Edgar Filing: IMAGING TECHNOLOGIES CORP/CA

As filed with the Securities and Exchange Commission on December 16, 2002
Reg. No. 33-

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-8

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

IMAGING TECHNOLOGIES CORPORATION
(Exact name of registrant as specified in its charter)

Delaware . . . . . . . . . . . . 33-0021693
(State or other jurisdiction of. (I.R.S. Employer
incorporation or organization) . identification No.)

17075 Via Del Campo
San Diego, California 92127
(858) 451-6120
(Address of principal executive offices)

AMENDED 2001 EMPLOYEE COMPENSATION PLAN
(Full title of plan)

[GRAPHIC OMITED]

Brian Bonar
President
17075 Via Del Campo
San Diego, California 92127
(Name and address of agent for service)

(858) 451-6120
(Telephone number, including area code of agent for service)

CALCULATION OF REGISTRATION FEE

Title of securities to Amount to be Proposed maximum Proposed maximum Amount of
be registered. . . . . Registered offering price per Aggregate offering Registration fee
share (1) Price
------------- -------------------

Common Stock . . . . . 13,650,000 $ 0.015 $ 204,750.00 $ 18.84
---------------------- ------------- ------------------- ------------------- -----------------

(1) Estimated solely for the purpose of determining the amount of registration
fee and pursuant to Rules 457(c) and 457 (h) of the General Rules and
Regulations under the Securities Act of 1993 with respect to 13,650,000
non-outstanding warrants which are subject to future grant under the plan, based
the average of the bid and asked prices per share of the registrant's common
stock reported by the OTC Nasdaq Stock Market on December 16, 2002.

EXPLANATORY NOTE
This registration statement is being filed to amend the 2001 Amended Employee
Compensation Plan filed in a Registration Statement on Form S-8 (Registration
No. 33-53274) filed with the Securities and Exchange Commission on January 5,
2001.
This registration statement registers offers and sales of shares of common
stock, issuable upon the exercise of warrants granted under our 2001 Stock
Compensation Plan that may include shares that constitute "control securities"
under General Instruction C to Form S-8. These control securities may be offered
and sold on a continuous or delayed basis in the future under Rule 415 of the
Securities Act of 1933, as amended (the "Securities Act"). The Board of
Directors has and is authorized to sell or award up to an additional 65,783,333
shares and/or options of the Company's Common Stock, $.005 par value
per share ("Common Stock").
This registration statement contains two parts. The first part contains an
"offer prospectus" prepared in accordance with Part I of Form S-3 (in accordance
with Instruction C of Form S-8). The second part contains information required
in the registration statement pursuant to Part II of Form S-8.

OFFER PROSPECTUS
IMAGING TECHNOLOGIES CORPORATION

13,650,000 Shares of Common Stock under the 2001 Stock compensation Plan of
Imaging Technologies Corporation

The shares we are registering are either currently held by or will be issued to
certain of our stockholders upon the exercise of stock options granted under our
2001 Employee Compensation Plan. We will pay the expenses of registering the
shares.

Our common stock is quoted on the NASD Over-The-Counter Bulletin Board under the
symbol "ITEC." The last reported sale price of the common stock on the Nasdaq
National Market on December 16, 2002 was $0.015 per share.

You should carefully consider the "Risks Factors" section beginning on page 3 of
this Offer Prospectus.

These shares have not been approved by the Securities and Exchange Commission or
any state securities commission nor have these organizations determined whether
this Prospectus is complete or accurate. Any representation to the contrary is a
criminal offense.

THE DATE OF THIS OFFER PROSPECTUS IS DECEMBER 16, 2002.

TABLE OF CONTENTS

ABOUT IMAGING TECHNOLOGIES CORPORATION. . . . . . . 5
RISK FACTORS .. . . . . . . . 6
PROCEEDS FROM SALE OF THE SHARES. . . . . . . . . . 12
SELLING STOCKHOLDERS. . . . . . . . . . . . . . . . 13
HOW THE SHARES MAY BE DISTRIBUTED . . . . . . . . . 13
LEGAL . . . . . . . . . . 14
EXPERTS . . . . . . . . . . . . . . . . . . . . . . 14
WHERE YOU CAN FIND MORE INFORMATION . . . . . . . . 14
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE . 15
INDEMNIFICATION OF DIRECTORS AND DIRECTORS. . . . . 15

PROSPECTUS SUMMARY

This is only a summary and does not contain all of the information that may be
important to you. You should read the more detailed information contained in
this prospectus and all other information, including the financial information
and statements with notes, referred to in this prospectus as discussed in the
"Where You Can Find More Information" section of this prospectus.

THE COMPANY

References in this Prospectus to "ITEC," the "Company," "we" or "us" are to
Imaging Technologies Corporation and our wholly-owned direct and indirect
subsidiaries, SoureOne Group, Inc., ("SourceOne"), incorporated under the laws
of the state of Delaware on November 9, 2001 (owned 100% by the Company);
EnStructure, Inc. ("EnStructure"), incorporated under the laws of the state of
Nevada on May 10, 2001 (owned 100% by the Company); EduAdvantage.com, Inc.,
("Edu"), incorporated under the laws of the state of California on November 15,
2000 (owned 100% by the Company); Dealseekers.com, Inc., ("Dealseekers"),
incorporated under the laws of the state of Delaware on May 7, 1999 (owned 71.4%
by the Company); and Color Solutions, Inc. ("Color Solutions"), incorporated
under the laws of the state of California (owned 100% by the Company).

We distribute high-quality digital imaging solutions. Our ColorBlind Color
Management software is a suite of applications, utilities and tools designed to
create, edit and apply industry standard ICC (International Color Consortium)
profiles that produce accurate color rendering across a wide range of peripheral
devices.

Our SourceOne and EnStructure subsidiaries are professional employer
organizations that provide a variety of personnel and facilities services to
small to medium-sized businesses.

