1
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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

               [X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                     SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended
                     June 30, 2003

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

                        Commission File Number: 333-06966

                               IMMECOR CORPORATION
                               -------------------
                 (Name of small business issuer in its charter)

                              California 68-0324628
(State or jurisdiction of incorporation or (I.R.S. Employer Identification No.)
                                  Organization)

           3636     North Laughlin Rd, Bldg 150, Santa Rosa CA 95403-2137
                    (Address of principal executive offices)

                                 (707) 636-2550
                           (Issuer's Telephone Number)

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

         Securities registered under Section 12(g) of the Exchange Act:
                         Common Stock, Without Par Value

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 contained in this form in
response to item 405 of Regulation S-B, and no disclosure will be contained, to
the best of registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of the Form 10-KSB or any
amendment to this Form 10-KSB. [X]

State Issuer's revenues for its most recent transition period (twelve months
ended June 30, 2003: $8,363,868.

There is currently no public market for the Company's outstanding shares of
common stock. The Company's shares of common stock are currently not listed on
any stock exchange as described in PART II, ITEM 5. Therefore, the Company is
unable to estimate the aggregate market value of its common stock at this time.

As of June 30, 2003, there were 5,806,128 shares of the issuer's Common Stock,
without par value, outstanding.


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                               IMMECOR CORPORATION

                                      INDEX
                                TABLE OF CONTENTS

                                     PART I

Item 1. Description of Business;
Item 2. Description of Property;
Item 3. Legal Proceedings;
Item 4. Submission of Matters to a Vote of Security Holders.

PART II

Item 5. Market for Common Equity and Related Stockholder Matters;
Item 6. Management's Discussion and Analysis or Plan of Operation;
Item 7. Financial Statements;
Item 8. Changes In and Disagreements with Accountants on Accounting and
        Financial Disclosure.

                                    PART III

Item 9.  Directors, Executive Officers, promoters and Control Persons,
         Compliance with Section 16 (a) of the Exchange Act;
Item 10. Executive Compensation;
Item 11. Security Ownership of Certain Beneficial Owners and Management;
Item 12. Certain Relationships and Related Transactions;
Item 13. Exhibits and Reports on Form 8-K.

FORWARD LOOKING STATEMENTS

Immecor Corporation (the "Company" or "Immecor") cautions readers that certain
important factors may affect the Company's actual results and could cause such
results to differ materially from any forward-looking statements that may be
deemed to have been made in this Form 10-KSB or that are otherwise made by or on
behalf of the Company. For this purpose, any statements contained in the Form
10-KSB that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the generality of the foregoing,
words such as "may", "expect", "believe", "anticipate", "intend", "could",
"estimate", or "continue" or the negative other variations thereof or comparable
terminology are intended to identify forward-looking statements. Such statements
are based on current expectations and are subject to risk, uncertainties and
changes in condition, significance, value and effect, including those discussed
under the heading "Risk Factors" in Item 6, "Management's Discussion and
Analysis or Plans Operations", Item 1, "Description of Business" and other
filings by Immecor with the Securities and Exchange Commission. Risk factors
that may affect the Company's results include, but are not limited to, the
Company's dependence on a limited number of customers and key personnel, its
ability to develop new product and service offerings, its possible need for
additional financing and its dependence on certain industries. Such risks,
uncertainties and changes in condition, significance, value and effect could
cause our actual results to differ
 materially from those anticipated events. Although we believe that the
assumptions underlying the forward-looking statements are reasonable, any of
these assumptions could prove inaccurate, including, but not limited to,
statements as to our future operating results and business plans. We disclaim
any intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.


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                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

         Immecor Corporation's (the "Company" or "Immecor") primary business is
to design, custom manufacture, and direct market high performance computer
systems. These high performance computer systems are heterogeneous and scalable,
allowing them to accommodate several different platforms and applications.
Immecor's system architecture is specifically designed for each customer and are
typically computation intensive and require high capacity not available on a
general purpose PC's or workstations. The primary markets for Immecor's products
are original equipment manufacturers ("OEM") in the wafer inspection, defense
electronics, medical diagnostic imaging and entertainment markets. These markets
have computing needs which benefit from a unique custom-built system
architecture that can be produced by Immecor.

         Immecor also direct markets a broad range of multi-brand microcomputer
products, including, Adobe, Cisco, Epson, Hewlett-Packard, IBM, Intel, Dell,
Microsoft, NEC, Novell, Sony, Symantec, Toshiba and 3Com, third-party software
networking, communication products and accessories through our in-house sales
staff to business, government, educational, institutional and home office users.

         The Company directs its marketing efforts toward current and
prospective customers with a direct focus on commercial accounts, including
business, government, and institutional accounts. These customers have a high
level of product knowledge and are most likely to purchase sophisticated systems
and products on a repetitive basis through the Company's direct marketing
channel. The Company enhances repeat purchases by offering value added services
to its customers, including prototype development, custom cables, chassis design
and production, systems integration, staging services, configuration control,
and warranty support.

MARKET OVERVIEW
         Primarily as a provider of custom industrial computers, subsystems,
electronic products and also as a distributor of other third-party hardware and
software products, the Company has chosen to focus on marketing to sectors that
offer both sufficient opportunity and strong prospects for sustained growth. The
Company's products directly address the need that has been expressed by leading
companies relying on quality, reliability, rapid product development, flexible
manufacturing, and solid engineering support. The Company benefits from a number
of trends within this industry as described below.

         Reduced Development Time: As technology life cycles shorten, our OEM
customers are pressed to deliver new generations of equipment to market even
faster, allowing the Company to benefit from the industry trend to reduce
development time of new products. Working under this growing time-to-market
pressure, customers place increasing value on a supplier that can consistently
deliver new solutions on an aggressive development schedule. Providing leading
edge engineering, the Company reduces the time-to-market for its products
through two initiatives: concurrent engineering and design-ready platforms.
Concurrent engineering creates a process allowing all functional disciplines to
take part in a product's design from the very beginning. With design-ready
platforms, the Company can modify standard platforms to meet specific customers
 needs for a customized product, a fast fulfillment schedule and at a
competitive price.

         Outsourcing: Many companies, and particularly those in the high
technology sector, are identifying their core competencies and outsourcing as
many of their own systems and subsystems production responsibilities to
companies like Immecor to reduce expenses.   The Company's outsourcing strategy
 provides maximum flexibility to respond to OEM customer requirements and
schedule adjustments. At the same time, the Company may also outsource certain
projects to overseas subcontractors to minimize its asset investment. By
providing outsourcing services to electronic manufacturers, the Company is able
to focus its manufacturing efforts on designing more reliable products,
designing efficient methods of building its products, and providing reliable
supply chain management.

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         Vendor Base Reduction: Reducing and improving supply-chain management
is a key strategy of many OEM companies today. Building better relationships in
the supply chain to reduce the number of suppliers from whom they purchase,
while driving down the individual unit production costs. The Company seeks to be
the vendor of choice by meeting a variety of needs on a reliable basis.

         Repair and Inventory Logistics: The Company provides repair, inventory
logistics, assembly, systems integration and supply chain management services
for a variety of computer, software, and hardware products to OEM customers. Our
OEM customers have traditionally performed these functions but as companies
focus their energies on core competencies, these types of services have been
outsourced to companies like Immecor.

         Develop Collaborative Relationships: Through the development and
expansion of collaborative relationships with its OEM customers, the Company
attempts to satisfy their needs by offering a full range of value-added
services, including design expertise, process development, control testing,
inventory management, and rapid response to volume and design changes. These
relationships also provide the Company with increased knowledge regarding the
OEM customer's products, allowing the Company to stay on the forefront of
developing the next product line for our OEM customers. The Company believes
that it has the knowledge and technical staff to act as an extension of the
customer's engineering organization in order to provide custom solutions.
Immecor has partnered with its customers to understand and resolve the
challenging problems encountered in applications as diverse as wafer inspection,
network connectivity and lab diagnostics systems.

