SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                 |X| QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000

                                       or

                 |_| TRANSITION REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                           Commission file No. 0-12641

                                [OBJECT OMITTED]
                        IMAGING TECHNOLOGIES CORPORATION
             (Exact name of registrant as specified in its charter)



                         DELAWARE                        33-0021693
             (State or other  jurisdiction  of     (IRS Employer ID No.)
              incorporation or organization)

                             15175 INNOVATION DRIVE
                           SAN DIEGO, CALIFORNIA 92128

                    (Address of principal executive offices)

       Registrant's Telephone Number, Including Area Code: (619) 613-1300


Check whether the registrant  (1) has filed all reports  required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.

                                 Yes |X| No |_|

The number of shares outstanding of the registrant's  common stock as of October
31, 2000, was 107,673,916.


<PAGE>
<TABLE>
<CAPTION>

                                                                                                       PAGE
<S>                                                                                                    <C>
PART I - FINANCIAL INFORMATION

         ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS

         Consolidated Balance Sheets
              September 30, 2000 (unaudited) and June 30, 2000 (audited)                               2

         Consolidated Statements of Operations
              Three months ended September 30, 2000 and 1999 (unaudited)                               3

         Consolidated Statements of Cash Flows
              Three months ended September 30, 2000 and 1999 (unaudited)                               4

         Notes to Consolidated Financial Statements.                                                    5



         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                         CONDITION AND RESULTS OF OPERATIONS                                           7

         ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                         MARKET RISK                                                                  14



PART II - OTHER INFORMATION

         ITEM 1.  LEGAL PROCEEDINGS                                                                   14
         ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS                                           15
         ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                                                     16
         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                 16
         ITEM 5.  OTHER INFORMATION                                                                   16
         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                                    16

SIGNATURES                                                                                            17
</TABLE>

                                       1
<PAGE>


                IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      SEPTEMBER 30, 2000 AND JUNE 30, 2000
                        (in thousands, except share data)
<TABLE>
<CAPTION>

                                     ASSETS

                                                                                 9/30/00          6/30/00
        Current assets

<S>                                                                            <C>               <C>
             Cash                                                              $     345         $    291
             Accounts receivable                                                     372              175
             Inventories                                                              65              203
             Prepaid expenses and other                                              281              333
                                                                               ---------         --------
                  Total current assets                                             1,063            1,002

        Property and Equipment, net                                                  514              531
        Other                                                                         70              150
                                                                               ---------         --------

                                                                               $   1,647        $   1,683
                                                                               =========        =========

              LIABILITIES AND SHAREHOLDERS' NET CAPITAL DEFICIENCY

        Current liabilities

             Borrowings under bank notes payable                               $   5,465        $   5,765
             Short-term debt                                                       2,813            2,563
             Accounts payable                                                      5,351            5,378
             Accrued expenses                                                      2,584            1,828
                                                                               ---------         --------
                  Total current liabilities                                       16,213           15,534
                                                                               ---------         --------

        Stockholders' net capital deficiency
             Series A preferred stock, $1,000 par value, 7,500 shares
                authorized, 420.5 shares issued and outstanding                      420              420
             Common stock, $0.005 par value, 200,000,000 shares
                Authorized; 105,507,937 shares issued and outstanding                528              507
             Paid-in capital                                                      60,283           58,641
             Shareholder loans                                                      (105)            (105)
             Accumulated deficit                                                 (75,692)         (73,314)
                                                                               ---------         --------
                  Total shareholders' net capital deficiency                     (14,566)         (13,851)
                                                                               ---------         --------
                                                                           $       1,647    $       1,683
                                                                             ===========      ===========
</TABLE>

                 See Notes to Consolidated Financial Statements.


                                       2
<PAGE>

                IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
          THREE MONTHS ENDED SEPTEMBER 30, 2000 AND SEPTEMBER 30, 1999
                        (in thousands, except share data)
<TABLE>
<CAPTION>
                                                                         SEPTEMBER 30,
                                                                          2000              1999
Revenues
<S>                                                                  <C>               <C>
     Sales of products                                               $     660         $     940
     Engineering fees                                                        -                25
     Licenses and royalties                                                177                88
                                                                      ---------         --------
                                                                           837             1,053
                                                                      ---------         --------
Costs and expenses

     Cost of products sold                                                 443               693
     Selling, general, and administrative                                2,351             3,378
     Cost of engineering fees, research, and development                   239               649
                                                                      ---------         --------
                                                                         3,033             4,720
                                                                      ---------         --------

Loss from operations                                                    (2,196)           (3,667)
                                                                      ---------         --------

Other income (expense):
     Interest and finance costs, net                                      (182)             (138)
     Other                                                                   -               (20)
                                                                      ---------         --------
                                                                          (182)             (158)
                                                                      ---------         --------

Loss before income taxes                                                (2,378)           (3,825)

Income tax benefit (expense)                                                 -                 -
                                                                      ---------         --------

Net loss                                                        $       (2,378)   $       (3,825)
                                                                   ============      ============

Earnings (loss) per common share
     Basic                                                     $         (0.02)  $         (0.12)
                                                                 ==============    ==============
     Diluted                                                   $         (0.02)  $         (0.12)
                                                                 ==============    ==============

Weighted average common shares                                         103,160            30,889
                                                                       =======            ======
Weighted average common shares - assuming dilution                     103,160            30,889
                                                                       =======            ======
</TABLE>

                        See Notes to Consolidated Financial Statements.

