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 EXCHANGE ACT OF
1934




For the
Fiscal Year Ended December 31, 2007





(  )
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
transition period from _____ to _____





Commission
file number 005-82677




IMMUNOSYN
CORPORATION


(Name of
Small Business Issuer in its Charter)





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








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





(888)
853-3663


(Issuer’s
Telephone Number)




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




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




Check whether the issuer is not
required to file reports pursuant to Section 13 or 15(d) of the Exchange
Act.     [   ]




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




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
[  ]




Check if there is no disclosure of
delinquent filers in response to Item 405 of Regulation S-K contained in this
form, and no disclosure will be contained, to the best of the Registrant’s
knowledge, in definitive proxy or information statements  incorporated
by reference in Part III of this Form 10-KSB or any amendment to this Form
10-KSB.   [   ]




1




Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the
Act).  yes  [ X ]
no  [   ]




The Company’s revenues during the
fiscal year ended December 31, 2007 were $0.




The aggregate market value of the
voting and non-voting common equity held by non-affiliates computed by reference
to the price at which the common equity was sold, or the average bid and asked
price of such common equity, as of June 30, 2007 was approximately
$70,000,000.  There was no public market for the common equity until
October 26, 2007.




As of March 28, 2008, the Company had
272,000,000 issued and outstanding shares of Common Stock.




DOCUMENTS
INCORPORATED BY REFERENCE




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




Transitional Small Business Disclosure
Format (check one): yes [   ] no [X]




2




CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING INFORMATION




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




3




PART
I




Item
      1.
            Description
      of Business.




About Immunosyn Corporation;
Background and History




Immunosyn
Corporation (“Immunosyn” or the “Company”) is a Delaware corporation
headquartered in La Jolla, California that owns an exclusive worldwide license
to market, distribute and sell a biopharmaceutical drug product, currently
referred to as SF-1019, for multiple uses including the treatment of any and all
diseases and pathological conditions, subject to receipt of appropriate
regulatory approval in each jurisdiction where SF-1019 will be
marketed.  Under the terms of its exclusive license, the Company is
further granted the rights to any improvement of SF-1019 and other compounds
which are developed under the same technology platform and which are chemically
similar to SF-1019.




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




Immunosyn’s
primary asset is its exclusive worldwide license from Argyll Biotech to market,
distribute and sell SF-1019.  The Company also has the right of first
offer to enter into additional license agreements for uses of other compounds
which are not already covered under the existing license
agreement.  In addition to SF-1019, Argyll Biotech has licensed
certain intellectual property developed by Professor Kenneth Willeford,
Professor of Biochemistry and Molecular Biology, Mississippi State
University.  Argyll Biotech has also retained Professors Jonathan
Heeney, Chairman, Department of Virology, BPRC, and Angus Dalgleish, Chair of
Oncology, Gastroenterology and Endocrinology, St. George’s Hospital Medical
School, who are both well known anti-viral researchers and immuno-pathology
specialists, as its scientific advisors.  We believe that the combined
experience of all of Argyll Biotech’s scientific advisory board members should
provide substantial guidance toward achieving approval of SF-1019 for marketing,
distribution and sale to the target market.




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




Argyll
Biotech is responsible for all research and product development, clinical
testing, regulatory approvals, production and product support.  Argyll
Biotech anticipates that it will commence clinical trials and studies of SF-1019
and prepare and submit all filings required for regulatory approval
of




4




that
product for treatment of various diseases including CIPD, RSD, diabetic
neuropathy and diabetic ulcers, both in the United States and in other countries
that are targeted for distribution and sale of the product.  The
Company believes that a proof of concept trial is underway in Europe for
treatment of diabetic ulcers with SF-1019.  It is expected that the
next phase of the trial will be completed during the first half of 2008 and, if
successful, larger-scale independently-managed formal clinical trials will take
place shortly thereafter.  The Company believes that a limited
feasibility clinical study of SF-1019 was conducted in the U.S. for treatment of
CIDP and RSD as well.  Argyll Biotech has also retained a consulting
firm to provide clinical and regulatory consulting services in support of the
marketing authorization process by the US FDA.




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




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




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




Business




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




Diabetes
mellitus refers to a family of diseases featuring high glucose levels caused by
the body’s inability to produce and/or utilize insulin.  According to
the United States National Diabetes Information Clearinghouse, the 2005 estimate
of prevalence or total number of cases of diabetes in adults is 20.8 million,
with 14.6 million diagnosed cases and an additional 6.2 million undiagnosed
cases
(http://www.ndep.nih.gov/diabetes/pubs/FS_GenSnapshot.pdf).  According
to the same source, the 2005 incidence, or number of new cases, is 1.5
million.




One of
the most severe complications of diabetes is lower-limb amputation, which is
caused by diabetic ulcers.  These ulcers form as a result of diabetic
neuropathy, or peripheral neuropathy, a nervous system disease evident in 60% of
diabetic patients (Caring For Diabetes Educational Forum;




5




http://www.caringfordiabetes.com/T&P/MicroComplications/T_P_Neuropathy.cfm).  According
to the National Diabetes Education Program, diabetic neuropathy causes
micro-vascular damage that can result in loss of protective sensation in the
feet, poor circulation and foot ulcers.




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




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




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




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




The Argyll Biotech License
Agreement




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




Grant
of Rights




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




6




Development
and Regulatory Matters




Argyll
Biotech anticipates that it will commence clinical trials and studies of SF-1019
and prepare and submit all filings required for such clinical trials and studies
for treatment of CIDP, diabetic neuropathy and diabetic ulcers, both in the
United States and in other countries that are targeted for distribution and sale
of the product.  Argyll Biotech will also submit periodic written
reports to Immunosyn to document its efforts toward procuring regulatory
approval of SF-1019, as well as clinical budgets and plans for each year during
which development efforts are conducted.  Argyll Biotech will retain
full responsibility for preparation and implementation of all trial protocols
and regulatory activities and for all costs associated with those
activities.




Distribution
and Promotion




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




License
Fees




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




Payments
and Reports




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




Manufacture
and Supply




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




Intellectual
Property Ownership




Argyll
Biotech will retain full ownership of its intellectual property, including
intellectual property that is jointly-developed by the
parties.  Argyll Biotech must take reasonable steps to protect its




7




intellectual
property from third-party infringement, and to defend Immunosyn against charges
of infringement that refer, relate or pertain to Immunosyn’s marketing, sale and
distribution of SF-1019.




Publication
and Confidentiality




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




Recall
and Indemnification




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




Term
and Termination




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




Government
Regulations




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




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




·
            Preclinical
      laboratory and animal tests;




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




·
            Adequate
      and well-controlled human clinical trials to 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.




8




The
testing and approval process requires substantial time.  Preclinical
tests include laboratory evaluation of the product candidate, its chemistry,
formulation and stability, as well as animal studies to assess the potential
safety and efficacy of the product candidate.  Certain preclinical
tests must be conducted in compliance with good laboratory practice
regulations.  Violations of these regulations can, in some cases, lead
to an invalidation of the studies, requiring such studies to be
replicated.  In some cases, long-term preclinical studies are
conducted while clinical studies are ongoing.




Argyll
Biotech must submit the results of preclinical tests, together with
manufacturing information and analytical data, to the FDA as part of an IND,
which must become effective before any human clinical trials begin in the United
States.  Analogous requirements are in place in the countries of the
European Union and in the United Kingdom, where Argyll Biotech is preparing to
conduct preclinical and clinical trials.  If the FDA or its foreign
equivalent raises questions about an IND within a certain period of time after
its submission, that regulatory body may impose a clinical hold.  In
such a case, the IND sponsor and the regulatory authority must resolve any
outstanding concerns before clinical trials can begin.  All clinical
trials must be conducted under the supervision of a qualified investigator in
accordance with good clinical practice regulations.  These regulations
include the requirement that all subjects provide informed
consent.  Further, an independent Institutional Review Board (“IRB”)
at each medical center proposing to conduct clinical trials must review and
approve any clinical study.  The IRB also continues to monitor the
study and must be kept aware of the study’s progress, particularly as to adverse
events and changes in any research.  Progress reports detailing the
results of the clinical trials must be submitted at least annually to the FDA or
its foreign equivalent and more frequently if adverse events occur.




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




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




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




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




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




We
understand that Argyll Biotech intends to submit the results of SF-1019 product
development, pre-clinical studies and clinical studies to the FDA or its foreign
equivalent as part of an NDA for approval of the marketing and commercial
shipment of the product.  The appropriate regulatory authority will
review each NDA submitted and may request additional information, rather than
accept the NDA for filing.  In this event, the application must be
resubmitted with additional information.  The resubmitted application
is also subject to review before the regulatory body accepts it for
filing.  Once the NDA is




9




accepted,
the regulatory agency begins an in-depth review of the
NDA.  Regulatory agencies have substantial discretion in the approval
process and may disagree with Argyll Biotech’s interpretation of the data
submitted in the NDA.  The review process may be significantly
extended by the regulatory agency’s requests for additional information or
clarification regarding information already provided.  Also, as part
of the review, the regulatory agency may refer the application to an appropriate
advisory committee, typically a panel of clinicians, for review, evaluation and
a recommendation.  Manufacturing establishments also are often subject
to inspections prior to NDA approval to assure compliance with GMPs and with
manufacturing commitments made in relevant marketing applications.




In the
United States, under the Prescription Drug User Fee Act (“PDUFA”), submission of
an NDA with clinical data requires payment of a user fee.  For fiscal
year 2007, that fee was $896,200.  Similar fees and requirements are
in place in foreign jurisdictions.  In return, the relevant regulatory
agencies assign time goals for reviewing NDAs prior to issuing a “complete
response” in which an NDA may be approved, or denied if the regulatory agency’s
criteria are not satisfied, or require additional clinical data.  Even
if these data are submitted, the regulatory agency may ultimately decide that
the NDA does not satisfy the criteria for approval.  If the regulatory
agency approves the NDA, the product becomes available for physicians to
prescribe, but even after approval, a regulatory agency may later decide to
withdraw product approval if compliance with regulatory standards is not
maintained or if safety problems occur after the product reaches the
market.  A regulatory agency may also require post-marketing studies,
known as Phase IV studies, as a condition to approval to develop additional
information regarding the safety of a product.  In addition, a
regulatory agency can require surveillance programs to monitor approved products
that have been commercialized, and such agencies have the power to require
changes in labeling or to prevent further marketing of a product based on the
results of these post-marketing programs.




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




European
Regulations




The
initial preclinical trials and clinical studies of SF-1019 are expected to be
conducted by Argyll Biotech under European auspices and
jurisdiction.  Prior regulatory approval in order to initiate Phase I
(healthy human volunteer) studies is required in many of the European Union
member states.  Following successful completion of Phase I studies,
data must be submitted in a summarized format to the applicable regulatory
authority in the member state in respect of applications for the conduct of
later Phase II proposed studies.  European Union regulatory
authorities typically are required to raise objections within one to three
months after receipt of a proposal for a study, but they often have a right to
extend this review period at their discretion.  In addition, one or
more independent ethics committees, which typically operate similarly to an
Institutional Review Board in the United States, will review the ethics of
conducting the proposed research.




