SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report
(Date of earliest event reported)
March 4, 2004
IMAGING TECHNOLOGIES CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE . . . . . . . . 0-12641 33-0021693
(State of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.)
17075 Via Del Campo
San Diego, California 92127
(Address of Principal Executive Offices)
(858) 451-6120
(Registrant's telephone number, including area code):
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
ITEM 2. DISPOSITION OF ASSETS.
In January 2003, the Registrant ("ITEC" or the "Company) and Greenland
Corporation ("GRLC") completed a stock purchase transaction whereby ITEC became
the majority shareholder of GRLC. Since January 2003, GRLC has been a subsidiary
of ITEC.
Pursuant to a letter agreement dated February 9, 2003 and approved by the
Board of Directors of both ITEC and GRLC, the Registrant and GRLC have
implemented the following:
1. GRLC has canceled a certain Convertible Promissory Note issued by ITEC to
GRLC in the amount of $2,225,000;
2. GRLC has canceled an existing inter-company transfer debt of ITEC to
GRLC estimated at approximately $1,200,000;
3. ITEC has returned all shares of GRLC common stock except for 19,183,390
shares;
4. 6,000,000 of the shares returned by ITEC to GRLC may, at the option of
GRLC, be held in a separate escrow account under the name of ITEC, but ITEC will
convey through proxy or other document, all of its rights to GRLC;
5. ITEC has assigned and granted all right, title, and interest in its
rights to acquire any and all interest in and to ePEO Link, Inc. assets and/or
client base; and
6. Members of the GRLC Board of Directors who also serve on ITEC Board have
resigned from the GRLC Board.
As a result of the above, the Registrant is now a minority shareholder of GRLC.
GRLC will no longer be operated as a subsidiary of ITEC. The financial impact of
this transaction is detailed in Item 7 of this report.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro forma financial information
The accompanying pro forma consolidated balance sheet presents the accounts of
Imaging Technologies Corporation and Subsidiaries ("ITEC") as if the disposition
of Greenland Corporation ("Greenland") occurred on December 31, 2003. The
accompanying pro forma consolidated statements of operations present the
accounts of ITEC for the year ended June 30, 2003 and the six months ended
December 31, 2003 as if the disposition of Greenland had occurred on July 1,
2002.
The following adjustments would be required if the disposition occurred as
indicated in the presentation below: (a) to remove all of Greenland's balance
sheet accounts from the consolidated financial statements and to record the gain
on the disposition of Greenland; and (b) to remove all of Greenland's statement
of operations activity from the consolidated financial statements.
IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES
PRO FORMA BALANCE SHEET
AS OF DECEMBER 31, 2003
AS FILED
IN 10QSB ADJUSTMENTS PRO FORMA
ASSETS
Current assets
Cash. . . . . . . . . . . . . . . . . . . . . . . $ 68 $ (72) (a) $ 140
Accounts receivable, net. . . . . . . . . . . . . 750 406 (a) 344
Inventories, net. . . . . . . . . . . . . . . . . 15 15
Prepaid expenses and other current assets . . . . 53 53
-------------- ----------------
Total current assets. . . . . . . . . . . . . . . 886 334 552
-------------- ---------------- ---------------
Goodwill . . . . . . . . . . . . . . . . . . . . . . . 2,822 2,822 (a) -
Patents, net . . . . . . . . . . . . . . . . . . . . . 1,498 1,498
PEO contracts, net . . . . . . . . . . . . . . . . . . 1,007 1,007 (a) -
Property and equipment, net. . . . . . . . . . . . . . 259 77 (a) 182
Workers' compensation deposit and other current assets 135 135 (a) -
-------------- ---------------- ----------
Total assets. . . . . . . . . . . . . . . . . . . $ 6,607 $ 4,375 $ 2,232
============== ================ ===============
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities
Borrowings under bank notes payable . . . . . . . $ 3,145 $ - $ 3,145
Notes payable, current portion. . . . . . . . . . 2,644 854 (a) 1,790
Convertible debentures, net . . . . . . . . . . . 952 952
Accounts payable. . . . . . . . . . . . . . . . . 3,779 1,217 (a) 2,562
Obligations under capital lease. . . . . . . . . . 362 315 (a) 47
PEO payroll taxes and other payroll deductions. . 8,281 3,493 (a) 4,788
Advances from related party . . . . . . . . . . . 30 30
Other accrued expenses. . . . . . . . . . . . . . 12,337 1,214 (a) 11,123
-------------- ---------------- ----------
Total current liabilities . . . . . . . . . . . . 31,530 7,093 24,437
-------------- ---------------- ---------------
Long-term liabilities
Long-term capital lease . . . . . . . . . . . . . 51 51 (a) -
Long-term convertible debentures, net . . . . . . 400 400
Long-term notes payable . . . . . . . . . . . . . 482 482
-------------- ----------------
Total Liabilities. . . . . . . . . . . . . . . . . . . 32,463 7,144 25,319
-------------- ---------------- ---------------
