INTERNATIONAL IMAGING SYSTEMS, INC.
2419 E. Commercial Blvd., Suite 305, Ft. Lauderdale, Florida 33308
INFORMATION STATEMENT
NOTICE OF CHANGE IN CONTROL AND OF A MAJORITY OF DIRECTORS
PURSUANT TO SECTION 14(f) OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14f-1 THEREUNDER
______________________________________________________
Approximate Date of Mailing: November 30, 2006
Dear Shareholder:
This notification is furnished by the Board of Directors (the
"Board") of International Imaging Systems, Inc. (the "Company")
pursuant to Rule 14f-1 of the Securities and Exchange Act of 1934
(the "Exchange Act") to inform the shareholders of the Company of
a change in control of the Company and a change in the majority
of the Board effected pursuant to a Stock Purchase Agreement,
dated as of September 19, 2006 (the "Purchase Agreement"), by and
among the Company, three of the Company's shareholders, Laura
Palisa Mujica, Lara Sarafianos and Michael D'Angelo ("Sellers"),
the Company's Chief Executive Officer, C. Leo Smith, and Lomond
International, Inc. as agent for the several buyers ("Buyers").
This notification was prepared by the Company, except that
information about the new directors was furnished to the Company
by the new directors. The new directors assume no responsibility
for the accuracy or completeness of the information prepared by
the Company.
Please read this notification carefully. It describes the
essential terms of the Purchase Agreement and contains certain
biographical and other information concerning the new directors
of the Company. Additional information about the Purchase
Agreement and the business of the Company is contained in the
Company's Quarterly Report on Form 10-QSB dated November 15,
2006, and its Current Report on Form 8-K dated September 22, 2006
(the "Reports"), which were filed with the United States
Securities and Exchange Commission (the "Commission"). The
Reports and their accompanying exhibits may be inspected without
charge at the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
Copies of such materials may also be obtained from the SEC at
prescribed rates. The SEC also maintains a Web site that contains
reports, proxy and information statements and other information
regarding public companies that file reports with the SEC. Copies
of the Reports may be obtained from the SEC's EDGAR archives at
http://www.sec.gov/cgo-bin/srch-edgar.
CHANGE IN CONTROL
On September 19, 2006 (the "Purchase Date"), the parties entered
into the Purchase Agreement and pursuant thereto the several
Buyers purchased and the Sellers sold an aggregate of 4,500,000
previously issued and outstanding shares of the Company's
restricted common stock, comprising, 56.4 % of the issued and
outstanding capital stock of the Company, for the aggregate
purchase price of $405,000, or $0.09 per share. All of the
Company's current officers and directors agreed to resign and the
Buyers' nominees, Messrs. John Vogel, Robert Scherne and Vincent
Finnegan were appointed to fill the vacancies resulting in
connection with the stock purchase transaction.
This information statement will be mailed to shareholders on or
about November 30, 2006 to holders of record of the Company's
common stock as of the close of business on November 15, 2006. On
the Purchase Date, the Company had outstanding 7,973.700 shares
of common stock after giving effect to the stock purchase
transaction. e. Each share of common stock is entitled to one
vote on all matters to be voted on by shareholders.
NO VOTE OR OTHER ACTION OF THE COMPANY'S SHAREHOLDERS
IS REQUIRED IN CONNECTION WITH THIS INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE REQUESTED NOT TO SEND US A PROXY
INFORMATION STATEMENT
CHANGES IN MANAGEMENT AND THE BOARD OF DIRECTORS
In connection with the Purchase Agreement, on the Purchase Date,
the Company's directors, C. Leo Smith and Alex Sarafianos and its
Chief Executive Officer, C. Leo Smith and Secretary, Susan
Archer, resigned and Mr. Smith appointed John Vogel as the
President, Chief Executive Officer of the Company ("Vogel") and
Robert Scherne as Chief Financial Officer of the Company
("Scherne"). In addition, subject to and effective upon
compliance with Rule 14f-1 under the Exchange Act, Mr.Smith
appointed Mr.Vogel (as Chairman) and Vincent Finnegan
("Finnegan") as the new Board prior to tendering his
resignation as a director. Rule 14f-1 provides that Vogel and
Finnegan will become directors ten(10) days after the filing of
this Statement with the Securities and Exchange Commission (the
"Commission") and its delivery to the Company's shareholders, and
each will serve until his successor is elected and qualified. A
shareholder vote is not required and will not be taken with
respect to the election of the new directors in connection with
the Purchase Agreement.
EXECUTIVE OFFICERS
The new executive officers of the Company are identified in the
table below. Each executive officer of the Company serves at the
pleasure of the Board.
