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 December 31, 2001

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
             For the Transition Period from __________ to: _________

                        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 registrant's  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 fiscal year: $ 9,766,802.

         There is currently no public market for the company's Common Stock and
such shares are not currently 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 December 31, 2001, there were 5,806,128 shares of the issuer's
Common Stock, without par value, outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE
         None



<PAGE>


                               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.



<PAGE>


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, real-time and
video-on-demand image processing computer systems. The systems transform
sensor-generated data into information for yield management and process
monitoring systems for the semiconductor industry. These multi-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 general purpose PC's or workstations. The primary
markets for Immecor's products are original equipment manufacturers (OEM) in the
wafer inspection, defense electronics and medical diagnostic imaging markets.
These markets have computing needs which benefit from a unique custom-built
system architecture that can be produced by Immecor. Currently, the Company's
major customer is in the semiconductor industry.

         Immecor also direct markets a broad range of multi-brand microcomputer
products, including hardware and peripherals, 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 offers popular brand name computer products from Adobe, Apple, Cisco,
Compaq, Epson, Hewlett-Packard, IBM, Intel, Microsoft, NEC, Novell, Sony,
Symantec, Toshiba and 3Com, among others.

     The Company directs its marketing efforts toward current and prospective
customers with a direct focus on commercial accounts, including business,
government, educational 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 markets to prospective customers through its direct sales
staff and continues to generate repeat sales from existing customers while
attracting sales from new customers. 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.

         Additionally, the Company plans to focus on developing and expanding
its e-business initiatives. The Company's strategy is to implement its website
as an extension of its direct marketing programs and provide a business model
that would provide revenues from online sales.

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, customer's 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 an
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


<PAGE>


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.

         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.
These functions have traditionally been performed by our OEM customers 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 is actively involved in pursuing an
ISO 9002 certification 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. In the event the Company were to identify an appropriate
acquisition candidate, there is no assurance that the Company would be able to
successfully negotiate the terms of any such acquisition, finance such
acquisition and integrate such acquired business, products or technologies into
the Company's existing business and operations. Furthermore, the integration of
an acquired business could cause a diversion of management time and resources.
In addition, there can be no assurance that any acquisition of new technology
will lead to the successful development of new products, or that any such new
products, if developed, will achieve market acceptance or prove to be
profitable. There can be no assurance that a given acquisition, when
consummated, would not materially adversely affect the Company's business,
financial condition or results of operations.


<PAGE>


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
OEM accounts and 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 99% of our net sales during fiscal 2001
were derived from customers that were also customers during the same period of
fiscal 2000. One semiconductor customer and one medical diagnostic customer
accounted for 92% and 6%, respectively, of the Company's net sales in fiscal
2001 and 85% and 1%, respectively, of the Company's net sales in fiscal 2000.
Although we seek to diversify our customer base, a small number of customers
currently are responsible for a significant portion of our net sales. In the
second half of fiscal 2001, we recruited and trained additional sales staff with
experience and contacts in our target OEM markets to diversify our customer
base. 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 30 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.


<PAGE>


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 15,837 square feet of office, showroom
and assembly space. Santa Rosa is located approximately 50 miles north of San
Francisco.

         The Company maintains an additional 4,500 square feet of office and
system integration space at 1600 Wyatt Drive, Suites 11-12, Santa Clara,
California 95054

         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

         In the semiconductor, computer and medical diagnostic industries,
companies receive notices from time to time alleging infringement of patents,
copyrights, or other intellectual property rights. While Immecor has not been
notified of claims that it may be infringing patents, copyrights or other
intellectual property rights owned by other third parties, any litigation could
result in substantial costs and diversion of resources and could have a material
adverse effect on Immecor's business, financial condition and results of
operations. In the future, third parties may assert infringement claims against
Immecor or its customers. In the event of an infringement claim, Immecor may be
required to spend a significant amount of money to develop a non-infringing
alternative or to obtain licenses. Immecor may not be successful in developing
such an alternative or obtaining a license on reasonable terms, if at all. In
addition, any such litigation could be lengthy and costly and could harm
Immecor's 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.