Preferred stock - minority interest in subsidiary. . . 921 921 (a) -
-------------- ---------------- ----------
Shareholders' deficiency
Series A convertible preferred stock. . . . . . . 420 420
Common stock. . . . . . . . . . . . . . . . . . . 1,588 1,588
Common stock warrants and option. . . . . . . . . 475 475
Paid-in capital . . . . . . . . . . . . . . . . . 83,302 705 (a) 82,597
Accumulated deficit . . . . . . . . . . . . . . . (112,562) (4,395) (a) (108,167)
-------------- ---------------- ----------
Total shareholders' deficiency. . . . . . . . . . (26,777) (3,690) (23,087)
-------------- ---------------- ---------------
Total liabilities and shareholders' deficiency. . $ 6,607 $ 4,375 $ 2,232
============== ================ ===============
IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 2003
AS FILED
IN 10K ADJUSTMENTS PRO FORMA
Revenue
Sale of products. . . . . . . . . . . . . . . $ 924 $ 924
Software sales, licenses and royalties. . . . 367 367
PEO Services . . . . . . . . . . . . . . . . . . . 2,899 400 (b) 2,499
---------------- --------------- -------
Total revenue. . . . . . . . . . . . . . . . . . . 4,190 400 3,790
---------------- --------------- ----------
Cost of revenue
Sale of products. . . . . . . . . . . . . . . 396 396
Software sales, licenses and royalties. . . . 90 90
PEO Services. . . . . . . . . . . . . . . . . 1,813 174 (b) 1,639
---------------- --------------- -------
Total cost of revenue. . . . . . . . . . . . . . . 2,299 174 2,125
---------------- --------------- ----------
Gross profit . . . . . . . . . . . . . . . . . . . 1,891 226 1,665
Selling, general and administrative expenses . . . 7,586 1,963 (b) 5,623
---------------- --------------- ---------- -------
Loss from operations . . . . . . . . . . . . . . . (5,695) (1,737) (3,958)
Other income (expense)
Interest and financing costs, net . . . . . . (3,530) (135) (b) (3,395)
Gain on extinguishment of debt. . . . . . . . 2,370 3 (b) 2,367
---------------- --------------- -------
(1,160) (132) (1,028)
---------------- --------------- ----------
Loss before provision for income taxes . . . . . . (6,855) (1,869) (4,986)
Provision for income taxes . . . . . . . . . . . . - - -
---------------- --------------- ----------
Net Loss . . . . . . . . . . . . . . . . . . . . . (6,855) (1,869) (4,986)
Preferred stock dividends. . . . . . . . . . . . . (21) (21)
---------------- ---------------
Net loss attributed to common shareholder. . . . . $ (6,876) $ (5,007)
================ ===============
Loss per common shares - basic and diluted . . . . $ (0.07) $ (0.05)
================ ===============
Weighted average common shares . . . . . . . . . . 96,316 96,316
================ ===============
IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2003
AS FILED
IN 10QSB ADJUSTMENTS PRO FORMA
Revenue
Sale of products. . . . . . . . . . . . . . . $ 455 $ 455
Software sales, licenses and royalties. . . . 36 36
Temporary staffing services . . . . . . . . . 3,436 3,436
PEO Services. . . . . . . . . . . . . . . . . 6,549 4,479 (b) 2,070
-------------- ------------- -----
Total revenue. . . . . . . . . . . . . . . . . . . 10,476 4,479 5,997
-------------- ------------- ----------
Cost of revenue
Sale of products. . . . . . . . . . . . . . . 128 128
Software sales, licenses and royalties. . . . 3 3
Temporary staffing services . . . . . . . . . 1,194 1,194
PEO Services. . . . . . . . . . . . . . . . . 7,135 3,439 (b) 3,696
-------------- ------------- ---------- -----
Total cost of revenue. . . . . . . . . . . . . . . 8,460 3,439 5,021
-------------- ------------- ----------
Gross profit . . . . . . . . . . . . . . . . . . . 2,016 1,040 976
Selling, general and administrative expenses . . . 6,413 2,336 (b) 4,077
-------------- ------------- -----
Loss from operations . . . . . . . . . . . . . . . (4,397) (1,296) (3,101)
Other income (expense)
Interest and financing costs, net . . . . . . (929) - (929)
Gain on extinguishment of debt. . . . . . . . 518 (107) (b) 625
Other . . . . . . . . . . . . . . . . . . . . 25 44 (b) 69
-------------- ------------- -----
(386) (63) (235)
-------------- ------------- ----------
Loss before provision for income taxes . . . . . . (4,783) (1,359) (3,336)
Provision for income taxes . . . . . . . . . . . . - - -
-------------- ------------- ----------
Net Loss . . . . . . . . . . . . . . . . . . . . . (4,783) (1,359) (3,336)
Preferred stock dividends. . . . . . . . . . . . . (10) (10)
-------------- -------------
Net loss attributed to common shareholder. . . . . $ (4,793) $ (3,346)
============== =============
Loss per common shares - basic and diluted . . . . $ (0.02) $ (0.01)
============== =============
Weighted average common shares . . . . . . . . . . 264,745 264,745
============== =============
(b) Exhibits
1. Letter Agreement between the Company and Greenland Corporation, dated
February 9, 2004.
2. Press release of March 1, 2004
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: March 4, 2004
IMAGING TECHNOLOGIES CORPORATION
By: /s/ Brian Bonar
Name: Brian Bonar
Title: Chairman, President, and Chief Executive Officer