In order
to gain marketing approval in the European Union, Argyll Biotech must submit a
dossier to the relevant authority for review, which, in the European Union, is
known as a Marketing Authorization Application (“MAA”).  The format of
the MAA is specific and is laid out by each




10




applicable
regulatory authority, although in general it will contain information on the
quality of the chemistry, manufacturing and pharmaceutical aspects of the
product as well as non-clinical and clinical data.




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




Failure
to comply with applicable regulatory requirements after obtaining regulatory
approval can, among other things, result in the suspension of regulatory
approval, as well as possible civil and criminal sanctions.  Renewals
in the European Union may require additional data, which may result in a license
being withdrawn.  In the European Union, regulators have the authority
to revoke, suspend or withdraw approvals of previously-approved products, to
prevent companies and individuals from participating in the drug approval
process, to request recalls, to seize violative products and to obtain
injunctions to close manufacturing plants not operating in conformity with
regulatory requirements and to stop shipments of violative
products.




Pricing
Controls




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




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




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




11




Third
Party Reimbursements




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




Patent
Restoration and Marketing Activity




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




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




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




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




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




12




Competition




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




Argyll
Biotech intends to seek to limit potential sources of competition by developing
products that are eligible for orphan drug designation and approval or other
forms of protection.  Specifically, Argyll Biotech intends to target
CIDP as a potential candidate for treatment with SF-1019 due to its orphan drug
for orphan drug status.  CIDP is listed by the National Organization
for Rare Disorders (http://www.rarediseases.org/)
as an orphan disease with less than 200,000 cases in the United
States.  The only available treatment is IVIG (intravenous gamma
globulin) at a cost of $2000-$6000 per month depending on dosage.  The
mechanism of action of IVIG is to block release of inflammatory cytokines
directly and therefore lasts only about 1-2 weeks.  However, due to
their substantially greater resources, competitors may develop similar
technologies and products more rapidly or may market them more
effectively.  Competing technologies or products may be more effective
than any of those that are being or will be developed by Argyll
Biotech.  In addition, existing competitors enjoy the strategic
advantages of existing brand recognition, marketing and distribution networks,
thus enabling them to introduce new products much more rapidly than
Immunosyn.




Employees




As of
December 31, 2007, we had three executive officers, Mr. Stephen D. Ferrone,
President and CEO, Mr. Douglas McClain, Jr., our Corporate Secretary, and G.
David Criner, Chief Financial and Accounting Officer.  Stephen D.
Ferrone is currently our only full-time employee.  On February 1,
2008, Douglas A. McClain, Jr. resumed the position of Chief Financial and
Accounting Officer on a part-time basis following Mr. Criner’s
resignation.  The Company expects to hire additional executive staff
and employees, including potentially a full-time CFO, as needed.




Item
1A.                      Risk
Factors




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




Risks Related to the
Company’s Business




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




Our
independent auditor has expressed doubt about our ability to continue as a going
concern.  Note 2 to our financial statements includes an explanatory
paragraph expressing doubt about our ability to continue as a going
concern.  Our ability to continue as a going concern is dependent on
our ability to implement our business plan, raise capital and generate
revenues.  Since inception, we have borrowed $632,016 from Argyll
Equities, LLC and Argyll Biotech who together own approximately 60% of
Immunosyn’s Common Stock.  These advances are unsecured and are to be
repaid on demand.  In addition, the Company had accounts payable and
accrued expenses of $151,693 and $16,717, respectively, as of December 31,
2007.




13




As of
December 31, 2007, Immunosyn had an accumulated deficit of $828,600 and a
working capital deficit of $733,523 which is considered insufficient to fund
operations over the next 12 months.




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




As of
December 31, 2007, Argyll Biotech had an accumulated deficit of approximately
$715,000 and a working capital deficit of approximately
$564,000.  Argyll Biotech does not anticipate any revenues in the
foreseeable future but continues to incur significant losses from
operations.  This raises substantial doubt about Argyll Biotech’s
ability to continue as a going concern.  Argyll will require
substantial additional financing to bring SF-1019 to market.  If
adequate financing is not available to Argyll Biotech, it may be required to
delay, scale back or eliminate some of its research and development programs or
the proposed clinical trials of SF-1019, to relinquish rights to certain
technologies or products or to license third parties to commercialize
technologies and products that Immunosyn might otherwise seek to
license.  Argyll Biotech’s inability to obtain financing, if required,
would have a material adverse effect on the value of Immunosyn’s exclusive
license and Immunosyn’s ability to develop its operations and implement its
business plan.




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




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




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




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




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




Both
Argyll Biotech and Immunosyn are recently formed entities and, consequently,
lack the requisite personnel, facilities, equipment or experience to execute
their product development, testing, regulatory approval and marketing
objectives.  Argyll Biotech will be required to hire additional
qualified scientific and technical personnel as well as personnel with expertise
in clinical testing and government regulation, to expand various research and
development programs and to pursue product development, regulatory approval and
marketing plans.  Immunosyn will also have to hire marketing and
administrative personnel to promote its presence in the portion of the medical
community that treats maladies associated




14




with CIDP
and diabetes.  There is intense competition for qualified personnel in
the areas of Argyll Biotech’s and the Company’s respective activities, and there
can be no assurances that Argyll Biotech or the Company will be able to attract
and retain the qualified personnel necessary for the development of its and
their respective businesses.




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




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




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




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




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




15




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




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




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




Immunosyn
has been informed that Argyll Biotech is implementing controls to prevent
unregulated use of SF-1019 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
value.




Prior to
Argyll Biotech’s development of SF-1019, caprine serum had been the subject of
unregulated use by parties unrelated to Argyll Biotech and the
Company.  Last year, the Company  learned that research
samples of SF-1019 have been used by several individuals in the United States
and Mexico, and such uses have been publicized as “testimonials” on a
shareholder’s web site.  To the extent unapproved research samples of
SF-1019 have been exported from the United States or used in the United States,
the FDA may issue cease and desist letters and take other action to prevent any
further export, use or promotion within the United States.  Such
actions by the FDA, if any, may delay or affect Argyll Biotech’s ability to
obtain FDA approval for SF-1019 and will have a material adverse effect on the
Company’s exclusive license from Argyll Biotech.




The
Company has been informed that Argyll Biotech has taken steps to prevent
distribution or export of SF-1019 for unapproved human use in any country,
including the United States.  In addition, the Company has informed
all of its shareholders to discontinue all further promotion of SF-1019 that
does not comply with FDA regulations.  The Company’s Board of
Directors has assumed responsibility for coordinating these controls with Argyll
Biotech and monitoring their implementation.




16




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




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




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




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




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




Pursuant
to our exclusive license agreement with Argyll Biotech, the Company issued
147,000,000 shares of Common Stock to Argyll Biotech at par value of $0.0001 per
share in payment of the exclusive world-wide license rights to SF-1019 for a
term that will last for the later of 10 years from the date when SF-1019 is
first commercially sold or the date when the patent covering SF-1019 expires,
which in most jurisdictions is twenty years from the date of
filing.  On October 25, 2007, Immunosyn entered into an Amended and
Restated License Agreement with Argyll Biotech.  The amended license
agreement expands the grant of rights to Immunosyn to include the exclusive
worldwide right to market, sell, distribute and promote SF-1019 in its current
form for multiple uses including the treatment of any and all diseases and
pathological conditions (not just Chronic Inflammatory Demyelinating
Polyneuropathy (CIDP), Diabetic Neuropathy (DN) and diabetic ulcers
(DU)).  Immunosyn is further granted the rights to any improvement of
SF-1019 and other compounds, which are developed under the same technology
platform and which are chemically similar to SF-1019.  In conjunction,
Immunosyn also




17




obtained
an exclusive, worldwide license to all intellectual property owned by or
assigned to Argyll Biotechnologies, LLC for the purpose of marketing,
distribution, sale and promotion of SF-1019.  Immunosyn continues to
have the right of first offer to enter into additional license agreements for
uses of other compounds that are developed and which are not already covered
under the amended license agreement.  The exclusive license agreement
is between related entities, was not negotiated in an arms-length transaction,
and does not bear any relationship to established or traditional methods of
valuing such fees.  Instead, the license rights were recorded at
Argyll Biotech’s cost basis of the underlying patents licensed to
Immunosyn.




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




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




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




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




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




18




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




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




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




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




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




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




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




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




Competition
in Immunosyn’s industry is intense.  Potential competitors in the
United States and Europe are numerous and include pharmaceutical, chemical and
biotechnology companies, most of which




19




have
substantially greater capital resources, marketing experience, research and
development staffs and facilities than does Immunosyn.  Among others,
Eli Lilly & Company and Wyeth Pharmaceuticals, Inc. market antidepressants,
and Pfizer, Inc. markets anticonvulsants that are prescribed for treating
diabetic neuropathy.  In addition, Daval is also testing a caprine
serum product, called Aimspro, for treating multiple sclerosis and other
neurological disorders




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




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




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




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




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




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




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




Immunosyn
currently has no sales and marketing capability.  The creation of
infrastructure to commercialize medical products is a difficult, expensive and
time-consuming process.  Immunosyn may




20




not be
able to establish direct or indirect sales and distribution capabilities
anywhere in the world or be successful in gaining market acceptance for any
products, including SF-1019.




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




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




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




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




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




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




21




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




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




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




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




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




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




22




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




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




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




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




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




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




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




23




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




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




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




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




·
            difficulty
      in establishing or managing distribution
  relationships;




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




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




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




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




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




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




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




24




In
addition, regulatory authorities may require additional clinical trials, which
could result in increased costs and significant development delays.




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




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




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




·
            inability
      to adequately follow patients after
treatment;




·
            safety
      issues, side effects or other adverse
effects;




·
            lack
      of efficacy during the clinical trials;
and




·
            government
      or regulatory delays.




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




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




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




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




·
            failure
      to receive necessary regulatory
approvals;




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




·
            failure
      to achieve market acceptance; and




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




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




25




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




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




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




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




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




As
directed by Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX 404”), the SEC
adopted rules requiring public companies to include a report of management on
the company’s internal controls over financial reporting in their annual
reports, including in their Form 10-KSB.  We are subject to this
requirement commencing with our fiscal year ending December 31, 2007 and a
report of our management is included under Item 8A(T) of this Annual Report on
Form 10-KSB.  In addition, SOX 404 requires the independent registered
public accounting firm auditing a company’s financial statements to also attest
to and report on the operating effectiveness of such company’s internal
controls.  However, this annual report does not include an attestation
report because, under current law, we will not be subject to these requirements
until our annual report for the fiscal year ending December 31,
2008.  We can provide no assurance that we will comply with all of the
requirements imposed thereby.  There can be no assurance that we will
receive a positive attestation from our independent auditors.  In the
event we identify significant deficiencies or material weaknesses in our
internal controls that we cannot remediate in a timely manner or we are unable
to receive a positive attestation from our independent auditors
with




26




respect
to our internal controls, investors and others may lose confidence in the
reliability of our financial statements.




