BP International Inc – ‘10KSB’ for 5/31/01

On:  Wednesday, 8/29/01   ·   For:  5/31/01   ·   Accession #:  1019687-1-500760   ·   File #:  0-26189

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Annual Report — Small Business   —   Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Annual Report -- Small Business                       13     67K 
 2: EX-99.1     Miscellaneous Exhibit                                 20     70K 

10KSB   —   Annual Report — Small Business
Document Table of Contents

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 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 ---------------

 FORM 10-KSB

(X) ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT  
OF 1934                                                                 
(Fee Required)                                                                  

----------------------

FOR THE FISCAL YEAR ENDED MAY 31, 2001       COMMISSION FILE NUMBER 0-26189   
--------------------------------------       -------------------------------  

 ALLERGY IMMUNO TECHNOLOGIES, INC.
(Small Business Issuer in its Charter)
--------------------------------------

       DELAWARE                                           95-3937129
       --------                                           ----------
(State or other jurisdiction of                            (I.R.S. Employer 
 -------------------------------                           Identification No.)
incorporation or organization)                                              
------------------------------                                              

1531 MONROVIA AVENUE, NEWPORT BEACH, CA                           92663       
---------------------------------------                           -----       
(Address of principal executive offices)                         (Zip Code)     

    Issuer's Telephone Number:                              (949) 645-3703
    --------------------------                              --------------

Securities registered under Section 12(b) of the Exchange Act:
--------------------------------------------------------------

 (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
 -----------------------------

Check whether the issuer (1) filed all reports required to be filed by Section13
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( )          

Check if disclosure of delinquent filers in response to Item 405 of Regulation  
S-B is not contained herein, and will not be contained, to the best of issuer's 
knowledge, in definitive proxy or information statements incorporated by        
reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. 
(X)                                                                             

State issuer's revenues for its most recent fiscal year: $100,270.              

State the aggregate market value of the voting stock held by non-affiliates of  
the issuer (based upon 2,941,982 shares held by non-affiliates and the closing  
price of $.05 per share for Common Stock in the over-the-counter market as of   
July 2, 2001): $147,099.                                                        

Number of shares of the issuer's common stock, par value $.001, outstanding as  
of August 15, 2001: 17,170,390 shares.                                          

DOCUMENTS INCORPORATED BY REFERENCE: The issuer's information statement for its 
2001 Annual Meeting and the Annual Report on Form 10-KSB for the fiscal year    
ended May 31, 2001, for Biomerica, Inc.                                         

Transitional Small Business Disclosure Format              YES ( )    NO (X)    
--------------------------------------------------------------------------------

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                                Table of Contents                                       


                                                                                        
PART I        ......................................................................  1 
     Item 1.  DESCRIPTION OF BUSINESS..............................................  1  
     Item 2.  DESCRIPTION OF PROPERTY..............................................  6  
Item 3.       LEGAL PROCEEDINGS....................................................  6  
     Item 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDER.....................  6  
PART II       ......................................................................  6 
     Item 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.............  6  
     Item 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION               
              AND RESULTS OF OPERATIONS............................................  7  
     Item 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA..........................  8  
     Item 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING                
              AND FINANCIAL DISCLOSURE.............................................  8  
PART III      ......................................................................  8 
     Item 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF           
              THE REGISTRANT; COMPLIANCE WITH SECTION 10(A) OF THE EXCHANGE ACT....  8  
     Item 10. EXECUTIVE COMPENSATION...............................................  8  
     Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.......  8  
     Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................  8  
     Item 13. EXHIBITS LITS AND REPORTS ON FORM 8-K................................  9  
SIGNATURES    ......................................................................  10
EXHIBIT INDEX ......................................................................  11


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PART I  

Item 1.  DESCRIPTION OF BUSINESS                                                
-----------------------                                       

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.                                                                        

GENERAL                                                                         
-------                                                                         

     Allergy Immuno Technologies, Inc. ("AIT" or "The Company") provides
clinical testing services to physicians, laboratories and pharmaceutical firms  
in specialized areas of allergy and immunology. Test samples are sent to the    
Company's laboratory for evaluation and the results of the tests are reported to
the customer (physician, pharmaceutical company or clinical laboratory). All of 
the Company's current revenues are derived from providing these testing         
services. The Company's prior research resulted in four patents being issued to 
the Company covering novel oral and injectable allergy treatments as an         
alternative to allergy shots.                                                   

       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") now
owns approximately 74.6% of the Company's common stock. Biomerica is a global   
medical company devoted to developing, manufacturing and marketing advanced     
medical diagnostic products for the early detection of diseases. Biomerica's    
products are sold to physicians, hospitals, laboratories and drugstores. 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 Pink Sheets under the stock symbol ALIM.