         Expand Complementary Businesses: The Company believes that providing a
wide range of services affords the Company a competitive advantage to meet it's
OEM customer's needs and, therefore, increases the likelihood that the Company
will make continuing sales to its customers. Immecor's custom manufacturing
approach is based on a highly integrated process that takes a product from
concept through production. All products are required to meet specified
standards of performance, quality, and reliability. Systems integration,
concurrent engineering, materials resource planning (MRP) services, and
Just-In-Time delivery are also integrated into manufacturing operations as part
of the services provided by the Company.

STRATEGY
         Products and services: The Company's objective is to be a one-stop shop
technology solution center for OEM customers who require sophisticated
manufacturing and inventory solutions and who are likely to have substantial
volume requirements. While continuing to concentrate on our established customer
base, the definition of the Company's target markets will continue to focus on
high growth sectors supporting the need for low to mid runs for custom
manufactured technology products. To achieve its objective, the Company's
strategy is to differentiate itself from its competition by providing prototype
design services, faster time-to-market, superior product performance, quality,
service and the low total cost of ownership. The Company believes that quality
and responsiveness to the customer's needs are of critical importance in its
efforts to compete successfully.

         The Company has achieved an ISO 9002 certification as a method to
reinforce its techniques and procedures to measure, monitor and improve
performance. Through its commitment to customer service and quality, the Company
believes it is able to provide superior value to its customers.

         Potential Acquisitions: In the normal course of its business, the
Company seeks to identify potential acquisitions of businesses, products and
technologies that could complement or expand the Company's business, customer
base and sales. An acquisition model is currently being developed.

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COMPETITION
         The industry in which the Company competes is highly competitive and
characterized by increasing OEM customer demands for improved product
performance, shorter manufacturing cycles and lower prices. Competition
typically occurs at the design stage, where the customer evaluates alternative
design approaches, including those from internal development organizations. A
design win generally ensures a customer will purchase the product from Immecor
until their next generation system is developed. The Company believes that its
future ability to compete effectively will depend upon its ability to continue
to improve product and process technologies and to develop new products.
However, we may be at a competitive disadvantage as to price and innovation
compared to manufacturers with lower cost structures and more research and
development resources. In addition, there can be no assurance that competitive
pressures will not result in price erosion, reduced margins, loss of market
share or other factors, that could have a material adverse effect on the
Company's business, financial condition and results of operations.

SALES AND MARKETING
         Our sales and marketing are integrated processes involving direct
salespersons and project managers, as well as our senior executives. Our sales
resources are directed at multiple management and staff levels within targeted
industry sectors. Historically, we have had substantial recurring sales from
existing customers. For our reseller business, we receive unsolicited inquiries
resulting from advertising and public relations activities, as well as referrals
from current customers.

         The Company is dependent on a small number of customers for a large
portion of its revenues, approximately 73% of our net sales during fiscal 2003
were derived from customers that were also customers during the same period of
fiscal 2002. One customer accounted for 66%, respectively, of the Company's net
sales in fiscal 2003; 86%, respectively, of the Company's net sales in fiscal
2002; and 90%, respectively, of the Company's net sales in fiscal 2001. The
Company has developed and produced a sales culture that promotes active
marketing.

INTELLECTUAL PROPERTY MATTERS
         The Company believes that its future success is primarily dependent
upon the technical competence and creative skills of its personnel, rather than
upon any patent or other proprietary rights. Although we do not believe that our
trademark, product designs and manufacturing processes infringe on the
intellectual property rights of third parties, we cannot assure that third
parties will not assert infringement claims against us in the future. If such an
assertion were to be made, it may become necessary or useful for us to enter
into licensing arrangements or to resolve such an issue through litigation.
However, we cannot assure that such license rights would be available to us on
commercially acceptable terms or that any such litigation would be resolved
favorably. Additionally, such litigation could be lengthy and costly and could
materially harm our financial condition regardless of the outcome of such
litigation.

RESEARCH AND DEVELOPMENT
         The Company maintains a research and development department, which is
engaged in the modification and improvement of existing products and the
development of new products. The Company believes that the timely introduction
of new technology and products is an important component of its competitive
strategy.

EMPLOYEES
         The Company presently employs approximately 26 full-time people. The
Company has not, to date, experienced difficulty in attracting and retaining
sufficient engineering and technical personnel and sales staff to meet its
needs. The Company considers its relations with its employees to be
satisfactory. The Company is largely dependent upon the skills and efforts of
its senior executive management, as well as its technical employees. The Company
maintains key-man life insurance on certain executives for which the loss of
their services could have a material adverse effect on the Company's business,
financial condition and results of operations.

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ITEM      2.      DESCRIPTION OF PROPERTY

         The Company's corporate headquarters are located at 3636 North Laughlin
Road, Building 150, in the Westwind Business Park, Santa Rosa, California,
95403-1027, where the Company maintains approximately 16,000 square feet of
office, showroom and assembly space. Santa Rosa is located approximately 50
miles north of San Francisco.

         The Company maintains an additional 6,200 square feet of office and
system integration space at 2370 Qume Drive #A, Santa Clara, California 95131.

         The Company's Santa Rosa telephone number is (707) 636-2550 and the
facsimile number is (707)636-2565. The Company's Santa Clara telephone number is
408-982-1133 and the facsimile number is 408-982-1134. The Company's e-mail
address is immecor@immecor.com, and the Company's World Wide Web home page is
http//www.immecor.com.

ITEM  3.       LEGAL PROCEEDINGS

     On October 2002, the Company received a lawsuit from R.G. Technical for
approximately $63,000, stating that the R.G. Technical had a contractual
agreement with Immecor for services performed on behalf of Genex, a vendor to
Immecor. The Company disputes the lawsuit and believes that there is not a basis
for the lawsuit, or that Immecor had a contractual obligation to R.G. Technical.
At a recent deposition R.G. Technical admitted that they could not support the
lawsuit against Immecor and Immecor's attorneys have requested a full dismissal.
If the lawsuit is not dismissed, the Company will proceed with full legal action
against R.G. Technical for malicious prosecution. Immecor is also pursuing legal
action against Genex for failure to indemnify Immecor from the R.G. Technical
lawsuit, since Genex signed an indemnification agreement.

     On January 2003, the Company received a lawsuit from Sarah Aasved, a former
employee, seeking damages relating to a sex and pregnancy discrimination
complaint. The Company disputes the lawsuit and believes that there is no basis
for the lawsuit, and that the Company is requesting the matter to be dismissed.
Immecor is also seeking legal action against Sarah Aasved for malicious
prosecution and employment fraud.

          The Company is not a party to any other litigation and is currently
not aware of any threatened litigation that could have a material adverse effect
on the Company's business, results of operations or financial condition.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.
                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     There is currently no public market for the Company's outstanding shares of
common stock. The Company's shares of common stock are currently not listed on
any stock exchange. As of June 30, 2003, there were 5,806,128 shares of the
issuer's Common Stock.

     The stock transfer agent and registrar for the Company's shares of common
stock is U.S. Stock Transfer Corporation located at 1745 Gardena Avenue,
Glendale, California 91204-2991. Based on data obtained from our transfer agent,
there were 96 stockholders of record of the Common Stock of the Company as of
June 30, 2003.

