SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of the Earliest Event Reported): December 30, 2005
INTERNATIONAL IMAGING SYSTEMS, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 000-25413 65-0854589
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(State or other Jurisdiction of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
2419 Commercial Boulevard, Suite 307, Ft. Lauderdale, FL 33308
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (954) 772-5501
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ] Written communication pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Solicitation 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))
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 December 30, 2005, we entered into an Limited Liability Company
Interest Purchase Agreement (the "Purchase Agreement"), pursuant to which we
sold to Steven Cinnante, an unaffiliated party (although a former production
manager), ("Buyer"), all of the issued and outstanding membership interests of
our subsidiary, Advanced Imaging Systems, LLC ("AIS"), for $100 in cash. The
details of the sale, including all of the information required by Item 1.01 of
this Current Report on Form 8-K (this "Report"), are set forth in Item 2.01
"Acquisition or Disposition of Assets" below, the contents of which are
incorporated by reference herein.
Item 2.01. Completion of Acquisition or Disposition of Assets.
The following is a summary of the Purchase Agreement and is qualified
in its entirety by reference to the Purchase Agreement that is filed as an
exhibit to this Report.
Pursuant to the Purchase Agreement, on December 30, 2005, we sold to
the Buyer all of the issued and outstanding membership interests of our
subsidiary, Advanced Imaging Systems, LLC, for $100 in cash. The sole asset of
AIS on the date of sale was the right to receive future commissions from an
unrelated party in connection with certain sales by such party as a result of a
prior sale agreement between AIS and such party whereby such party acquired all
of AIS's assets relating to AIS's former commercial printing business. On the
date of sale, AIS had outstanding liabilities of approximately $1,200,000.
As a result of the sale of AIS, our principal businesses will consist
of the marketing of plastic and paper cards, employee leasing and marketing of
pre-owned photocopier machines, which businesses are carried out through our
wholly owned subsidiaries, Accurate Images, Inc., Advanced Staffing
International, Inc. and Renewable Assets, Inc., respectively. On April 13, 2004,
our Board of Directors approved the spin-off of all of the shares of Renewable
Assets, Inc. owned by us to our shareholders of record as of April 14, 2004. We
have been unable to complete the spin-off as expected due to our inability to
comply with certain regulatory requirements. We are attempting to effect such
compliance but no assurance can be given that we will be successful. If the
spin-off does not take effect, we will have to consider all of our strategic
alternatives regarding such business, including the sale or other termination
thereof.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements.
None
(b) Pro Forma Financial Information (filed herewith)
(International Imaging Systems, Inc. for the nine months ended
September 30, 2005 and for the year ended December 31, 2004.
(1) Pro Forma Consolidated Balance Sheet
(2) Pro Forma Condensed Consolidated Statement of Operations
(c) Exhibits.
2.1 Limited Liability Company Interest Purchase Agreement,
dated December 30, 2005, by and between International
Imaging Systems, Inc. and Steven Cinnante (omitting all
schedules and exhibits) *
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* The Registrant will furnish all omitted schedules and exhibits to the
Purchase Agreement upon the request of the Securities and Exchange
Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERNATIONAL IMAGING SYSTEMS, INC.
Date: December 30, 2005
/s/ C. LEO SMITH
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C. Leo Smith
Chief Executive Officer
INTERNATIONAL IMAGING SYSTEMS, INC.
AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 2005
TABLE OF CONTENTS
PRO FORMA CONSOLIDATED BALANCE SHEET 1
PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS 2
NOTES TO PRO FORMA CONDENSED
FINANCIAL STATEMENTS 3-4
INTERNATIONAL IMAGING SYSTEMS, INC.
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
(UNAUDITED)
SEPTEMBER 30, 2005
ASSETS
PRO FORMA
ADJUSTMENTS
HISTORICAL ----------------------------- PRO FORMA
BALANCES DR CR BALANCES
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CURRENT ASSETS:
Cash $ 9,630 $ 1,698(1) $ 7,932
Accounts Receivable 60,108 60,108
Net Assets of Discontinued Operations 11,998 11,998
Advances to Customer 355,214 355,214
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TOTAL CURRENT ASSETS 436,950 435,252
PROPERTY AND EQUIPMENT 4,654 4,654
OTHER ASSETS:
Security Deposits 4,051 4,051
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TOTAL ASSETS $ 445,655 $ 443,957
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LIABILITIES AND SHAREHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
Notes Payable - Current $ 1,043,085 $ 368,725(1) $ 674,360
Accounts Payable 543,425 498,914(1) 44,511
Accrued Expenses 36,539 36,539(1) --
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TOTAL CURRENT LIABILITIES 1,623,049 718,871
NOTES PAYABLE - NON-CURRENT 18,386 18,386(1) --
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TOTAL LIABILITIES 1,641,435 718,871
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SHAREHOLDERS' DEFICIENCY:
Preferred Stock - $.001 Par Value -
1,000 Shares Authorized; -0- Shares
Issued and Outstanding
Common Stock - $.001 Par Value -
29,000,000 Shares Authorized;
6,703,700 Shares Issued and Outstanding 6,704 6,704
Additional Paid-In Capital 278,959 278,959
Accumulated Deficit (1,481,443) 920,866(1) (560,577)
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TOTAL SHAREHOLDERS'
DEFICIENCY (1,195,780) (274,914)
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TOTAL LIABILITIES AND
SHAREHOLDERS' DEFICIENCY $ 445,655 $ 922,564 $ 922,564 $ 443,957
============ ============ ============ ============
See accompanying notes to financial statements.