Our e-commerce units, www.dealseekers.com and www.color.com, provide sales and
------------------- -------------
service support for consumables such as inks, toner, and paper, and for color
education and software products.

We were incorporated in March, 1982 under the laws of the State of California,
and reincorporated in May, 1983 under the laws of the State of Delaware. Our
principal executive offices are located at 17075 Via Del Campo, San Diego,
California 92127. Our main phone number is (858)451-6120.

RISK FACTORS

AN INVESTMENT IN SHARES OF ITEC COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. IN
ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, YOU SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS BEFORE PURCHASING ANY ITEC SHARES.

EXCEPT FOR HISTORICAL INFORMATION, THE INFORMATION CONTAINED IN THIS PROSPECTUS
AND IN OUR SEC REPORTS ARE "FORWARD-LOOKING" STATEMENTS. OUR ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE PROJECTED OR IMPLIED IN SUCH FORWARD-LOOKING
STATEMENTS. THE RISKS DESCRIBED BELOW ADDRESS SOME OF THE FACTORS THAT MAY
AFFECT OUR FUTURE OPERATING RESULTS AND FINANCIAL PERFORMANCE.

IF WE ARE UNABLE TO SECURE FUTURE CAPITAL, WE WILL BE UNABLE TO CONTINUE OUR
OPERATIONS.

If we are unable to secure future capital, we will be unable to continue our
operations. Our business has not been profitable in the past and it may not be
profitable in the future. We may incur losses on a quarterly or annual basis
for a number of reasons, some within and others outside our control. See
"Potential Fluctuation in Our Quarterly Performance." The growth of our business
will require the commitment of substantial capital resources. If funds are not
available from operations, we will need additional funds. We may seek such
additional funding through public and private financing, including debt or
equity financing. Adequate funds for these purposes, whether through financial
markets or from other sources, may not be available when we need them. Even if
funds are available, the terms under which the funds are available to us may not
be acceptable to us. Insufficient funds may require us to delay, reduce or
eliminate some or all of our planned activities.

IF OUR QUARTERLY PERFORMANCE CONTINUES TO FLUCTUATE, IT MAY HAVE A NEGATIVE
IMPACT ON OUR BUSINESS.

Our quarterly operating results can fluctuate significantly depending on a
number of factors, any one of which could have a negative impact on our results
of operations. The factors include: (1) the timing of product announcements and
subsequent introductions of new or enhanced products by us and by our
competitors; (2) the availability and cost of inventory; (3) the timing and mix
of shipments of our products; (4) the market acceptance of our new products; (5)
our ability to retain our existing PEO customers and to recruit new PEO
customers; (6) seasonality; (7) currency fluctuations; (8) changes in our prices
and in our competitors' prices; (9) the timing of expenditures for staffing and
related support costs; (10) the extent and success of advertising; (11) research
and development expenditures; and (12) changes in general economic conditions.

We may experience significant quarterly fluctuations in revenues and operating
expenses as we introduce new products. In addition, our inventory purchases and
spending levels are based upon our forecast of future demand for our products.
Accordingly, any inaccuracy in our forecasts could adversely affect our
financial condition and results of operations. Demand for our products could be
adversely affected by a slowdown in the overall demand for computer systems,
printer products or digitally printed images. Our failure to complete shipments
during a quarter could have a material adverse effect on our results of
operations for that quarter. Quarterly results are not necessarily indicative
of future performance for any particular period. Our PEO business is dependent
upon the staffing levels of our clients. Reductions of our clients' staff could
have a negative impact on our future financial performance.

SINCE OUR COMPETITORS HAVE GREATER FINANCIAL AND MARKETING RESOURCES THAN WE DO,
WE MAY EXPERIENCE A REDUCTION IN MARKET SHARE AND REVENUES.

The markets for the products we sell are highly competitive and rapidly
changing. Some of our current and prospective competitors have significantly
greater financial, technical, manufacturing and marketing resources than we do.
Our ability to compete in our markets depends on a number of factors, some
within and others outside our control. These factors include: (1) the frequency
and success of product introductions by us and by our competitors; (2) the
variety of PEO related services offered by us and by our competitors; (3) the
selling prices of our products and of our competitors' products; (4) the
performance of our products and of our competitors' products; (5) product
distribution by us and by our competitors; (6) our marketing ability and the
marketing ability of our competitors; and (7) the quality of customer support
offered by us and by our competitors.

A key element of our strategy is to provide competitively priced, quality
products. We cannot be certain that our products will continue to be
competitively priced. We have reduced prices on certain of our products in the
past and will likely continue to do so in the future. Price reductions, if not
offset by similar reductions in product costs, will reduce our gross margins and
may adversely affect our financial condition and results of operations.

IF WE ARE UNABLE TO OFFER OUR CUSTOMERS NEW PRODUCTS IN A TIMELY MANNER, WE MAY
EXPERIENCE A SIGNIFICANT DECLINE IN SALES AND REVENUES, WHICH MAY HURT OUR
ABILITY TO CONTINUE OPERATIONS.

The markets for our products are characterized by rapidly evolving technology,
frequent new product introductions and significant price competition.
Consequently, short product life cycles and reductions in product selling prices
due to competitive pressures over the life of a product are common. Our future
success will depend on our ability to continue to offer competitive products and
achieve cost reductions for the products we sell. In addition, we monitor new
technology developments and coordinate with suppliers, distributors and dealers
to enhance our existing products and lower costs. Advances in technology will
require increased investment in ColorBlind product development to maintain our
market position. If we are unable to develop new, competitive products in a
timely manner, our financial condition and results of operations will be
adversely affected.

IF THE MARKET'S ACCEPTANCE OF OUR PRODUCTS AND SERVICES CEASES TO GROW, WE MAY
NOT GENERATE SUFFICIENT REVENUES TO CONTINUE OUR OPERATIONS.