Risks Related to the
Company’s Securities




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




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




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




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




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




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




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




Item
      2.
            Description
      of Property.




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




27




Item
      3.
            Legal
      Proceedings.




Pursuant
to a subpoena dated January 20, 2006 issued by the Securities and Exchange
Commission (“SEC”) to an affiliate of Argyll Biotech in proceedings captioned In
the Matter of Directors Financial Group, Ltd. and In The Matter of Prime Bank
Securities, and pursuant to two subpoenas issued by the SEC to affiliates of
Argyll Biotech on March 30, 2006 in a proceeding captioned In The Matter of The
Argyll Group, LLC, the Company and its affiliates have been asked to produce all
documents concerning a wide variety of topics including many related directly to
a prior licensee of SF-1019, Nurovysn Merger Corporation.  Pursuant to
a third subpoena dated December 15, 2006 issued by the SEC to the Company, the
Company has been asked to produce documents concerning private placements of the
Company’s stock and other matters disclosed in this report.  The
Company and its affiliates have actively cooperated with the SEC and have
produced documents responsive to these subpoenas, completing their responses in
early August 2007.  Immunosyn has had no further communication with
the SEC regarding the subpoenas since January 2007.  Although
Immunosyn and its affiliates believe they have complied with the SEC’s
subpoenas, there can be no assurance that the Company or the Company’s
affiliates will not be found liable for one or more violations of law which
could expose the Company or the Company’s affiliates, including Argyll Biotech,
to liability for fines and penalties, as well as injunctive or other sanctions
that might prohibit or restrict the Company’s or Argyll Biotech’s ability to
proceed with financing its operations or listing its Common Stock.




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




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




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




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




None.




28




PART
II




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




Market for Common
Equity




Our
Common Stock began trading on the Over-The-Counter Bulletin Board (the “OTCBB”)
on Friday, October 26, 2007, under the symbol “IMYN.”  According to
Yahoo! Finance, the high and low sale prices of our Common Stock on the OTCBB
during the fourth quarter of 2007 were $15.00 and $2.55,
respectively.  These quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions.  Prior to October 26, 2007, there was no public trading
market for our securities.




As of
March 14, 2008, 425,000,000 shares of our Common Stock were authorized for
issuance, 272,000,000 shares of Common Stock were issued and outstanding and
there were approximately 295 holders of record of our Common
Stock.  As of March 28, 2008, 25,000,000 shares of our Preferred Stock
were authorized for issuance and no shares of Preferred Stock were issued and
outstanding.




Dividends




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




Securities Authorized for
Issuance Under Equity Compensation Plans




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




The
following table provides information as of December 31, 2007 relating to the
Plan, the only compensation plan under which equity securities of the Company
are authorized for issuance:




EQUITY
COMPENSATION PLAN INFORMATION




Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights
              (a)
            Weighted-average
      exercise price of outstanding options, warrants and rights
              (b)
            Number
      of securities remaining available for future issuance under equity
      compensation plans (excluding securities reflected in column
      (a))
              (c)Equity
      compensation plans approved by security holders
            0
            0
            7,450,000


Equity
      compensation plans not approved by security holders
              0
              0
              0Total
              0
              0
              7,450,000


29




Recent Sales of Unregistered
Securities




Immunosyn
agreed to pay The Blaine Group, Inc. $1,500 per month in restricted stock. 
As a result, a total of  743 shares of Immunosyn stock have been allocated
to be issued to The Blaine Group, Inc. in 2007.  Pursuant to a contract
with Basic Investors, Inc., Immunosyn has allocated 10,000 shares of restricted
Immunosyn stock.  See Note 6 to the consolidated financial
statements.




Purchases of Equity
Securities by the Small Business Issuer and Affiliated
Purchasers




The
following table provides information with respect to any purchase made by or on
behalf of the Company or any “affiliated purchaser,” as defined, of shares of
Common Stock of the Company:




SMALL
BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES




Period
            (a)
      Total Number of Shares (or Units) Purchased
            (b)
      Average Price Paid per Share (or Unit)
            (c)
      Total Number of Shares (or Units) purchased as Part of Publicly Announced
      Plans or Programs
            (d)
      Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May
      Yet Be Purchased Under the Plans or ProgramsJune
      21, 2007 (1)
            2,700,000
            $.0001
            0
            0August
      24, 2007 (2)
            250,000
            $.0001
            0
            0Total
            2,950,000
            $.0001
            0
            0







(1) This
transaction does not constitute a “purchase.” The shares were acquired in
satisfaction of Immunosyn’s obligations pursuant to an agreement with Manuel
Bello for consulting services provided to Immunosyn.




(2) This
transaction does not constitute a “purchase.”  The shares were
acquired in satisfaction of Immunosyn’s obligations pursuant to an agreement
with L & R Trust for consulting services provided to Immunosyn.




Item
      6.
            Management’s
      Discussion and Analysis or Plan of
Operation.




Overview




Immunosyn
is a development stage company that was formed in August 2006 and is
headquartered in La Jolla, California.  In September 2006, it executed
an exclusive license agreement with an affiliated company, Argyll Biotech, in
exchange for 147,000,000 shares of its Common Stock or approximately 53.44% of
the outstanding shares of the Company’s Common Stock.  The license
agreement was amended and restated in October 2007.  Pursuant to the
terms of the license agreement, as




30




amended,
the Company has an exclusive worldwide license to market, distribute and sell a
biopharmaceutical drug product, currently referred to as SF-1019, for multiple
uses including the treatment of a variety of diseases, subject to the receipt of
appropriate regulatory approval in each jurisdiction where SF-1019 will be
marketed.  Under the terms of its exclusive license, Immunosyn also
has a right of first offer to extend its exclusive license to include variants
of SF-1019 that may be approved by various regulatory authorities for treatment
of other diseases and pathologies.  Argyll Biotech is responsible for
all research and product development, clinical testing, regulatory approvals,
production and product support.  In accordance with the amended
license agreement, the parties agreed that the cost of SF-1019 to the Company
will be 40% of the gross sales price of SF-1019 as sold to a third party
customer by the Company.




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




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




Plan of
Operation




At
December 31, 2007, the Company had an accumulated deficit of $828,600 and a
working capital deficit of $733,523.  Currently, an affiliated company
provides general support services to the Company, without charge.  In
addition, since inception, Immunosyn has borrowed $632,016 from Argyll Equities,
LLC and Argyll Biotech who together own approximately 60% of Immunosyn’s Common
Stock.  These advances are unsecured and will be repaid on
demand.  In October 2007, the Company hired both a Chief Executive
Officer and a Chief Financial Officer who has since left the
Company.  The Company has advances from these parties as
well.  The Company needs additional financing to continue its
operations and may raise funds in the future privately or
publicly.  The Company has listed its Common Stock on the
Over-The-Counter Bulletin Board and trading commenced on October 26,
2007.




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




·
            Paying
      current administrative staff;




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




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




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




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




31




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




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




·
            selecting
      and compensating board members.




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




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




Off Balance Sheet
Arrangements




None.




32




Item
      7.
            Financial
      Statements.




REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the
Board of Directors Immunosyn
Corporation La Jolla,
California


(A
Development Stage Company)




We have
audited the accompanying balance sheet of Immunosyn Corporation (a development
stage company) as of December 31, 2007 and the related statements of expenses,
changes in shareholders' equity (deficit), and cash flows for the year then
ended and for the periods from August 3, 2006 (inception) through December 31,
2007 and from August 3, 2006 (inception) through December 31, 2006. These
financial statements are the responsibility of Immunosyn Corporation’s
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform an audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. Immunosyn is not required to have,
nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of Immunosyn’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Immunosyn Corporation as of
December 31, 2007, and the results of operations and cash flows for the year
then ended and for the periods from August 3, 2006 (inception) through December
31, 2007 and from August 3, 2006 (inception) through December 31, 2006 in
conformity with accounting principles generally accepted in the United States of
America.
 
 The
accompanying financial statements have been prepared assuming that Immunosyn
Corporation will continue as a going concern. As discussed in Note 2 to the
financial statements, Immunosyn Corporation suffered losses from operations and
has a working capital deficiency, which raises substantial doubt about its
ability to continue as a going concern. Management's plans regarding those
matters also are described in Note 2. The financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.


/s/
Malone & Bailey, P.C.


www.malone-bailey.com Houston,
TX March
28,2008




33




Immunosyn
Corporation




(A
Development Stage Company)




Balance
Sheet




December
      31, 2007ASSETSCurrent
      AssetsCash
            
            $
            24,115Prepaid
      Expenses
            
            
            51,480Total
      Current Assets
            
            
            75,595Property
      and equipment, net of accumulated depreciation of $1,179
            
            
            5,254License
      rights
            
            
            400,000Deposits
            
            
            4,642Total
      Assets
            
            $
            485,491LIABILITIES
      AND SHAREHOLDERS’ EQUITY (DEFICIT)Current
      LiabilitiesAccounts
      payable
            
            $
            151,693Accrued
      expense
            
            
            16,717Advances
      from affiliates
            
            
            640,708Total
      Current Liabilities
            
            
            809,118Shareholders’
      Equity (Deficit)Common
      stock, $0.0001 par value, 425,000,000 shares authorized, 272,000,000
      shares issued and outstanding
            
            
            27,200Additional
      paid-in capital
            
            
            477,773Deficit
      accumulated during the development stage
            
            
            (828,600
            )Total
      Shareholders’ Equity (Deficit)
            
            
            (323,627
            )Total
      Liabilities and Shareholders’ Equity (Deficit)
            
            $
            485,491




See
accompanying summary of accounting policies and notes
to financial statements.