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INTERNATIONAL IMAGING SYSTEMS, INC.
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2005
AND
YEAR ENDED DECEMBER 31, 2004
(UNAUDITED)
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2005 DECEMBER 31, 2004
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PROFORMA PROFORMA
ADJUSTMENTS ADJUSTMENTS
HISTORICAL --------------------- PROFORMA HISTORICAL -------------------------- PROFORMA
BALANCES DR CR BALANCES BALANCES DR CR BALANCES
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REVENUES $ 728,165 $ 54,947(2) $ 673,218 $ 2,796,936 $ 2,779,763(2) $ 17,173
COST OF GOODS SOLD -- -- 2,156,773 2,156,773(2) --
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GROSS PROFIT 728,165 673,218 640,163 17,173
GENERAL AND
ADMINISTRATIVE
EXPENSES 1,055,853 33,824(2) 1,022,029 1,278,389 539,401(2) 738,988
OTHER INCOME (LOSS) (37,647) 37,647(2) -- 171,885 171,885(2) --
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(LOSS) FROM
CONTINUING
OPERATIONS $ (365,335) $ (348,811) $ (466,341) $ (721,815)
========== ========== =========== ===========
BASIC AND DILUTED
(LOSS) FROM
CONTINUING
OPERATIONS PER
COMMON SHARE $ (.061) $ (.058) $ (.077) $ (.120)
========== ========== =========== ===========
WEIGHTED AVERAGE
NUMBER OF BASIC
AND DILUTED
COMMON SHARES
OUTSTANDING 6,029,400 6,029,400 6,028,700 6,028,700
========== ========== =========== ===========
See accompanying notes to financial statements.
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INTERNATIONAL IMAGING SYSTEMS, INC.
AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION -
On December 30, 2005, the Registrant sold, for $100, its interest in
its subsidiary, Advanced Imaging Systems, LLC. At the date of the sale,
the subsidiary had no assets and liabilities of approximately
$1,200,000. Included in liabilities were $430,000 of "Exchangeable
Notes" payable. The lenders have the option to receive payment in the
form of common stock of the parent company. A total of 860,000 shares
of parent company common stock could be issued in satisfaction of the
indebtedness. The accompanying pro forma balance sheet includes a
liability to these "Exchangeable Note" holders of $258,000. This amount
was determined by reference to the current fair value of the parent
company's common stock.
The transaction resulted in a gain of approximately $920,000.
The unaudited pro forma statements of operations of the Registrant for
the year ended December 31, 2004 and the nine months ended September
30, 2005, give effect to certain adjustments that are directly
attributable to the operations of the sold subsidiary as if the
transaction was consummated as of January 1, 2004.
The unaudited pro forma condensed balance sheet as of September 30,
2005 is presented as if the subsidiary sale had occurred on September
30, 2005.
Advanced Imaging Systems, LLC was sold to the company's former
production manager.
In the opinion of the Registrant, all adjustments and disclosures
necessary for a fair presentation of the pro forma data have been made.
These pro forma condensed financial statements are presented for
illustrative purposes only and are not necessarily indicative of the
operating results or the financial position that would have been
achieved had the asset sale been consummated as of the dates indicated
or the results that may be obtained in the future.
These pro forma condensed financial statements and notes thereto should
be read in conjunction with the Registrant's consolidated financial
statements and the notes thereto as of and for the periods ended
September 30, 2005 and December 31, 2004.
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INTERNATIONAL IMAGING SYSTEMS, INC.
AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
NOTE B - PRO FORMA ADJUSTMENTS -
1) To record reduction of assets and liabilities relating to sale
of subsidiary.
2) To record reversal of operating income and expenses
attributable to the sold subsidiary.
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