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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
ACT OF 1934
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FOR THE QUARTER ENDED AUGUST 31, 2002
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ALLERGY IMMUNO TECHNOLOGIES, INC.
(Small Business Issuer in its Charter)
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State or other jurisdiction of incorporation or organization: DELAWARE
I.R.S. Employer Identification No.: 95-3937129
8540 Cinder Bed Road Suite 300 Newington, VA 22122
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(Address of principal executive offices) (Zip Code)
Issuer's Telephone Number: (571)642-0488
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Securities registered under Section 12(b) of the Exchange Act:
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(Title of each class) (Name of each exchange on which
registered)
NONE N/A
Securities registered under Section 12(g) of the Exchange Act:
(Title of each class)
COMMON STOCK, PAR VALUE $.001
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Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
YES(X) NO( )
Number of shares of the issuer's common stock, par value $.001, outstanding
as of August 31, 2002: 17,978,948 shares.
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THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 PROVIDES A "SAFE HARBOR"
FOR FORWARD-LOOKING STATEMENTS. CERTAIN INFORMATION CONTAINED HEREIN (AS WELL
AS INFORMATION INCLUDED IN ORAL STATEMENTS OR OTHER WRITTEN STATEMENTS MADE
OR TO BE MADE BY ALLERGY IMMUNO TECHNOLOGIES, INC.) CONTAINS STATEMENTS THAT
ARE FORWARD-LOOKING, SUCH AS STATEMENTS RELATING TO CONSUMMATION OF A
TRANSACTION, ANTICIPATED FUTURE REVENUES OF THE COMPANY AND SUCCESS OF
CURRENT PRODUCT OFFERINGS. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND
UNKNOWN RISKS AND UNCERTAINTIES WHICH COULD SIGNIFICANTLY AFFECT ANTICIPATED
RESULTS IN THE FUTURE, AND ACCORDINGLY, SUCH RESULTS MAY DIFFER MATERIALLY
FROM THOSE EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS MADE BY OR ON BEHALF
OF ALLERGY IMMUNO TECHNOLOGIES. THESE RISKS AND UNCERTAINTIES INCLUDE, AMONG
OTHER THINGS, THE CONTINUED DEMAND FOR THE COMPANY'S SERVICES, COMPETITIVE
AND ECONOMIC FACTORS OF THE MARKET PLACE, AVAILABILITY OF SUPPLIES, ABILITY
OF THE COMPANY TO RAISE NEEDED CAPITAL FOR DEVELOPMENT OF NEW PRODUCTS AND
ADDITIONAL WORKING CAPITAL FOR CURRENT BUSINESS, HEALTH CARE REGULATIONS AND
THE STATE OF THE ECONOMY.
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Item 1. FINANCIAL STATEMENTS
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Allergy Immuno Technologies, Inc.
Compiled Financial Statements (Unaudited)
Three Month Period Ended August 31, 2002
Johnson CPA, PLLC
2276 Franklin Turnpike, Suite 115
Danville, Virginia 24540
Phone: 434-836-4498
Fax: 434-836-4493
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Board of Directors and Shareholders
Allergy Immuno Technologies, Inc.
We have compiled the accompanying the balance sheet as of the three month
period ended August 31, 2002, the statement of shareholders' deficit for the
three month period then ended, and the statements of operations, and cash
flows for the three month periods ended August 31, 2002 and 2001 of Allergy
Immuno Technologies, Inc. (The Company), in accordance with Statements on
Standards for Accounting and Review Services issued by the American Institute
of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements,
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not
express an opinion or any other form of assurance on them.
Management has elected to prepare these compiled pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures included herein are adequate to make
the information presented not misleading.
The 2001 financial statements of the Company were compiled by other
accountants who did not express an opinion or any other form of assurance on
those statements.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. During the fiscal year ended May 31, 2002,
the Company discontinued all operations and these conditions raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 7.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Johnson CPA, PLLC
Danville, Virginia
October 3, 2002
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Allergy Immuno Technologies, Inc.