LABORATORY SERVICES                                                             

    AIT currently operates a licensed clinical reference laboratory in
Newport Beach, California, for allergy and other esoteric diagnostic testing    
services. The Company purchases diagnostic products from Biomerica and other    
manufacturers of diagnostic products. Biomerica does not make competing products
to AIT, but rather makes products that the Company may purchase at a discount   
for use in its clinical laboratory. Being a credited clinical laboratory, AIT   

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provides specialized testing services to large organizations such as Laboratory 
Corporation of America and Bayer, as well as other clinics and physicians. The  
laboratory accepts samples from the physicians, laboratories, clinics or        
pharmaceutical companies, performs the requested test and sends a written report
of the test results to the customer. Most of the tests performed relate to      
allergy or immunology. Examples of some of the commonly performed tests are     
described below.                                                                

CANDIDA RELATED CONDITIONS                                                      

 An elevation of certain antibodies specific to CANDIDA ALBICANS
(pathogenic fungus) antigens is an indication of either an infection (systemic  
or topical) by C. ALBICANS, or the overgrowth of the fungus in the intestine.   
The overgrowth in the intestine can cause C. ALBICANS antigens to enter the     
circulation causing systemic Candidiasis. The use of antibiotics,               
immunosuppressive agents, or birth control pills creates favorable conditions   
for Candidiasis. Systemic Candidiasis is a serious condition in immunosuppressed
patients.                                                                       

FOOD ALLERGIES                                                                  

      AIT has various panels that can simultaneously detect if a person is
allergic to any one of 90 different foods by using only a few drops of a        
patient's Blood. Incompletely digested food antigens may gain access to the     
systemic circulation either through the microvilli by endocytosis or through the
intercellular spaces of the gut mucosa in conditions such as the inflammatory   
bowel disease, celiac disease, gastroenteritis or the immature mucosa of the    
infant. Certain antibodies may be produced against these food antigens and may  
form complexes with newly absorbed antigens and can lead to tissue damage when  
deposited in various organs.                                                    

BASOPHIL HISTAMINE RELEASE (BHR)                                                

      The BHR test can be used to assess the allergic response using human
blood in a test tube rather than on humans directly. Since most allergic        
reactions end ultimately with histamine release, the measurement of histamine is
essential in evaluating the effects of allergy.                                 

OTHER ALLERGIES                                                                 

        AIT also performs other tests for various allergies such as inhalants,
molds, weeds, insects, and animals, among others.                               

TECHNOLOGY AND PATENTS                                                          

       AIT has succeeded in obtaining four patents pertaining to discoveries
for allergy treatment. 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).                                      

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      (4) Allergen-thymic hormone conjugates for treatment of IgE mediated
allergies: U.S. Patent #5,275,814 (issued January 4,1994).                      

        There can be no assurance or guarantee that the Company can adequately
protect its patents or proprietary technology, nor that the Company will ever   
obtain the funds necessary to commercialize the patented technology.            

RESEARCH AND DEVELOPMENT                                                        

        During fiscal 2001 the Company did not spend any funds on research and
development as compared to $53,000 in fiscal 2000. The Company does not expect  
to engage in further research and development until the Company obtains         
additional financing or until the Company enters into a strategic alliance with 
a partner that would conduct the research needed to bring the products to       
market. Biomerica has continually advanced the Company operating funds over     
recent years. Biomerica determined that it could not continue to advance the    
Company such large funds to cover the costs of continued research. In fiscal    
1998 Biomerica invested funds into AIT in order to raise additional capital to  
continue the research. An alliance that would have been beneficial to the AIT   
was negotiated with a third party, but did not come to fruition. However, the   
Company did receive a one-time payment of $100,000 for consulting services and  
an option to purchase 10,000 Class A Units of Hollister-Stier LLC at a purchase 
price of $10 per unit.                                                          

        The introduction of a new product goes through phases: the formulation
of an idea; proving that idea through scientific challenge; determining product 
feasibility and finally distributing the product for others to benefit from it. 
Thus far the Company has worked to prove the feasibility and effectiveness of   
its technology of encapsulating specific allergens with liposomes to act as     
antagonist to an allergic reaction to that allergen in an individual. The       
technology has been successfully tested IN VITRO in the Company's laboratories. 
The technology has also been successfully tested in limited animal models. The  
above constitutes almost 40% of the work needed to be done in the introduction  
of a product. The remaining 60% is the regulatory approval, mass production and 
marketing of the technology in order to create a viable product.                