34




Immunosyn
Corporation




(A
Development Stage Company)




Statements
of Expenses




Year
                  Ended
                  December
      31, 2007
              
              
              August
      3, 2006(inception)
                  Through
                  December
      31, 2006
              
              
              August
      3, 2006(inception)
                  Through
                  December
      31, 2007EXPENSESGeneral
      & administrative
              
              $
              646,777
              
              
              $
              155,763
              
              
              $
              802,540Interest
      expense
              
              
              26,060
              
              
              
              -
              
              
              
              26,060NET
      LOSS
              
              $
              (672,837
              )
              
              $
              (155,763
              )
              
              $
              (828,600
              )Net
      loss per share, basic and diluted
              
              $
              -
              
              
              $
              -
              
              
              $
              -Weighted
      average number of common shares outstanding
              
              
              272,000,000
              
              
              
              216,140,000
              
              
              
              253,500,971
  See
accompanying summary of accounting policies and notes
to financial statements.
  35
  Immunosyn
Corporation
  (A
Development Stage Company)
  Statements
of Cash Flows
  Year
      Ended December 31, 2007
              
              
              August
      3, 2006 (inception) Through December 31, 2006
              
              
              August
      3, 2006 (inception) Through December 31, 2007Cash
      flows from operating activities:Net
      loss
              
              $
              (672,837
              )
              
              $
              (155,763
              )
              
              $
              (828,600
              )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
              
              
              1,179
              
              
              
              -
              
              
              
              1,179Imputed
      interest on advances from affiliates
              
              
              26,060
              
              
              
              -
              
              
              
              26,060Services
      rendered for stock
              
              
              66,413
              
              
              
              
              
              
              
              66,413Changes
      in:
              
              
              
              
              
              
              
              
              
              
              -Prepaid
      expenses
              
              
              (51,480
              )
              
              
              -
              
              
              
              (51,480
              )Other
      assets
              
              
              (2,500
              )
              
              
              (2,142
              )
              
              
              (4,642
              )Accounts
      payable
              
              
              151,693
              
              
              
              -
              
              
              
              151,693Accrued
      expenses
              
              
              2,671
              
              
              
              14,046
              
              
              
              16,717Net
      cash used in operating activities
              
              
              (478,801
              )
              
              
              (143,859
              )
              
              
              (622,660
              )Cash
      flows from investing activities:Purchase
      of property and equipment
              
              
              (6,433
              )
              
              
              -
              
              
              
              (6,433
              )Net
      cash used in investing activities
              
              
              (6,433
              )
              
              
              -
              
              
              
              (6,433
              )Cash
      flows from financing activities:Net
      advances from affiliates
              
              
              500,117
              
              
              
              140,591
              
              
              
              640,708Sale
      of common stock
              
              
              -
              
              
              
              12,500
              
              
              
              12,500Net
      cash provided by financing activities
              
              
              500,117
              
              
              
              153,091
              
              
              
              653,208Net
      change in cash
              
              
              14,883
              
              
              
              9,232
              
              
              
              24,115Cash
      at beginning of period
              
              
              9,232
              
              
              
              -
              
              
              
              -Cash
      at end of period
              
              $
              24,115
              
              
              $
              9,232
              
              
              $
              24,115Supplemental
      DisclosuresCash
      paid for interest
              
              $
              -
              
              
              $
              -
              
              
              $
              -Cash
      paid for income taxes
              
              $
              -
              
              
              $
              -
              
              
              $
              -Non-Cash
      Investing and Financing ActivitiesStock
      issued for license rights
              
              $
              -
              
              
              $
              400,000
              
              
              $
              400,000
  See
accompanying summary of accounting policies and notes
to financial statements.
  36
  Immunosyn
Corporation
 (A
Development Stage Company)
 STATEMENT
OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
 For
The Period From August 3, 2006 (Inception) through December 31,
2007
  Common
      StockShares
              
              
              Par
      Value
              
              
              Additional
      Paid-in Capital
              
              
              Development
      Stage Accumulated Deficit
              
              
              TotalBalance
      at August 3, 2006 (Inception)
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -Stock
      issued
              
              
              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
              )Balance
      at December 31, 2006
              
              
              272,000,000
              
              
              
              27,200
              
              
              
              385,300
              
              
              
              (155,763
              )
              
              
              256,737Imputed
      interest on advances from affiliate
              
              
              -
              
              
              
              -
              
              
              
              26,060
              
              
              
              -
              
              
              
              26,060Shares
      issued for services
              
              
              -
              
              
              
              -
              
              
              
              66,413
              
              
              
              -
              
              
              
              66,413Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (672,837
              )
              
              
              (672,837
              )Balance
      at December 31, 2007
              
              
              272,000,000
              
              
              $
              27,200
              
              
              $
              477,773
              
              
              $
              (828,600
              )
              
              $
              (323,627
              )
  See
accompanying summary of accounting policies and notes
to financial statements.
  37
  Immunosyn
Corporation
 (A
Development Stage Company)
 Notes
To Financial Statements
  Note
1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Background
  Immunosyn
Corporation is a Delaware corporation formed August 3, 2006 and headquartered in
La Jolla, California that has been granted an exclusive worldwide license to
market, distribute and sell a biopharmaceutical drug product, currently referred
to as SF-1019, in its current form.  Its current form has multiple
uses including the treatment of any and all diseases and pathological conditions
(not just Chronic Inflammatory Demyelinating Polyneuropathy (CIDP), Diabetic
Neuropathy (DN) and diabetic ulcers (DU)). This license was granted from an
affiliated company, Argyll Biotechnologies, LLC (“Argyll
Biotech”).  Immunosyn is further granted the rights to any
improvements of SF-1019 and other compounds, which are developed under the same
technology platform and which are chemically similar to SF-1019.
  Cash and Cash
Equivalents
  For
purposes of the statement of cash flows, Immunosyn considers all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.
  Long-Lived
Assets
  Long-lived
assets to be held and used are reviewed for impairment whenever events or
changes in circumstances indicate that their carrying amount may not be
recoverable. The carrying amount is not recoverable if it exceeds the sum of the
undiscounted cash flows expected to result from the use and eventual disposition
of the asset. If the carrying amount is not recoverable, an impairment loss is
recognized for the amount by which the carrying amount of the asset exceeds its
fair value.  Impairment testing was conducted as of December 31, 2007
by outside experts with no impairment found.
  Property and
Equipment
  Property
and equipment are stated at cost, net of accumulated depreciation. Depreciation
is computed using the straight –line method over the estimated useful lives of
the respective assets, generally five years
  Income
Taxes
  Deferred
taxes are provided on a liability method whereby deferred tax assets are
recognized for deductible temporary differences, and deferred tax liabilities
are recognized for taxable temporary differences. Temporary differences are the
differences between the reported amount of assets and liabilities and their tax
bases. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment.
  38
  Stock
Options
  Immunosyn
accounts for stock options using the fair value method. Fair value is determined
at the date of grant for employee options and at the date at which the grantee’s
performance is complete for non-employee options. Compensation cost is
recognized over the vesting period based on the fair value of the options. The
fair value of the options is calculated using the Black-Scholes option pricing
model.
  Basic and Diluted Net Loss
per Share
  Basic and
diluted net loss per share calculations are presented in accordance with
Financial Accounting Standards Statement 128, and are calculated on the basis of
the weighted average number of common shares outstanding during the year. They
include the dilutive effect of common stock equivalents in years with net
income. Basic and diluted loss per share are the same due to the absence of
common stock equivalents.
  Estimates
  The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
  Recent Accounting
Pronouncements
  Immunosyn
does not expect any recent accounting pronouncements to have a material effect
on its financial position or results of operations.
  Note
2.  GOING CONCERN UNCERTAINTY
  The
accompanying financial statements have been prepared assuming that Immunosyn
will continue as a going concern. Immunosyn was formed in August 2006 with an
initial source of financing from issuance of common stock and an advance from an
affiliate. As shown in the financial statements, Immunosyn had an accumulated
deficit of $828,600 and a working capital deficit of $733,523 as of December 31,
2007 which is considered insufficient to fund operations over the next 12
months. Management is trying to raise additional capital through sales of common
stock as well as seeking financing from third parties. These conditions raise
substantial doubt about Immunosyn’s ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
  Note
3.  LICENSE RIGHTS
  Grant of
Rights
  Under the
terms of the license agreement executed on September 28, 2006, Immunosyn was
granted the exclusive worldwide right to market, distribute, sell and promote
SF-1019 for treatment of CIPD, diabetic neuropathy and diabetic ulcers by Argyll
Biotech, in exchange for 147,000,000 shares of the common stock of the Company.
On October 25, 2007, Immunosyn and Argyll Biotech amended the license agreement
to expand the grant of rights to Immunosyn to include the exclusive worldwide
right to market, sell, distribute and promote SF-1019 in its current form for
multiple uses including the treatment of any and all diseases and pathological
conditions (not just Chronic Inflammatory Demyelinating
  39
  Polyneuropathy
(CIDP), Diabetic Neuropathy (DN) and diabetic ulcers (DU)).  Immunosyn
is further granted the rights in this amended license agreement to any
improvements of SF-1019 and other compounds, which are developed under the same
technology platform and which are chemically similar to SF-1019. Argyll Biotech
purchased a group of patents for $5,000,000 which, along with other intellectual
property, is included in the license agreement  Also, during the first
five years of the term of the license agreement, Immunosyn has the right to
enter into partnering arrangements with Argyll Biotech for development of other
novel drug treatment products.
  Development and Regulatory
Matters
  Argyll
Biotech anticipates that it will commence clinical trials and studies of SF-1019
and prepare and submit all filings required for regulatory approval of that
product for treatment of CIPD, RSD, diabetic neuropathy and diabetic ulcers,
both in the United States and in other countries that are targeted for
distribution and sale of the product. Argyll Biotech is required to submit
periodic written reports to Immunosyn to document its efforts toward procuring
such regulatory approval, as well as clinical budgets and plans for each year
during which development efforts are conducted. Argyll Biotech retains full
responsibility for preparation and implementation of all trial protocols and
regulatory activities and for all costs associated with those
activities.
  Distribution and
Promotion
  Immunosyn
assumes full responsibility to promote, distribute and sell SF-1019 for its
approved uses in the appropriate jurisdictions. To accomplish this, Immunosyn
plans to develop a sales force, and an order processing and distribution network
for each country in which regulatory approval of SF-1019 is granted. Immunosyn
plans to develop full marketing plans for each such country, although Argyll
Biotech will retain a right to participate in all marketing and promotion
activities. Each party is responsible for its own costs associated with these
activities.
  License
Fees
  As
consideration to Argyll Biotech for the rights granted to Immunosyn under the
agreement, Immunosyn issued 147,000,000 shares of common stock to Argyll
Biotech.
  Payments and
Reports
  Argyll
Biotech is not obligated to provide any accounting for its use of proceeds, nor
does Immunosyn have any audit rights to inspect Argyll Biotech’s use of the
license proceeds. Immunosyn is required to submit periodic sales reports to
Argyll Biotech.
  Manufacture and
Supply
  Argyll
Biotech retains responsibility for manufacturing and supplying all of
Immunosyn’s requirements of SF-1019. Argyll Biotech and Immunosyn have agreed
that the cost of SF-1019 to Immunosyn shall be equal to forty percent (40%) of
the gross sales price of SF-1019 as sold to a third party customer by
Immunosyn.  Argyll Biotech shall also confirm through testing and
other programs that the commercial quantities of SF-1019 that it manufactures
are fully compliant with all manufacturing and laboratory standards applicable
to drug products which are intended for use in humans.
  40
  Ownership, Patents and
Trademarks
  Argyll
Biotech retains full ownership of its intellectual property, including
intellectual property that is jointly-developed by the parties. Argyll Biotech
must take reasonable steps to protect its intellectual property from third-party
infringement, and to defend Immunosyn against charges of infringement that
refer, relate or pertain to Immunosyn’s marketing, sale and distribution of
SF-1019.
  Publication and
Confidentiality
  Argyll
Biotech and Immunosyn must collaborate on all publications of scientific or
medical reports relating to either company’s business, operations, research and
development or clinical trial results.
  Recall and
Indemnification
  Argyll
Biotech retains full responsibility for costs and activities relating to any
recall of SF-1019, and is required to defend, indemnify and hold Immunosyn
harmless for, from and against damages associated with those
recalls.
  Term and
Termination
  The
license agreement is in full force and effect for as long as any patent coverage
remains in place for SF-1019 in any country. Either party may terminate the
agreement only on account of an uncured material breach by the other party.
Immunosyn may terminate the agreement if a non-rebuttable regulatory or patient
safety issue is raised, in which event all remaining license fee obligations
will immediately be cancelled. Any fees paid prior to termination are
non-refundable.
  Valuation
  The
license rights are recorded at Argyll Biotech’s cost basis of the underlying
patents licensed to Immunosyn due to Argyll Biotech being a related
party.
  Note
4.  PROPERTY AND EQUIPMENT
  Property
and equipment consisted of the following:
  December
      31,
                  2007Office
      and computer equipment
              