Compiled Balance Sheet (Unaudited)
As of the Three Month Period Ended August 31,
2002
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Assets
Current Assets
Cash and Cash Equivalents $ -
Net Accounts Receivable -
Inventory -
Prepaid and Other Current Assets -
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Total Current Assets -
Long-Term Assets
Net Fixed Assets -
Net Intangible Assets -
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Long-Term Assets -
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Total Assets $ -
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Liabilities and Shareholders' Deficit
Current Liabilities
Accounts Payable $ -
Accrued Liabilities - Compensation -
Accrued Liabilities - Other -
Notes Payable - Current (Note 3) 225,282
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Total Current Liabilities 225,282
Shareholders' Deficit
Common Stock (Note 4) 17,979
Additional-Paid-In-Capital 1,898,929
Retained Earnings (2,142,190)
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Total Shareholders' Deficit (225,282)
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Total Liabilities and
Shareholders' Deficit $ -
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See Accountant's Compilation Report and Accompanying Notes to the Financial
Statements.
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Allergy Immuno Technologies, Inc.
Compiled Statements of Operations (Unaudited)
For the Three Month Period Ended August 31,
All Discontinued Operations 2002 2001
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Net Sales $ - $ 15,514
Cost of Sales - 19,494
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Gross Income (Loss) - (3,980)
Operating Expenses
General and Administrative - 17,993
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Total Operating Expenses - 17,993
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Operating Loss - (21,973)
Net Other Income - -
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Loss Before Income Taxes - (21,973)
Income Tax Expense (Note 6) - -
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Net Loss $ - $ (21,973)
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Per Share Data (basic and diluted):
Net Loss $ - $ (0.00)
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Weighted average number of common
shares outstanding 17,978,948 17,170,390
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See Accountant's Compilation Report and Accompanying Notes to the Financial
Statements.
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Allergy Immuno Technologies, Inc.
Compiled Statements of Shareholders' Deficit (Unaudited)
For the Three Month Period Ended August 31, 2002
Common Stock
----------------------------- Additional Accumu-
Number of Paid-In Lated
Shares Amount Capital Deficit Total
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May 31, 2002 17,978,948 $ 17,979 $ 1,898,929 $ (2,142,190) $ (225,282)
Net Loss - - - - -
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August 31, 2002 17,978,948 $ 17,979 $ 1,898,929 $ (2,142,190) $ (225,282)
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See Accountant's Compilation Report and Accompanying Notes to the Financial
Statements.
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Allergy Immuno Technologies, Inc.
Compiled Statement of Cash Flows (Unaudited)
For the Three Month Period Ended August 31,
All Discontinued Operations 2002 2001
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Cash Flows Provided by (Used in) Operating Activities
Net Loss $ - $ (21,973)
Adjustments to reconcile net (loss)
to net provided by (used in) cash
used in operating activities
Depreciation and Amortization - 47
(Increase) Decrease in Accounts Receivable - 975
(Increase) Decrease in Inventory - 889
(Increase) Decrease in Prepaid and Other
Current Assets - (47)
Increase (Decrease) in Accounts Payable
and Accrued Liabilities - 5,944
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Net Cash Flows Provided by (Used in)
Operating Activities - (14,165)
Cash Flows Provided by (Used in) Financing Activities
Advances from affiliate - 7,827
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Net Cash Flows Provided by (Used in)
Investing Activities - 7,827
Net Cash Flows - (6,338)
Cash, Beginning of Period - 9,455
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Cash, End of Period $ - $ 3,117
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See Accountant's Compilation Report and Accompanying Notes to the Financial
Statements.
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Allergy Immuno Technologies, Inc.
Notes To Compiled Financial Statements - Substantially Omits Most Disclosures
Three Month Period Ended August 31, 2002
1. Summary Of Significant Accounting Policies
Reference is made to Note 1 of the Notes to Financial Statements
contained in the Company's Annual Report on form 10-KSB for the fiscal year
ended May 31, 2002, for a summary of significant accounting policies utilized
by the Company and new accounting pronouncements.
2. Compilation and Disclosures
The accompanying balance sheet at August 31, 2002, and the statements of
operations, cash flows and cash flows for the three month periods ending
August 31, 2002 and August 31, 2001, are unaudited and have been prepared by
the Company pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such rules and regulations, although the Company believes that the
disclosures included herein are adequate to make the information presented
not misleading.
3. Limitation on Results of Operations
Results of operations for the interim periods covered by this Report may
not necessarily be indicative of results of operations for the full fiscal
year.
4. Notes Payable
Allergy Immuno Technologies, Inc. has an outstanding demand promissory
note for services rendered and expenses advanced by the former parent
company, Biomerica. The note is for $225,282 and accrues interest at 7%
compounded annually until payment on the note is made. As no term is
specified a schedule of payments is not available. The note is was sold on
May 30, 2001 to LDM, Holdings Inc.