The markets for our products are relatively new and are still developing. We
believe that there has been growing market acceptance for imaging products,
color management software, supplies and PEO services. We cannot be certain,
however, that these markets will continue to grow. Other technologies are
constantly evolving and improving. We cannot be certain that products based on
these other technologies will not have a material adverse effect on the demand
for our products and services. If our products are not accepted by the market,
we will not generate sufficient revenues to continue our operations.

IF WE ACQUIRE COMPLEMENTARY BUSINESSES, WE MAY NOT BE ABLE TO EFFECTIVELY
INTEGRATE THEM INTO OUR CURRENT OPERATIONS, WHICH WOULD ADVERSELY AFFECT OUR
OVERALL FINANCIAL PERFORMANCE.

In order to grow our business, we may acquire businesses that we believe are
complementary. To successfully implement this strategy, we must identify
suitable acquisition candidates, acquire these candidates on acceptable terms,
integrate their operations and technology successfully with ours, retain
existing customers and maintain the goodwill of the acquired business. We may
fail in our efforts to implement one or more of these tasks. Moreover, in
pursuing acquisition opportunities, we may compete for acquisition targets with
other companies with similar growth strategies. Some of these competitors may be
larger and have greater financial and other resources than we do. Competition
for these acquisition targets likely could also result in increased prices of
acquisition targets and a diminished pool of companies available for
acquisition. Our overall financial performance will be materially and adversely
affected if we are unable to manage internal or acquisition-based growth
effectively.

Acquisitions involve a number of risks, including: (1) integrating acquired
products and technologies in a timely manner; (2) integrating businesses and
employees with our business; (3) managing geographically-dispersed operations;
(4) reductions in our reported operating results from acquisition-related
charges and amortization of goodwill; (5) potential increases in stock
compensation expense and increased compensation expense resulting from
newly-hired employees; (6) the diversion of management attention; (7) the
assumption of unknown liabilities; (8) potential disputes with the sellers of
one or more acquired entities; (9) our inability to maintain customers or
goodwill of an acquired business; (10) the need to divest unwanted assets or
products; and (11) the possible failure to retain key acquired personnel.

Client satisfaction or performance problems with an acquired business could
also have a material adverse effect on our reputation, and any acquired business
could significantly under perform relative to our expectations. We are currently
facing all of these challenges and our ability to meet them over the long term
has not been established. As a result, we cannot be certain that we will be able
to integrate acquired businesses, products or technologies successfully or in a
timely manner in accordance with our strategic objectives, which could have a
material adverse effect on our overall financial performance.

In addition, if we issue equity securities as consideration for any future
acquisitions, existing shareholders will experience ownership dilution and these
equity securities may have rights, preferences or privileges superior to those
of our common stock. See "Future Capital Needs."

IF OUR VENDORS ARE NOT ABLE TO CONTINUE TO SUPPLY GOODS AND SERVICES AT
APPROPRIATE PRICES TO MEET THE MARKET DEMAND FOR OUR PRODUCTS, IT COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR FINANCIAL PERFORMANCE.

The terms of our supply contracts for goods and services are negotiated
separately in each instance. Any significant increase in prices or decrease in
availability of products we purchase for resale could have a material adverse
effect on our business and overall financial performance.

IF WE ARE FOUND TO BE INFRINGING ON A COMPETITOR'S INTELLECTUAL PROPERTY RIGHTS
OR IF WE ARE REQUIRED TO DEFEND AGAINST A CLAIM OF INFRINGEMENT, WE MAY BE
REQUIRED TO REDESIGN OUR PRODUCTS OR DEFEND A LEGAL ACTION AT SUBSTANTIAL COSTS
TO US.

We currently hold no patents. Our software products are copyrighted. However,
copyright protection does not prevent other companies from emulating the
features and benefits provided by our software. We protect our software source
code as trade secrets and make our proprietary source code available to OEM
customers only under limited circumstances and specific security and
confidentiality constraints.

Competitors may assert that we infringe their patent rights. If we fail to
establish that we have not violated the asserted rights, we could be prohibited
from marketing the products that incorporate the technology and we could be
liable for damages. We could also incur substantial costs to redesign our
products or to defend any legal action taken against us. We have obtained U.S.
registration for several of our trade names or trademarks, including: PCPI,
NewGen, ColorBlind, LaserImage, ColorImage, ImageScript and ImageFont. These
trade names are used to distinguish our products in the marketplace.

IF OUR FOREIGN ACCOUNTS RECEIVABLE ARE NOT COLLECTIBLE, A NEGATIVE IMPACT ON OUR
CONTINUED OPERATIONS AND OVERALL FINANCIAL PERFORMANCE COULD RESULT.

We conduct business globally. Accordingly, our future results could be adversely
affected by a variety of uncontrollable and changing factors including: (1)
foreign currency exchange fluctuations; (2) regulatory, political or economic
conditions in a specific country or region; (3) the imposition of governmental
controls; (4) export license requirements; (5) restrictions on the export of
critical technology; (6) trade restrictions; (7) changes in tariffs; (8)
government spending patterns; (9) natural disasters; (10) difficulties in
staffing and managing international operations; and (11) difficulties in
collecting accounts receivable.

In addition, the laws of certain countries do not protect our products and
intellectual property rights to the same extent as the laws of the United
States.

We intend to pursue international markets as key avenues for growth and to
increase the percentage of sales generated in international markets. In our
2002, 2001 and 2000 fiscal years, product, software, and licensing sales outside
the United States represented approximately 22%, 22%, and 2% of our net sales,
respectively. We expect product sales outside the United States to continue to
represent a significant portion of our sales. As we continue to expand our
international sales and operations, our business and overall financial
performance may be adversely affected by the factors stated above.

IF ALL OF THE LAWSUITS CURRENTLY FILED WERE DECIDED AGAINST US AND/OR ALL THE
JUDGMENTS CURRENTLY OBTAINED AGAINST US WERE TO BE IMMEDIATELY COLLECTED, WE
WOULD HAVE TO CEASE OUR OPERATIONS.