              $
              6,433Less:
      accumulated depreciation
              
              
              (1,179
              )$
              5,254
  Depreciation
expense was $1,179 for the year ended December 31, 2007.
  Note
5.  ADVANCES FROM AFFILIATES
  Immunosyn
was advanced $632,016 from Argyll Equities, LLC and Argyll Biotech who together
own approximately 60% of Immunosyn’s common stock. These advances are unsecured
and are to be repaid on demand. Interest expense in the amount of $26,060 was
accrued using an annual rate of 7.5%.
  41
  Advances
from Stephen D. Ferrone, CEO and President of Immunosyn, in the amount of $7,936
and from G. David Criner, CFO, in the amount of $756 are due and
payable.
  Note
6.  STOCKHOLDERS’ EQUITY
  Between
August 3, 2006 and August 31, 2006, Immunosyn sold a total of 125,000,000 shares
of Common Stock, at a purchase price of $0.0001 per share, to the selling
stockholders, resulting in gross proceeds to the Company of
$12,500.
  In
September 2006, a total of 147,000,000 shares of Common Stock were issued to
Argyll Biotech as a non-refundable payment of the license fee
for Immunosyn's exclusive license to SF-1019.
  Immunosyn
entered into a 12 month contract with The Blaine Group, Inc. (TBG) on October
12, 2007 for TBG to undertake a national financial public relations and
investors relations campaign for Immunosyn.  As part of this contract,
TBG agrees to handle all public relations matters, as agreed upon, for
Immunosyn.  This contract shall continue until terminated by either
party with thirty days written notice.  Immunosyn agreed to pay TBG
$1,500 per month in restricted stock.  As a result, a total of 743
shares of Immunosyn stock have been allocated to be issued to TBG in
2007.
  Immunosyn
entered into a contract with Basic Investors, Inc. (Basic) on October 15, 2007
to engage Basic to provide management and financial consulting services to
Immunosyn.  The term of this contract is from October 15, 2007 through
October 15, 2008.  Pursuant to this contract, Immunosyn has allocated
10,000 shares of restricted Immunosyn stock.
  Stock
Options
  Immunosyn
has adopted a stock option plan for employees, outside consultants, and
directors. There are 7,450,000 common shares available for grant under the plan.
The plan allows for incentive options with exercise prices of at least 100% of
the fair market value of Immunosyn’s common stock and nonqualified options with
exercise prices of at least 85% of the fair market value of Immunosyn’s common
stock.
  Immunosyn
accounts for stock options using the fair value method. Fair value is determined
at the date of grant for employee options and at the date at which the grantee’s
performance is complete for non-employee options. Compensation cost is
recognized over the vesting period based on the fair value of the options. The
fair value of the options is calculated using the Black-Scholes option pricing
model.
  No
options have been granted as of December 31, 2007.
  Note
7.  INCOME TAXES
  Deferred
taxes are provided on a liability method whereby deferred tax assets are
recognized for deductible temporary differences, and deferred tax liabilities
are recognized for taxable temporary differences. Temporary differences are the
differences between the reported amount of assets and liabilities and their tax
basis. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment.  Since inception, Immunosyn has incurred net losses
and, therefore, has no tax liability. The net deferred tax asset generated by
the loss carry-forward has been fully reserved. The cumulative net operating
loss carry-forward is $828,600 with $155,800 which will expire at
December 31, 2026, and $672,800 which will expire December 31,
2027.
  At
December 31, 2007, deferred tax assets consisted of the following:
  Net
      Operating Losses
              
              
              281,724Less:  valuation
      allowance
              
              
              (281,724
              )Net
      deferred tax asset
              
              
              -
  42
  Note
8.  COMMITMENTS AND CONTINGENT LIABILITIES
  On
October 12, 2007, Immunosyn entered into a 12 month contract with The Blaine
Group, Inc. (TBG) for TBG to undertake a national financial public relations and
investors relations campaign for Immunosyn.  As part of this contract,
TBG agrees to handle all public relations matters, as agreed upon, for
Immunosyn.  This contract shall continue until terminated by either
party with thirty days written notice.  Immunosyn agreed to pay TBG
$10,000 as a monthly retainer fee.  $8,500 of this retainer is payable
in cash and $1,500 in restricted stock to be valued at current market value on
the date of issue.
  Pursuant
to a subpoena dated January 20, 2006 issued by the Securities and Exchange
Commission to an affiliate of Argyll Biotech in proceedings captioned In the Matter of Directors
Financial Group, Ltd. and In The Matter of Prime Bank
Securities, and pursuant to subpoenas issued by the SEC to affiliates of
Argyll Biotech on March 30, 2006 and to Immunosyn on December 15, 2006 in a
proceeding captioned In The Matter of The Argyll
Group, LLC, Immunosyn and its affiliates have been asked to produce all
documents concerning a wide variety of topics including many related directly to
Immunosyn. Immunosyn and Argyll Biotech’s affiliates actively cooperated with
the SEC and produced documents responsive to these subpoenas, completing
their  responses in early August 2007.  Immunosyn has had no
further communication with the SEC regarding the subpoenas since January
2007.
  On
December 19, 2007, a shareholder of Immunosyn, Leon S. Segen, commenced an
action in the Southern District of New York derivatively on behalf of Immunosyn
to recover alleged short-swing profits from several alleged statutory insiders
of Immunosyn, including Immunosyn officer and director Douglas A. McClain
Jr.  The action includes Immunosyn as a nominal defendant only and
does not allege any claims of liability against Immunosyn.
  On March
19, 2008, a shareholder of the Company, Deborah Donoghue, commenced two actions
– one in the U.S. District Court for the Southern District of California and the
other in the U.S. District Court for the Southern District of New York --
derivatively on behalf of the Company to recover alleged short-swing profits
from several alleged statutory insiders of the Company, including Company office
and director Douglas A. McClain, Jr.  The actions include the Company
as a nominal defendant only and do not allege any claims of liability against
the Company.
  On or
about July 27, 2006, Daval, filed suit in the High Court of Justice, Chancery
Division in London, England against Argyll Biotech and five of Argyll Biotech’s
research scientists and others, including Douglas McClain, Sr., seeking an
injunction and damages or an account of profits based on allegations of breach
by the scientists and Mr. McClain of confidentiality agreements with Daval,
breaches by such persons of their fiduciary duties and conspiracy by Argyll
Biotech and certain of its shareholders to wrongfully disclose and use Daval’s
alleged trade secrets. Argyll Biotech has filed its defenses and continues to
investigate the merits of the suit and the basis of its defenses including,
among other grounds, that one of the active ingredients in SF-1019 disclosed in
Argyll Biotech’s 603 Application is based on independent research by Argyll
Biotech’s research scientists, and the method of producing SF-1019 is materially
different from Daval’s process.  The action is listed for trial in the
UK in January 2009. Immunosyn is not involved in this litigation.
  Immunosyn
has been provided with rent-free office space for two executive offices under a
monthly oral agreement with no specific term from its affiliate and shareholder,
Argyll Equities LLC. It is uncertain how long Argyll Equities will continue
providing office space or on what terms space will continue to be provided to
Immunosyn in the future. At present, Immunosyn does not require dedicated office
space.
  43
  Item
      8.
              Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure.
  None.
  Item
      8A(T).
              Controls
      and Procedures.
  Controls and
Procedures
  The
Company maintains disclosure controls and procedures (as defined in Rule
13a-15(e) under the Securities Exchange Act of 1934, as amended) that are
designed to ensure that information required to be disclosed by the Company in
reports it files or submits under the Securities Exchange Act of 1934, as
amended, is recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules and forms and that such information is accumulated
and communicated to the Company’s management, including the Company’s Chief
Executive Officer and Chief Financial and Accounting Officer, as appropriate, to
allow timely decisions regarding required disclosures.  In designing
and evaluating the disclosure controls and procedures, management recognizes
that any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives,
and management necessarily is required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.  As of
the end of the period covered by this report, and under the supervision and with
the participation of management, including its Chief Executive Officer and Chief
Financial and Accounting Officer, who are responsible for establishing and
maintaining adequate internal control over financial reporting as such term is
defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, such persons
conducted an evaluation of the effectiveness of the design and operation of
these disclosure controls and procedures. Based on this evaluation and subject
to the foregoing, the Company’s Chief Executive Officer and Chief Financial and
Accounting Officer concluded that these controls are not effective because there
are material weaknesses in our internal control over financial
reporting.  A material weakness is a deficiency, or a combination of
control deficiencies, in internal control over reporting such that there is a
reasonable possibility that that a material misstatement of Immunosyn’s annual
or interim financial statements will not be prevented or detected on a timely
basis.
  
 The material weakness relates to the
monitoring and review of work preformed by Immunosyn’s Chief Financial Officer
in the preparation of audit and financial statements, footnotes and financial
data provided to Immunosyn’s registered public accounting firm in connection
with the annual audit.  All of Immunosyn’s accounting functions
including financial reporting are carried out by our Chief Financial Officer
with review functions provided by our Chief Executive Officer and we do not have
an audit committee at this time.  The lack of accounting staff results
in a lack of segregation of duties and technical accounting experience necessary
for an effective internal control system.
 