DIVIDENDS
     The Board of Directors does not currently contemplate the payment of cash
dividends. Any decisions as to the payment of cash dividends on the Common Stock
will depend on the Company's ability to generate earnings, its need for capital,
its overall financial condition and such other factors as the Board of Directors
deems relevant.

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SALES OF UNREGISTERED SECURITIES

None.

ITEM  6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

      The following discussion and analysis of our financial condition and
results of operations should be read in conjunction with the Company's financial
statements and the notes thereto included in Part II, Item 7 "Financial
Statements" of this report. This discussion contains forward-looking statements,
which involve risks and uncertainties. Our actual results could differ
materially from those anticipated in forward looking statements as a result of
certain factors, including but not limited to those discussed in "Risk Factors"
and elsewhere in this annual report.

RESULTS OF OPERATIONS
      The following table sets forth a summary of the Company's operating
revenues and expenses, certain statement of operation items expressed as a
percentage of net sales for the three most recent fiscal periods. The Company
changed its fiscal year end from December 31 to June 30, effective July 1, 2002.
Accordingly, the Company is presenting financial information and analysis, where
applicable, for the six months ended June 30, 2002.

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<Table>
<Caption>
<S>                                        <C>                        <C>           <C>



                                            Year Ended                 Six Months    Year
                                            Ended                      Ended         Ended
                                            -----                      -----         -----
                                            June 30,                   June 30,      December 31,
                                            --------                   --------      ------------
                                            2003                       2002          2001
                                            audited                    audited       audited

OPERATING DATA (in thousands):

Net Sales                                   8,364                      4,070         9,767
Cost of sales                               6,214                      2,235         8,351
                                            -----                      -----         -----

         Gross Profits                      2,150                      1,835         1,416

Operating expenses:

  Sales and Marketing                         166                        131           140
  Research and Development                    170                        182           523
  General and administrative                1,610                        987         1,858
                                            -----                      -----         -----

         Operating income (loss)              204                        535        (1,105)

Other income (expense):

  Other and interest income                    12                         24            42
  Interest expense                            (45)                       (21)         (230)
  Income tax (provision) benefit              (23)                      (105)          233
                                              ----                     ------        ------

         Net income (loss)                    148                        433        (1,060)
OPERATING DATA AS A
PERCENTAGE OF NET SALES

Net sales                                   100.0%                     100.0%        100.0%
Cost of sales                                74.3%                      54.9%         85.5%
                                            ------                      -----        ------

         Gross Profit                        25.7%                      45.1%         14.5%

Operating expenses:
  Sales and marketing                         2.0%                       3.2%          1.4%
  Research and development                    2.0%                       4.5%          5.4%
  General and administrative                 19.2%                      24.3%         19.0%
                                            ------                    ---------      ------

         Operating income (loss)              2.4%                      13.1%        -11.3%

Other income (expense):
  Other and interest income                   0.1%                       0.6%          0.4%
  Interest expense                           -0.5%                      -0.5%         -2.4%
  Income tax (provision) benefit             -0.3%                      -2.6%          2.4%
                                             -----                      -----         -----

         Net income (loss)                    1.8%                      10.6%        -10.9%

</Table>

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FISCAL 2003 AS COMPARED TO FISCAL 2002

Net Revenues
         Net revenues of the Company for the fiscal year end June 30, 2003
increased 106% to $8,363,868 from $4,069,915 for six-month period ended June 30,
2002 ("fiscal 2002"). Higher sales in fiscal 2003 were primarily due to a
six-month reporting period in fiscal 2002 versus a 12-month reporting period in
fiscal 2003. Net revenues for June 30, 2002, decreased 58% from $9,766,802 for
December 31, 2001. Lower sales in fiscal 2002 were primarily due to a six-month
reporting period in fiscal 2002 versus a 12-month reporting period in fiscal
2002.

Gross Profit
            Gross profits for fiscal 2003 increased by 17% to $2,150,643 from
$1,835,276 in fiscal 2002. The increase is primarily due to a six-month period
ended June 30, 2002 ("fiscal 2002") as compared to a 12-month fiscal reporting
for 2003. Gross profit as a percentage of net revenues decreased from 45% in
fiscal 2002 to 26% in fiscal 2003. The decrease in gross profit is due to a
six-month reporting period in fiscal 2002 versus a 12-month period reporting in
fiscal 2003. The Company acknowledges that pricing pressures, lower demand and
changes in sales volume due to the slow economy may adversely impact gross
margins in upcoming quarters for the year ending June 30, 2004 ("fiscal 2004").

Sales and Marketing
            Sales and marketing expenses for fiscal 2003, increased $35,000 or
27% to $166,016 from $130,882 in fiscal 2002. Sales and marketing expenses
decreased 6% or $8,400 from $140,000 for fiscal 2001. The overall increase in
sales and marketing expenses for 2003, was due to an increase in sales personnel
and an increase in marketing material costs, as a part of the Company's efforts
to diversify and expand its customer base.

Research and Development
            Research and development expenses decreased by 7% to $169,785 in
fiscal 2003 from $182,452 in fiscal 2002. The decrease was primarily due to
sales of matured product lines and support of existing product lines, and a
softer demand for new products due to the slow down in the economy. Future
operating results will depend significantly on our ability to design and
manufacture products and provide services that have a competitive advantage in
our marketplace. Research and development expenses consist of related expenses
for certification, fabrication, labor and cost of materials for prototyping and
testing units. The Company expenses all of research and development costs as
incurred.

General and Administrative
         General and administrative expenses for fiscal 2003 increased 63% to
$1,609,627 from $986,558 in fiscal 2002. As a percentage of net revenues,
general and administrative expenses decreased 5% to 19.2% for fiscal 2003 from
24.3% for fiscal 2002. The decrease in fiscal 2003 was primarily due to a
six-month reporting period in fiscal 2002 versus a 12-month period reporting
period in fiscal 2003. General and administrative expenses for fiscal 2003
increased .2% from 19% in fiscal 2001. The increase in general and
administrative expenses as a percentage of net revenues is primarily due to
lower net revenues during the reporting period. The Company expects to continue
its efforts to reduce general operating costs and non-manufacturing related
capital expenditures in the upcoming quarters for fiscal 2004.

Interest Expense
         Interest expense increased by $24,386 or 117% from $20,780 for fiscal
2002 to $45,166 for fiscal 2003. The primary reason for the increase is due to a
six-month reporting period in fiscal 2002 versus a twelve-month reporting period
in fiscal 2003.

Income Taxes
         The Company reported an income tax provision (benefit) of $(96,027)
respectively, for fiscal 2003 and $(105,000) for fiscal 2002. In general, our
effective income tax (benefit) rate differs from the federal statutory rate of
35% largely as a function of state income taxes (benefit), change in valuation
allowance on deferred tax assets and other non-deductible expenses.

                                       10
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FISCAL 2002 AS COMPARED TO FISCAL 2001

Net Revenues
         Net revenues of the Company for the six-month period ended June 30,
2002 ("fiscal 2002"), decreased 58% to $4,069,915 from $9,766,802 for fiscal
year ended December 31, 2001 ("fiscal 2001"). Lower sales in fiscal 2002 were
primarily due to a six-month reporting period in fiscal 2002 versus a 12-month
period reporting period in fiscal 2001. Net revenues for the six months ended
June 30, 2002, decreased 22% to $4,069,915 from $5,246,065 for June 30, 2001.
Revenues decline was due to an overall weaker U.S. economy and demand for
computer equipment.

Gross Profit
            Gross profits for fiscal 2002 increased by 17% to $1,654,275 from
$1,415,675 in fiscal 2001. Gross profit as a percentage of net revenues
increased from 14% in fiscal 2001 to 41% in fiscal 2002. The increase in gross
profit is due to new product releases with higher profit margins in fiscal 2002
versus sales of matured products that carry a lower profit margin in fiscal
2001.

