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) September 19, 2006
------------------
INTERNATIONAL IMAGING SYSTEMS, INC.
------------------------------------
(Exact name of registrant as specified in Charter)
Delaware 000-25413 65-0854589
----------------------------------------------------------------
(State or other Jurisdiction Commission (IRS employer
of incorporation) file no.) identification no.)
2419 E. Commercial Boulevard, # 307, Ft. Lauderdale, FL 33308
- --------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (954) 492-3703
--------------
Not Applicable
----------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (see General
Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
Page 1 of 7
Forward Looking Statements
This Form 8-K and other reports we file from time to time with
the Securities and Exchange Commission (collectively the
"Filings") contain or may contain forward looking statements and
information that are based upon beliefs of, and information
currently available to, our management as well as estimates and
assumptions made by our management. When used in the Filings the
words "anticipate", "believe", "estimate", "expect", "future",
"intend", "plan" or the negative of these terms and similar
expressions as they relate to us or our management identify
forward looking statements. Such statements reflect our current
view with respect to future events and are subject to risks,
uncertainties, assumptions and other factors (including the risks
contained in the section of this report entitled "Risk Factors")
relating to our industry and our operations and results of
operations. Should one or more of these risks or uncertainties
materialize, or should the underlying assumptions prove
incorrect, actual results may differ significantly from those
anticipated, believed, estimated, expected, intended or planned.
Although we believe that the expectations reflected in the
forward looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements.
Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the
forward-looking statements to conform these statements to actual
results. The following discussion should be read in conjunction
with our financial statements and the related notes that appear
elsewhere in this report.
Item 1.01. Entry into a Material Definitive Agreement
On September 19, 2006, we entered into a Stock Purchase Agreement
("Purchase Agreement") dated as of September 19, 2006 by and
among the Registrant, International Imaging Systems, Inc., a
Delaware corporation, Lomond International, Inc., a North
Carolina corporation that acted as an agent for several
purchasers ("Buyer"), the Registrant's Chief Executive Officer,
C. Leo Smith ("Smith"), and certain major shareholders of the
Registrant, Laura Palisa Mujica, Lara Sarafianos and Michael
D'Angelo ("Major Shareholders"). Under the Purchase Agreement the
Major Shareholders sold 4,500,000 shares of the Company's
restricted common stock ("Common Stock"), or 56.4% of the issued
and outstanding capital stock of the Registrant, at $0.09 per
share, for an aggregate purchase price of $405,000.00 ("Stock
Resale Transaction"). All current officers and directors of the
Registrant would agree to resign and Buyer's nominees would be
appointed as officers and directors in connection with the Stock
Resale Transaction. Lomond acted as an agent for several
purchasers, all of whom are "accredited" investors as defined
under Regulation D of the Rules and Regulations under the
Securities Act. Smith, and the Company's administrative manager,
Susan Archer, also agreed to post-closing engagement as
consultants by the Company's wholly owned operating subsidiary,
Advanced Staffing International, Inc. as operations manager and
office administrator, respectively, for continuity of its
operations following the Stock Resale Transaction.
On September 19, 2006, in connection with and prior to completion
of the Stock Resale Transaction, the Major Shareholders,
determined to convert, and did convert, approximately $273,711 of
shareholder loan indebtedness of the Registrant to additional
paid-in capital. In addition, the Major Shareholders accepted
assignment of an account receivable from Alcard Mexico, S.A.,
owned and held by the Registrant, in full and final satisfaction
of an additional $30,000 of the Registrant's shareholder loan
Page 2 of 7
indebtedness. In total, the conversion to paid-in capital
transactions, and the acceptance of assignment of the Alcard
Mexico, S.A. account receivable, resulted in extinguishment of
the total shareholder loan indebtedness of the Registrant, in the
aggregate, approximate amount of $303,712. The Major Shareholders
effecting conversion of their shareholder debt to equity and
accepting assignment of the Alcard Mexico, S.A. receivable are
the same shareholders participating in the private sale of
4,500,000 shares of the Issuer's restricted Common Stock reported
in this Form 8-K, Item 1.01.
Item 5.01. Changes in Control of Registrant.
The transactions contemplated by the Purchase Agreement were
closed on September 19, 2006 (the "Effective Date"), certain
terms of which are described in Item 1.01 of this current Report
on Form 8-K, which is incorporated by reference in this Item
5.01.
On September 19, 2006, the Buyers acquired approximately 56.4% of
the issued and outstanding capital stock of the Registrant in a
privately negotiated control share acquisition transaction not
involving the Issuer, an underwriter or a dealer. The Buyers
purchased a total of 4,500,000 shares of the Issuer's restricted
Common Stock from Laura Palisa Mujica, Lara Sarafianos and
Michael D'Angelo (hereinafter "Sellers") for aggregate
consideration in the amount of $405,000, or $0.09 per share. The
purchase and sale transaction was a cash transaction closed on
September 19, 2006 with distribution of the net proceeds of sale
to the Sellers and dispatch of transfer instructions to the
Registrant's Transfer Agent to replace the Sellers as record
holders of the purchased stock and to transfer record title
thereto to the Buyers.