         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
December 31, 2001.

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.

SALES OF UNREGISTERED SECURITIES
         None.


<PAGE>


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
FISCAL 2001 AS COMPARED TO FISCAL 2000

Net Revenues
         Net revenues of the Company for fiscal year ended December 31, 2001
("fiscal 2001") decreased 68% to $9,766,802 from $30,223,306 for fiscal year
ended December 31, 2000 ("fiscal 2000"). Sales decline in fiscal 2001 was due to
a weak U.S. economy and a worldwide softening in demand for semiconductors,
which lead to excess capacity and reduced demand for semiconductor manufacturing
and other computer equipment. Fiscal 2000 revenues were higher due to a demand
for capital equipment for the Y2K issue and B2B business ventures. In comparison
to a more normalized growth year, the Company's revenues for fiscal year ended
December 31, 1999 ("fiscal 1999") were $10,121,025, which was 3.6% higher than
revenues posted in fiscal 2001.

Gross Profit
         Gross profit for fiscal 2001 decreased by 82% to $1,415,675 from
$7,932,267. The decrease is due to a decline in net revenues and due to an
increase in the inventory reserve by $438,300 in the fourth quarter of fiscal
2001 from the previous third quarter of $50,000. Gross profit as a percentage of
net revenues decreased from 26% in fiscal 2000 to 15% in fiscal 2001. Gross
profit as a percentage of net revenues, excluding inventory reserves, during the
same periods decreased from 26% to 20%, which is a result of a selling matured
products with lower margins while the Company developed new products and certain
fixed costs being spent over lower revenues. The Company acknowledges that
pricing pressures, lower demand and changes in sales volume due to the slow
economy and in the semiconductor sector may continue to adversely impact our
gross margins in upcoming quarters for the year ending December 31, 2002
("fiscal 2002").

Sales and Marketing
         Sales and marketing expenses increased 27% to $139,973 in fiscal 2001
from $110,097 in fiscal 2000. The increase was primarily due to an increase in
sales staff. The Company is making an effort to diversify its customer base by
actively hiring sales staff and enforcing a sales culture.

Research and Development
         Research and development expenses increased to $523,083 in fiscal 2001
from $8,785 in fiscal 2000. The increase was primarily due to an increase in
costs associated with developing new products for its semiconductor customers.
Our 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. To do this, the Company believes that continued investment
in research and development must be made. The Company expenses all of research
and development costs as incurred.

General and Administrative
         General and administrative expenses for fiscal 2001 decreased 49% to
$1,857,712 from $3,623,086 in fiscal 2000. As a percentage of net revenues,
general and administrative expenses increased to 19% for fiscal 2001 from 12%
for fiscal 2000. This increase as a percentage of net revenues was primarily due
to lower net revenues, offset by the Company's continuing efforts to reduce
salaries, general operating costs and non-manufacturing related capital
expenditures.

<PAGE>

Interest Expense
         Interest expense increased by $138,818 or 152% from fiscal 2000 to
fiscal 2001. Due to declining sales and increased research and development
investments, the Company utilized its line of credit to finance its operations.

Income Taxes
         The Company reported an income tax provision (benefit) and effective
income tax (benefit) rate of $1,742,457 and 42.2%, respectively, for fiscal 2000
and $(233,099) and (18)%, respectively, for fiscal 2001. 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.

LIQUIDITY AND CAPITAL RESOURCES
         Working capital was $2,334,671 at December 31, 2000, as compared to
$1,351,174 at December 31, 2001. Cash and cash equivalents and certificate of
deposit decreased to $30,424 at December 31, 2001 from $2,077,040 at December
31, 2000.

         In February 2000, the Company entered into a line of credit agreement
with Deutsche Financial 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 $1,500,000. As of December 31, 2000
and 2001, the Company's borrowing base was approximately $210,000 and $351,000,
respectively. At December 31 2001, there was approximately $30,000 of available
borrowing capacity under the line of credit and the outstanding borrowings bear
interest at 10.00%. The line is collateralized by accounts receivables,
inventory, property and equipment and is personally guaranteed by a stockholder.