Sales and Marketing
            Sales and marketing expenses for fiscal 2002 decreased $9,091 or 6%
to $130,882 from $139,973 in fiscal 2001. Sales and marketing expenses increased
90% or $61,950 to $130,882 for the six months ended June 30, 2002, from $68,932
for the six months ended June 30, 2001. The increase in sales and marketing
expenses was due to an increase in sales personnel as a part of the Company's
efforts to diversify and expand its customer base.

Research and Development
            Research and development expenses decreased by 65% to $182,452 in
fiscal 2002 from $523,083 in fiscal 2001. The decrease was primarily due to the
change in fiscal year and a decline in customer demand for research and
development of new products. Research and development expenses consist of
related expenses for certification, fabrication, and cost of materials for
prototyping and testing units. The Company expenses all of research and
development costs as incurred.

General and Administrative
         General and administrative expenses for fiscal 2002 decreased 47% to
$986,558 from $1,857,712 in fiscal 2001. As a percentage of net revenues,
general and administrative expenses increased 5% to 24% for fiscal 2002 from 19%
for fiscal 2001. The increase in general and administrative expenses as a
percentage of net revenues is primarily due to lower net revenues during the
transition period. The company expects to continue its efforts to reduce general
operating costs and non-manufacturing related capital expenditures in the
upcoming quarters for fiscal 2003.

Interest Expense
         Interest expense decreased by $209,626 or 91% from fiscal 2001 to
fiscal 2002. In fiscal 2001, the Company incurred higher interest expense from
increased borrowing activities on its line of credit and from the Internal
Revenue Service for fiscal 2000 income taxes payable.

LIQUIDITY AND CAPITAL RESOURCES

         Working capital was $2,020,650 at June 30, 2003, and $1,825,110 at June
30, 2002, as compared to $1,351,174 at December 31, 2001. Cash and cash
equivalents increased to $493,057 at June 30, 2003, from $482,855 at June 30,
2002. Cash and cash equivalents at December 31, 2001 was $30,424.

         The Company maintains a line of credit agreement with GE Capital
Services. The agreement allows the Company to borrow an amount limited to a
percentage of its borrowing base (eligible accounts receivables), as defined, up
to a maximum of $1,000,000. The line is collateralized by accounts receivables,
inventory, property and equipment and is personally guaranteed by a stockholder.

                                       11
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LIQUIDITY AND CAPITAL RESOURCES, Continued

         In fiscal 2003, the Company had net cash provided by operating
activities of $154,490 compared to net provided by operating activities of
$292,380 in fiscal 2002 and net cash used $(2,233,817) in fiscal 2001. The net
decrease of $137,890 from fiscal 2003 to fiscal 2002 is related primarily to the
Company's net income in fiscal 2003, decrease in the inventory reserve, and a
reduction in accounts payable and other liabilities.

         The Company had net cash used by investing activities of $(72,475) for
fiscal 2003 compared to net cash provided of $1,838 in fiscal 2002 and net cash
provided by $631,065 in fiscal 2001. The decrease of $(74,313) from fiscal 2003
to fiscal 2002 primarily relates to the issuance of new notes receivables
associated to owed commission draws by sales people.

         The Company had net cash used by financing activities of $(71,813) for
fiscal 2003 compared to net cash provided of $158,213 in 2002 and net cash used
of $167,455 in fiscal 2001. The decrease of $230,026 from fiscal 2003 to fiscal
2002 primarily relates to increased line of credit usage offset by other debt
repayments.

         Our liquidity is affected by many factors, some of which are based on
the normal ongoing operations of the business, and others of which relate to the
uncertainties in the custom computer manufacturing industry. There can be no
assurance that the Company will be successful in reducing costs or expanding its
line of credit, or that any credit increase will be on terms favorable to the
Company. There can also be no assurance that the Company's major customers will
continue to purchase from Immecor or fulfill the purchase projections provided
to Immecor. In the event that the Company is unable to expand its line of
credit, obtain other debt or equity financing, execute its cost reduction
program, improve its inventory turnover or generate additional revenues from new
products and/or new customers, the Company's business, financial condition and
results of operations could be materially and adversely affected. As a result,
the Company may not be able to generate sufficient cash from operations,
together with its existing cash balances, to satisfy its liquidity requirements
for the next twelve months.

Risk Factors

         Our operating results have varied widely in the past, and our future
operating results will continue to be subject to quarterly variations based upon
a variety of factors including those listed in this section and throughout this
Annual Report on Form 10-KSB. In addition, future operating results may not
follow any past trends. We believe the factors that make our results fluctuate
and difficult to predict include:

o The cyclical nature of the semiconductor, medical diagnostic and entertainment
  industries;
o The reduction in the price and profitability of our products; o Our timing of
new product introductions; o Our ability to develop and implement new
technologies; o The change in customers' schedules for fulfillment of orders; o
The cancellation of contracts or purchase orders by major customers; o
Competitors with substantially greater financial, engineering and
  manufacturing resources;
o The shortage of qualified workers; and
o Our ability to manage our manufacturing requirements and cost structure.

         As a result of these or other risk factors, we could fail to achieve
our expectations as to future revenues, gross profit, income and cash flows from
operations.

Recent Accounting Pronouncements

         In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation Transition and Disclosure, which provides alternative
methods of transition for stock-based employee compensation. SFAS No. 148 also
amends the disclosure requirements of Statement 123 to require prominent
disclosure in both annual and interim financial statements about the method of
accounting for stock-based employee compensation. The Company's adoption of SFAS
No. 148 had no effect on the Company's results of operations or financial
position.

                                       12
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS

<Table>
<Caption>
<S>                                                                                              <C>
     The following Financial Statements are filed as part of this report:

     Balance Sheets at June 30, 2003, June 30, 2002 and December 31, 2001                        F-1

     Statements of Operations for June 30, 2003, six months end June 30, 2002
     and year ended December 30, 2001                                                            F-2

     Statements of Stockholders' Equity for June 30, 2003, six months end
     June 30, 2002 and year ended December 31, 2001.                                             F-3

     Statements of Cash Flows for June 30, 2003, six months ended June 30, 2002
     and December 31, 2001                                                                       F-4

     Notes to Financial Statements                                                               F-5

     Report of Independent Accountants                                                           F-12

</Table>

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

         None
                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16 (a)OF THE EXCHANGE ACT


DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names of all directors and officers of the
Company and the position held by them:

    Name                               Position

    Heinot H. Hintereder               President & CEO, Director

    Jason C. Lai                       Executive Vice President, Director

    Nhon K. Tran                       Vice President, Chief Operations Officer,
                                       Director

    William L. Lindgren                Chief Financial Officer, Director,
                                       Secretary

    Dr. Rodney Tognetti                Director

                                       13
<PAGE>

         Heinot H. Hintereder is cofounder of the Company. Was the Founder and
served as President and CEO of Immecor Corporation of Delaware until its
acquisition by the Company. Served 5 years as Manager of the Financial &
Corporate Support Unit, Fireman's Fund Insurance Companies until retirement in
1992. For 25 years held various other managerial and supervisory positions at
Fireman's Fund. President, Founder, and CEO of Biblionics Corporation, a
software development company. Founder, Partner, and General Manager of W.
Koehler K.G., a German trading company. In all, Mr. Hintereder has 35 years
experience in large business systems design, selection of computer equipment and
system configuration. Mr. Hintereder was educated in Germany and holds the
German equivalent of a Masters degree in Business Administration.