The Registrant is informed upon inquiry that all of the
consideration used by the Buyers in the purchase and sale
transaction were personal funds or working capital and that none
of the consideration was comprised of loan proceeds from a bank
or otherwise.
As part of the transactions described above, the following
changes to the Company's directors and officers have occurred or
will occur:
- - C. Leo Smith resigned as the Registrant's Chief Executive
Officer, Chief Financial Officer and member of the Board of
Directors as of the Effective Date.
- - Susan Archer resigned as the Registrant's Secretary as of the
Effective Date.
- - Alex Sarafianos resigned as member of Registrant's Board of
Directors as of the Effective Date.
- - John Vogel became the Registrant's Chief Executive Officer and
a director as of the Effective Date.
- - Robert Scherne became the Registrant's Chief Financial Officer
as of the Effective Date.
- -Vincent Finnegan become a director of the Registrant as of the
Effective Date.
Page 3 of 7
SECURITY OWNERSHIP OF BENEFICIAL OWNER AND MANAGEMENT PRIOR TO
THE TRANSACTION
The following table sets forth, as of September 18, 2006, certain
information regarding the ownership of our capital stock by each
of our directors and executive officers, each person who is known
to be a beneficial owner of more than 5% of any class of our
voting stock, and by all of our officers and directors as a
group. Unless otherwise indicated below, to our knowledge, all
persons listed below have sole voting and investing power with
respect to their shares of capital stock, except to the extent
authority is shared by spouses under applicable community
property laws.
Beneficial ownership is determined in accordance with the rules
of the Securities and Exchange Commission and generally includes
voting or investment power with respect to securities. Shares of
our common stock for computing the percentage of the person or
entity holding such shares is based on 7,973,700 shares of the
Common Stock issued and outstanding on a fully diluted basis, as
of September 18, 2006.
Name of Beneficial Owner (1) Shares of Common Percentage (%) of
---------------- -----------------
Stock Owned Common Stock (2)
- ----------------------------- --------------- ----------------
Michael D'Angelo 1,500,000 19.83%
Laura Palisa Mujica 2,100,000 27.76%
Lara Nicole Sarafianos 1,200,000 15.87%
Alicia M. LaSala 504,000 6.62%
Alfred M. Schiffrin 635,000 8.40%
Alex Sarafianos 25,000 0.33%
C. Leo Smith 160,000(3) 2.02%(3)
Susan Archer 130,000 1.72%
All officers and directors
as a group 315,000 4.07%
(three persons)(3)
(1) Beneficial ownership as reported in the table above has been
determined in accordance with Instruction (1) to Item 403 (b) of
Regulation S-B of the Exchange Act.
(2) Percentages are approximate.
(3) Excludes the 2,100,000 shares owned by the mother of Mr.
Smith, Laura Palisa Mujica. Mr. Smith disclaims beneficial
ownership of such shares.
Page 4 of 7
SECURITY OWNERSHIP OF BENEFICIAL OWNERSHIP AND MANAGEMENT
FOLLOWING THE TRANSACTION
The following table sets forth information as of the date hereof
with respect to the beneficial ownership of the outstanding
shares of Registrant's common stock immediately following the
Stock Resale Transaction by (i) each person known by Registrant
who will beneficially own five percent (5%) or more of the
outstanding shares; and (ii) the officers and directors who will
take office as of the Effective Date, individually and as a
group:
============================== =========================== ===========================
Name Shares of Common Stock Held Percentage of Shares Issued
Following Completion of the and Outstanding Following
Stock Resale Transaction Completion of the Stock
Resale Transaction
============================== ========================== ============================
John Vogel 0 0%
============================== ========================== ============================
Robert Scherne 0 0%
============================== ========================== ============================
Vincent Finnegan 0 0%
============================== ========================== ============================
Windmere Insurance Company 433,333 5.4%
============================== ========================== ============================
Vision Opportunity Master Fund 500,000 6.3%
============================== ========================== ============================
Ralph O. Olson 793,333(1) 9.9%(1)
============================== ========================== ============================
Martin A. Sumichrast 765,000(2) 9.6%(2)
============================== ========================== ============================
Menlo Venture Partners 396,000 5.0%
============================== ========================== ============================
Castle Bison, Inc. 396,000 5.0%
============================== ========================== ============================
Officers and Directors as a group 0 0%
============================== ========================== ============================
TOTALS 3,283,666 41.2%
============================== ========================== ============================
(1) Includes 93,333 shares owned by members of Mr. Olson's
immediate family. Mr. Olson disclaims beneficial ownership of
such shares.