On or about October 7, 1999, the law firms of Weiss & Yourman and Stull, Stull &
Brody made a public announcement that they had filed a lawsuit against us and
certain current and past officers and/or directors, alleging violation of
federal securities laws during the period of April 21, 1998 through October 9,
1998. On or about November 17, 1999, the lawsuit, filed in the name of Nahid
Nazarian Behfarin, on her own behalf and others purported to be similarly
situated, was served on us. A motion to dismiss the lawsuit was granted on
February 16, 2001 on our behalf and those individual defendants that have been
served. However, on or about March 19, 2001, an amended complaint was filed on
behalf of Nahid Nazarian Behfarin, Peter Cook, Stephen Domagala and Michael S.
Taylor, on behalf of themselves and others similarly situated. On or about
March 20, 2001, we once again filed a motion to dismiss the case along with
certain other individual defendants. The motion was denied and an answer to the
complaint has been filed on behalf of the company and certain individual
defendants. We believe these claims are without merit and we intend to
vigorously defend against them on our behalf as well as on behalf of the other
defendants. The defense of this action has been tendered to our insurance
carriers.

On August 22, 2002, the Company was sued by its former landlord, Carmel Mountain
#8 Associates, L.P. or past due rent on its former facilities at 15175
Innovation Drive, San Diego, CA 92127.

The Company is also a party to a lawsuit filed by Symphony Partners, L.P.
related to its acquisition of SourceOne Group, LLC. We have hired counsel to
represent us in this action and believe that the claims against the Company are
without merit.

The Company is one of dozens of companies sued by The Massachusetts Institute of
Technology, et.al, related to a patent held by the plaintiffs that may be
related to part of the Company's ColorBlind software. We believe that any
amounts due in royalties or otherwise to the plaintiffs by the Company, should
the Company be in violation of said patent, would not be material.

Throughout fiscal 2000, 2001, and 2002, and through the date of this filing,
approximately fifty trade creditors have made claims and/or filed actions
alleging the failure of us to pay our obligations to them in a total amount
exceeding $3 million. These actions are in various stages of litigation, with
many resulting in judgments being entered against us. Several of those who have
obtained judgments have filed judgment liens on our assets. These claims range
in value from less than one thousand dollars to just over one million dollars,
with the great majority being less than twenty thousand dollars. Should we be
required to pay the full amount demanded in each of these claims and lawsuits,
we may have to cease our operations. However, to date, the superior security
interest held by Imperial Bank has prevented nearly all of these trade creditors
from collecting on their judgments.

IF OUR OPERATIONS CONTINUE TO RESULT IN A NET LOSS, NEGATIVE WORKING CAPITAL AND
A DECLINE IN NET WORTH, AND WE ARE UNABLE TO OBTAIN NEEDED FUNDING, WE MAY BE
FORCED TO DISCONTINUE OPERATIONS.

For several recent periods, up through the fiscal quarter ended September
30, 2002, we had a net loss, negative working capital and a decline in net
worth, which raise substantial doubt about our ability to continue as a going
concern. Our losses have resulted primarily from an inability to achieve product
sales and contract revenue targets due to insufficient working capital. Our
ability to continue operations will depend on positive cash flow from future
operations and on our ability to raise additional funds through equity or debt
financing. Although we have reduced our work force and discontinued some of our
operations, if we are unable to achieve the necessary product sales or raise or
obtain needed funding, we may be forced to discontinue operations.

IF OUR WORLDWIDE DISTRIBUTORS REDUCE OR DISCONTINUE SALES OF OUR PRODUCTS, OUR
BUSINESS MAY BE MATERIALLY AND ADVERSELY AFFECTED.

Our products are marketed and sold through a distribution channel of value added
resellers, manufacturers' representatives, retail vendors, and systems
integrators. We have a network of dealers and distributors in the United States
and Canada, in the European Community and on the European Continent, as well as
a growing number of resellers in Africa, Asia, the Middle East, Latin America,
and Australia. We support our worldwide distribution network and end-user
customers through distribution and support operations headquartered in San
Diego. As of June 30, 2002, we directly employed 61 individuals involved in
marketing and sales activities.

A large percentage of our sales are made through distributors who may carry
competing product lines. These distributors could reduce or discontinue sales of
our products, which could materially and adversely affect us. These independent
distributors may not devote the resources necessary to provide effective sales
and marketing support of our products. In addition, we are dependent upon the
continued viability and financial stability of these distributors, many of which
are small organizations with limited capital. These distributors, in turn, are
substantially dependent on general economic conditions and other unique factors
affecting our markets. We believe that our future growth and success will
continue to depend in large part upon our distribution channels. Our business
could be materially and adversely affected if our distributors fail to pay
amounts to us that exceed reserves we have established.

IF HEALTH INSURANCE PREMIUMS, UNEMPLOYMENT TAXES AND WORKERS' COMPENSATION RATES
INCREASE, IT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR FINANCIAL PERFORMANCE.

Health insurance premiums, state unemployment taxes and workers'
compensation rates are, in part, determined by our claims experience, and
comprise a significant portion of our PEO operations' direct costs. We employ
risk management procedures in an attempt to control claims incidence and
structure our benefits contracts to provide as much cost stability as possible.
However, should we experience a large increase in claims activity, the
unemployment taxes, health insurance premiums or workers' compensation insurance
rates we pay could increase. Our ability to incorporate such increases into
service fees to clients is generally constrained by contractual agreements with
our clients. Consequently, we could experience a delay before such increases
could be reflected in the service fees we charge. As a result, such increases
could have a material adverse effect on our financial condition or results of
operations.

WE CARRY SUBSTANTIAL LIABILITY FOR WORKSITE EMPLOYEE PAYROLL AND BENEFITS COSTS.