 Immunosyn recognizes the importance of
internal controls.  As Immunosyn is currently a development stage
company with limited ongoing financial operations, management is making an
effort to mitigate this material weakness to the fullest extent
possible.  At present this is done by having the Chief Executive
Officer review Immunosyn’s financial statements, account reconciliations and
accounts payable reports that have been prepared by Chief Financial Officer for
reasonableness.  All unexpected results are
investigated.  At any time, if it appears that any control can be
implemented to continue to mitigate such weakness, it will be immediately
implemented.  As Immunosyn grows in size and as its
  44
  finances
allow, management will hire sufficient accounting staff and implement
appropriate procedures for monitoring and review of work performed by our Chief
Financial Officer.
  Management’s Annual Report
on Internal Control over Financial Reporting
  Section
404 of the Sarbanes-Oxley Act of 2002 requires that management document and test
the Company’s internal control over financial reporting and include in this
Annual Report on Form 10-KSB a report on management’s assessment of the
effectiveness of our internal control over financial reporting.
  Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Rule 13a-15(f) of
the Securities Exchange Act of 1934, as amended.  Under the
supervision and with the participation of our management, including our Chief
Executive Officer and Chief Financial Officer, we conducted an evaluation of the
effectiveness of our internal control over financial reporting based upon the
framework in Internal Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).  Based on
that evaluation, our management certifies that this report is complete, that
this report complies with all relevant regulatory requirements, and that our
internal control over financial reporting is not effective, as of December 31,
2007.
  This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by our
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit us to provide only management’s report in
this annual report.
  Changes in Internal
Controls
  During
the year ended December 31, 2007, there have not been any changes in the
Company’s internal controls that have materially affected or are reasonably
likely to materially affect, the Company’s internal control over financial
reporting.   However, please note the discussion above.
  Item
      8B.
              Other
      Information.
  None.
  PART
III
  Item
      9.
              Directors,
      Executive Officers, Promoters, Control Persons and Corporate Governance;
      Compliance with Section 16(a) of the Exchange
  Act.
  Set forth
below is information regarding the Company’s current directors and executive
officers.  There are no family relationships between any of our
directors or executive officers.  The directors are elected annually
by stockholders.  The executive officers serve at the pleasure of the
Board of Directors.
  Name
              Age
              TitleStephen
      D. Ferrone
              57
              President
      and Chief Executive Officer, DirectorDouglas
      A. McClain, Jr.
              33
              Chairman
      of the Board, Chief Financial and Accounting Officer, Secretary,
      DirectorMyron
      W. Wentz
              67
              Director
  45
  STEPHEN D. FERRONE,
President and Chief Executive Officer, Director
  Mr.
Ferrone was appointed by the Company to serve as the President and Chief
Executive Officer of the Company and a member of the Board of Directors
effective the opening of business on October 15, 2007.  Mr. Ferrone,
57, is an attorney with more than 20 years of experience in the investment
industry, having held senior leadership and management roles in marketing and
sales with a number of publicly traded financial services companies including
Morningstar, Inc., ABN-AMRO and Charles Schwab & Co., Inc.  From
August 2005 to October 2007, Mr. Ferrone was the founder and principal of SF
Consulting, a private business consulting company.  From May 2005 to
August 2005, Mr. Ferrone served as the Director of Distribution and National
Sales of Morningstar, Inc. and Morningstar Investment Services.  From
August 1996 to April 2005, Mr. Ferrone had various roles at ABN-AMRO Asset
Management and ABN-AMRO Investment Fund Services including Senior Managing
Director and National Sales Director.  From May 1991 to August 1996,
Mr. Ferrone served as a Regional marketing Director of Charles Schwab & Co.,
Inc. and Schwab Institutional.  In addition, from September 1977 to
May 1983, Mr. Ferrone served as an Assistant State’s Attorney and felony trial
prosecutor in the Cook County State’s Attorney’s Office in Chicago,
Illinois.  He holds a JD degree from Loyola University School of Law
and a BA from Northwestern University.  He is also a licensed
securities broker holding series 7, 24 and 63 licenses.
  Mr.
Ferrone is not currently a director of any other reporting
company.  There are no family relationships between Mr. Ferrone and
any of the other directors or executive officers of the Company.  Mr.
Ferrone, through SF Consulting, was previously a party to a consulting
arrangement with the Company which called for payments aggregating
$150,000.  Mr., Ferrone served as a director and officer of a
predecessor of the Company, Nurovysn Merger Corporation, which was dissolved in
August 2006.
  DOUGLAS A. MCCLAIN, JR.,
Chairman of the Board, Chief Financial and Accounting Officer, Corporate
Secretary, Director
  Mr.
McClain is 33 years of age and a financial executive with 10 years of
experience.  In 2002, Mr. McClain co-founded Argyll Equities, LLC and
its affiliates (including Argyll Biotech), a boutique private equity investment
banking and corporate finance firm, where he serves as an executive officer and
director.  In 1999, he joined International Profit Associates, a
business consulting firm, as a Senior Executive responsible for mergers and
acquisitions, and corporate finance, where he was employed until
2001.  Mr. McClain graduated with a Bachelor of Business
Administration in finance from Mercer University’s Stetson School of Business
and Economics in 1996.  Mr. McClain was a founder of the Company and
has been a director and officer since inception in August 2006.  Mr.
McClain resigned as Chief Financial Officer and Chief Accounting Officer of the
Company effective the close of business on Friday, October 19, 2007, but resumed
such positions on February 1, 2008.  He is also Chairman of the Board
of Directors and Secretary of the Company.
  MYRON W. WENTZ,
Director
  Myron W.
Wentz became a director of the Company on March 14, 2008.  Dr. Wentz
is Chairman of the Board and Chief Executive Officer of USANA Health Sciences,
Incorporated (NASDAQ: USNA).  Dr. Wentz founded USANA in 1992 and has
been the Chairman and CEO since its inception.  USANA is a public
company that develops and manufactures nutritional and personal care products
that are sold directly to preferred customers and associates throughout the
world.  In 1974, Dr. Wentz founded Gull Laboratories (the former
parent company of USANA) and served as President and Chairman from 1974 to 1994
during which time Gull developed, manufactured and marketed medical diagnostic
test kits designed to detect infectious diseases, particularly those caused by
viruses, and used in private and
  46
  hospital
laboratories around the world.  Gull was sold to Fresenius, a German
medical products company, in 1994 although Dr. Wentz continued as Chairman until
1998.  In 1998, Dr. Wentz founded Sanoviv Medical Institute, a
holistic medical facility located on the pacific Coast near Rosarito Beach,
Mexico.  Dr. Wentz received his doctorate from North Central College
in Illinois.
  As part
of the Stock Purchase and Option Agreement dated March 13, 2008 between Dr.
Wentz and Argyll Biotech, the Company’s largest shareholder, Argyll Biotech
agreed to nominate and/or cause Dr. Wentz (or his designees) to be elected to
the Company’s Board of Directors at each annual meeting of stockholders for so
long as Dr. Wentz owns at least 200,000 shares of the Company’s Common Stock and
Argyll Biotech agreed to vote all, or cause (to the extent within its control)
to be voted all, shares of the Company’s Common Stock owned or controlled by
Argyll Biotech, directly or indirectly, to be voted to elect Dr. Wentz or his
designee to serve on the Company’s Board of Directors for so long as Dr. Wentz
owns at least 200,000 shares of the Company’s Common Stock.  Dr. Wentz
agreed to serve on the Company’s Board of Directors if elected.
  Advisors and
Consultants
  The
following person is serving as an advisor to the Company:
  FRED G.
JAGER – Mr. Jager is founder, president and chief executive officer of Hunter
Wise Financial Group, LLC and Hunter Wise Securities, LLC.  For three
decades he has represented public and privately held companies throughout North
America, and a successful advisor in middle-market corporate
finance.  Formerly president of Geneva Corporate Finance, Inc., Mr.
Jager also founded Denver-based Jager & Company, Inc., which was the largest
corporate finance firm of its kind in the Rocky Mountain region.  He
also was executive vice president of an investment banking firm in Northern
California, and chief operating officer of one of the largest vocational
educational companies in the world.  A former intelligence officer,
Mr. Jager has been a director on numerous public and private companies, is
experienced business speaker and author of numerous published
articles.
  Compliance with Section
16(a) of the Exchange Act
  Section
16(a) of the Exchange Act, as amended, requires our executive officers,
directors and persons who beneficially own more than 10% of our shares of Common
Stock to file reports of their beneficial ownership and changes in ownership
(Forms 3, 4 and 5, and any amendment thereto) with the SEC.  Executive
officers, directors, and greater-than-ten percent holders are required to
furnish us with copies of all Section 16(a) forms they file.
  Based
solely upon a review of Forms 3, 4 and 5 furnished to us for the fiscal year
ended December 31, 2007, we have determined that our directors, officers and
greater than 10% beneficial owners, except as provided below, complied with all
applicable Section 16 filing requirements.
  Argyll
Biotech, Padmore Holdings, Ltd., Clairsvelle Holdings, Ltd., Cuxhaven Holdings,
Ltd., Argyll Equities, James T. Miceli and Douglas A. McClain, Jr. were late in
filing one or more transactions on Form 4.
  Code of
Ethics
  The
Company has adopted a code of ethics that applies to the Company’s principal
executive officer, principal financial and accounting officer, or persons
performing similar functions.  This code of ethics is available, free
of charge, on our website at www.immunosyn.com.
  47
  Corporate
Governance
  Nominating
Process
  The
Company’s Board of Directors has no nominating committee.  When the
Company develops its operations, it will create a nominating
committee.  In the meantime, the entire Board of Directors is acting
as the Company’s nominating committee.  There are no material changes
to the procedures by which security holders may recommend nominees to the
Company’s Board of Directors.
  Audit
Committee Financial Expert
  The
Company does not have an audit committee or a compensation committee of its
Board of Directors.  In addition, the Company’s Board of Directors has
determined that the Company does not have an audit committee financial expert
serving on the Board.  When the Company develops its operations, it
will create an audit and a compensation committee and will seek an audit
committee financial expert for its Board and audit committee.  Until
it has such committees and such an expert, the Company will not be able to list
its stock on the major securities exchanges or the Nasdaq.  In the
meantime, the entire Board of Directors is acting as the Company’s audit
committee.
  Item
      10.
              Executive
      Compensation.
  The
following table sets forth information concerning all cash and non-cash
compensation awarded to, earned by or paid to the named executive officers
during the 2007 fiscal year:
  Summary
Compensation Table – 2007
  Name
      and Position (a)
              Year
      (b)
              Salary
      ($) (c)
              Bonus
      ($) (d)
              Stock
      Awards ($) (e)
              Option
      Awards ($) (f)
              Non-Equity
      Incentive Plan Compensation ($) (g)
              Change
      in Pension Value and Nonqualified Deferred Compensation Earnings ($)
      (h)
              All
      Other Compensation ($) (i)
              Total
      ($) (j)D.
      Kent Norton, President and CEO (1)
              2007
              0
              0
              0
              0
              0
              0
              0
              0Stephen
      D. Ferrone, President and CEO (2)
              2007
              7,696
              0
              0
              0
              0
              0
              0
              7,696Douglas
      A. McClain, Jr., Chief Financial and Accounting Officer
(3)
              2007
              0
              0
              0
              0
              0
              0
              0
              0G.
      David Criner, Chief Financial and Accounting Officer (4)
              2007
              7,043
              0
              0
              0
              0
              0
              0
              7,043
 