         Jason C. Lai is cofounder of the  Company.  Served as Vice  President
Sales & Marketing  of Immecor  Corporation  of Delaware until its  acquisition
by the Company in 1994.  Before joining the Company Mr. Lai served 3 years as
Sales and Marketing  Executive for Comrex  Systemation from 1991 to 1993.
Before 1991 Mr. Lai was an independent  distributor for Apple  computers.
Mr. Lai has 10 years experience in the computer business.

         Nhon K. Tran is a major investor in the Company. Before joining the
Company in July of 1995 as Vice President, Chief Technical Officer, Mr. Tran
served 10 years with Parker Hannifin Corporation in the field of computer driven
robotic motion control products, five years of which he served as Associate
Engineer for new product development.

         William L. Lindgren is Chief  Financial  Officer since May of 1999.
Mr. Lindgren has 15 years  experience in cash  management, commercial  lending,
securities sales and insurance  planning.  Before joining the Company,
Mr. Lindgren served as regional executive with the business  banking  division
for Bay View Bank.  Mr.  Lindgren  holds an AA degree in  Accounting  and a BS
degree in Business Management.

         Dr. Rodney Tognetti is a member of the Company's  Board of Directors.
Mr. Tognetti is a retired  educator,  local  industrial property owner and
investor in emerging companies. He is a member of the Board of Directors of
Trancas Associates.

         Directors of the Company hold their offices until the next annual
meeting of the Company's stockholders and until their successors have been duly
elected and qualified or their earlier resignation, removal from office or
death.

         Officers of the Company serve at the pleasure of the Board of Directors
and until the first meeting of the Board following the next annual meeting of
the Company's stockholders and until their successors have been chosen and
qualified.

ITEM 10.  EXECUTIVE COMPENSATION

         The Company's Summary Compensation Table is set forth below. As in
previous years, the Company has no Option/SAR Grants, Aggregated Option/SAR
Grants Exercises or Fiscal Year End Option/SAR's for the period ended June 30,
2003 and for the six months ended June 30, 2002 and for the years ended December
31, 2001 and 2000, nor were there any long-term incentive plan awards, or stock
options or stock appreciation rights. The Company's compensation to non-employee
directors consists of a fee of $250 per meeting of the Board of Directors.

                                       15
<PAGE>

<Table>
<Caption>
<S>                                  <C>            <C>                  <C>              <C>
                           SUMMARY COMPENSATION TABLE

Name and
Principal Position                   Fiscal         Compensation         Compensation     All other
                                     Period         Paid                 Deferred         Compensation

Heinot H. Hintereder                    2000        $  184,000           $ 385,996        $   8,450
President &                             2001        $  192,319           $  37,306        $  24,417
Chief Executive Officer                 2002        $   99,742           $   9,999        $    None
                                        2003        $   74,396           $  16,664        $    None

Jason C. Lai                            2000        $  184,000           $ 387,467        $   8,450
Executive Vice President                2001        $  186,691           $    None        $  24,417
                                        2002        $   89,999           $  10,000        $    None
                                        2003        $   50,264           $  16,665        $    None

Nhon K. Tran                            2000        $  199,000           $ 387,467        $   8,450
Vice President &                        2001        $  136,744           $  50,000        $  24,417
Chief Technical Officer                 2002        $   89,999           $  26,666        $    None
                                        2003        $   49,295           $  16,665        $    None

William L. Lindgren                     2000        $   85,992           $   5,782        $    3,000
Chief Financial Officer                 2001        $   98,830           $    None        $     None
                                        2002        $   52,500           $    None        $     None
                                        2003        $   30,481           $   8,750        $     None

</Table>

Note     1: All deferred compensation was accrued in the financial statements as
         of June 30, 2003.

EMPLOYMENT AGREEMENTS

         The Company is reviewing a new three-year  employment  agreement for
its top executives.  The Company  maintains  key-man life insurance policies in
the amounts of $2 million each on Jason C. Lai and Nhon K. Tran.

         The Company still maintains employment agreements with 1) Bill
Pillchick ("Pillchick"), a Sales Representative; 2) Brian Hou ("Hou"), a Sales
Representative and 2) Lyn Leavitt ("Leavitt"), a Sales Representative. Between
January, 2003 to June 30, 2003, the Company entered into employment agreements
with 3) Steve Becker ("Becker"), an Outside Sales Representative; and 4) Eric
Oberg ("Oberg"), a Sales Representative. These agreements are for a one-year
term. The Company may terminate agreements with these employees for cause at any
time and these employees may terminate the agreement at any time by giving
written notice to the Company. For a period of one year after its expiration or
its termination by the Company for cause, the agreements prohibit these
employees from selling any products then being marketed by the Company to its
customer base or release any trade information. This provision may not be
enforceable in whole or in part, subject to California court determination.

INDEMNIFICATION AGREEMENTS

         The Company will enter into an indemnification agreement with its
directors and executive officers. Each indemnification agreement provides or
will provide that the Company will indemnify such person against certain
liabilities (including settlements)and legal action, proceeding or investigation
(other than actions brought by or in the name of the Company) to which he or she
is, or is threatened to be, made a party by reason of his or her status as a
director, officer or agent of the Company, provided that such director,
executive officer or agent acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interest of the Company
and, with respect to any criminal proceedings, had no reasonable cause to
believe his or her conduct was unlawful. With respect to any action brought by
or in the right of the Company, a director, executive officer or agent will also
be indemnified, to the extent not prohibited by applicable law, against expenses
and amounts paid in settlement, and certain liabilities if so determined by a
court of competent jurisdiction, actually and reasonably incurred by him or her
in connection with such action if he or she acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interest of
the Company. Insofar as indemnification for liabilities arising under the
federal securities laws may be permitted, the Company has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy and is, therefore, unenforceable.

                                       16
<PAGE>

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth as of June 30, 2003, the number of
shares of Common Stock owned of record or beneficially owned by each of the
Company's officers, directors, and stockholders owning at least 5% of the
Company's issued and outstanding shares of Common Stock, by all of the Company's
officers and directors as a group, and the percentage of the total outstanding
shares represented by such shares.

<Table>
<Caption>
<S>                                 <C>                                         <C>

Name and Address                    Shares Beneficially                         Approximate
Beneficial Owner                    Owned                                       Percent of Class

Heinot H. Hintereder                2,539,600                                     43.7
131 Keppel Way
Cotati, CA 94931

Nhon K. Tran                        1,090,000                                     18.8
3783 Dafford Place
Santa Rosa CA 95404

Jason C. Lai                          977,500                                     16.8
5625 Mireille Drive
San Jose, CA 95118

Dr. Rodney Tognetti                   145,500                                      2.5
4132 Susan Lane
Penngrove, CA 94951

All officers and
directors as a group                4,752,600                                     81.8

</Table>

COMPLIANCE WITH SECTION 16 (A) OF THE 1934 ACT

         Section 16 (a) of the 1934 Act requires the Company's executive
officers, directors and holders of more than 10% of the Company's Common Stock,
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Such persons are required to furnish the Company with
copies of all Section 16 (a) forms they file.

         Based solely on oral or written representations from certain reporting
persons that no Forms 5 were required for those persons, the Company believes
that, with respect to fiscal 2003, its executive officers, directors and greater
than 10% beneficial owners complied with all such filing requirements.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Since its inception, from time to time, certain executive officers,
directors and shareholders have provided short-term funds to the Company and
deferred a portion of their salaries in order to finance operating expenses for
the Company. Such advances from the officer shareholders have been disclosed in
the financial statements.

                                       17
<PAGE>

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

A.  All schedules have been omitted, as the information is inapplicable or the
    information is presented in the financial statements or Notes thereto.

