14	%

____________

(1)	Includes in each case shares of Common Stock that may be issued upon exercise of options or warrants that are exercisable within 60 days for the subject individual only, if any.  Percentages are computed on the basis of 272,172,347 shares of Common Stock outstanding as of March 12, 2009.  All shares are directly owned unless otherwise indicated.
(2)	A Delaware limited liability company owned 50% by James T. Miceli and 50% by Douglas McClain Jr.

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(3) A British Virgin Islands entity, with Mr. Lynn Booker having voting and dispositive control, and owned 45% by James T. Miceli, 45% by Douglas McClain Jr., and 10% by Douglas McClain Sr.

(4) A British Virgin Islands entity, with Mr. Lynn Booker having voting and dispositive control, and owned by Douglas McClain Jr.

(5) A Texas limited liability company owned 50% by Douglas McClain Jr. and 50% James T. Miceli.

(6) Including Mr. McClain’s shares held by Clairsvelle Holdings, Ltd.; his indirect beneficial ownership of an aggregate of 100,000 shares held by the Bruce McClain Family Trusts 1, 2, 3 and 4 through his role as trustee of such trusts; his indirect beneficial ownership of 4,000,000 shares held by the GRD Family Trust 2006 through his role as trustee of such trust; and his undivided interests in Padmore Holdings, Argyll Biotech and Argyll Equities.

(7) Including Mr. Miceli’s undivided interests in Argyll Biotech, Padmore Holdings and Argyll Equities; his indirect beneficial ownership in 2,000,000 shares held by each of the Kaitlyn Miceli Trust, the Ryan Miceli Trust and the Steven Miceli Trust through his role as trustee of such trusts; and 500,000 shares held directly by Mr. Miceli.  Does not include 12,710,000 shares held by Mr. Miceli's wife as to which he disclaims beneficial ownership.

(8) Does not include 300,000 shares held by Mr. Ferrone's wife as to which he disclaims beneficial ownership.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Certain Relationships and Related Transactions

Except as set forth below, there have been no material transactions during the past two years between us and any officer, director or any stockholder owning greater than 5% of our outstanding shares, nor any of their immediate family members.

The Company has entered into an exclusive license agreement with Argyll Biotech, an affiliate of the Company that owns approximately 53.41% of the Company’s issued and outstanding Common Stock as of March 12, 2009.  The exclusive license agreement, including, without limitation, the fees established in that agreement, will be between related entities, was not negotiated in an arms-length transaction and does not necessarily bear any relationship to established or traditional methods of valuing such fees.  No independent audit or verification of the license fee has been made to determine its fairness to Immunosyn.

If the proceeds received by Argyll Biotech from the sale of the Company’s stock are inadequate to complete development and regulatory approval of SF-1019, we will pay the deficiency through a fee equal to three and one-half per cent (3-1/2%) of Immunosyn’s gross sales of SF-1019, in addition to the cost of product purchases from Argyll Biotech.  The license fee is deemed earned when paid and there are no restrictions on the release or use of the license fee paid to Argyll Biotech, which may be used in Argyll Biotech’s discretion for any purpose.  No refund will be owed by Argyll Biotech in the event the cost of development and regulatory approval is substantially less than the fee, nor are there any penalties owed by Argyll Biotech if it fails to complete product development or obtain regulatory approval for its distribution.  The Company’s inability or failure to pay any license fees when due will adversely affect the Company’s licensed rights.  As those rights will be the Company’s sole and primary asset, if the Company is unable to maintain those rights, the Company will lose substantially all of its value.

Douglas A. McClain, Jr., our Chief Financial and Accounting Officer, Corporate Secretary and a Director of the Company, is a shareholder and an officer of Argyll Equities and Argyll Biotech, shareholders of the Company.  As discussed above, the Company is a party to the exclusive license agreement with Argyll Biotech, the Company’s principal asset.

The Company has been provided with rent-free office space for two executive offices under a monthly oral agreement with no specific term from its affiliate and shareholder, Argyll Equities.  It is uncertain how long Argyll Equities will continue providing office space or on what terms space will continue to be provided to the Company in the future.

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In addition, since inception, Immunosyn has borrowed $885,105 from Argyll Equities, LLC and Argyll Biotech who together own approximately 60% of Immunosyn’s Common Stock.  These advances are unsecured and will be repaid on demand.  Interest expense in the amount of $87,386 since inception and $61,326 in 2008 was accrued using an annual rate of 7.5%.  Advances from Stephen D. Ferrone, President and CEO of the Company, in the amount of $8,559 are due and payable.