  (1) Mr.
Norton resigned his positions as President and Chief Executive Officer of the
Company and a member of the Board of Directors effective the close of business
on Friday, October 12, 2007.
  (2)
Stephen D. Ferrone was appointed by the Company to serve as the President and
Chief Executive Officer of the Company and a member of the Board of Directors
effective the opening of business on October 15, 2007 to fill the vacancy
created by the resignation of Mr. Norton from such positions.
  48
  (3)
Douglas A. McClain, Jr. resigned as Chief Financial Officer and Chief Accounting
Officer of the Company effective the close of business on Friday, October 19,
2007.  He remained as a member of the Board of Directors and as
Secretary of the Company.  Mr. McClain was appointed by the Company to
serve as the Chairman of the Board of the Company effective the opening of
business on October 22, 2007.  Mr. McClain resumed his role as Chief
Financial and Accounting Officer of the Company effective February 1, 2008 upon
the resignation of Mr. Criner.
  (4) G.
David Criner was appointed by the Company to serve as the Chief Financial
Officer and Chief Accounting Officer of the Company effective the opening of
business on October 22, 2007 to fill the vacancy created by the resignation of
Mr. McClain from such positions.  Mr. Criner resigned his position
effective February 1, 2008.
  Narrative Disclosure to
Summary Compensation Table
  D. Kent
Norton, the Company’s President and Chief Executive Officer until October 12,
2007, was not a party to an employment agreement with the Company.
  Effective
October 15, 2007, Stephen D. Ferrone and the Company entered into an Employment
Agreement (the “Ferrone Employment Agreement”) pursuant to which Mr. Ferrone is
employed by the Company as its President and Chief Executive Officer, as
described below.  In addition, Argyll Biotechnologies, LLC has agreed
to nominate and/or cause Mr. Ferrone to be elected to the Company’s Board of
Directors at each annual meeting of stockholders during the Term.  The
term of the Ferrone Employment Agreement began on October 15, 2007 and will
terminate on December 31, 2009, unless earlier terminated, and will
automatically extend for each succeeding one year period unless either party
provides the other with a written notice at least 30 days prior to the end of
the then current Term advising that the party providing the notice shall not
agree to so extend the Term (the “Term”).
  On
November 15, 2007, Mr. Ferrone and the Company entered into a First Amendment to
the Ferrone Employment Agreement pursuant to which the parties agreed to change
the base compensation Mr. Ferrone is to receive from the Company under the
Ferrone Employment Agreement to a base salary equal to $3,000 per month (or pro
rata portion thereof) payable semi-monthly (less applicable taxes and
withholdings).  Under this Amendment, Mr. Ferrone’s base salary
continues to be subject to annual review by the Company’s Board or the
Compensation Committee thereof for discretionary periodic increases but not
decreases.
  Under the
Ferrone Employment Agreement, Mr. Ferrone is to receive a bonus for each year of
the Term equal to (1) one half of one percent (0.5%) on gross revenues (GR) less
the Company’s cost of product of $0-$500 million dollars, (2) three quarters of
one percent (0.75%) on GR of $500 million to one billion dollars and (3) one
percent (1%) on GR above one billion dollars, paid between January 1 and March
15 of the following year (“Bonus”).
  Mr.
Ferrone is to participate in all of the Company’s employee benefit and incentive
compensation plans and arrangements made available during the Term to its other
senior executives, including health insurance, and is entitled to four weeks of
paid vacation per year and five sick days per year.  The Company is to
promptly reimburse Mr. Ferrone for his reasonable out-of-pocket expenses
incurred in connection with his employment by the Company.
  Under the
Ferrone Employment Agreement, additional amounts are payable to Mr. Ferrone by
the Company under certain circumstances upon the termination of the Ferrone
Employment Agreement.  If the termination is on account of Mr.
Ferrone’s death or “Disability” (all as defined in the Ferrone Employment
Agreement), no additional amount (other than payment of Base Salary and/or Bonus
accrued and due through the date of Mr. Ferrone’s death or termination for
Disability) shall be payable to Mr. Ferrone.  If the termination is on
account of the Company’s termination of Mr. Ferrone’s employment “For Cause” or
Mr. Ferrone’s resignation “Without Good Reason” (all as defined in the Ferrone
  49
  Employment
Agreement), no additional amount (other than payment of Base Salary through the
date of termination) shall be payable to Mr. Ferrone.  If the
termination is on account of Mr. Ferrone’s resignation “For Good Reason,” or the
Company’s termination of Mr. Ferrone’s employment “Without Cause,” Mr. Ferrone
shall receive, subject to his continued compliance with his confidentiality and
nonsolicitation obligations under the Ferrone Employment Agreement, continued
payments in an amount equal to the greater of (1) 12 months of his then current
monthly Base Salary or (2) $400,000, payable in accordance with the Company’s
normal payroll practices and policies,  accrued Bonus and benefit plan
payments, accrued vacation and continued coverage under the Company’s medical,
dental and life insurance benefits for the 12-month period immediately following
Mr. Ferrone’s resignation or termination, as applicable.
  Under the
Ferrone Employment Agreement, the Company is required to maintain directors’ and
officers’ liability insurance for Mr. Ferrone during the Term. The Company is
also required to indemnify Mr. Ferrone in certain circumstances.
  Under the
Ferrone Employment Agreement, Mr. Ferrone is eligible to participate in the
Company’s Stock Option Plan; otherwise Mr. Ferrone is to be granted options
subject to approval by the Compensation Committee of the Board of Directors and
in a manner customary for like companies in the industry (such option exercise
price being equal to the fair market value of the stock on December 31st of the
Term year for which they are being granted).  No such options have yet
been granted to Mr. Ferrone by the Company.
  There has
not been and there is currently no arrangement with Mr. McClain to provide
compensation for his executive services to the Company as Chief Financial and
Accounting Officer.
  Effective
October 22, 2007, G. David Criner and the Company entered into an Employment
Agreement (the “Criner Employment Agreement”) pursuant to which Mr. Criner was
employed by the Company as its Chief Financial Officer and Chief Accounting
Officer, as described below.  The term of the Criner Employment
Agreement began on October 22, 2007 and will terminate on December 31, 2009,
unless earlier terminated, and will automatically extend for each succeeding one
(1) year period unless either party provides the other with a written notice at
least 30 days prior to the end of the then current Term advising that the party
providing the notice shall not agree to so extend the Term (the
“Term”).  Mr. Criner resigned his position on February 1,
2008.
  On
November 15, 2007, Mr. Criner and the Company entered into a First Amendment to
the Criner Employment Agreement pursuant to which the parties agreed to change
the base compensation Mr. Criner is to receive from the Company under the Criner
Employment Agreement to a base salary equal to $3,000 per month (or pro rata
portion thereof) payable semi-monthly (less applicable taxes and
withholdings).  Mr. Criner’s base salary is subject to annual review
by the Company’s Board or the Compensation Committee thereof for discretionary
periodic increases but not decreases.
  Under the
Criner Employment Agreement, Mr. Criner is to receive a bonus for each year of
the Term as determined by the Board of Directors, paid between January 1 and
March 15 of the following year (“Bonus”).
  Mr.
Criner is to participate in all of the Company’s employee benefit and incentive
compensation plans and arrangements made available during the Term to its other
senior executives, including health insurance, and is entitled to 4 weeks of
paid vacation per year and 5 sick days per year.  The Company is to
promptly reimburse Mr. Criner for his reasonable out-of-pocket expenses incurred
in connection with his employment by the Company.
  50
  Under the
Criner Employment Agreement, additional amounts are payable to Mr. Criner by the
Company under certain circumstances upon the termination of the Criner
Employment Agreement.  If the termination is on account of Mr.
Criner’s death or “Disability” (all as defined in the Criner Employment
Agreement), no additional amount (other than payment of Base Salary and/or Bonus
accrued and due through the date of Mr. Criner’s death or termination for
Disability) shall be payable to Mr. Criner.  If the termination is on
account of the Company’s termination of Mr. Criner’s employment “For Cause” or
Mr. Criner’s resignation “Without Good Reason” (all as defined in the Criner
Employment Agreement), no additional amount (other than payment of Base Salary
through the date of termination) shall be payable to Mr. Criner.  If
the termination is on account of Mr. Criner’s resignation “For Good Reason,” or
the Company’s termination of Mr. Criner’s employment “Without Cause,” Mr. Criner
shall receive, subject to his continued compliance with his confidentiality and
nonsolicitation obligations under the Criner Employment Agreement, continued
payments in an amount equal to the lesser of (1) 12 months of his then current
monthly Base Salary or (2) $450,000, payable in accordance with the Company’s
normal payroll practices and policies, accrued Bonus and benefit plan payments,
accrued vacation and continued coverage under the Company’s medical, dental and
life insurance benefits for the 12-month period immediately following Mr.
Criner’s resignation or termination, as applicable.
  Under the
Criner Employment Agreement, the Company is required to maintain directors’ and
officers’ liability insurance for Mr. Criner during the Term. The Company is
also required to indemnify Mr. Criner in certain circumstances.
  Outstanding Equity Awards at
Fiscal Year-End
  We did
not award any stock options or other equity incentive plan awards to any above
named executive officer during fiscal 2007 and there are no stock options or
other equity incentive plan awards outstanding as of the end of fiscal
2007.
  Non-Employee Director
Compensation
  For
fiscal 2007, we did not pay any compensation to any of our
directors.  The Company has no formal plan for Director compensation,
but anticipates that it will reimburse the reasonable and customary expenses of
any non-employee Directors associated with their service on the Board, including
travel expenses and standard fees for attending board and committee
meetings.  In addition, the Company has established the Immunosyn 2006
Stock Option Plan (the “Plan”) for employees, directors and consultants and
reserved 7,450,000 shares for issuance under the Plan.  At the date
hereof, no options have been issued under this Plan.
  Item
      11.
              Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.
  Securities Authorized for
Issuance Under Equity Compensation Plans
  The
Company has adopted an employee stock option plan, which acts as an incentive
stock and stock option plan, under which the Company’s employees, directors and
consultants will be eligible to receive, in relevant part, either securities or
stock options exercisable for the Company’s securities.  The Company
has reserved 7,450,000 shares of Common Stock for issuance under this
Plan.  No options have been issued under this Plan.
  51
  Security Ownership of
Certain Beneficial Owners and Management
  The
following table lists stock ownership of our Common Stock as of March 27,
2008.  The information includes beneficial ownership by (i) holders of
more than 5% of our Common Stock, (ii) each of our directors and executive
officers and (iii) all of our directors and executive officers as a
group.  Except as noted below, to our knowledge, each person named in
the table has sole voting and investment power with respect to all shares of our
Common Stock beneficially owned by them.
  Name
      and Address
                of
      Beneficial Owner
              
              Director/Officer
              
              Amount
      and Nature of
                Beneficial
      Ownership (1)
              
              
              Percentage
                of ClassArgyll
      Biotechnologies LLC (2)
                4225
      Executive Square, Suite 260
                La
      Jolla, CA 92037
              
              
              
              
              145,363,798
              
              
              
              53.44
              %Padmore
      Holdings, Ltd. (3)
                1100
      N.W. Loop 410, Suite 207
                San
      Antonio, TX 78213
              
              
              
              
              16,324,050
              
              
              
              6.00
              %Clairsvelle
      Holdings, Ltd. (4)
                1100
      N.W. Loop 410, Suite 207
                San
      Antonio, TX 78213
              
              
              
              
              19,740,000
              
              
              