         In fiscal 2001, the Company had net cash used in operating activities
of $(2,233,817) compared to net cash provided by operating activities of
$2,944,177 in fiscal 2000. The net decrease related primarily to a net loss and
reductions in accounts payable, income taxes payable, accrued bonuses and other
liabilities in fiscal 2001.

         The Company had net cash provided by investing activities of $631,065
for fiscal 2001 compared to net cash used of $(1,180,668) in fiscal 2000. The
difference of $1,811,733 primarily relates to lower equipment purchases,
redemption of certificate of deposits and proceeds from notes receivable in
fiscal 2001.

         The Company had net cash provided by financing activities of $167,455
for fiscal 2001 compared to net cash used of $(355,576) in 2000. The difference
of $523,032 primarily relates to increased line of credit usage and borrowings
from a stockholder offset by other debt repayments in fiscal 2001.

         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 semiconductor equipment and medical diagnostic equipment
industries. Our significant customer concentration also poses additional
liquidity risks if we lose our major customer, who accounted for 85% and 92% of
the Company's net sales in fiscal 2000 and 2001, respectively. The Company's
management has initiated an aggressive cost-reduction program during the first
quarter of fiscal 2002 to reduce all non-R&D and non-essential marketing
expenditures. Additionally, the Company also placed tight controls for new
inventory purchases as management plans to aggressively market, and in some
instances discount, select inventory items and products to improve turnover.
More importantly, the Company also believes that based revised forecasts from
its major customers, it will be able to sell its newly developed products at
higher gross profit margins beginning sometime in the second or third quarter of
fiscal 2002.

         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 and
expected income tax refund, to satisfy its liquidity requirements for the next
twelve months.

<PAGE>

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 and medial diagnostic
         industries;
o        The reduction in the price and profitability of our products;
o        Our timing of new product introductions;
o        Our ability to development 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 June 1998, the Financial Accounting Standards Board, (FASB) issued
Statement of Financial Accounting Standard (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities, which establishes accounting and
reporting standards for derivative instruments and hedging activities. Adoption
of SFAS No. 133 in 2001 did not have a material effect on the Company's results
of operations or financial position.

         In June 2001, the FASB issued SFAS No. 141, Business Combinations,
which requires that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001. The use of the pooling-of-interest
method will be prohibited. Adoption of SFAS No. 141 had no effect on the
Company's results of operations or financial position.

         In June 2001, the FASB issued SFAS No. 142, Goodwill and Other
Intangible Assets, which changes the accounting for goodwill from an
amortization method to an impairment-only approach. Amortization of goodwill,
including goodwill recorded in past business combinations, will cease upon
adoption of SFAS No. 142. SFAS No. 142 will be effective for the Company's
fiscal year beginning January 1, 2002. The Company's adoption of SFAS No. 142 is
not expected to have a material effect on the Company's results of operations or
financial position.

         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 also broadens the presentation
of discontinued operations to include more disposal transactions. SFAS No. 144
will be effective for the Company's fiscal year beginning January 1, 2002. The
Company's adoption of SFAS No. 144 is not expected to have a material effect on
the Company's results of operations or financial position.

<PAGE>

ITEM     7.       FINANCIAL STATEMENTS

The following Financial Statements are filed as part of this report:

Balance Sheets at December 31, 2000 and 2001                                F-1

Statements of Operations for the years ended
December 31, 2000 and 2001                                                  F-2

Statements of Stockholders' Equity for the years ended
December 31, 2000 and 2001                                                  F-3

Statements of Cash Flows for the years ended
December 31, 2000 and 2001                                                  F-4

Notes to Financial Statements                                               F-5

Report of Independent Accountants - PricewaterhouseCoopers LLP             F-11

Report of Independent Certified Public Accountants -
Grant Thornton, LLP                                                        F-12

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

         An 8-K was filed with the SEC on August 17, 2001, to change the
Company's independent accountant from Grant Thornton LLP to
PricewaterhouseCoopers LLP. There were no 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

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

         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.