B.  None.


                                   SIGNATURES

In accordance with Section 13 or 15 (d) of the Exchange Act and Certification
Pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934, as
amended, the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

I, Heinot H. Hintereder, certify that:

1.  I have reviewed this annual report on Form 10-KSB of Immecor Corporation;

2.  Based on my knowledge, this annual report does not contain any untrue
    statement of a material fact or omit to state a material fact necessary to
    make the statements made, in light of the circumstances under which such
    statements were made, not misleading with respect to the period covered by
    this annual report;

3.  Based on my knowledge, the financial statements, and other financial
    information included in this annual report, fairly present in all material
    respects the financial condition, results of operations and cash flows of
    the registrant as of, and for, the periods presented in this annual report;


Date: September 15, 2003

By:   /s/ Heinot H. Hintereder
          --------------------
          Heinot H. Hintereder
          Chief Executive Officer


                                       18
<PAGE>


                                   SIGNATURES

In accordance with Section 13 or 15 (d) of the Exchange Act and Certification
Pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934, as
amended, the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

I, William L. Lindgren, certify that:

1.  I have reviewed this annual report on Form 10-KSB of Immecor Corporation;

2.  Based on my knowledge, this annual report does not contain any untrue
    statement of a material fact or omit to state a material fact necessary to
    make the statements made, in light of the circumstances under which such
    statements were made, not misleading with respect to the period covered by
    this annual report;

3.  Based on my knowledge, the financial statements, and other financial
    information included in this quarterly report, fairly present in all
    material respects the financial condition, results of operations and cash
    flows of the registrant as of, and for, the periods presented in this annual
    report;


Date: September 15, 2003

By:  /s/ William L. Lindgren
     -----------------------
         William L. Lindgren
         Chief Financial Officer


                                       19
<PAGE>


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

SIGNATURES                                              DATE

/s/ Heinot H. Hintereder, Director                      September 15, 2003
------------------------------------                    ------------------

/s/ Jason C. Lai, Director                              September 15, 2003
------------------------------------                    ------------------

/s/ Nhon K. Tran, Director                              September 15, 2003
------------------------------------                    ------------------

/s/ William L. Lindgren, Director                       September 15, 2003
------------------------------------                    ------------------

/s/  Dr. Rodney Tognetti, Director                      September 15, 2003
------------------------------------                    ------------------


                                       20
<PAGE>


<Table>
<Caption>
<S>                                                           <C>               <C>        <C>

                                                          IMMECOR CORPORATION
                                                                  Balance Sheets

ASSETS
                                                              June 30,          June 30,   Dec. 31,
                                                              ---------         --------   --------
                                                              2003              2002       2001

Cash                                                          493,057           482,855       30,424
Accounts receivable, net of allowance for doubtful
 accounts of $12,945, 22,000 and $22,000                      785,029           740,887      430,624
Inventories, net of inventory reserves of $80,811
 288,914 and $488,300                                       1,458,828         1,676,993    1,833,132
Notes receivable - current                                     29,116            26,448       48,127
Prepaid expenses                                              158,096            41,976       27,101
Federal income taxes receivable                                                  73,353                             -      -
Income tax recoverable                                         29,012                 -      380,297
                                                               ------        ----------      -------

     Total current assets                                   3,026,491         2,969,159    2,749,705

Equipment and improvements, net                               236,372           358,665      404,613
Notes receivable                                              124,998            55,191       50,369
                                                              -------            ------       ------

     Total assets                                           3,387,861         3,383,015    3,204,687

LIABILITIES AND STOCKHOLDERS' EQUITY

Line of credit                                                351,064           388,627      179,478
Accounts payable                                              453,894           368,146      911,666
Notes payable                                                       -            34,250       85,186
Accrued liabilities                                           101,298           312,502      222,201
Deferred taxes                                                 96,027                --           --
Income taxes payable                                               --            40,524           --

     Total current liabilities                              1,002,283         1,144,049    1,398,531

Stockholders Equity:
Common stock, no par value, 50,000,000 shares authorized;
5,806,128 shares issued and outstanding                       288,855           288,855      288,855
Retained earnings                                           2,096,723         1,950,111    1,517,301
                                                            ---------         ---------    ---------

     Total stockholders  equity                             2,385,578         2,238,966    1,806,156

     Total liabilities and stockholders' equity             3,387,861         3,383,015    3,204,687

</Table>


<PAGE>



<Table>
<Caption>
<S>                                                       <C>                       <C>               <C>
                               IMMECOR CORPORATION
                            STATEMENTS OF OPERATIONS


                                                               June 30,              June 30,          December 31,
                                                                                     --------          ------------
                                                                   2003              2002              2001

Net sales                                                  $  8,363,868              $  4,069,915      $  9,766,802
Cost of sales                                                 6,213,880                 2,234,639         8,351,127
                                                              ---------                 ---------         ---------

       Gross profit                                           2,149,988                 1,835,276         1,415,675

Operating Expenses
    Sales and marketing                                         166,015                   130,882           139,973
    Research and development                                    169,785                   182,452           523,083
    General and administrative                                1,609,627                   986,558         1,857,712
                                                              ---------                   -------         ---------

       Operating (loss) income                                  204,561                   535,384        (1,105,093)

Other income (expense):
     Other income                                                   459                    17,505            13,494
     Interest income                                             11,857                     6,118            28,539
     Interest expense                                          (45,166)                  (20,780)          (230,406)
                                                               --------                  --------          ---------

       Income (loss) before income taxes                        171,711                   538,227        (1,293,466)

Income taxes provision (benefit)                                 23,474                   105,417          (233,099)
                                                                 ------                   -------          ---------

       NET (LOSS) INCOME                                        148,237                   432,810        (1,060,367)

Net (loss) income per share - basic and diluted                     .03                      0.08             (0.18)

</Table>



<PAGE>



<Table>
<Caption>
<S>                                                                <C>               <C>              <C>
                               IMMECOR CORPORATION
                            Statements of Cash Flows

                                                                   For the            For the Six     For the
                                                                   Year Ended         Months Ended    Year Ended
                                                                   June 30,           June 30,        December 31,
                                                                   2003               2002            2001
                                                                   ----               ----            ----


Cash flows from operating activities:
     Net (loss) income                                             $  148,237      432,810        (1,060,367)
       Adjustments to reconcile net (loss) income to net cash
          provided by (used in) operating activities:
          Depreciation and amortization                               122,995        60,967            119,097
          Deferred income taxes                                        96,027             -            147,400
          Reserve for inventories                                    (208,103)     (199,386)           488,300
          Changes in operating assets and liabilities:
          Accounts receivable                                         (44,142)     (310,263)         2,460,489
          Income tax recoverable                                     (102,365)      380,297           (380,297)
          Inventories                                                 426,268       355,525            464,260
          Prepaid and other assets                                   (120,067)      (14,875)           136,757
          Accounts payable                                             85,748      (543,520)        (1,936,581)
          Accrued expenses                                           (211,204)       90,301           (962,420)
          Income taxes payable                                        (40,524)       40,524         (1,710,455)
                                                                     ---------    ---------         -----------
           Net cash (used in) provided by operating activities        152,870       292,380         (2,233,817)
                                                                      -------      --------         -----------

Cash flows from investing activities:
     Purchase of property and equipment                                        --           --        (370,442)
     Redemption of certificate of deposit                                      --           --        (611,319)
     Proceeds from notes receivable                                      (70,855)       30,093               -
     Increase in notes receivable                                               -      (3,375)        (198,907)
                                                                       ----------      -------        ---------
           Net cash provided by (used in) investing activities           (70,855)       26,718      (1,180,668)
                                                                       ----------       ------      -----------