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Date Became an
Name Age Executive Officer Positions
_____________________________________________________________________
John Vogel 53 September 19, 2006 President, CEO
Robert Scherne 50 September 19, 2006 Treasurer, CFO
and Secretary
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information available to the
Company, as of November 21, 2006, with respect to the beneficial
ownership of the outstanding shares of the Company's Common Stock
by (i) any holder of more than five percent (5%) of the
outstanding shares; (ii) the Company's officers and directors,
including directors elect and (iii) the Company's officers and
directors as a group:
Name and Address Shares of Percentage (%) of
of Beneficial Owner(1) Common Stock Owned Common Stock(2)
____________________________________________________________________
Martin A. Sumichrast 765,000 9.59%(9)
Alicia M. LaSala(4) 400,000(5) 6.83%(5)
Alfred M. Schiffrin(7) 400,000 6.83%
Alex Sarafianos(8) 25,000(10) __%(10)
C. Leo Smith(3) 0(12) 0%(12)
Susan Archer(3) 100,000 1.71%
John Vogel 0 0%
Robert Scherne 0 0%
Vincent Finnegan 0 0%
All officers and directors
as a group 125,000(12) 1.56%(12)
(six persons(11))
______________________________
(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 based upon 7,973,700 issued and
outstanding shares of common stock.
(3) The business address of the stockholder, director or
officer, as the case may be, noted above is 2419 E.
Commercial Blvd., Ft. Lauderdale, FL 33308.
(4) The address of the stockholder noted above is 6674 Serena
Lane, Boca Raton, FL 33433.
(5) Includes 20,000 shares of Common Stock owned of record by a
trust for the benefit of Mrs. LaSala's minor child of which
her husband is the sole trustee. Mrs. LaSala disclaims
beneficial ownership of such shares.
(7) The business address of the stockholder noted above is 7040
W. Palmetto Park Road, Building 4, #572, Boca Raton, FL
33433.
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(8) The address of the director elect noted above is 16008
Wilmington Place, Tampa FL 33647.
(9) The business address of the stockholder noted above is 11125
Colonial Country Lane, Charlotte, NC 28277.
(10) Excludes all shares owned by Lara Nicole Sarafianos.
Mr. Sarafianos is the brother-in-law of Mrs. Sarafianos and
disclaims beneficial ownership of all shares owned by Mrs.
Sarafianos.
(11) Includes resigning officers and directors and directors
elect who are not also officers.
(12) Excludes all shares owned by the mother of Mr. Smith, Laura
Palisa Mujica. Mr. Smith disclaims beneficial ownership of such
shares.
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS
(a) There are no material proceedings known to the Company to
which any director, officer or affiliate of the Company, or any
owner of record or beneficially of more than 5% of any class of
voting securities of the Company, or any affiliate of such
persons is a party adverse to the Company or has a material
interest adverse to the Company.
(b) The following brief biographies contain information about the
Company's Directors. The information includes each person's
principal occupations and business experience for at least the
past five years. This information has been furnished to the
Company by the individuals named. There are no family
relationships known to the Company between the Directors and
executive officers. There are no legal proceedings known to the
Company that are material to the evaluation of the ability or
integrity of any of the Directors or executive officers.
C. Leo Smith (`Smith"), 35, former Chairman of the Board of
Directors and former Chief Executive and Chief Financial Officer,
served as the Manager of the Company since its inception. From
November 1991 until April 2002, he was the Chief Executive
Officer of Smith International Enterprises, Inc. (d/b/a
Ameriplast Manufacturing), a privately owned manufacturer of pre-
paid telephone calling cards. In April 2002, the company was sold
to Signature Graphics Inc., a privately owned Florida
corporation. Smith earned a B.A. degree from Florida State
University.
Alex Sarafianos ("Sarafianos"), 40, Director, served since April
2000 to the present as Senior Vice president and National Sales
Director of AmSouth Funds of AmSouth Bank. From October 1994 to
March 2000, he was Vice President and Senior Funds Wholesaler of
BISYS Fund Services. Sarafianos earned a B.B.A. degree from
Mercer University.
John Vogel ("Vogel") Chief Executive Officer, Director 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).
Robert Scherne ("Scherne") Chief Financial Officer, Secretary 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
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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.
Vincent Finnegan ("Finnegan") Director, 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.