MANUFACTURING                                                                   

     AIT does not currently perform any manufacturing. The Company would
need to develop procedures for manufacturing the encapsulated liposome allergens
and related technologies. At this time no work is being done on this due to     
limited resources. AIT is seeking to collaborate with pharmaceutical companies  
to produce and market its products.                                             

THE MARKET                                                                      

         Allergies affect 41 million people in the U.S. (20% of the population).
It is also estimated that in the U.S. alone there are 3.5 million lost workdays 
every year due to allergic episodes. The incidence of allergies is at least the 
same in other industrialized countries with some estimates reaching 35-50% of   
the population. The total U.S. allergy market, at present, exceeds $5 billion   
dollars annually.                                                               

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SEASONALITY OF BUSINESS                                                         

 The business of the Company has not been subject to significant
seasonal fluctuations.                                                          

EMPLOYEES                                                                       

        The Company currently employs one employee who works in the laboratory
performing clinical testing. It contracts with Biomerica for a variety of       
services.                                                                       

FOREIGN BUSINESS                                                                

All of the Company's fixed assets are located within Southern 
California. All of the sales are within the United States.                      

BACKLOG                                                                         

AIT has no backlog.                                           

COMPETITION                                                                     

 The independent clinical laboratory industry in the U.S. and in
California is highly competitive and fragmented. According to one industry      
source, there are approximately 4,500 independent clinical laboratories in the  
U.S. These independent clinical laboratories fall into two separate categories: 
(1) smaller, local laboratories that generally offer fewer tests and services   
and (2) larger laboratories. The Company is a small laboratory.                 

       In the U.S. there are currently approximately thirteen competitors in
the immunotherapy market, with four holding substantial market shares. These    
four are led by Hollister-Stier LLC, which gained strength in the market after  
it merged with Miles Laboratories. Other top competitors include Center         
Laboratories, ALK and Greer Laboratories. All of these companies have           
substantially greater resources and business experience than the Company. The   
technology that the Company would like to develop is an unproven technology.    
Currently many companies make products for the treatment of allergies. The      
treatments usually involve the patient undergoing a lengthy series of injections
with allergens in order to build up a resistance to same. There are other       
products in the allergy treatment market which use oral pills and inhalants such
as Claritin brand inhalants. However, these technologies afford temporary relief
or are discomforting to the patient, while liposome encapsulated allergen       
products would be designed to give patients longer term relief from allergic    
reactions.                                                                      

    In Europe there are more companies which deal in the immunotherapy
market, but they primarily sell within the borders of their own countries.      

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GOVERNMENT REGULATION AND LICENSES                                              

GENERAL                                                                         
-------                                                                         

        Numerous aspects of AIT's operations, including its testing processes,
its business practices and in some instances, the amount and methods by which it
is paid, are subject to governmental regulation at the Federal, state and/or    
local levels.                                                                   

         In order to bring oral or inhalant type products to market, the Company
would have to obtain or license other technology as well as file for other FDA  
clearances. Such filing would require a substantial amount of resources.        

FEDERAL AND STATE CLINICAL LABORATORY LICENSING                                 

        All clinical laboratories operating in the United States, with limited
exceptions, are required to obtain Federal certification pursuant to the        
Clinical Laboratory Improvement Act (CLIA) and its implementing regulations. The
law and its implementing regulations impose, as conditions for such             
certification, requirements relating to test processes, personnel               
qualifications, facilities and equipment, record keeping, quality control,      
quality assurance and participation in proficiency testing. The same regulatory 
requirements also apply as conditions for participation in the Medicare and     
Medicaid programs. CLIA regulations vary depending on the complexity of the     
methodologies performed by the laboratory. Compliance is verified by periodic   
on-site inspections. Sanctions for failure to meet CLIA/Medicare certification  
requirements include suspension or revocation of certification, criminal        
penalties, injunctive actions to close the laboratory, civil penalties or       
imposition of specific plans of correction to remedy alleged deficiencies.      
Licensing requirements similar to those imposed pursuant to CLIA also apply at  
the state level, with similar sanctions for noncompliance. Effective January 1, 
1996, California Senate Bill 113 ("SB 113") became law and amended the          
California laws governing clinical laboratories to make them at least as        
stringent as CLIA was as of January 1, 1994.                                    