Under our PEO operations' client service agreements, we become a co-employer of
worksite employees and we assume the obligations to pay the salaries, wages and
related benefits costs and payroll taxes of such worksite employees. We assume
such obligations as a principal, not merely as an agent of the client company.
Our obligations include responsibility for (1) payment of the salaries and wages
for work performed by worksite employees, regardless of whether the client
company makes timely payment to us of the associated costs and service fees; and
(2) providing benefits to worksite employees even if the costs incurred by us to
provide such benefits exceed the fees paid by the client company. If a client
company does not pay us, or if the costs of benefits provided to worksite
employees exceed the fees paid by a client company, our ultimate liability for
worksite employee payroll and benefits costs could have a material adverse
effect on our financial condition or results of operations.

IF CERTAIN FEDERAL, STATE AND LOCAL LAWS RELATED TO LABOR, TAX AND EMPLOYMENT
MATTERS ARE CHANGED, IT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR CONTINUED
PEO OPERATIONS AND ON OUR OVERALL FINANCIAL PERFORMANCE.

By entering into a co-employer relationship with employees assigned to work at
client company locations, we assume certain obligations and responsibilities as
an employer under these laws. However, many of these laws (such as the Employee
Retirement Income Security Act ("ERISA") and federal and state employment tax
laws) do not specifically address the obligations and responsibilities of
non-traditional employers such as PEOs; and the definition of "employer" under
these laws is not uniform. Additionally, some of the states in which we operate
have not addressed the PEO relationship for purposes of compliance with
applicable state laws governing the employer/employee relationship. If these
other federal or state laws are ultimately applied to our PEO relationship with
our worksite employees in a manner adverse to us, such an application could have
a material adverse effect on our financial condition or results of operations.

While many states do not explicitly regulate PEOs, twenty-one states have passed
laws that have licensing or registration requirements for PEOs, and several
other states are considering such regulation. Such laws vary from state to
state, but generally provide for monitoring the fiscal responsibility of PEOs
and, in some cases, codify and clarify the co-employment relationship for
unemployment, workers' compensation and other purposes under state law. There
can be no assurance that we will be able to satisfy licensing requirements of
other applicable relations for all states. Additionally, there can be no
assurance that we will be able to renew our licenses in all states.

Our client service agreement establishes a contractual division of
responsibilities between us and our clients for various personnel management
matters, including compliance with and liability under various government
regulations. However, because we act as a co-employer, we may be subject to
liability for violations of these or other laws despite these contractual
provisions, even if we do not participate in such violations. Although our
agreement provides that the client is to indemnify us for any liability
attributable to the conduct of the client, we may not be able to collect on such
a contractual indemnification claim, and thus may be responsible for satisfying
such liabilities. Additionally, worksite employees may be deemed to be our
agents, subjecting us to liability for the actions of such worksite employees.

IF WE ARE UNABLE TO RETAIN HEALTH AND WORKERS' COMPENSATION INSURANCE PLANS THAT
COVER WORKSITE EMPLOYEES ON FAVORABLE TERMS, IT COULD HAVE A MATERIAL ADVERSE
EFFECT ON OUR CONTINUED PEO OPERATIONS AND ON OUR OVERALL FINANCIAL PERFORMANCE.

The current health and workers' compensation contracts are provided by vendors
with whom we have an established relationship and on terms that we believe to be
favorable. While we believe that replacement contracts could be secured on
competitive terms without causing significant disruption to our business, there
can be no assurance in this regard. Nevertheless, workers' compensation and
health insurance rates have been rising substantially over the past year and
have had a negative effect on us and on the PEO industry in general.
Accordingly, these rising costs have had a negative effect on our revenues and
results of operations.

IF WE ARE UNABLE TO RETAIN OR REPLACE OUR EXISTING PEO CUSTOMERS, IT COULD HAVE
A MATERIAL ADVERSE EFFECT ON OUR OVERALL FINANCIAL PERFORMANCE.

Our standard agreements with PEO clients are subject to cancellation on sixty
days written notice by either us or the client. Accordingly, the short-term
nature of these agreements make us vulnerable to potential cancellations by
existing clients, which could materially and adversely affect our financial
condition and results of operations. Additionally, our results of operations are
dependent, in part, upon our ability to retain or replace client companies upon
the termination or cancellation of our agreements.

AS A COMPANY IN THE TECHNOLOGY INDUSTRY AND DUE TO THE VOLATILITY OF THE STOCK
MARKETS GENERALLY, OUR STOCK PRICE COULD FLUCTUATE SIGNIFICANTLY IN THE FUTURE.

The market price of our common stock historically has fluctuated significantly.
Our stock price could fluctuate significantly in the future based upon any
number of factors such as: (1) general stock market trends; (2) announcements of
developments related to our business; (3) fluctuations in our operating results;
(4) a shortfall in our revenues or earnings compared to the estimates of
securities analysts; (5) announcements of technological innovations, new
products or enhancements by us or our competitors; (6) general conditions in the
computer peripheral market and the imaging markets we serve; (7) general
conditions in the worldwide economy; (8) developments in patents or other
intellectual property rights; and (9) developments in our relationships with our
customers and suppliers.

In addition, in recent years the stock market in general, and the market for
shares of technology stocks in particular, have experienced extreme price
fluctuations, which have often been unrelated to the operating performance of
affected companies. Similarly, the market price of our common stock may
fluctuate significantly based upon factors unrelated to our operating
performance.

IF AN OPERATIONAL RECEIVER IS REINSTATED TO CONTROL OUR OPERATIONS, WE MAY NOT
BE ABLE TO CARRY OUT OUR BUSINESS PLAN.