No employee of the Company receives any additional compensation
for his or her services as a Director. Non-management directors
receive no salary for their services as such, but may participate
in the Company's stock option plans. The board of directors has
authorized payment of reasonable travel or other out-of-pocket
expenses incurred by non-management directors in attending
meetings of the board of directors and committees thereof.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act and regulations thereunder
require the Company's executive officers and Directors, and
persons who own more than ten percent of the Common Stock of the
Company to file reports of ownership and changes in ownership
with the Commission, and to furnish the Company with copies of
all such Section 16(a) reports filed. Based solely on the
Company's review of copies of the Section 16(a) reports filed for
the fiscal year ended December 31, 2005 and for the period
January 1, 2006 through November 21, 2006, the Company believes
that all reports have been filed in a timely manner.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Except as set forth below, no transactions have occurred since
the beginning of the Company's last fiscal year or are proposed
with respect to which a director, executive officer, security
holder owning of record or beneficially more than 5% of any class
of the Company's securities or any member of the immediate
families of the foregoing persons had or will have a direct or
indirect material interest. On September 19, 2006, the Company
entered into consulting agreements with former officers, C. Leo
Smith and Susan Archer to secure their services as operations
management for its wholly - owned subsidiary, Advanced Staffing
International, Inc. to assure continuity of that company's
management. The agreements provide for compensation for such
services as a percentage of the gross revenue of Advanced
Staffing International, Inc. and extend for a term of twelve
months, through September 18, 2007.
During the three month period ended September 30, 2006, the
Company paid promotional / marketing fees to an entity owned by
the Company's Chief Executive Officer, C. Leo Smith in the amount
of $4,500.
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In September, 2006, the Company assigned its rental security
deposit, $4,051, to an individual related to a shareholder as
compensation for services to the Company.
On September 19, 2006, the Sellers in the stock purchase, change
of control transaction in connection with the transaction,
converted a total of approximately $245,000 of shareholder loan
indebtedness of the Company to additional paid in capital. In
addition, the Sellers accepted assignment of the Company's last
account receivable, in the amount of $30,000, in full and final
satisfaction of an additional $30,000 of the Company's loan to
shareholder indebtedness. In total, the Sellers' conversion of
Company debt to paid in capital and the Sellers' acceptance of
assignment of the Company's last account receivable, resulted in
the extinguishment of shareholder loan indebtedness of the
Company in the aggregate approximate amount of $275,000.
INDEBTEDNESS OF MANAGEMENT
There has been no indebtedness owed to the Company since the
beginning of the Company's last fiscal year by any director,
executive officer, security holder owning of record or
beneficially more than 5% of any class of the Company's
securities or any member of the immediate families of the
foregoing persons, any corporation or organization of which any
of the foregoing persons serves as an executive officer, partner,
beneficial owner of 10% or more of any class of equity
securities, or any trust in which any of the foregoing persons
has a substantial beneficial interest or serves as trustee or in
a similar capacity.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
There are no standing committees of the Board. Since the Purchase
Date, the Board has held no meetings and has taken action by
unanimous written consent authorizing the Company's private
placement of 225,000 shares of Series A Convertible Preferred
Stock from its authorized previously unissued capital stock for
gross proceeds of $123,750 to be used by the Company for
working capital. The private placement was closed November 3,
2006.
EXECUTIVE COMPENSATION AND EMPLOYMENT AGREEMENTS
Prior to the Purchase Agreement and during the Company's fiscal
2005 and for the nine month period ended September 19, 2006, the
Company's President, C. Leo Smith, and Secretary, Susan Archer,
received cash or other form of compensation for their services
from the Company during such periods as follows:
2005 2006
____________________ _____________________
C. Leo Smith Cash Salary $54,450 Cash Salary $23,900
Common Stock $40,000
Susan Archer Cash Salary $37,850 Cash Salary $ 6,575
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STOCK OPTION PLANS
The Company's 2003 Equity Incentive Program (the "Program") was
adopted by the Board in July 2003 and approved by the Company's
stockholders in August 2003, subject to becoming effective 20
days after the mailing of an information statement to
shareholders with respect thereto as required under applicable
law. The Program was adopted to secure for the Company and each
of its Affiliates (as defined in the Program) the benefits
arising from ownership of the Company's common stock by those
officers, directors and employees of, and consultants to, the
Company and/or any of its Affiliates.
In March of 2006, the Company issued 250,000 shares of
authorized, previously unissued common stock to a consultant,
John F. LaSala, for services rendered to the Company. The fair
value of the shares issued amounted to $62,500.
In August, 2006, the Company issued 160,000 shares of authorized,
previously unissued common stock to its Chief Executive Officer,
C. Leo Smith, as compensation for serving as the Company's CEO
without salary from February, 2006 through September, 2006. The
fair value of the shares issued amounted to $40,000.
