##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-KSB
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended December 31, 2006
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File No.
 IMMUNOSYN CORPORATION
  Delaware
    
    20-5322896(State of incorporation)
    
    (IRS Employer Identification No.)4225 Executive Square, Suite 260, La Jolla, CA 92037
    
    92037(Address of Principal Executive Offices)
    
    Zip Code
    o
  þ
    
    oYES
    
    NO
 þ
  þ
    
    oYES
    
    NO
    Documents Incorporated by Reference
  (1)
    
    Registration Statement on Form SB-2, (File No. 333-137881) filed with the Commission on October
6, 2006, as amended November 3, 2006 and December 22, 2006.(2)
    
    Prospectus, filed under Rule 424(b) with the Commission on January 4, 2007.
 o þ
   1




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TABLE OF CONTENTS  PART IItem 1. Description of BusinessItem 1A. Risk FactorsItem 2. Description of PropertyItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPART IIItem 5. Market for Common Equity and Related Stockholder MattersItem 6. Plan of OperationItem 7. Financial StatementsItem 8. Changes in and Disagreements With Accountants on Accounting and Financial DisclosureItem 8A. Controls and ProceduresItem 8B Other InformationPART IIIItem 9. Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance with Section 16(a) of the Exchange ActItem 10. Executive CompensationItem 11. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 12. Certain Relationships and Related Transactions and Director IndependenceItem 13. ExhibitsItem 14. Principal Accountant Fees and ServicesSIGNATURESEX-10.3: FORM OF AMENDED AND RESTATED LOCK-UP AGREEMENTEX-14.1: CODE OF ETHICSEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION    Table of Contents  CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
  2




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PART I
  
 Item 1. Description of Business.
 About Immunosyn Corporation; Background and History
     3




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Business
     4




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The Argyll Biotech License Agreement
  Grant of Rights
  Development and Regulatory Matters
  Distribution and Promotion
 5




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License Fees
 1 2
 Payments and Reports
 1 2
 Manufacture and Supply
  Intellectual Property Ownership
  Publication and Confidentiality
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Recall and Indemnification
  Term and Termination
  Discussion of Applicable Government Regulations
   
    
    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 establish the safety and efficacy
of the product candidate for its intended use;
    
    Submission to the FDA of a New Drug Application (NDA); and
    
    FDA approval and review of a NDA.
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
    
    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.
  8
    Table of Contents      European Regulations
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Pricing Controls
    Third Party Reimbursements
 10
    Table of Contents    Patent Restoration and Marketing Activity
      Competition
 . 11
    Table of Contents    http://www.rarediseases.org
 Employees
  
 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.
  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.
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Argyll Biotech and Immunosyn have no operating history, which makes it impossible to evaluate their
business and to predict any future operating results.
  Immunosyn expects to incur substantial losses for the foreseeable future and may never achieve
profitability.
  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.
   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.
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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.
  SF-1019 has not been approved for any human use nor for treatment of any particular disease, and
such approval may never be obtained.
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Immunosyn has been informed that Argyll Biotech is implementing controls to prevent unregulated use
of SF-1019 and 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 or no value.
   The Company depends on Argyll Biotechs patent and proprietary rights to develop and protect
technologies and products, which rights may not offer sufficient protection from infringement by
third parties.
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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.
 1 2
 Immunosyns inability or failure to pay any license fees when due will adversely affect the
Companys licensed rights, which will cause the Company to lose substantially all of its value.
  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 will be our sole supplier of SF-1019; the exclusive license agreement does not fix
the purchase price the Company will pay to Argyll Biotech for manufacturing and supplying SF-1019
and Immunosyn may be unable to negotiate rights to distribute SF-1019 for uses other than CIDP,
diabetic neuropathy and diabetic ulcers.
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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.
  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.
   Argyll Biotech may not apply for or be successful in receiving orphan/special drug status on any
products.
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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.
  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.
 .
  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.
  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.
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Immunosyn has limited sales and marketing capability and may not be successful in selling or
marketing any products.
  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.
  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.
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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.
  21




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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 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.
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The Companys management and internal systems might be inadequate to handle its potential growth.
  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.
  
    
    difficulty in establishing or managing distribution relationships;
    
    different standards for the development, use, packaging, pricing and marketing of
products and technologies;
    
    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
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
    
    general geopolitical risks, such a political and economic instability, changes in
diplomatic and trade relations, and foreign currency risks.
  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.
   
    
    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.
  SF-1019 or its variants may never be successfully commercialized.
  
    
    discovery during pre-clinical testing or clinical trials that the products are
ineffective or cause harmful side effects;
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
    
    failure to receive necessary regulatory approvals;
    
    inability to manufacture on a large or economically feasible scale;
    
    failure to achieve market acceptance; and
    
    preclusion from commercialization due to proprietary rights of third parties.
  The industry in which we operate is subject to extensive government regulation and SF-1019 require
regulatory approvals, which makes it more expensive for us and Argyll Biotech to operate our
businesses.
   25
    Table of Contents    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.
   Even if the Company were to become a Pink Sheets Company, it may not be able to attract the
attention of major brokerage firms or securities analysts.
  Immunosyn is making no representations and is providing no assurances that its Common Stock will
become listed on the American Stock Exchange, NASDAQ, the Boston Stock Exchange or any other
securities exchange.
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Immunosyn has never paid dividends and has no plans to pay dividends at any time in the near or
distant future.
  