<PAGE>

         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 2000.
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 had no Option/SAR Grants, Aggregated
Option/SAR Grants Exercises or Fiscal Year End Option/SAR's for the years ended
December 31, 2000 and 2001, 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.


                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
<S>                                               <C>                 <C>                <C>

Name and                                          Compensation        Compensation         All other
Principal Position                       Years          Paid           Deferred (1)      Compensation

Heinot H. Hintereder                    1999        $  139,000                None             None
President &                             2000        $  184,000           $ 385,996        $   8,450
Chief Executive Officer                 2001        $  192,319           $  37,306        $  24,417

Jason C. Lai                            1999        $  199,873           $  93,388             None
Executive Vice President                2000        $  184,000           $ 387,467        $   8,450
                                        2001        $  186,691                None        $  24,417

Nhon K. Tran                            1999        $  121,582           $  15,000             None
Vice President &                        2000        $  199,000           $ 387,467        $   8,450
Chief Technical Officer                 2001        $  136,744           $  50,000        $  24,417


William L. Lindgren                     1999        $   32,413           $   3,487             None
Chief Financial Officer                 2000        $   85,992           $   5,782        $   3,000
                                        2001        $   98,830                None             None
</TABLE>

Note 1: All deferred compensation was accrued in the financial statements of the
corresponding year.

<PAGE>

EMPLOYMENT AGREEMENTS
         Between November, 2001 to December 2001, the Company entered into
employment agreements with 1) Travis Williams ("Williams"), a Sales
Representative; 2) Brian Hou ("Hou"), a Sales Representative; and 3) Trent
Pierson ("Pierson"), a Sales Representative. The agreements are for a one year
term. The Company may terminate agreements with Williams, Hou, or Pierson for
cause at any time and Williams, Hou or Pierson 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 Williams, Hou or Pierson 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 has entered into or 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.

ITEM    11.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

                   The following table sets forth as of December 31, 2001 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

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

Heinot H. Hintereder                    2,626,900                  45.2
131 Keppel Way
Cotati, CA 94931

Nhon K. Tran                            1,090,000                  18.7
7235 Cadiz Court
Rohnert Park, CA 94928

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

All officers and directors as a group   4,839,900                  83.4

</TABLE>


<PAGE>


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 2001, 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 in
order to finance medium to large purchases of computer components. All of these
funds have been repaid by the Company as noted in Notes to Financial Statements.


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.  An 8-K was filed with the SEC on August 17, 2001 to change independent
    accountants.

                                   SIGNATURES
In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                         IMMECOR CORPORATION

Date:    March 18, 2001                  By:   /s/  Heinot H. Hintereder

                                         -----------------------
                                         Heinot H. Hintereder
                                         President and Chief Executive Officer

Date:    March 18, 2001                  By:   /s/ William L. Lindgren

                                         ----------------------
                                         Wil Lindgren
                                         Chief Financial Officer

<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                            March 18, 2001

/s/ Jason C. Lai, Director                                    March 18, 2001

/s/ Nhon K. Tran, Director                                    March 18, 2001

/s/ William L. Lindgren, Director                             March 18, 2001

/s/ Dr. Rodney Tognetti, Director                             March 18, 2001





<PAGE>



                               IMMECOR CORPORATION
                                 BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>
<S>                                                                         <C>                    <C>

                                                                                             DECEMBER 31

                                                                                       2000                2001
                                                                                       ----                ----

ASSETS
    Cash                                                                     $      1,465,721      $        30,424
    Certificate of Deposit                                                            611,319                    -
    Accounts receivables, net of allowance for
    doubtful amounts of $22,000 and $22,000                                         2,891,113              430,624
    Inventories, net of inventory reserve of $0 and $488,300                        2,785,692            1,833,132
    Note receivable - current                                                          90,300               48,127
    Prepaid assets                                                                    163,858               27,101
    Income taxes recoverable                                                                -              380,297
    Deferred income taxes                                                             167,200                    -
                                                                             ----------------      ---------------