5. Net Loss Per Share
The FASB has issued Statement of Financial Accounting Standards No. 128
(SFAS 128), "Earnings Per Share." SFAS 128 is primarily a disclosure
standard which requires public companies to present basic earnings per share
(EPS) and, if applicable, diluted earnings per share, instead of primary and
fully diluted earnings per share. Basic EPS is computed by dividing net
income for the year by the weighted average number of shares of common stock
outstanding during the year. Diluted EPS is computed by dividing net (loss)
income for the year by weighted average number of shares of common stock and
common stock equivalents outstanding during the year.
The following table illustrates the required disclosure of the
reconciliation of the numerators and denominators of the basic and diluted
EPS computations.
For the Three Month Period Ended Income Shares Per Share
August 31, 2002 (Numerator) (Denominator) Amount
- --------------------------------- ----------- ----------- ------------
Basic EPS
Loss available to common
shareholders $ - 17,978,948 $ -
Effect of Dilutive Securities
Options $ - - $ -
Diluted EPS
Loss available to common
shareholders plus assumed
conversions $ - 17,978,948 $ -
For the Three Month Period Ended Income Shares Per Share
August 31, 2001 (Numerator) (Denominator) Amount
- --------------------------------- ----------- ----------- ------------
Basic EPS
Loss available to common
shareholders $ (21,973) 17,170,390 $ -
Effect of Dilutive Securities
Options $ - - $ -
Diluted EPS
Loss available to common share-
holders plus assumed conversions $ (21,973) 17,170,390 $ -
7. Going Concern
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. During the fiscal year ended May
31, 2002, the Company discontinued all operations and these conditions raise
substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
It is uncertain at this time the future of Allergy Immuno Technologies, Inc.
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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THE FOLLOWING DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF THE COMPANY SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL
STATEMENTS AND NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT.
THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS
AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER MATERIALLY FROM
THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN
FACTORS, INCLUDING, BUT NOT LIMITED TO, COMPETITION AND OVERALL MACRO-
ECONOMIC CONDITIONS.
GENERAL
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The Company formerly generated revenue by providing clinical testing
services to doctors, laboratories and pharmaceutical firms in specialized
areas of allergy and immunology determinations. However, in March of 2002,
Allergy's board resolved to terminate Allergy's operations.
As discussed further in our recently filed Form 10K-SB, Annual Report for
the period ended May 31, 2002, Allergy's assets and liabilities were
transferred to Biomerica, Inc. in April of 2002, leaving Allergy with no
significant operations. On May 30, 2002, the Company underwent a change in
control. Biomerica, Inc., sold 13,350,000 shares of its stock in Allergy's to
LDM Holdings, Inc. The purpose of the transaction underlying LDM's purchase
of 13,350,000 shares of Allergy was to ultimately transform Allergy's
business operations. LDM's principals also operate Omnics International
Corporation, a Florida-based company that manufactures an omni-direction
wheel that has application to wheelchairs, robotics, forklifts, and any other
device requiring or benefiting from increased mobility.
The Company had originally planned, following the change in control, to
either (i) acquire the omni-directional wheel technology currently owned by
Omnics International Corporation, or (ii) acquire the Omnics International
Corporation outright. The purpose of either plan was to bring the
exploitation and development of the omni-directional wheel technology and its
operations under Allergy. Both plans were considered and ultimately rejected.
Thus, Allergy's present business plan is to find a suitable operating
company with which Allergy can merge. As such, Allergy has had no business
operation since March of 2002.
RESULTS OF OPERATIONS (OPERATIONS ARE DISCONTINUED)
THREE MONTHS ENDED AUGUST 31, 2002, COMPARED TO THREE MONTHS ENDED AUGUST 31,
2001
Revenues for the quarter ended August 31, 2002 were $0 as compared to
$15,514 in the prior quarter period. This represents a decrease of $15,514
from the previous period. The Company's decision to phase out its
operations contributed solely to the decrease in revenue. Cost of
sales was reduced from $19,494 to $0 as compared to the previous period.
Again, our discontinuation of operations contributed solely to the
elimination of cost of sales.