Douglas A. McClain Sr., the beneficial owner of a 10% interest in Padmore which owns 13,880,550 shares of Common Stock in the Company, is the father of Douglas A. McClain, Jr., who is a Director, as well as the Chief Financial and Accounting Officer and Secretary of the Company.  Including Douglas A. McClain Jr.’s undivided interest in Padmore, Argyll Biotech and Argyll Equities, the McClain’s control a total of 111,510,345 shares of Common Stock, or approximately 40.97% of the Company’s Common Stock.  During 2008, Padmore transferred 150,000 shares of Common Stock of the Company to Bear Creek Advisors, LLC, a consultant to the Company.

Director Independence

Myron W. Wentz is an “independent director” as such term is defined in the Nasdaq Marketplace Rules.  Neither Douglas A. McClain, Jr. nor Stephen D. Ferrone is an independent director under such Rules.

Item 14. Principal Accountant Fees and Services.

The following table presents the fees for professional audit services rendered by Malone & Bailey, P.C. for the audit of the Company’s annual financial statements for the fiscal years ended December 31, 2007 and 2008 and fees for other services rendered by Malone & Bailey, P.C. during such periods:

Fee Category	Fiscal 2007		Fiscal 2008
Audit Fees	$	20,000	$	40,000
Audit-Related Fees	$	0	$	0
Tax Fees	$	5,000	$	5,200
All Other Fees	$	4,160	$	-
Total Fees	$	29,160	$	45,200

Audit fees include fees related to the services rendered in connection with the annual audit of the Company’s consolidated financial statements and the reviews of and other services related to registration statements, offering memoranda and statutory or regulatory filings.

Audit-related fees are for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of the Company’s financial statements.

Tax Fees include (i) tax compliance, (ii) tax advice, (iii) tax planning and (iv) tax reporting.

All Other Fees includes fees for all other services provided by the principal accountants not covered in the other categories such as litigation support, etc.

All of the services for 2007 and 2008 were performed by the full-time, permanent employees of Malone & Bailey, P.C.

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PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a)           The following documents are filed as part of this Report:

1. Financial Statements:

Report of Independent Registered Public Accounting Firm

Balance Sheet

Statement of Expenses

Statement of Cash Flows

Statement of Changes in Shareholders’ Equity (Deficit)

Notes to Financial Statements

2. Financial Statement Schedules:

None

3. Exhibits

The following exhibits are filed with, or incorporated by reference into, this Report.

Exhibit Number	Description
3.1(a)	Certificate of Incorporation of Immunosyn Corporation, filed with the Secretary of State of the State of Delaware on August 3, 2006.
3.2(a)	By-laws of Immunosyn Corporation.
10.1(a)	License Agreement between Immunosyn Corporation and Argyll Biotechnologies, LLC, dated as of September 28, 2006.
10.2(b)	Amended and Restated License Agreement between Immunosyn Corporation and Argyll Biotechnologies, LLC, dated as of October 25, 2007, effective as of September 26, 2006.
10.3(a)	Form of Lock-Up Agreement.
10.4(e)	Form of Amended and Restated Lock-Up Agreement.
10.5(a)	Immunosyn 2006 Stock Option Plan.
10.6(c)	Employment Agreement effective as of October 15, 2007 between Stephen Ferrone and the Company.
10.7(d)	First Amendment to Employment Agreement of Stephen Ferrone effective November 15, 2007 between the Company and Stephen Ferrone.
10.8(c)	Employment Agreement effective as of October 22, 2007 between David Criner and the Company.
10.9(d)	First Amendment to Employment Agreement of David Criner effective November 15, 2007 between the Company and David Criner.
14.1(e)	Code of Ethics.

23.1*	Consent of Malone & Bailey, P.C.
31.1*	Certification of Stephen D. Ferrone, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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31.2*	Certification of Douglas A. McClain, Jr., Chief Financial and Accounting Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Stephen D. Ferrone, Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Douglas A. McClain, Jr., Chief Financial and Accounting Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

____________________________

*	Exhibit filed with this Report.
(a)	Incorporated by reference to the Company’s Registration Statement on Form SB-2 (File No. 333-137881) filed with the Securities and Exchange Commission (the “SEC”) on October 6, 2006, as amended November 3, 2006 and December 22, 2006.

(b) Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on October 25, 2007.

(c) Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on October 23, 2007.

(d) Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on November 19, 2007.

(e) Incorporated by reference to the Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, filed with the SEC on March 30, 2007.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:  March 16, 2009

IMMUNOSYN CORPORATION
By:	/s/ Douglas A. McClain, Jr.
	Douglas A. McClain, Jr.  Chief Financial and Accounting Officer

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 date indicated:

Signature	Title	Date
/s/ Stephen D. Ferrone	President, Chief Executive Officer, Director (Principal Executive Officer)	March 16, 2009
Stephen D. Ferrone
/s/ Douglas A. McClain, Jr.	Chief Financial and Accounting Officer, Director (Principal Financial	March 16, 2009
Douglas A. McClain, Jr.	and Accounting Officer)
	Director	March 16, 2009
Myron W. Wentz, Ph.D.

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