     The Company currently holds an annually renewed clinical laboratory
license with the Department of Health Services, State of California. The current
license expires December 31, 2001. The Company also holds a clinical laboratory 
license from the state of Florida. This current license expires November 11,    
2002 and is renewed every two years. The Company holds a CLIA Certificate of    
Compliance, which is a requirement of the Federal government for clinical       
laboratories. This certificate expires in February 2003 and is renewed every two
years. Although the Company has never failed to obtain renewals, its business   
operations would be materially and adversely affected if it were unable to do   
so.                                                                             

FEDERAL AND STATE BILLING AND FRAUD AND ABUSE LAWS                              

   The Federal Medicare laws impose specific billing requirements on
clinical laboratories. Generally, laboratories are required to bill the Medicare
program directly rather than billing physicians or beneficiaries.               

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SPECIMEN TRANSPORTATION                                                         

    Regulations of the Department of Transportation, the Public Health
Service, and the Postal Service apply to the transportation of clinical         
laboratory specimens.                                                           

Item 2.  DESCRIPTION OF PROPERTY                                                
-----------------------                                       

         The Company currently leases 1,600 square feet of office and laboratory
space in Newport Beach, California, on a month-to-month basis, at a rate of     
$1,400 per month, plus taxes and insurance. The property is in good condition   
and sufficient to meet the needs of the Company at this time. The Company does  
not plan to obtain additional space in the foreseeable future. However, if the  
Company obtains a research and marketing partner or raises additional funds the 
need would arise for acquiring additional space. The facilities are leased from 
Mrs. Ilse Sultanian and JSJ Management (one of the partners of which, Janet     
Moore, is an officer, director and stockholder of the Company).                 

      At the same facilities ancillary support services such as accounting
and office support are provided by Biomerica. AIT pays Biomerica a monthly fee  
of approximately $1,450 for these services.                                     

Item 3.  LEGAL PROCEEDINGS                                                      
-----------------                                             

Inapplicable.                                                 

Item 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS                      
-------------------------------------------------             

Inapplicable.                                                 

Item 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.              
---------------------------------------------------------     

         The Company's Common Stock is traded on the NASDAQ's OTC Bulletin Board
under the symbol "ALIM". The high and low closing bid information for the       
Company's Common Stock during the years ended May 31, 2000 and 2001, is based on
information received from Bloomberg, L.P., the Nasdaq Trading and Market        
Services and a Company market maker.                                            

                                                        High           Low
                                                        ----           ---
Year Ended May 31, 2000:                                                        

Quarter ended May 31, 2000...........................    $.14          $.125

Quarter ended February 29, 2000......................     .15           .10 

Quarter ended November 30, 1999......................     .15           .05 

Quarter ended August 31, 1999........................     .25           .02 

Year Ended May 31, 2001:                                                        

Quarter ended May 31, 2001...........................    $.07          $.07 

Quarter ended February 28, 2001......................     .13           .13 

Quarter ended November 30, 2000......................     .06           .06 

Quarter ended August 31, 2000........................     .11           .11 

       The quotations reflect inter-dealer price, without mark-up, mark-down
or commission and may not represent actual transactions. The stock is thinly    
traded and transactions in the stock are sporadic and infrequent.               

         As of May 31, 2001, there were approximately 500 shareholders of record
of the Company's common stock and no holders of the Company's preferred stock.  

       The Company has not declared or paid any cash dividends on its common
stock and does not intend to declare or pay any cash dividends in the           
foreseeable future. The payment of dividends, if any, is within the discretion  
of the Board of Directors and will depend on the Company's earnings, if any, its
capital requirements, and financial condition and other such factors as the     
Board of Directors may consider.                                                

      There has been no issuance of stock during the fiscal year ended May
31, 2001.                                                                       

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Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 
       -----------------------------------------------------------------------
OF OPERATIONS                                                   
-------------                                                   

    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                                                                         
-------                                                                         

       The Company currently generates revenue by providing clinical testing
services to doctors, laboratories and pharmaceutical firms in specialized areas 
of allergy and immunology determinations. Test samples are sent to the Company's
laboratory for evaluation and the results of the tests are reported to the      
customer (doctors or other).                                                    

     The Company has obtained four patents on technology relating to the
treatment of allergies. Additional financing would be required for the Company  
to complete the development of its technology. The Company is not expected to   
engage in further research or development unless it obtains such additional     
financing. In connection with these efforts, the Company may enter into a       
strategic alliance or joint venture to finance the cost of such further research
and development.                                                                

       The Company's laboratory facilities are located next to its office in
Newport Beach, California. At the same facilities ancillary support services    
such as accounting and office support are provided by Biomerica. AIT pays       
Biomerica a monthly fee of approximately $1,450 for these services.             