General and administrative expenses decreased from $17,993 to $0
during the three-month period ended August 31, 2002, as compared to the three
month period ended August 31, 2001. The decrease was due solely to the
Company's termination of operations. The company had no research and
development expenses in either period.
LIQUIDITY AND CAPITAL RESOURCES
As of August 31, 2002, the Company had cash of $0 compared to $3,117 for
the previous quarterly period.
The Company historically experienced losses and relied on borrowings
from Biomerica, Inc. to maintain liquidity and continue operations. Biomerica
was the Company's largest shareholder until Biomerica sold a 74.25% share in
the Company on May 30, 2002. Biomerica will not make further loans to the
Company.
The Company's March 2002 decision to cease Company operations has and
will significantly impact the Company's liquidity in the following ways:
*The Company has reduced its administrative and operating expenses.
*The Company has eliminated expenses related to its cost of sales.
*The Company will continue to have reduced administrative and operating
expenses.
*The Company no longer has a source of revenue, and its sales will be $0
until it develops operations or finds a suitable operating company with which
it can merge.
*The Company is presently operating at a loss, and will continue to operate
at a loss until it develops operations or finds a suitable operating company
with which it can merge.
Management believes that losses will continue during fiscal 2003. The
Company is presently relying on loans from its majority shareholder, LDM
Holdings, Inc. to pay its administrative expenses. There is no guarantee that
LDM Holdings will continue to fund the Company's losses.
Going Concern
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. We have no operations, and thus no
source of revenue. We continue to incur operating expenses. We had
substantial working capital and shareholders' deficits at May 31, 2002. These
factors, among others, raise substantial doubt about the Company's ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
There can be no assurances that the Company will be able to successfully
implement its plans, including generating profitable operations, generating
positive cash flows from operations and obtaining additional debt and equity
capital to meet present and future working capital demands.
RECENT CHANGE IN CONTROL
On May 30, 2002, the Company underwent a change in control. Biomerica,
Inc., sold 13,350,000 shares its stock in Allergy to LDM Holdings, Inc., 8540
Cinder Bed Road, Suite 300, Newington, VA 22122. The shares represent 74.25%
of the outstanding voting shares of Allergy. Biomerica received $212,500 in
cash and LDM Holdings received the 13,350,000 shares and a promissory
obligation from Allergy to Biomerica in the amount of $225,282.
The purpose of the transaction underlying LDM's purchase of 13,350,000
shares of Allergy was to ultimately transform Allergy's business operations.
LDM's principals also operate Omnics International Corporation, a Florida-
based company that manufactures an omni-directional wheel that has
application to wheelchairs, robotics, forklifts, and any other device
requiring or benefiting from increased mobility.
The management of LDM, since the purchase of the shares in Allergy, has
accepted positions on the board of directors of Allergy. The board of
directors of Allergy, prior to the LDM's purchase of Allergy shares, was
populated by four directors: Dr. Robert Orlando, Zackary Irani, Janet Moore,
and Susan Irani. On June 6, 2002, these four directors resigned from
Allergy's board concurrently with the appointment of three new board members:
Lou Marrero, Dean Martin, and John Peca. Soon thereafter, on June 18th, 2002,
the board increased the membership of Allergy's board to five persons, and
appointed C. Edward Poteat and Philip S. Hoffman.
The Company had originally planned, following the change in control, to
either (i) acquire the omni-directional wheel technology currently owned by
Omnics International Corporation, or (ii) acquire the Omnics International
Corporation outright. The purpose of either plan was to bring the
exploitation and development of the omni-directional wheel technology and its
operations under Allergy. Both plans were considered and ultimately rejected.
Thus, Allergy's present business plan is to find a suitable operating
company with which Allergy can merge.
OUR FORMER OPERATIONS
As noted above, we ceased our clinical testing services in March of
2002. Until then, we formerly provided clinical testing services to
physicians, laboratories and pharmaceutical firms in specialized areas of
allergy and immunology. Test samples were sent to the Company's laboratory
for evaluation and the results of the tests were reported to the customer
(physician, pharmaceutical company or clinical laboratory). All of the
Company's current revenues were derived from providing these testing
services. Our prior research resulted in four patents being issued to the
Company covering novel oral and injectable allergy treatments as an
alternative to allergy shots. All of our patents were transferred to
Biomerica in April of 2002.