On August 20, 1999, at the request of Imperial Bank (now Comerica Bank), our
primary lender, the Superior Court, San Diego appointed an operational receiver
to us. On August 23, 1999, the operational receiver took control of our
day-to-day operations. Through further equity infusion, primarily in the form
of the exercise of warrants to purchase our common stock, operations have
continued, and on June 21, 2000, the Superior Court, San Diego issued an order
dismissing the operational receiver as a part of a settlement of litigation with
Imperial Bank pursuant to the Settlement Agreement effective as of June 20,
2000. The Settlement Agreement requires that we make monthly payments of
$150,000 to Imperial Bank until the indebtedness is paid in full. However, in
the future, without additional funding sufficient to satisfy Imperial Bank and
our other creditors, as well as providing for our working capital, there can be
no assurances that an operational receiver may not be reinstated. If an
operational receiver is reinstated, we will not be able to expand our products
nor will we have complete control over sales policies or the allocation of
funds.

The penalty for noncompliance of the Settlement Agreement is a stipulated
judgment that allows Imperial Bank to immediately reinstate the operational
receiver and begin liquidation proceedings against us. The monthly payments
were reduced to $50,000 for the balance of calendar year 2002; and continue as
of the date of this report.

SINCE OUR COMMON STOCK IS NO LONGER LISTED ON THE NASDAQ SMALLCAP MARKET, IT HAS
BEEN MORE DIFFICULT TO RAISE FINANCING .

The Nasdaq SmallCap Market and Nasdaq Marketplace Rules require an issuer to
evidence a minimum of $2,000,000 in net tangible assets, a $35,000,000 market
capitalization or $500,000 in net income in the latest fiscal year or in two of
the last three fiscal years, and a $1.00 per share bid price, respectively.
Since we do not qualify to be listed on The Nasdaq SmallCap Market, shareholders
may find it more difficult to sell our common stock. This lack of liquidity also
may make it more difficult for us to raise capital in the future.

Trading of our common stock is now being conducted over-the-counter through the
NASD Electronic Bulletin Board and covered by Rule 15g-9 under the Securities
Exchange Act of 1934. Under this rule, broker/dealers who recommend these
securities to persons other than established customers and accredited investors
must make a special written suitability determination for the purchaser and
receive the purchaser's written agreement to a transaction prior to sale.
Securities are exempt from this rule if the market price is at least $5.00 per
share.

The Securities and Exchange Commission adopted regulations that generally define
a "penny stock" as any equity security that has a market price of less than
$5.00 per share. Additionally, if the equity security is not registered or
authorized on a national securities exchange or the Nasdaq and the issuer has
net tangible assets under $2,000,000, the equity security also would constitute
a "penny stock." Our common stock does constitute a penny stock because our
common stock has a market price less than $5.00 per share, our common stock is
no longer quoted on Nasdaq and our net tangible assets do not exceed $2,000,000.
As our common stock falls within the definition of penny stock, these
regulations require the delivery, prior to any transaction involving our common
stock, of a disclosure schedule explaining the penny stock market and the risks
associated with it. Furthermore, the ability of broker/dealers to sell our
common stock and the ability of shareholders to sell our common stock in the
secondary market would be limited. As a result, the market liquidity for our
common stock would be severely and adversely affected. We can provide no
assurance that trading in our common stock will not be subject to these or other
regulations in the future, which would negatively affect the market for our
common stock.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains some forward-looking statements that involve
substantial risks and uncertainties. These forward-looking statements can
generally be identified by the use of forward-looking words like "may," "will,"
"expect," "anticipate," "intend," "estimate," "continue," "believe" or other
similar words. Similarly, statements that describe our future expectations,
objectives and goals or contain projections of our future results of operations
or financial condition are also forward-looking statements. Our future results,
performance or achievements could differ materially from those expressed or
implied in these forward-looking statements as a result of certain factors,
including those listed under the heading "Risk Factors" and in other cautionary
statements in this prospectus.

PROCEEDS FROM SALE OF THE SHARES

All of the shares of common stock in this Offer Prospectus are being offered by
the selling stockholders. We will not receive any proceeds from the sale of the
shares of common stock, but if all of the options exercised we will receive
$470,000 in connection with the exercise of stock options relating to such
shares of common stock. We intend to use these funds for working capital.

SELLING STOCKHOLDERS
The shares offered under our Offer Prospectus are being registered for Offers
and Sales by selling stockholders who have or may in the future acquire their
shares of our common stock by exercising options granted to them under our
Amended 2001 Employee Compensation Plan. The selling stockholders named in the
following table may resell all, a portion, or none of these shares of our common
stock. There is no assurance that any of the selling stockholders will sell any
or all of the shares of our common stock offered by them.

Participants under the Amended 2001 Employee Compensation Plan who are deemed to
be "affiliates" of the Company who acquire shares of our common stock may be
added to the selling stockholders listed below from time to time by use of a
prospectus supplement filed pursuant to Rule 424(b) under the Securities Act of
1933, as amended.

The following table sets forth certain information concerning the Affiliated
selling stockholders as of the date of this Offer Prospectus, and as adjusted to
reflect the sale by the affiliated selling stockholders of the shares of our
common stock offered, assuming sale of all of the shares offered:

Name. . . . . . . . Shares Beneficially Owned Number of Shares Offered
Prior to the Offering (1) by the Prospectus (2)(3)
Number Percent Number Percent(4)
-------------------------- ------------------------- --------- ----------
Brian Bonar
Chairman and CEO 8,007,500 7.7 4,000,000 3.8
Robert A. Dietrich
Director. . . . . 3,387,500 3.3 2,375,000 2.3
Eric W. Gaer
Director. . . . . 2,436,000 2.3 2,375,000 2.3
Stephen J. Fryer
Director. . . . . 2,453,250 2.4 2,375,000 2.3
Richard H. Green
Director. . . . . 2,469,500 2.4 2,375,000 2.3
George Macleod
VP Sales. . . . . 150,000 0.0 150,000 0.0

(1) Represents shares beneficially owned by the named individual, including
shares that such person has the right to acquire within 60 days of the date of
this Offer Prospectus. Unless otherwise noted, all persons referred to above
have sole voting and sole investment power.