Cash flows from financing activities:
     Net borrowings (repayments) from line of credit                     (37,563)      245,789        (350,890)
     Borrowings from note payable                                              --            -              --
     Repayments on note payable                                          (34,250)    (386,307)          (4,686)
                                                                       ----------    ---------          -------
           Net cash provided by financing activities                     (71,813)    (140,518)        (355,576)
                                                                       ----------    ---------        ---------

           Net change in cash                                              10,202    (463,558)        1,407,993

Cash balance, beginning of period                                         482,855      498,636           57,788
                                                                       ----------      -------           ------
Cash balance, end of period                                              $493,057      $35,078      $ 1,465,721
                                                                         ========     ========      ===========

</Table>


<PAGE>


                               IMMECOR CORPORATION
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization
         The Company's primary business is to design, custom manufacture, and
direct market high performance computer systems. These high performance computer
systems are heterogeneous and scalable, allowing them to accommodate several
different platforms and applications. Immecor's system architecture is
specifically designed for each customer and are typically computation intensive
and require high capacity not available on a general purpose PC's or
workstations. The primary markets for Immecor's products are original equipment
manufacturers ("OEM") in the wafer inspection, defense electronics, medical
diagnostic imaging and entertainment markets. These markets have computing needs
which benefit from a unique custom-built system architecture that can be
produced by Immecor. The necessary components are purchased from domestic and
foreign manufacturers and distributors. The Company operates exclusively in the
customized computer system segment. The Company markets its finished products
through its own sales force, primarily in the United States of America.

Change in fiscal year
         The Company changed its fiscal year end from December 31 to June 30,
effective July 1, 2002.

Liquidity
         The Company finances its operations primarily with cash flows generated
from operations and borrowings under its bank line of credit. The Company's
current liquidity requirements relate primarily to inventory procurement,
facilities cost, payroll, research and development and other fixed operating
expenses. The Company's financial condition is affected by many factors, some of
which are based on the normal ongoing operations of the business, and others of
which relate to the uncertainties in the semiconductor equipment industry.

         The Company has placed tighter controls for new inventory purchases,
deferred executive salaries, and have expanded its sales force to achieve better
liquidity through lower expenses and increased sales. The Company believes that
based on expected cash flow to be generated from operations, together with its
existing cash balances, sufficient resources will be available to maintain its
planned level of operations.

         There can be no assurance, however, that the Company will continue to
be successful in further reducing costs or expanding its line of credit, or that
any credit increase will be on terms favorable to the Company. There can also be
no assurance that the Company's major customers will continue to purchase from
the Company or fulfill the purchase projections provided to the Company. In the
event that the Company is unable to expand its line of credit, obtain other debt
or equity financing, execute its cost reduction program, improve its inventory
turnover or generate additional revenues from new products and/or new customers,
the Company's business, financial condition and results of operations could be
materially and adversely affected.

Use of estimates
         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the 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.

Cash equivalents
         The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents.

                                       21
<PAGE>

Certain risks and concentrations
         Financial instruments that potentially subject the Company to
concentration risk are primarily cash and accounts receivable. At times, cash
deposits may be in excess of Federal Deposit Insurance Corporation limits. The
Company performs ongoing credit evaluations of its customers' financial
condition and generally requires no collateral. The Company maintains allowances
for potential credit losses on customer accounts receivable, when deemed
necessary, and such losses have been within management's expectations.

         The Company's products include components that are subject to rapid
technological change. Significant technological change could adversely affect
the Company's operating results and subject the Company to returns of product
and inventory losses. While the Company has ongoing programs to minimize the
adverse effect of such changes and consider technological change in estimating
its allowances, such estimates could change in the future.

Inventories
         Inventories are stated at the lower of cost or market with cost
determined on the first-in, first-out method. The Company reviews the levels of
its inventories in light of current and forecasted demands to identify and
provide reserves for obsolete, slow-moving and or non-saleable inventory. For
the fiscal year end June 30, 2003 and 2002, the Company reduced its inventory
reserve by $208,103 and $199,386 respectively for the fiscal year end June 30,
2002. During the years ended December 31, 2001 and 2000, the Company recorded
valuation adjustments of approximately $488,000 and $0, respectively, in cost of
sales on the accompanying statements of operations to reduce inventoried costs
to net realizable value.

Property and equipment
         Property and equipment are stated at cost less accumulated depreciation
and amortization. Depreciation is computed using the straight-line method over
the estimated useful lives of the assets, generally three to ten years.
Amortization of leasehold improvements is also computed using the straight-line
basis method over the shorter of the lease term or the estimated useful lives of
the improvements. Expenditures for repairs and maintenance are charged to
expense as incurred. Upon disposition, the cost and related accumulated
depreciation are removed from the accounts and the resulting gain or loss, if
any, is recognized in the statement of operations.

         Long-lived assets to be held and used in operations are reviewed for
impairment whenever events or changes in circumstances indicate that the related
carrying amounts may not be recoverable. The Company believes that no impairment
exists for long-lived assets at June 30, 2003.

Revenue recognition
         Revenue is recognized when products are shipped and title passes to the
customer, and is recorded net of returns, discounts and allowances.

Income taxes
         The Company uses the liability method in accounting for income taxes.
Deferred tax assets and liabilities are determined based on differences between
the financial reporting and tax bases of assets and liabilities using enacted
tax rates in effect for the year in which the differences are expected to
reverse. A valuation allowance is established to reduce deferred tax assets if
it is more likely than not that some or all of a deferred tax asset may not to
be realized. Income tax benefit (provision) is comprised of the taxes receivable
(payable) for the period and the net change during the period in deferred tax
assets and liabilities.

Research and development
         Research and development costs are expensed when incurred.

Advertising costs
         The Company expenses costs of advertising as incurred, which were
approximately $12,360, 1,200, $2,000 and $19,000 for the months ended June 30,
2003 and for six-month period of June 30, 2002, and years ended December 31,
2001 and 2000, respectively.

                                       22
<PAGE>

Basic and diluted net loss per share
         Basic earnings per share are computed using the weighted average number
of common shares outstanding during the period. The Company has no potentially
dilutive securities.

Fair value of financial instruments
         The fair value of cash and cash equivalents, line of credit and notes
payable approximates carrying value due to the short-term nature of such
instruments. The fair value of long-term notes receivable approximates carrying
value based on terms available for similar instruments. The Company does not
hold any derivative financial instruments.

Recent accounting pronouncements

         In August 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal Of Long-Lived Assets, which establishes one accounting
model to be used for long-lived assets to be disposed of by sale, whether
previously used or newly acquired. SFAS No. 144 is effective for the Company's
transition period beginning January 1, 2002. The Company's adoption of SFAS No.
144 had no effect on the Company's results of operations or financial position.

         In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation - Transition and Disclosure, which provides alternative
methods of transition for stock-based employee compensation. SFAS No. 148 also
amends the disclosure requirements of Statement 123 to require prominent
disclosure in both annual and interim financial statements about the method of
accounting for stock-based employee compensation. The Company's adoption of SFAS
No. 148 had no effect on the Company's results of operations or financial
position.

Reclassifications
         No reclassifications have been done.