       Total current assets                                                         8,175,203            2,749,705
                                                                             ----------------      ---------------

    Property and equipment, net                                                       443,045              404,613
    Notes receivable                                                                  108,607               50,369
                                                                             ----------------      ---------------

       Total Assets                                                          $      8,726,855      $     3,204,687
                                                                             ================      ===============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
    Line of credit                                                           $              -      $       179,478
    Notes payable - current                                                            97,209               85,186
    Accounts payable                                                                2,848,247              911,666
    Accrued bonuses                                                                 1,152,280              166,073
    Accrued liabilities                                                                32,341               56,128
    Income taxes payable                                                            1,710,455                    -
                                                                                --------------     ---------------

       Total current liabilities                                             $      5,840,532      $     1,398,531

    Deferred income taxes                                                              19,800                    -

       Total liabilities                                                     $      5,860,332      $     1,398,531
                                                                             ================      ===============

Commitments (Note 7).

Stockholders' equity:
    Common stock, no par value, 50,000,000 shares authorized:
    5,806,128 shares issued and outstanding                                           288,855              288,855
    Retained earnings                                                               2,577,668            1,517,301
                                                                             ----------------      ---------------

       Total shareholders' equity                                                   2,866,523            1,806,156
                                                                             ----------------      ---------------

       Total liabilities and shareholders' equity                            $      8,726,855      $     3,204,687
                                                                             ================      ===============

</TABLE>


<PAGE>


                               IMMECOR CORPORATION
                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
<S>                                                                          <C>                   <C>

                                                                                         Years Ended December 31,

                                                                                         2000                 2001

Net sales                                                                    $     30,223,306      $     9,766,802
Cost of sales                                                                      22,291,039            8,351,127

       Gross profit                                                                 7,932,267            1,415,675

Operating Expenses
    Sales and marketing                                                               110,097              139,973
    Research and development                                                            8,785              523,083
    General and administrative                                                      3,623,086            1,857,712
                                                                             ----------------      ---------------

       Operating (loss) income                                                      4,190,299          (1,105,093)

Other income (expense):
     Other income                                                                       2,280               13,494
     Interest income                                                                   23,073               28,539
     Interest expense                                                                (91,588)            (230,406)
                                                                             ----------------      ---------------

       Income (loss) before income taxes                                            4,124,664          (1,293,466)

Income taxes provision (benefit)                                                    1,742,457            (233,099)

       NET (LOSS) INCOME                                                     $      2,382,207      $   (1,060,367)
                                                                             ================      ===============

Net (loss) income per share - basic and diluted                             $             .41      $        (0.18)
                                                                            =================      ===============

Weighted average shares outstanding - basic and diluted                     5,806,128              5,806,128

</Table>

<PAGE>


                               IMMECOR CORPORATION
                       STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
<S>                                <C>             <C>               <C>             <C>

                                                                                      Total
                                            Common                   Retained         Stockholders'
                                    -----------------------
                                    Shares           Amount          Earnings         Equity

     Balance, December 31, 1999    5,806,128       $   288,855       $    195,461     $   484,316

     Net income                            -                 -          2,382,207       2,382,207
                                   ---------          --------  -----------------       -------------


     Balance, December 31, 2000    5,806,128           288,855          2,577,668       2,866,523


     Net loss                            -                   -         (1,060,367)     (1,060,367)
                                  --------            --------         -----------     -----------

     Balance - December 31, 1999   5,806,128      $    288,855      $   1,517,301   $   1,806,156
                                   =========      ============      =============   =============

</TABLE>

<PAGE>

                              IMMECOR CORPORATION
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
<S>                                                                          <C>                   <C>
                                                                                       Years Ended December 31,