(2) Includes 500,000 shares owned by members of Mr. Sumichrast's
immediate family. Mr. Sumichrast disclaims beneficial ownership
of such shares.
Item 5.02 Departure of Directors or Principal Officers; Election
of Directors; Appointment of Principal Officers.
On September 19, 2006, pursuant to the Purchase Agreement, C. Leo
Smith, Susan Archer and Alex Sarafianos each delivered
resignation letters to the Company (a) resigning as directors of
the company, and (b) in the case of Mr. Smith and Ms. Archer,
resigning as Chief Executive Officer/Chief Financial Officer and
Secretary respectively, as of the Effective Date of the Stock
Resale Transaction. The resignations of Messrs. Smith and
Sarafianos and Ms. Archer are not the result of any disagreement
with the Registrant on any matter relating to the Registrant's
operations, policies or practices. A copy of the resignation
letters of Messrs. Smith and Sarafianos and Ms. Archer are filed
as Exhibits 17.1 and 17.2 and 17.3, respectively, to this Form 8-
K.
Page 5 of 7
On September 19, 2006, in accordance with the terms of the Stock
Purchase Agreement, the board of directors appointed Mr. John
Vogel as Chief Executive Officer and a director of the Company,
Mr. Robert Scherne as Chief Financial Officer of the Company and
Mr. Vincent Finnegan as a director of the Company. Neither Mr.
Vogel nor Mr. Scherne has entered into an employment agreement
with the Registrant at this time.
Mr. Vogel has also been a director and co-founder of Century 21
Ability, Inc. from the period 1996 to December 2005. Mr. Vogel
has over 30 years of experience in marketing and sales, including
13 years at World Savings Bank (WSB); VP District and VP Regional
Loan Origination and VP Sales Manager and VP of Real Estate
(Owned).
Mr. Scherne has been the principal of Robert C. Scherne, CPA, PC,
since March 2003. Prior to that, Mr. Scherne was employed as an
accountant by Merdinger, Fruchter Rosen and Company from December
1993 to December 2002; by Louis Sturz & Co. and its successor
firm Grossman, Russo & Shapiro from July 1986 until November
2002; and by L.H. Frishkoff & Co. and its successor firm, A. Uzzo
&Co., from July 1978 to June 1986. Mr. Scherne holds a BBA in
Accounting from Pace University (New York City), and is an active
member of the American Institute of Certified Public Accountants
and the New York State Society of Certified Public Accountants.
Mr. Finnegan has been employed by Wells Fargo since August of
2005. Prior to that, Mr. Finnegan was employed by Santa Barbara
Bank and Trust. At Santa Barbara Bank and Trust he was
responsible for trust development from November of 2004 until
January of 2005. Also, Mr. Finnegan served as a Regional Vice
President of Sales at Phoenix Life Insurance Group from August of
1999 until October of 2003. Mr. Finnegan holds a Juris Doctorate
from Chicago Kent College of Law and an MBA from Iona College
Graduate School of Business.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There is no family relationship between any of our former
officers or directors and our proposed officers and directors.
There are no orders, judgments, or decrees of any governmental
agency or administrator, or of any court of competent
jurisdiction, revoking or suspending for cause any license,
permit or other authority to engage in the securities business or
in the sale of a particular security or temporarily or
permanently restraining any of our officers or directors from
engaging in or continuing any conduct, practice or employment in
connection with the purchase or sale of securities, or convicting
such person of any felony or misdemeanor involving a security, or
any aspect of the securities business or of theft or of any
felony. Nor are any of the officers or directors of any
corporation or entity affiliated with us so enjoined.
Page 6 of 7
Item 9. Financial Statements and Exhibits.
(a)
Exhibits
Number Description
- -------- --------------
10.1 Stock Purchase Agreement dated as of September 19, 2006
by and among the Registrant, Lomond International, Inc.,
a North Carolina corporation, C. Leo Smith and certain
major shareholders of the Registrant.
10.2 C. Leo Smith Consulting Agreement dated September 19, 2006
10.3 Susan Archer Consulting Agreement dated September 19, 2006
10.4 Schedule of Buyers
10.5 Agreement for Closing dated September 19, 2006
17.1 Resignation of Officer and Director - C. Leo Smith
17.2 Resignation of Officer - Susan Archer
17.3 Resignation of Director - Alex Sarafianos
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report on current Form
8-K to be signed on its behalf by the undersigned hereunto duly
authorized.
INTERNATIONAL IMAGING SYSTEMS, INC.
By: /s/ John Vogel
-------------------------------
John Vogel, Executive Officer
Dated: September 22, 2006
Page 7 of 7