 Item 2. Description of Property.
  
 Item 3. Legal Proceedings.
   27




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Item 4. Submission of Matters to a Vote of Security Holders.
  
 PART II
 
 Item 5. Market for Common Equity and Related Stockholder Matters.
 Market for Common Equity
  Dividends
  Recent Sales of Unregistered Securities
   
 Item 6. Plan of Operation
 Overview
  28




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Plan of Operation
   
 
 
 
 
 
  29




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Off Balance Sheet Arrangements
  
 Item 7. Financial Statements
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www.malone-bailey.com
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ASSETSCash
    
    $
    9,232Total current assets
    
    
    9,232Other assets
    
    
    2,142License rights
    
    
    400,000Total assets
    
    $
    411,374LIABILITIES
& SHAREHOLDERS EQUITYAccrued liabilities
    
    $
    14,046Advances from affiliates
    
    
    140,591Total current liabilities
    
    
    154,637Commitments and contingencies
    
    
    SHAREHOLDERS EQUITYCommon stock, $.0001 par value,
425,000,000 shares authorized,
272,000,000 issued and outstanding
    
    
    27,200Additional paid-in capital
    
    
    385,300Deficit accumulated in the development
stage
    
    
    (155,763
    )Total shareholders equity
    
    
    256,737Total liabilities & shareholders
equity
    
    $
    411,374
 
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Selling, general and
administrative expenses
    
    $
    155,763Total expenses
    
    
    155,763Net loss
    
    $
    (155,763
    )Basic and diluted net loss
per common share
    
    $
    (0.00
    )Weighted average common
shares outstanding
    
    
    216,140,000
 
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CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (155,763
    )Adjustments to reconcile net loss to
cash used in operating activities:Changes in:Accrued liabilities
    
    
    14,046Other assets
    
    
    (2,142
    )NET CASH USED IN OPERATING ACTIVITIES
    
    
    (143,859
    )CASH FLOWS FROM FINANCING ACTIVITIESAdvances from affiliates
    
    
    140,591Sale of common stock
    
    
    12,500NET CASH
PROVIDED BY FINANCING ACTIVITIES
    
    
    153,091NET CHANGE IN CASH
    
    
    9,232Cash balance,
beginning of
period
    
    
    Cash balance, end of period
    
    $
    9,232SUPPLEMENTAL DISCLOSURES:Cash paid for interest
    
    $
    Cash paid for income taxes
    
    $
    NON-CASH INVESTING AND FINANCING ACTIVITIES:Stock issued for license rights
    
    $
    400,000
 
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DeficitAccumulatedAdditional
    
    
    DuringCommon
    
    
    Paid-in
    
    
    DevelopmentShares
    
    
    Stock
    
    
    Capital
    
    
    Stage
    
    
    TotalsBalances at August 3, 2006
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Proceeds from issuance of
common stock
    
    
    125,000,000
    
    
    
    12,500
    
    
    
    
    
    
    
    
    
    
    
    12,500Stock issued for license
agreement
    
    
    147,000,000
    
    
    
    14,700
    
    
    
    385,300
    
    
    
    
    
    
    
    400,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (155,763
    )
    
    
    (155,763
    )Balances at December 31,
2006
    
    
    272,000,000
    
    
    $
    27,200
    
    
    $
    385,300
    
    
    $
    (155,763
    )
    
    $
    256,737
 
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Immunosyn Corporation  (A Development Stage Company)  Notes To Financial Statements
  Background
  Cash and Cash Equivalents
  Long-Lived Assets
  Income Taxes
  Stock Options
  Basic and Diluted Net Loss per Share
  Estimates
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Recent Accounting Pronouncements
     Grant of Rights
  Development and Regulatory Matters
  Distribution and Promotion
  37




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License Fees
  Payments and Reports
  Manufacture and Supply
  Ownership; Patents and Trademarks
  Publication and Confidentiality
  Recall and Indemnification
  Term and Termination
  Valuation
  38




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Stock Options
     In the Matter of Directors Financial
Group, Ltd. In The Matter of Prime Bank Securities In The Matter of The Argyll Group, LLC
   39




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Item 8.
    
    Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure.
  
 Item 8A.
    
    Controls and Procedures.
 Controls and Procedures
   Changes in Internal Controls
  
 Item 8B
    
    Other Information.
  
 PART III
 
 Item 9.
    