                                                                                       2000                2001
Cash flows from operating activities:
    Net income (loss)                                                        $      2,382,207      $   (1,060,367)
     Adjustments to reconcile net (loss) income to net
     cash used in operating activities:
     Depreciation                                                                      52,998              119,097
     Deferred income taxes                                                          (150,255)              147,400
     Reserve for inventories                                                                -              488,300
     Cash effect of changes in operating assets and liabilities:
       Accounts receivable                                                        (1,901,141)            2,460,489
       Income taxes recoverable                                                             -            (380,297)
       Inventories                                                                (1,626,054)              464,260
       Prepaid expenses                                                             (104,382)              136,757
       Accounts payable                                                             1,467,553          (1,936,581)
       Accrued bonuses and liabilities                                              1,112,796            (962,420)
       Income taxes payable                                                         1,710,455          (1,710,455)
                                                                             ----------------      ---------------

            Net cash provided by (used in) operating activities                     2,944,177          (2,233,817)

Cash flows from investing activities:
     Acquisition of property and equipment                                          (370,442)             (80,666)
     Purchase of certificate of deposit                                             (611,319)                    -
     Redemption of certificate of deposit                                                   -              611,319
     Issuance of note receivable                                                    (198,907)              (8,000)
     Proceeds from notes receivable                                                         -              108,412
                                                                                      -------              -------
       Net cash (used in) provided by investing activities                        (1,180,668)              631,065
                                                                                  -----------              -------

Cash flows from financing activities:
     (Repayments on) proceeds from line of credit, net                              (350,890)              179,478
     Proceeds from note payable                                                             -               50,000
     Repayments on notes payable                                                      (4,686)             (62,023)
                                                                                      -------             --------

       Net cash provided by (used in) financing activities                          (355,576)              167,455
                                                                                    ---------              -------

       Net increase (decrease) in cash and cash equivalents                         1,407,933          (1,435,297)

Cash and cash equivalents - beginning of year                                          57,788            1,465,721
                                                                             ----------------      ---------------

Cash and cash equivalents - end of year                                      $      1,465,721      $        30,424
                                                                             ================      ===============

Supplemental disclosure of cash flow information: Cash paid during the year for:
       Interest                                                              $         91,558      $       230,406
                                                                             ================      ===============

       Income taxes                                                          $        225,800      $     1,710,455
                                                                             ================      ===============


</TABLE>


<PAGE>


                               IMMECOR CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 2000 and 2001

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization
         The Company designs, assembles and markets high-performance computer
systems and components used for real-time and video-on-demand yield management
and process monitoring in the semiconductor industry. The Company's computer
systems are utilized in imaging-based semiconductor patterned wafer inspection,
reticle inspection, and in the measurement of overlay, registration and line
width. 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.

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. For the year ended December 31, 2001, the Company experienced
declining sales and incurred net losses and operating cash outflow. 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. In
addition, the loss of the Company's major customer (Major Customer) could result
in significant liquidity risk.

         The Company's management has initiated an aggressive cost-reduction
program during the first quarter of fiscal 2002. Additionally, the Company also
placed controls for new inventory purchases as management plans to aggressively
market, and in some instances discount, select products to improve turnover. The
Company also believes that, based on revised forecasts from the Major Customer,
it will be able to sell its newly developed products at higher gross margins
beginning sometime in the second or third quarter of fiscal 2002. Therefore, the
Company believes that based on expected cash flow to be generated from
operations, together with its existing cash balances and expected income tax
refund, sufficient resources will be available to maintain its planned level of
operations.

         There can be no assurance, however, 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 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.


<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 non-saleable inventory. During
the years ended December 31, 2000 and 2001, the Company recorded valuation
adjustments of approximately $0 and $488,000, 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 December 31, 2001.

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 $19,000 and $2,000 for the years ended December 31, 2000 and 2001,
respectively.

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.


<PAGE>


                               IMMECOR CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 2000 and 2001

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 June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities, which establishes accounting and
reporting standards for derivative instruments and hedging activities. Adoption
of SFAS No. 133 in 2001 did not have a material effect on the Company's results
of operations or financial position.