(2) Includes all Shares issued to such named individuals upon the exercise of
options granted under the Amended 2001 Employee Compensation Plan.
(3) Does not constitute a commitment to sell any or all of the stated number of
shares of common stock. The number of shares of common stock offered shall be
determined from time to time by each selling stockholder in his or her sole
discretion.

(4) Based upon 104,177,896 Shares outstanding as of December 16, 2002.

HOW THE SHARES MAY BE DISTRIBUTED

The selling stockholders may sell shares of our common stock in various ways and
at various prices. Some of the methods by which the selling stockholders may
sell their shares of common stock include:

- ordinary brokerage transactions and transactions in which the broker
solicits purchasers;

- privately negotiated transactions;

- block trades in which the broker or dealer will attempt to sell the shares
of common stock as agent but may position and resell a portion of the block as
principal to facilitate the transaction;

- purchases by a broker or dealer as principal and resale by that broker or
dealer for the selling stockholder's account under this Offer Prospectus;

- sales under Rule 144 rather than by using this Offer Prospectus;

- a combination of any of these methods of sale; and

- any other legally permitted method.

The applicable sales price may be affected by the type of transaction.

The selling stockholders may also pledge their shares of common stock as
collateral for a margin loan under their customer agreements with their brokers.
If there is a default by the selling stockholders, the brokers may offer and
sell the pledged shares of common stock.

Brokers or dealers may receive commissions or discounts from the selling
stockholders (or, if the broker-dealer acts as agent for the purchaser of the
shares of common stock, from that purchaser) in amounts to be negotiated. These
commissions are not expected to exceed those customary in the types of
transactions involved.

We cannot estimate at the present time the amount of commissions or discounts,
if any, that will be paid by the selling stockholders in connection with sales
of the shares of common stock.

Any broker-dealers or agents that participate with the selling stockholders in
sales of the shares of common stock may be deemed to be "underwriters" within
the meaning of the Securities Act of 1933, as amended, in connection with such
sales. In that event, any commissions received by broker-dealers or agents and
any profit on the resale of the shares of common stock purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act of
1933.

Under the securities laws of certain states, the shares of common stock may be
sold in those states only through registered or licensed broker-dealers. In
addition, the shares of common stock may not be sold unless they have been
registered or qualified for sale in the relevant state or unless the shares of
common stock qualify for an exemption from registration or qualification.

We have agreed to pay all fees and expenses incident to the registration of the
shares of common stock.

The selling stockholders and other persons participating in the distribution of
the shares of common stock offered under this Offer Prospectus are subject to
the applicable requirements of Regulation M promulgated under the Securities
Exchange Act of 1934, in connection with sales of the shares of common stock.

LEGAL OPINION

Thomas Beener, Esq., has advised us with respect to the validity of the
securities offered by this prospectus.

EXPERTS

The financial statements included in our annual report on Form 10-K/A
incorporated by reference in this Offer Prospectus have been audited by
Stonefield Josephson, Inc., independent certified public accountants, to the
extent and for the periods set forth in their report incorporated herein by
reference, and are incorporated herein in reliance upon such report given upon
the authority of said firm as experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any report or document we file at the public reference facilities maintained by
the Securities and Exchange Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549 and at the Securities and Exchange Commission's regional
offices located at Seven World Trade Center, Suite 1300, New York, New York
10048, and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Please
call the SEC at 1-800-SEC-0880 for more information about the public reference
rooms. Our Securities and Exchange Commission filings are also available from
the Securities and Exchange Commission's website located at www.sec.gov.
-----------

Quotations for the prices of our common stock appear on the Nasdaq National
Market, and reports, proxy statements and other information about us can also be
inspected at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The Securities and Exchange Commission allows us to "incorporate by reference"
the information we file with it, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this Offer Prospectus, and
later information that we file with the Securities and Exchange Commission will
automatically update and supersede this information.

We incorporate by reference the following filings and any future filings made
with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934:

(a) the Company's annual report on Form 10-K for the fiscal year ended June 30,
2001 and June 30, 2000;

(b) all other reports filed by the Company pursuant to Section 13(a) or
Section 15 (d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since June 30, 2001 through the date hereof;

(c) the Registrant's Form 8-A filed on July 6, 1984 pursuant to Section 12 of
the Exchange Act, in which there is described the terms, rights and provisions
applicable to the Registrant's outstanding Common Stock, and

(d) any document filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof, but
prior to the filing of a post-effective amendment to this Registration Statement
which Indicates that all shares of Common Stock registered hereunder have been
sold or that deregisters all such shares of common Stock then remaining unsold,
such documents being deemed to be incorporated by reference herein and to be
part hereof from the date of filing of such documents.

This Offer Prospectus, which is a part of the registration statement, does not
contain all the information set forth in, or annexed as exhibits to, the
registration statement, as permitted by the SEC's rules and regulations. For
further information with respect to us and the common stock offered under this
Offer Prospectus, please refer to the registration statement, including the
exhibits, copies of which may be obtained from the locations described above.
Statements concerning any document filed as an exhibit are not necessarily
complete and, in each instance, we refer you to the copy of the document filed
as an exhibit to the registration statement.

You may request, at no cost, a copy of any or all of the information
incorporated by reference by writing or telephoning us at: Imaging Technologies
Corporation, 17075 Via Del Campo, San Diego, CA 92127, (858) 451-6120.

You should only rely on the information incorporated by reference or provided in
this Offer Prospectus or any supplement. We have not authorized anyone else to
provide you with different information. Our common stock is not being offered in
any state where the offer is not permitted. You should not assume that the
information in this Offer Prospectus or any supplement is accurate as of any
date other than the date on the front of those documents.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the General Corporation Law of the State of Delaware provides, in
general, that a corporation incorporated under the laws of the State of
Delaware, such as the registrant, may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding (other than a derivative action by or in the right of
the corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
enterprise, against expenses (including attorney's fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe such person's conduct was
unlawful. In the case of a derivative action, a Delaware corporation may
indemnify any such person against expenses (including attorneys' fees) actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery of the State of Delaware or any other court in which such
action was brought determines such person is fairly and reasonable entitled to
indemnity for such expenses.