    Directors, Executive Officers, Promoters, Control Persons and Corporate Governance;
Compliance with Section 16(a) of the Exchange Act.
  40




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Name
    
    Age
    
    TitleD. Kent Norton
    
    
    55
    
    
    President and Chief Executive Officer, DirectorDouglas McClain, Jr.
    
    
    32
    
    
    Chief Financial and Accounting
Officer, Secretary, Director
 D. KENT NORTON, J.D., President and Chief Executive Officer, Director
  DOUGLAS MCCLAIN, JR., Chief Financial and Accounting Officer, Corporate Secretary, Director
  Advisors and Consultants
   Code of Ethics
  Corporate Governance
 Nominating Process
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Audit Committee Financial Expert
  
 Item 10. Executive Compensation.
   Non-Employee Director Compensation
  
 Item 11.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.
 Securities Authorized for Issuance Under Equity Compensation Plans
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Security Ownership of Certain Beneficial Owners and Management
  Amount andNature ofName and Address
    
    
    
    Beneficial
    
    Percentageof Beneficial Owner
    
    Director/Officer
    
    Ownership (1)
    
    of ClassArgyll Biotechnologies LLC (2)
    
    
    
    
    147,000,000
    
    
    
    54.0
    %4225 Executive Square, Suite 260La Jolla, CA 92037Padmore Holdings, Ltd. (3)
    
    
    
    
    28,000,000
    
    
    
    10.3
    %1100 N.W. Loop 410, Suite 207San Antonio, TX 78213Clairsvelle Holdings, Ltd. (4)
    
    
    
    
    20,500,000
    
    
    
    7.5
    %1100 N.W. Loop 410, Suite 207San Antonio, TX 78213Cuxhaven Holdings Ltd (5)
    
    
    
    
    20,500,000
    
    
    
    7.5
    %1100 N.W. Loop 410, Suite 207San Antonio, TX 78213Argyll Equities LLC (6)
    
    
    
    
    15,000,000
    
    
    
    5.5
    %4225 Executive Square, Suite 260La Jolla, CA 92037D. Kent Norton
    
    President and Chief
    
    
    500,000
    
    
    
    0.2
    %2406 Shadow Wood Circle
    
    Executive Officer,Holladay, UT 84117
    
    DirectorDouglas McClain, Jr. (7)
    
    Chief Financial and
    
    
    114,100,000
    
    
    
    41.9
    %4225 Executive Square, Suite 260
    
    Accounting Officer andLa Jolla, CA 92037
    
    Secretary, DirectorAll directors and officers as a
    
    
    
    
    114,600,000
    
    
    
    42.1
    %group (two persons)
 
 (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 272,000,000 shares of Common Stock outstanding as of
March 28, 2007. 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. 43




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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 British Virgin Islands entity, with Mr. Lynn Booker having voting and dispositive control,
and owned by James T. Miceli.(6)
    
    A Texas limited liability company owned 50% by Douglas McClain Jr. and 50% James T. Miceli.(7)
    
    Including Mr. McClains shares held by Clairsvelle Holdings, Ltd., his undivided interests in
Padmore, Argyll Biotechnologies and Argyll Equities. 
 Item 12.
    
    Certain Relationships and Related Transactions and Director Independence
 Certain Relationships and Related Transactions
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Director Independence
  
 Item 13. Exhibits.
   
   Exhibit Number
    
    Description3.1(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(a)
    
    Form of Lock-Up Agreement.10.3*
    
    Form of Amended and Restated Lock-Up Agreement.10.4(a)
    
    Immunosyn 2006 Stock Option Plan.14.1*
    
    Code of Ethics.31.1*
    
    Certification of D. Kent Norton, Chief Executive
Officer, pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.31.2*
    
    Certification of Douglas McClain, Jr., Chief Financial
and Accounting Officer, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1*
    
    Certification of D. Kent Norton, Chief Executive
Officer, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.32.2*
    
    Certification of Douglas McClain, Jr., Chief Financial
and Accounting Officer, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
 
 *
    
    Exhibit filed with this Report. 45




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(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 on October 6, 2006, as amended
November 3, 2006 and December 22, 2006. 
 Item 14.
    
    Principal Accountant Fees and Services.
  Fee Category
    
    Fiscal 2006Audit Fees
    
    $
    10,600Audit-Related Fees
    
    $
    0Tax Fees
    
    $
    0All Other Fees
    
    $
    0Total Fees
    
    $
    10,600
      46




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SIGNATURES
   IMMUNOSYN CORPORATIONBy:
    
    /s/ Douglas McClain, Jr.

Chief Financial and Accounting Officer
  Signature
    
    Title
    
    Date/s/ D. Kent Norton

D. Kent Norton
    
    President, Chief Executive Officer, Director (Principal
Executive Officer)
    
    March 30, 2007/s/ Douglas McClain, Jr.

Douglas McClain, Jr.
    
    Chief Financial and
Accounting Officer, Director
(Principal Financial and
Accounting Officer)
    
    March 30, 2007
 47