         In June 2001, the FASB issued SFAS No. 141, Business Combinations,
which requires that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001. The use of the pooling-of-interest
method will be prohibited. Adoption of SFAS No. 141 had no effect on the
Company's results of operations or financial position.

         In June 2001, the FASB issued SFAS No. 142, Goodwill and Other
Intangible Assets, which changes the accounting for goodwill from an
amortization method to an impairment-only approach. Amortization of goodwill,
including goodwill recorded in past business combinations, will cease upon
adoption of SFAS No. 142. SFAS No. 142 will be effective for the Company's
fiscal year beginning January 1, 2002. The Company's adoption of SFAS No. 142 is
not expected to have a material effect on the Company's results of operations or
financial position.

         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 will be effective for the
Company's fiscal year beginning January 1, 2002. The Company's adoption of SFAS
No. 144 is not expected to have a material impact on the Company's results of
operations or financial position.

Reclassifications
         Certain prior year amounts have been reclassified to conform to the
2001 presentation with no effect on net income or retained earnings as
previously reported.

NOTE 2 -  INVENTORIES

Inventories consist of the following as of December 31:
                                      2000                2001

Component parts             $      1,894,270      $     2,103,109
Finished systems                     891,422              218,323
Less inventory reserve                     -             (488,300)
                             ----------------      ---------------
                            $      2,785,692      $     1,833,132
                            ================      ===============


<PAGE>


                               IMMECOR CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 2000 and 2001

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of December 31:
                                          2000                2001

Equipment and furniture        $        325,136      $       374,743
Vehicles                                209,889              209,889
Leasehold improvements                   30,067               53,925
                                         ------               ------
                                        565,092              638,557
Less accumulated depreciation          (122,047)            (233,944)
                                ----------------      ---------------

                               $        443,045      $       404,613
                               ================      ===============

NOTE 4 - NOTES RECEIVABLE

Note receivable consists of the following as of December 31:

<TABLE>
<CAPTION>
<S>                                                              <C>                  <C>
                                                                        2000                2001
Notes receivable, no collateral with interest ranging
from 11.5% to 12.5% maturing through January 2006.               $     13,375         $    69,955

Notes receivable from employees, no collateral and
non-interest bearing due on demand.                                   185,532              28,541
                                                                 -------------        -----------
                                                                      198,907              98,496
              Less current portion                                     90,300              48,127
                                                                 --------------       ------------


                                                                 $     108,607        $    50,369
                                                                ================      ============
</TABLE>


NOTE 5 - LINE OF CREDIT

The Company has a $1,500,000 line of credit with Deutsche Financial Services
at an interest rate of 10% as of December 31, 2001 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 December 31, 2001, there was approximately $30,000 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.


<PAGE>


NOTE 6 - NOTES PAYABLE

Notes payable consists of the following as of December 31;

<TABLE>
<CAPTION>
<S>                                                           <C>                       <C>
                                                                       2000                 2001

         Note payable, collateralized by vehicle with
         interest at 10.5%, repaid in September 2001          $        3,820            $         -

         Note payable, no collateral and non-interest
         bearing due on demand                                        93,389                 35,186

         Note payable to stockholder employee, no
         Collateral and non-interest bearing due on demand                 -                 50,000
                                                              -----------------         -----------
                                                              $       97,209            $    85,186
                                                              =================         ===========
</TABLE>

NOTE 7 - COMMITMENTS

         The Company leases its headquarters in Santa Rosa, California, and it's
sales office in Santa Clara, California, under noncancelable operating lease
agreements, which expire in January 2006 and April 2002, respectively. The
Company is also obligated to pay its pro-rata share of utilities for these
facilities. Rent expense was approximately $155,000 and $248,000 for the years
ended December 31, 2000 and 2001, respectively.