NOTE 2 INVENTORIES
         Inventories consist of the following as of June 30, 2003, and June 30,
2002 and December 31, 2001:

<Table>
<Caption>
<S>                                 <C>                        <C>                      <C>

                                            2003                       2002                      2001

         Component parts            $   1,308,693              $   1,727,459            $    2,103,109
         Finished systems                 230,945                    238,448                   218,323
         Less inventory reserve          (80,810)                  (288,914)                 (488,300)
                                         --------                  ---------                 ---------
                                    $   1,458,828              $   1,676,993            $    1,833,132
</Table>

NOTE 3 PROPERTY AND EQUIPMENT

         Property and equipment consist of the following as of June 30, 2003,
June 30, 2002 and December 31, 2001:

<Table>
<Caption>
<S>                                            <C>               <C>               <C>
                                                     2003              2002             2001

         Equipment and furniture               $   383,487       $   382,784       $   374,743
         Vehicles                                  209,888           209,889           209,889
         Leasehold improvements                     60,903            60,903            53,925
                                                    ------            ------            ------
                                                   654,278           653,576           638,557
         Less accumulated depreciation
         and amortization                         (417,906)         (294,911)         (233,944)
                                                  ---------         ---------         ---------
                                               $   236,372       $   358,665        $  404,613
</Table>

                                       23
<PAGE>


NOTE 4 NOTES RECEIVABLE

         Notes receivable consist of the following as of June 30, 2003, June 30,
2002 and December 31, 2001:

<Table>
<Caption>
<S>                                                               <C>             <C>              <C>

                                                                       2003             2002              2001
         Notes receivable, no collateral with interest
         ranging from 11.5% to 12.5%, maturing
         through January 2006                                     $   40,063       $   55,618       $   69,955

         Notes receivable from employees, no collateral
         and non-interest bearing, due on demand                     114,051           26,021           28,541
                                                                     -------           ------           ------
                                                                     154,114           81,639           98,496
         Less current portion                                         29,116           26,448           48,127
                                                                      ------           ------           ------
                                                                 $   124,998       $   55,191       $   50,369
</Table>


NOTE 5 - LINE OF CREDIT

         The Company has a $1,500,000 line of credit with GE Capital at an
interest rate of 10.25% as of June 30, 2003 and is collateralized by the
Company's accounts receivable, inventory and property and equipment. The
available balance under the line of credit is subject to certain borrowing base
limitations related to the Company's eligible accounts receivable balances. At
June 30, 2003, there was approximately $5,000 of available borrowing capacity on
the line of credit. Under the line of credit agreement, the Company must comply
with certain financial covenants, including a maximum debt to equity ratio. The
line of credit is also personally guaranteed by one of the Company's
stockholders.

NOTE 7 - COMMITMENTS

         The Company leases its headquarters in Santa Rosa, California, and its
facilities in Santa Clara, California, under non-cancelable operating lease
agreements, which expire in January 2006 and April 2005, respectively. The
Company is also obligated to pay its pro-rata share of utilities for these
facilities. Rent expense was approximately $153,000 for the six months ended
June 30,2002 and $248,000 for the year ended December 31, 2001, respectively.
Rent expense was approximately $164,000 for June 30, 2003.

         Minimum future rental payments under the operating lease agreements as
         of June 30, 2003, are approximately as follows:

         For the year ending
         June 30,

         2004       $  313,000
         2005          319,000
         2006          226,000
                       -------
                    $  858,000

NOTE 8 SALES TO MAJOR CUSTOMERS

         A substantial portion of the Company's business is dependent upon sales
to major customers, the loss of which would have a material adverse effect on
the Company's financial position and results of operations. Approximately 73% of
our net sales during fiscal 2003 were derived from customers that were also
customers during the same period of fiscal 2002. One customer accounted for 66%,
respectively, of the Company's net sales in fiscal 2003; 86%, respectively, of
the Company's net sales in fiscal 2002; and 90%, respectively, of the Company's
net sales in fiscal 2001. The Company has developed and produced a sales culture
that promotes active marketing.

                                       24
<PAGE>

NOTE 9 - INCOME TAXES

         The provision (benefit) for income taxes consists of the following for
the six months ended June 30, 2002, and for the years ended December 31, 2001
and 2000:

                                    2003             2002           2001
Current:
  Federal                  $     (73,353)     $     82,319  $   (381,299)
  State                              800            23,098           800
                                     ---            ------           ---
                                 (72,553)          105,417      (380,499)

Deferred:
  Federal                         96,027                --       149,000
  State                               --                --        (1,600)
                                      --                --        -------
                             $    23,474     $     105,417   $  (233,099)

         A reconciliation of the statutory federal income tax rate with the
Company's effective tax rate for the year ended June 30, 2003, and for the years
ended June 30, 2002 and December 31, 2001, is approximately as follows:

<Table>
<Caption>
<S>                                                  <C>               <C>            <C>

                                                     2003              2002           2001
Federal statutory rate                                34.0%              34.0%       (34.0%)
State income taxes, net of federal benefit             0.1                4.2           --
Nondeductible expenses                                (4.4)               0.3          3.8
Valuation allowance                                  (16.0)             (19.0)        13.8
Adjustment to estimated income tax accrual              --                0.1         -1.6
Other, net                                              --                 --           --
                                                        --                 --           --
                                                      13.7%              19.6%       (18.0%)

</Table>

Significant components of the Company's deferred income taxes assets
(liabilities) consist approximately of the following at June 30, 2003 and 2002,
and December 31, 2001:

<Table>
<Caption>
<S>                                          <C>                   <C>             <C>

                                                     2003              2002             2001
Depreciation and amortization                     (43,700)          (24,000)         (14,700)
Bad debts reserve                                    3,000             8,500            8,500
Inventory reserves                                 166,700           121,300          206,300
Warranty reserves                                   13,500           (3,900)           21,100
Other accrued expenses                              12,500           (2,500)               --
State net operating loss carry forwards             69,000            32,500           25,000
                                                    ------            ------           ------
                                                   221,000           131,900          246,200
Less valuation allowance                         (125,000)         (131,900)        (246,200)
                                                 ---------         ---------        ---------
                                              $     96,000          $     --         $     --
</Table>

         Realization of the deferred tax assets is dependent on generating
sufficient taxable income prior to the expiration of the loss carry forwards. A
full valuation allowance has been established for the deferred tax assets
because of the uncertainty that such deferred tax assets will be realized. For
the year ended June 30, 2003, the valuation allowance decreased by approximately
$114,300. The change in the valuation allowance was a net increase of
approximately $114,300 for the year ended June 30, 2002 and a net increase of
approximately $233,000 for the year ended December 31, 2001. At June 30, 2003,
net operating loss (NOL) carry forwards were approximately $108,000 and $328 000
for state tax purposes and expire in 2014 and 2013, respectively. The amount of
the deferred tax assets considered realizable, however, could change in the near
term if future taxable income during the carry forward period varies from
management's estimates.

NOTE 10 DEFINED CONTRIBUTION PLAN

                   The Company adopted a 401k Plan in January 2001 covering all
eligible employees after 90 days pf employment with the Company. Eligible
employees may contribute up to 15% of their compensation to the 401k Plan,
subject to statutory limitations. The Company's Board of Directors may
contribute a discretionary amount up to 6% of the employee's eligible
compensation. The Company did not make any contributions for the fiscal period
ending June 30, 2003, and June 30, 2002, and December 31, 2001.



<PAGE>





REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors and Shareholders
Immecor Corporation

We have audited the accompanying balance sheet of Immecor Corporation (a
California corporation) as of June 30, 2003, and the related statements of
operations, shareholders' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides 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 Immecor Corporation as of June 30,
2003, and the results of its operations and its cash flows for the year then
ended in conformity with accounting principles generally accepted in the United
States of America. The financial statements of the Company at June 30, 2002 and
December 31, 2001 and for the years then ended were audited by other independent
accountants whose report dated December 16, 2002, expressed an unqualified
opinion on those statements.

Bollinger Accountancy, APC
Windsor, California
July 26, 2003