The Program provides for the grant of incentive stock options,
nonqualified stock options and restricted stock grants
(collectively "Awards") as approved by the Board or a committee
thereof (the "Committee"). Incentive stock options granted under
the Program are intended to qualify as "incentive stock options"
within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"). Nonqualified stock options granted
under the Program are intended not to qualify as incentive stock
options under the Code.
The total number of shares of the Company's Common Stock that may
be issued under the Program upon the exercise of all options
granted under the Program or the satisfaction by all recipients
of all conditions necessary for the receipt of restricted stock
grants may not exceed 6,000,000, of which 1,000,000 shares shall
be available for issuance under incentive stock options and
5,000,000 shall be available for issuance under nonqualified
stock options and/or restricted stock awards. The 1,000,000
shares of the Company's Common Stock available for issuance under
incentive stock options shall be increased annually, starting
with the calendar year following the calendar year in which the
Program is adopted, by 5% of the excess, if any, of (i) the total
number of issued and outstanding shares of the Company's Common
Stock as of the first day of the fiscal year of the Company
beginning with or within any such subsequent calendar year over
(ii) the total number of issued and outstanding shares of the
Company's Common Stock as of the date on which the Program is
adopted; provided, however, that as of the date of any such
annual increase, the total number of shares available for
issuance under incentive stock options under the Program may not
exceed 15% of the total number of authorized shares of the
Company's Common Stock as of the date on which the Program is
adopted. The 5,000,000 shares of the Company's Common Stock
available for issuance under nonqualified stock options and/or
restricted stock awards shall be increased annually, starting
with the calendar year following the calendar year in which the
Program is adopted, by the sum of (i) 15% of the excess, if any,
of (A) the total number of issued and outstanding shares of the
Company's Common Stock at the time the first such Award is made
during such subsequent calendar year over (B) the total number of
issued and
Page 7 of 8
outstanding shares of Common Stock as of the date on which the
Program is adopted, (ii) the total number of shares of the
Company's Common Stock repurchased by the Company under the
Program during the preceding calendar year and (iii) the total
number of shares of the Company's Common Stock surrendered to the
Company during the preceding calendar year in payment of the
exercise price of nonqualified stock options; provided, however,
that, as of the date of any such annual increase, the total
number of shares of the Company's Common Stock available for
issuance under nonqualified stock options and/or restricted stock
awards shall not exceed 50% of the total number of authorized
shares of Common Stock as of the date on which the Program is
adopted. If any Award expires, or is terminated or forfeited, in
whole or in part, the unissued shares of the Company's Common
Stock covered by such Award shall again be available for the
grant of Awards under the Program. If an Award granted under the
Program shall expire or terminate for any reason without having
been exercised in full, the unpurchased shares of the Company's
Common Stock subject to such Award shall again be available for
subsequent Awards under the Program. Shares issued under the
Program may consist in whole or in part of authorized but
unissued shares or treasury shares. The number of shares of the
Company's Common Stock available for issuance under the Program
is subject to adjustment, as set forth in the Program, in the
event of any stock split, reverse stock split, stock dividend,
extraordinary cash dividend, recapitalization, reorganization
merger, consolidation, exchange of shares, liquidation, spin-off,
split-up or other similar change in capitalization of the
Company.
The total number of shares of the Company's Common Stock that may
be granted under all Awards made to a recipient during any one
calendar year may not exceed 100,000 shares.
Eligible participants under the Program include the following
persons: (i) executive officers, officers and directors
(including advisory and other special directors) of the Company
and/or any of its Affiliates; (ii) full-time and part-time
employees of the Company and/or any of its Affiliates; and (iii)
natural persons engaged by the Company or any Affiliate as
consultants.
Except as otherwise expressly provided therein, the Program
provides that the Board, or a committee appointed by the Board to
administer the Program, shall have complete discretion to
determine when and to which eligible participants Awards are to
be granted, the number of such shares of the Company's Common
Stock to be awarded to each such participant and the terms and
conditions of each Award. An Award may be made for cash,
property, services rendered or other form of payment constituting
lawful consideration under applicable law. No grant will be made
if, in the judgment of the Board or the committee, as the case
may be, such a grant would constitute a public distribution
within the meaning the U.S. Securities Act of 1933, as amended,
or the rules or regulation promulgated thereunder.
The Program terminates on the tenth anniversary of its adoption
by the Board unless terminated earlier by the Board. Upon
termination of the Program, no new Awards may be granted;
however, Awards previously granted may extend beyond the
termination date.
INTERNATIONAL IMAGING SYSTEMS, INC.
By:/S/John Vogel
-------------------------------
John Vogel
Chief Executive Officer
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