RESULTS OF OPERATIONS                                                           

TWELVE MONTHS ENDED MAY 31, 2001, COMPARED TO TWELVE MONTHS ENDED MAY 31, 2000  

       Revenues for the year ended May 31, 2001 were $100,270 as compared to
$79,976 in the prior year period. This represents an increase of $20,294 or 25% 
from the previous period. The Company performed some testing for a company      
per-forming a research project, which contributed to the increase in sales. Cost
of sales as a percentage of sales decreased from 118% to 87% due to lower       
material costs and wages.                                                       

General and administrative expenses decreased from $111,899 to
$79,026 during the twelve-month period ended May 31, 2001, as compared to the   
twelve month period ended May 31, 2000. The decrease was $32,873 or 29%. The    
decrease was due to lower legal and accounting costs during fiscal 2001 as      
compared to the prior year where there were high costs related to new SEC filing
requirements and the initial filing of the Company's 10-SB. For the year ended  
May 31, 2001 research and development expenses were $0 compared to $52,700 for  
the same period in fiscal 2000. The decrease was due to a research project in   
fiscal 2000, which was terminated before fiscal 2001.                           

       Other income increased for the year ended May 31, 2001 to $3,884 from
$1,098 due to income realized on the sale of the land in fiscal 2001.           

LIQUIDITY AND CAPITAL RESOURCES                                                 

       As of May 31, 2001, the Company had cash of $9,455 compared to $2,603
for the previous year. Its current working capital deficit was $283,207 as      
compared to a deficit of $267,972 for the previous year.                        

 The Company has been experiencing losses and has had to rely on
borrowings from Biomerica, Inc., which owns approximately 74.6% of the          
outstanding stock of AIT. Management believes that losses will continue during  
fiscal 2002. Biomerica will not be able to fund operations as in the past. As of
May 31, 2001 the Company owed Biomerica $295,825. Biomerica is not charging the 
Company interest on the advances and has not determined any date of repayment.  
In the past Biomerica has taken the Company's stock as repayment for cash       
advanced. However, there can be no assurance that Biomerica will accept the     
Company's stock as repayment in the future.                                     

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Going Concern                                                                   

       The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. During the year ended May 31, 2001    
("Fiscal 2001"), the Company experienced a net loss of $62,654 and had negative 
cash flows from operations of $42,809. In addition, the Company had substantial 
working capital and shareholders' deficits at May 31, 2001. 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.              

Item 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                            
-------------------------------------------                   

   Exhibit 99.1, "Allergy Immuno Technologies, Inc." is incorporated
herein by this reference.                                     

Item 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND        
 ---------------------------------------------------------------
FINANCIAL DISCLOSURE                                          
--------------------                                          

Inapplicable.                                                 

PART III

Item 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF THE    
     -------------------------------------------------------------------
REGISTRANT; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE     
---------------------------------------------------------     

This information is incorporated by reference to the Company's
information statement for its 2001 Annual Meeting of Stockholders which will be 
filed not later than 120 days After the end of the Company's fiscal year ended  
May 31, 2001.                                                                   

Item 10. EXECUTIVE COMPENSATION                                                 
----------------------                                        

This information is incorporated by reference to the Company's
information statement for its 2001 Annual Meeting of Stockholders which will be 
filed not later than 120 days after the end of the Company's fiscal year ended  
May 31, 2001.                                                                   

Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT         
 ---------------------------------------------------------------

This information is incorporated by reference to the Company's
information statement for its 2001 Annual Meeting of Stockholders which will be 
filed not later than 120 days after the end of the Company's fiscal year ended  
May 31, 2001.                                                                   

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                         
----------------------------------------------                

This information is incorporated by reference to the Company's
information statement for its 2001 Annual Meeting of Stockholders which will be 
filed not later than 120 days after the end of the Company's fiscal year ended  
May 31, 2001.                                                                   