The Company's predecessor was originally incorporated in Utah in 1981
under the name Investor's Wealth. In 1985 that company changed its name to
Advanced Allergy Research Center, Inc. In June of 1986 NMS Pharmaceuticals,
Inc. (now Biomerica, Inc.) invested $350,000 and certain assets pursuant to
an Agreement for Purchase of Stock and Transfer of Assets dated May 15, 1986
in exchange for 6,559,064 shares of common stock. Biomerica, Inc.
("Biomerica") owned approximately 75.67% of the Company's common stock, until
it sold 13,350,000 shares of Allergy stock on May 30, 2002, leaving Biomerica
with 1.42% of Allergy's outstanding stock.
Allergy Immuno Technologies, Inc. was incorporated in Delaware in 1986.
It was qualified as a foreign corporation in California in January 1987. In
January 1987 the predecessor Utah corporation merged with and into the
Delaware corporation pursuant to an Agreement and Plan of Merger filed on
January 20, 1987, with the Secretary of State of Delaware and with the
Secretary of State of Utah. The Company's common stock is traded on the Over-
the-Counter Bulletin Board under the stock symbol ALIM.
LABORATORY SERVICES
Allergy formerly operated a licensed clinical reference laboratory in
Newport Beach, California, for allergy and other esoteric diagnostic testing
services. The Company purchased diagnostic products from Biomerica and other
manufacturers of diagnostic products.
TECHNOLOGY AND PATENTS
Allergy formerly owned patents pertaining to discoveries for allergy
treatment, all of which were transferred to Biomerica in connection with the
General Assigment Agreement of April 30, 2002. These are:
(1) Immunotherapy agents for treatment of IgE mediated allergies: U.S.
Patent #5,116,612 (issued May 6, 1992).
(2) Liposome containing immunotherapy agents for treatment of IgE
mediated allergies: U.S. Patent #5,049,390 (issued September 17, 1991).
(3) Immunotherapy agents for treatment of IgE mediated allergies: U.S.
Patent #4,946,945 (issued August 7, 1990).
(4) Allergen-thymic hormone conjugates for treatment of IgE mediated
allergies: U.S. Patent #5,275,814 (issued January 4,1994).
RESEARCH AND DEVELOPMENT
During fiscal 2002 the Company did not spend any funds on research and
development. The Company does not expect to engage in further research and
development with respect to its former operations.
MANUFACTURING
Allergy does not currently perform any manufacturing.
SEASONALITY OF BUSINESS
The business of the Company has not been subject to significant seasonal
fluctuations.
EMPLOYEES
During the period of this report, until March, 2002, the Company
employed one employee who worked in the laboratory performing clinical
testing. Currently, the Company has no full time employees.
Item 3. LEGAL PROCEEDINGS
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We are not a party to any legal proceedings.
Item 4. CHANGES IN SECURITIES AND USE OF PROCEEDS
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The rights of security holders have not been materially modified during
the reporting period.
Item 5. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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No matters have been submitted to security holders during the reporting
period.
Item 6. OTHER INFORMATION: CHANGES TO THE BOARD OF DIRECTORS
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We have undergone changes to our board of directors during the reporting
period. LDM Holdings took majority control of Allergy on May 30, 2002. In
connection with this change, Allergy's former board, all of whom were also
board members of Biomerica, Inc., resigned from the board.
Dr. Robert Orlando resigned from the Allergy board by letter on May 21,
2002. The three remaining Allergy board members Zackary Irani, Janet Moore,
and Susan Irani all resigned without disagreement with Allergy by resolution
of the board on June 6, 2002. Concurrently with their resignation, the
outgoing Allergy board appointed board members Lou Marrero, Dean Martin, and
John Peca.
On June 18th, the new Allergy board appointed two additional board
members, Edward Poteat and Phillip S. Hoffman.
On September 25, John A. Peca and Lou Marrero resigned from the board
without disagreement with Allergy.
Item 7. EXHIBITS AND REPORTS ON FORM 8-K
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We reported a change of accountants on Form 8-K on August 9, 2002. Soon
thereafter, we filed an amended 8-K regarding the change of accountants on
August 26. Our amendment clarified and expanded on the relationship between
us and our accountants, CPA Johnson, regarding advice we had sought from CPA
Johnson before we selected them as our auditors.
SIGNATURES
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In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated: October 15, 2002
ALLERGY IMMUNO TECHNOLOGIES, INC.
Registrant
By /s/ Dean Martin
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Dean Martin,
President, Secretary and Principal Financial Officer
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