              7.26
              %Argyll
      Equities LLC (5)
                4225
      Executive Square, Suite 260
                La
      Jolla, CA 92037
              
              
              
              
              15,282,964
              
              
              
              5.62
              %James
      T. Miceli (7)
                4225
      Executive Square, Suite 260
                La
      Jolla, CA 92037
              
              
              
              
              94,169,204
              
              
              
              34.62
              %Douglas
      A. McClain, Jr. (6)
                4225
      Executive Square, Suite 260
                La
      Jolla, CA 92037
              
              Chief
      Financial and Accounting Officer and Secretary, Director
              
              
              107,409,204
              
              
              
              39.49
              %Stephen
      D. Ferrone220
      Savanna Court
                Lake
      Forest, IL 60045
              
              President
      and Chief Executive Officer, Director
              
              
              1,450,000
              
              
              
              0.53
              %Myron
      W. Wentz, Ph.D
                2602C
      Transportation Avenue
                National
      City, CA 91950
              
              Director
              
              
              400,000
              
              
              
              0.15
              %All
      directors and officers as a group (three persons)
              
              
              
              
              109,259,204
              
              
              
              40.17
              %
 ____________
 
 (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 27,
      2008.  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.
  52
  (3)
              A
      British Virgin Islands entity, with Mr. Lynn Booker having voting and
      dispositive control, and owned 45% by James T. Miceli, 45% by Douglas
      McClain Jr., and 10% by Douglas McClain
Sr.
  (4)
              A
      British Virgin Islands entity, with Mr. Lynn Booker having voting and
      dispositive control, and owned by Douglas McClain
  Jr.
  (5)
              A
      Texas limited liability company owned 50% by Douglas McClain Jr. and 50%
      James T. Miceli.
  (6)
              Including
      Mr. McClain’s shares held by Clairsvelle Holdings, Ltd. and his undivided
      interests in Padmore Holdings, Argyll Biotech and Argyll
      Equities.
 (7)
                Including
      Mr. Miceli’s undivided interests in Argyll Biotech, Padmore Holdings and
      Argyll Equities; his indirect beneficial ownership in 2,000,000 shares
      held by each of the Kaitlyn Miceli Trust, the Ryan Miceli Trust and the
      Steven Miceli Trust through his role as trustee of such
      trusts; and 500,000 shares held directly by Mr. Miceli.  Does
      not include 12,710,000 shares held by Mr. Miceli's wife as to which he
      disclaims beneficial ownership.
 Item
      12.
              Certain
      Relationships and Related Transactions, and Director
      Independence.
  Certain Relationships and
Related Transactions
  Except as
set forth below, there have been no material transactions during the past two
years between us and any officer, director or any stockholder owning greater
than 5% of our outstanding shares, nor any of their immediate family
members.
  The
Company has entered into an exclusive license agreement with Argyll Biotech, an
affiliate of the Company that owns approximately 53.44% of the Company’s issued
and outstanding Common Stock as of December 31, 2007.  The exclusive
license agreement, including, without limitation, the fees established in that
agreement, will be between related entities, was not negotiated in an
arms-length transaction and does not necessarily bear any relationship to
established or traditional methods of valuing such fees.  No
independent audit or verification of the license fee has been made to determine
its fairness to Immunosyn.
  If the
proceeds received by Argyll Biotech from the sale of the Company’s stock are
inadequate to complete development and regulatory approval of SF-1019, we will
pay the deficiency through a fee equal to three and one-half per cent (3-1/2%)
of Immunosyn’s gross sales of SF-1019, in addition to the cost of product
purchases from Argyll Biotech.  The license fee is deemed earned when
paid and there are no restrictions on the release or use of the license fee paid
to Argyll Biotech, which may be used in Argyll Biotech’s discretion for any
purpose.  No refund will be owed by Argyll Biotech in the event the
cost of development and regulatory approval is substantially less than the fee,
nor are there any penalties owed by Argyll Biotech if it fails to complete
product development or obtain regulatory approval for its
distribution.  The Company’s inability or failure to pay any license
fees when due will adversely affect the Company’s licensed rights.  As
those rights will be the Company’s sole and primary asset, if the Company is
unable to maintain those rights, the Company will lose substantially all of its
value.
  Douglas
A. McClain, Jr., our Chief Financial and Accounting Officer and a Director of
the Company, is a shareholder and an officer of Argyll Equities and Argyll
Biotech, shareholders of the Company.  As discussed above, the Company
is a party to the exclusive license agreement with Argyll Biotech, the Company’s
principal asset.
  The
Company has been provided with rent-free office space for two executive offices
under a monthly oral agreement with no specific term from its affiliate and
shareholder, Argyll Equities.  It is uncertain how long Argyll
Equities will continue providing office space or on what terms space will
continue to be provided to the Company in the future.
  In
addition, since inception, Immunosyn has borrowed $632,016 from Argyll Equities,
LLC and Argyll Biotech who together own approximately 60% of Immunosyn’s Common
Stock.  These advances
  53
  are
unsecured and will be repaid on demand.  Interest expense in the
amount of $26,060 was accrued using an annual rate of 7.5%.  Advances
from Stephen D. Ferrone, President and CEO of the Company, in the amount of
$7,936 and from G. David Criner, the former CFO of the Company, in the amount of
$756 are due and payable.
  Douglas
A. McClain Sr., the beneficial owner of a 10% interest in Padmore which owns
16,324,050 shares of Common Stock in the Company, is the father of Douglas A.
McClain, Jr., who is a Director, as well as the Chief Financial and Accounting
Officer and Secretary for the Company.  Including Douglas A. McClain
Jr.’s undivided interest in Padmore, Argyll Biotech and Argyll Equities, the
McClain’s control a total of 107,409,204 shares of Common Stock, or
approximately 39.49% of the Company’s Common Stock.
  Director
Independence
  Myron W.
Wentz is an “independent director” as such term is defined in the Nasdaq
Marketplace Rules.  Neither Douglas A. McClain, Jr. nor Stephen D.
Ferrone is an independent director under such Rules.
  Item
      13.
              Exhibits
      and Financial Statement Schedules.
  (a)           The
following documents are filed as part of this Report:
  1.
              Financial
      Statements:
  Report of
Independent Registered Public Accounting Firm
 Balance
Sheet
 Statement
of Expenses
 Statement
of Cash Flows
 Statement
of Changes in Shareholders’ Equity (Deficit)
 Notes to
Financial Statements
  2.
              Exhibits
  The
following exhibits are filed with, or incorporated by reference into, this
Report.
  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(b)
                Amended
      and Restated License Agreement between Immunosyn Corporation and Argyll
      Biotechnologies, LLC, dated as of October 25, 2007, effective as of
      September 26, 2006.10.3(a)
                Form
      of Lock-Up Agreement.10.4(e)
                Form
      of Amended and Restated Lock-Up Agreement.10.5(a)
                Immunosyn
      2006 Stock Option Plan.10.6(c)
                Employment
      Agreement effective as of October 15, 2007 between Stephen Ferrone and the
      Company.10.7(d)
                First
      Amendment to Employment Agreement of Stephen Ferrone effective November
      15, 2007 between the Company and Stephen
  Ferrone.
  54
  10.8(c)
                Employment
      Agreement effective as of October 22, 2007 between David Criner and the
      Company.10.9(d)
                First
      Amendment to Employment Agreement of David Criner effective November 15,
      2007 between the Company and David Criner.14.1(e)
                Code
      of Ethics.23.1*
                Consent of Malone & Bailey, P.C.31.1*
                Certification of Stephen D. Ferrone, Chief Executive
      Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.31.2*
                Certification of Douglas A. McClain, Jr., Chief
      Financial and Accounting Officer, pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.32.1*
                Certification of Stephen D. Ferrone, Chief Executive
      Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.2*
                Certification of Douglas A. McClain, Jr., Chief
      Financial and Accounting Officer, pursuant to Section 906 of the
      Sarbanes-Oxley Act of
2002
 ____________________________
 
 *           Exhibit
filed with this Report.
 
 (a)
              Incorporated
      by reference to the Company’s Registration Statement on Form SB-2 (File
      No. 333-137881) filed with the Securities and Exchange Commission
      (the “SEC”) on October 6, 2006, as amended November 3, 2006 and
      December 22, 2006.
  (b)
              Incorporated
      by reference to the Company’s Current Report on Form 8-K, filed with the
      SEC on October 25, 2007.
  (c)
              Incorporated
      by reference to the Company’s Current Report on Form 8-K, filed with the
      SEC on October 23, 2007.
  (d)
              Incorporated
      by reference to the Company’s Current Report on Form 8-K, filed with the
      SEC on November 19, 2007.
  (e)
              Incorporated
      by reference to the Company’s Annual Report on Form 10-KSB for the fiscal
      year ended December 31, 2006, filed with the SEC on March 30,
      2007.
  55
  Item
      14.
              Principal
      Accountant Fees and Services.
  The
following table presents the fees for professional audit services rendered by
Malone & Bailey, P.C. for the audit of the Company’s annual financial
statements for the fiscal years ended December 31, 2006 and 2007 and fees for
other services rendered by Malone & Bailey, P.C. during such
periods:
  Fee
      Category
                
                Fiscal
      2006
                
                
                Fiscal
      2007Audit
      Fees
                
                $
                10,600
                
                
                $
                20,000Audit-Related
      Fees
                
                $
                0
                
                
                $
                0Tax
      Fees
                
                $
                0
                
                
                $
                5,000All
      Other Fees
                
                $
                0
                
                
                $
                4,160Total
      Fees
                
                $
                10,600
                
                
                $
                29,160
 
 Audit
fees include fees related to the services rendered in connection with the annual
audit of the Company’s consolidated financial statements and the reviews of and
other services related to registration statements and other offering
memoranda.
  Audit-related
fees are for assurance and related services by the principal accountants that
are reasonably related to the performance of the audit or review of the
Company’s financial statements.
  Tax Fees
include (i) tax compliance, (ii) tax advice, (iii) tax planning and (iv) tax
reporting.
  All Other
Fees includes fees for all other services provided by the principal accountants
not covered in the other categories such as litigation support,
etc.
  All of
the services for 2006 and 2007 were performed by the full-time, permanent
employees of Malone & Bailey, P.C.
  56
  SIGNATURES
  Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
  Dated:  March
28, 2008
   IMMUNOSYN
      CORPORATIONBy:
              /s/ Douglas A.
      McClain, Jr.Douglas A. McClain,
      Jr.Chief
      Financial and Accounting Officer
   Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated:
 
 
 Signature
              Title
              Date/s/Stephen D.
      FerroneStephen
      D. Ferrone
              President,
      Chief Executive Officer, Director (Principal Executive
      Officer)
              March
      28, 2008/s/Douglas A. McClain,
      Jr.Douglas
      A. McClain, Jr.
              Chief
      Financial and Accounting Officer, Director (Principal Financial and
      Accounting Officer)
              March
      28, 2008Myron
      W. Wentz, Ph.D.
              Director
              March
      28, 2008
 
 57