Our certificate of incorporation provides that directors shall not be personally
liable for monetary damages to our company or our stockholders for breach of
fiduciary duty as a director, except for liability resulting from a breach of
the director's duty of loyalty to our company or our stockholders, intentional
misconduct or willful violation of law, actions or inactions not in good faith,
an unlawful stock purchase or payment of a dividend under Delaware law, or
transactions from which the director derives improper personal benefit. Such
limitation of liability does not affect the availability of equitable remedies
such as injunctive relief or rescission. Our certificate of incorporation also
authorizes us to indemnify our officers, directors and other agents to the
fullest extent permitted under Delaware law. Our bylaws provide that the
registrant shall indemnify our officers, directors and employees. The rights to
indemnity thereunder continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors, and administrators of the person. In addition, expenses incurred by a
director or officer in defending any action, suit or proceeding by reason of the
fact that he or she is or was a director or officer of our company shall be paid
by the registrant unless such officer, director or employee is adjudged liable
for negligence or misconduct in the performance of his or her duties.

This means that our certificate of incorporation provides that a director is not
personally liable for monetary damages to us or our stockholders for breach of
his or her fiduciary duties as a director. A director will be held liable for a
breach of his or her duty of loyalty to us or our stockholders, his or her
intentional misconduct or willful violation of law, actions or in actions not in
good faith, an unlawful stock purchase or payment of a dividend under Delaware
law, or transactions from which the director derives an improper personal
benefit. This limitation of liability does not affect the availability of
equitable remedies against the director including injunctive relief or
rescission. Our certificate of incorporation authorizes us to indemnify our
officers, directors and other agent to the fullest extent permitted under
Delaware law. We have entered into indemnification agreements with all of our
officers and directors. In some cases, the provisions of these indemnification
agreements may be broader than the specific indemnification provisions contained
in our certificate of incorporation or otherwise permitted under Delaware law.
Each indemnification agreement may require us to indemnify an officer or
director against liabilities that may arise by reason of his status or service
as an officer or director, or against liabilities arising from the director's
willful misconduct of a culpable nature.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE

The following documents filed by Imaging Technologies Corporation (the
"Company") with the Securities and Exchange Commission (the "Commission") are
incorporated by reference herein:

(a) the Company's annual report on Form 10-K for the fiscal year ended June 30,
2002;

(b) all other reports filed by the Company pursuant to Section 13(a) or Section
15 (d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
since June 30, 2002 through the date hereof;

(c) any document filed by the Company with the Commission pursuant to Sections
13(a), 13( c), 14 or 15(d) of the Exchange Act subsequent to the date hereof,
but prior to the filing of a post-effective amendment to this Registration
Statement which Indicates that all shares of Common Stock registered hereunder
have been sold or that deregisters all such shares of common Stock then
remaining unsold, such documents being deemed to be incorporated by reference
herein and to be part hereof from the date of filing of such documents.

ITEM 4. DESCRIPTION OF SECURITIES

Not applicable.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL

Not applicable.

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS

We do not maintain a directors and officers liability policy.

ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED

Not applicable.

ITEM 8. EXHIBITS

The Exhibits to this registration statement are listed in the index to Exhibits
on page 16.

ITEM 9. UNDERTAKINGS

(a) The undersigned registrant hereby undertakes:

(1) To file during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:

(i) To include any prospectus required by Section 10(a)(3) of the securities Act
1933:

(ii) To reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in this Registration
Statement:

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement; provided,
however, that paragraph (1)(i) and (1)(ii) do not apply if the information
required to be included in a post-effective amendment by those paragraph is
contained in periodic reports filed by the Company pursuant to Section 13 or
Section 15 (d) of the Exchange Act that are incorporated by reference in this
Registration Statement.

(2) That for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendments shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) To remove from registration by mean of a post-effective amendment any of the
securities being registered hereunder that remain unsold at the termination of
the offering.

(b) The undersigned Company hereby undertakes that for purposes of determining
any liability under the Securities Act of 1933, each filing of the company's
annual report pursuant to Section 13 (a) or Section 15(d) of the Securities and
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the above-described provisions or otherwise, the Company has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing a form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California on December 16, 2002.

IMAGING TECHNOLOGIES CORPORATION

By /s/ Brian Bonar

_________________________________________
Brian Bonar, President & Chief Executive
Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Brian Bonar and Philip J. Englund, each of them acting
individually as his attorney-in-fact, each with full power of substitution and
resubstitution, for him in any and all capacities, to sign any and all
amendments to this Registration Statement, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith as fully to al intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact, or their substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.

SIGNATURE . . . . . . . . . . . . . . TITLE DATE
------------------------------------- ----------------- ----

/s/ Brian Bonar
Chairman of the Board of Directors,
President, and Chief Executive . . December 16, 2002
Brian Bonar . . . . . . . . . . . . . Officer
-------------------------------------

/s/ Eric W. Gaer
December 16, 2002
Eric W. Gaer. . . . . . . . . . . . . Director
-------------------------------------

/s/ Robert A. Dietrich
December 16, 2002
Robert A. Dietrich. . . . . . . . . . Director
-------------------------------------

/s/ Stephen J. Fryer
December 16, 2002
Stephen J. Fryer. . . . . . . . . . . Director
-------------------------------------

S/s Richard H. Green
December 16, 2002
Richard H. Green. . . . . . . . . . . Director
-------------------------------------

INDEX TO EXHIBITS

5.1 Opinion of Counsel, regarding the legality of the securities
registered hereunder.

10.3 Amended 2001 Stock Compensation Plan

23.1 Consent of Stonefield Josephson, Inc.

23.2 Consent of Counsel (included as part of Exhibit 5.1)

24 Power of Attorney (Contained within Signature Page)