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Item 13. EXHIBITS LIST AND REPORTS ON FORM 8-K                                  
-------------------------------------                         

EXHIBITS                                                                        
--------                                                                        

EXHIBIT NO.  DESCRIPTION                                                        
-----------  ------------                                                       

2.1          Agreement and Plan of Merger by and between Advanced Allergy       
         Research Center Inc., and Allergy Immuno Technologies, Inc., as
             filed with the Secretaries of State of Delaware and Utah on January
       20, 1987 (incorporated by reference to Exhibit 2.1 filed with
           Amendment No. 1 to the Registration Statement on Form 10-SB filed
June 24, 1999).                                       

3.1          Certificate of Incorporation (incorporated by reference to Exhibit 
         3.1 filed with Amendment No. 1 to the Registration Statement on
Form 10-SB filed June 24, 1999).                      

3.2          Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 
          filed with Amendment No. 1 to the Registration Statement on Form
10-SB filed June 24, 1999).                           

16.1         Letter on Change of Certifying Accountant (incorporated by         
          reference to Exhibit No. 1 to the Registration Statement on Form
10-SB filed June 24, 1999).                           

99.1         Allergy Immuno Technologies, Inc. Consolidated Financial Statements
            for the Year Ended May 31, 2001 and 2000 and Independent Auditors'
Report.                                               

Reports on Form 8-K                                                             
-------------------                                                             

None                                                                            

9 

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SIGNATURES

    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: August 29, 2001                                                          

                                 ALLERGY IMMUNO TECHNOLOGIES, INC.
          Registrant

                       By /s/ Zackary S. Irani
                                          --------------------------------------
                                 Zackary S. Irani, Chief Executive
                    Officer and Chairman

In accordance with the Exchange Act, this report has been signed below by the   
following persons on behalf of the registrant and in the capacities and on the  
dates indicated.                                                                

Signature and Capacity                                                          
----------------------                                                          

/s/ Zackary S. Irani                    Dated August 29, 2001                   
--------------------------                    ------------------                
Zackary S. Irani                                                                
Chief Executive Officer,                                                        
Chairman of the Board and                                                       
Director                                                                        

/s/ Janet Moore                         Dated August 29, 2001                   
--------------------------                    ------------------                
Janet Moore                                                                     
Chief Financial Officer,                                                        
Chief Accounting Officer and                                                    
Director                                                                        

/s/ Robert A. Orlando                   Dated August 29, 2001                   
--------------------------                    ------------------                
Robert A. Orlando, M.D., Ph.D.                                                  
Director                                                                        

/s/ Susan H. Irani                      Dated August 29, 2001                   
---------------------------                   -------------------               
Susan H. Irani                                                                  
Director                                                                        

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 EXHIBIT INDEX
 -------------

                                                                SEQUENTIALLY
EXHIBIT NUMBER                   DESCRIPTIONS                       NUMBERED    
---------------                  ------------                       --------    

2.1                Agreement and Plan of Merger by and between                  
Advanced Allergy Research Center Inc., and
 Allergy Immuno Technologies, Inc., as filed
   with the Secretaries of State of Delaware and
Utah on January 20, 1987*                 

3.1                Certificate of Incorporation*                                

3.2                Bylaws of the Registrant*                                    

16.1               Letter on Change of Certifying Accountant*                   

99.1               Allergy Immuno Technologies, Inc. Financial**                
Statements for the Year Ended May 31, 2001
And 2000 and Independent Auditors' Report 

-------------------                                                             

* Previously filed and incorporated by reference to the Company's Form 10-SB    
Registration Statement filed May 25, 1999 with the Securities and Exchange      
Commission.                                                                     

**       Being filed herewith.                                                  

11

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10KSB’ Filing		Date		First		Last			Other Filings
		11/11/02		7
		12/31/01		7
Filed on:		8/29/01		12
		8/15/01		1
		7/2/01		1
For Period End:		5/31/01		1		13
		2/28/01		8					10QSB
		11/30/00		8					10QSB
		8/31/00		8					10QSB
		5/31/00		8		13			10KSB40,  DEF 14C,  NT 10-K
		2/29/00		8					10QSB,  10QSB/A
		11/30/99		8					10QSB,  10QSB/A
		8/31/99		8					10QSB,  NT 10-K
		6/24/99		11
		5/25/99		13					10SB12G
		1/1/96		7
		1/1/94		7
		5/6/92		4
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