         Minimum future rental payments under the operating lease agreements as
of December 31, 2001, are approximately as follows:

For the year ending
    December 31,

2002                                                  $    281,000
2003                                                       264,000
2004                                                       264,000
2005                                                       264,000
                                                           -------
                                                      $  1,073,000

NOTE 8 - SALES TO MAJOR CUSTOMERS

         A substantial portion of the Company's business is dependent upon sales
to the Major Customer in one industry, the loss of which would have a material
adverse effect on the Company's financial position and results of operation. The
Major Customer accounted for approximately 85% and 92% of total sales for the
years ended December 31, 2000 and 2001, respectively. The Major Customer also
comprised approximately 80% and 87% of total accounts receivable as of December
31, 2000 and 2001, respectively. The Company is actively attempting to expand
its customer base to lessen the effect of this concentration risk by recruiting
and training new sales staff to increase sales in other markets and to add new
customers.


<PAGE>


                               IMMECOR CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 2000 and 2001

NOTE 9 - INCOME TAXES

         The provision (benefit) for income taxes consists of the following for
the years ended December 31:

                                                 2000                  2001
Current:
Federal                                $      1,511,212      $     (381,299)
State                                           381,500                  800
                                       ----------------      ---------------
                                              1,742,457             (380,499)
                                       ----------------      ----------------
Deferred:
Federal                                       (121,635)               149,000
State                                          (28,620)                (1,600)
                                               --------                -------
                                              (150,225)                147,400
                                        ----------------       ---------------
                                       $      1,742,457      $        (233,099)
                                       ================        ===============

A reconciliation of the statutory federal income tax rate with the Company's
effective tax rate for the years ended December 31, is approximately as follows:

                                                    2000                2001

Federal statutory rate                              34.0%              (34.0)%
State income taxes, net of federal benefit           5.9                    -
Nondeductible cost                                   0.3                  3.8
Valuation allowance                                  0.0                 13.8
Adjustment to estimated income tax accrual           0.0                 (1.6)
Other, net                                           2.0                    -
                                                -------------      -------------
                                                    42.2%               (18.0)%

Significant components of the Company's deferred income taxes (liabilities)
consist approximately of the following at December 31:


                                              2000                2001
Deferred Tax Liability
Depreciation and amortization          $         19,800      $      (14,700)
Bad debts reserve                                 9,425                8,500
Inventory reserves                                    -              206,300
Warranty reserves                                     -               21,100
State net operating loss carryforwards          157,775               25,000
                                                -------               ------
                                                147,400              246,200
Less valuation allowance                              -             (246,200)
                                            ------------      ---------------
                                       $        147,400      $             -
                                       ================      ===============

         Realization of the deferred tax assets is dependent on generating
sufficient taxable income prior to the expiration of the loss carryforwards. A
full valuation allowance has been established for the deferred tax assets
because of the uncertainty that such deferred tax assets will be recognized. The
change in the valuation allowance was a net increase of approximately $0 and
$233,000 for the years ended December 31, 2000 and 2001, respectively. At
December 31, 2001, net operating loss (NOL) carryforwards were approximately
$360,000 for state tax purposes and expire in 2026.


<PAGE>


                               IMMECOR CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 2000 and 2001

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 year ended December 31, 2001.



<PAGE>


                        Report of Independent Accountants



To the Board of Directors and Stockholders
Immecor Corporation:


In our opinion, the accompanying balance sheet and the related statements of
operations, of stockholders' equity and of cash flows present fairly, in all
material respects, the financial position of Immecor Corporation at December 31,
2001, 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. 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 of these
statements in accordance with auditing standards generally accepted in the
United States of America, which 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, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion. The financial statements of
the Company at December 31, 2000, and for the year then ended were audited by
other independent accountants whose report dated March 9, 2001, expressed an
unqualified opinion on those statements.


/s/ PricewaterhouseCoopers LLP


San Francisco, California
March 15, 2002



<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 December 31, 2000, 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 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 Immecor Corporation as of
December 31, 2000, 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.


/s/ Grant Thornton, LLP


San Francisco, California
March 9, 2001