                                       3
<PAGE>

                IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
          THREE MONTHS ENDED SEPTEMBER 30, 2000 AND SEPTEMBER 30, 1999
                        (in thousands, except share data)
<TABLE>
<CAPTION>
                                                                   2000             1999
                                                                   ----             ----
  Cash flows from operating activities
<S>                                                          <C>             <C>
     Net loss                                                $  (2,378)      $   (3,825)
     Adjustments to reconcile net loss to net
       cash from operating activities
          Depreciation and amortization                             72               59
           Amortization of capitalized software                      -              356
           Stock issued for services                               450              326
          Changes in operating assets and liabilities
             Accounts receivable                                  (197)             546
             Inventories                                           138               140
             Prepaid expenses and other                            132               211
             Accounts payable and accrued expenses                 729               543
                                                             ---------       ----------

                 Net cash from operating activities             (1,054)          (1,644)
                                                             ---------       ----------
  Cash flows from investing activities
     Capitalized software                                            -             (358)
     Capital expenditures                                          (55)               -
                                                             ---------       ----------
                 Net cash from investing activities                (55)            (358)
                                                             ---------       ----------

  Cash flows from financing activities
     Net borrowings under bank notes payable                      (300)          (1,049)
     Issuance of other notes payable                               250                 -
     Net proceeds from issuance of common stock                  1,213              884
                                                             ---------       ----------
                 Net cash from financing activities              1,163            1,933
                                                             ---------       ----------

  Net increase (decrease) in cash                                   54              (69)
     Cash, beginning of period                                     291               75
                                                             ---------       ----------
     Cash, end of period                               $           345   $            6
                                                             =========       ==========

  Supplemental disclosure of cash flow information
     Cash paid during the period for interest          $           182   $         192
     Cash paid during the period for income taxes      $             -               -
                                                             =========       ==========
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                       4
<PAGE>

                IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        (in thousands, except share data)

                                   (unaudited)

NOTE 1.  BASIS OF PRESENTATION

The  accompanying  unaudited  consolidated  condensed  financial  statements  of
Imaging Technologies Corporation and Subsidiaries (the "Company" or "ITEC") have
been prepared  pursuant to the rules of the Securities  and Exchange  Commission
(the  "SEC") for  quarterly  reports on Form 10-Q and do not  include all of the
information  and note  disclosures  required by  generally  accepted  accounting
principles.  These financial  statements and notes herein are unaudited,  but in
the opinion of  management,  include  all the  adjustments  (consisting  only of
normal recurring adjustments) necessary for a fair presentation of the Company's
financial  position,  results  of  operations,  and cash  flows for the  periods
presented.  These financial  statements  should be read in conjunction  with the
Company's  audited  financial  statements  and notes thereto for the years ended
June 30, 2000,  1999,  and 1998 included in the Company's  annual report on Form
10-K  filed  with  the  SEC.  Interim  operating  results  are  not  necessarily
indicative of operating  results for any future  interim  period or for the full
year.

NOTE 2.  GOING CONCERN CONSIDERATIONS

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going  concern.  At September  30, 2000,  and for the
three months then ended,  the Company had a net loss,  negative working capital,
and a decline in net worth  which raise  substantial  doubt about its ability to
continue as a going concern.  The Company's losses have resulted  primarily from
an  inability  to achieve  product  sales and  contract  revenue  targets due to
insufficient working capital.  ITEC's ability to continue operations will depend
on positive  cash flow,  if any,  from future  operations  and on the  Company's
ability to raise additional funds through equity or debt financing.  The Company
has cut back and/or  discontinued some of its operations and, if it is unable to
raise or obtain  needed  funding,  the  Company  may be  forced  to  discontinue
operations  generally.  On August 20, 1999, at the request of Imperial Bank, the
Company's  primary  lender,  the  Superior  Court  of  San  Diego  appointed  an
operational receiver who took control of the Company's day-to-day  operations on
August 23, 1999.  On June 21, 2000, in  connection  with a settlement  agreement
reached with  Imperial  Bank,  the  Superior  Court of San Diego issued an order
dismissing the operational receiver.

On October 21, 1999, Nasdaq notified the Company that it no longer complied with
the  bid  price  and  net  tangible  assets/market   capitalization/net   income
requirements for continued  listing on The Nasdaq SmallCap Market.  At a hearing
on December 2, 1999, a Nasdaq  Listing  Qualifications  Panel also raised public
interest concerns relating to the Company's financial  viability.  The Company's
common stock was delisted from The Nasdaq Stock Market  effective with the close
of  business  on March 1, 2000.  As a result of being  delisted  from The Nasdaq
SmallCap  Market,  stockholders may find it more difficult to sell common stock.
This lack of liquidity  also may make it more  difficult to raise capital in the
future.   Trading  of  the  Company's   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.

                                       5
<PAGE>

The  Company  is in the  process  of  reestablishing  management  control of its
operations  and  resuming  its  strategic  plan.  In order to succeed,  however,
Company must obtain  additional  funds to provide  adequate  working capital and
finance operations.  To address the Company's working capital needs, on July 12,
2000, it announced an agreement for a financing facility providing  commitments,
under  specific  conditions,  to purchase up to $36 million of its common shares
over  the  two  years  after  September  27,  2000,  the  effective  date  of  a
registration  statement filed with the Securities and Exchange  Commission.  The
Company has also  engaged a financial  advisor to assist  with  additional  fund
raising efforts and to help identify merger and  acquisition  candidates.  There
can be no assurance,  however,  that the Company will be able to comply with the
Imperial Bank  settlement  agreement,  meet the  conditions  under the financing
facility,  or complete any  additional  debt or equity  financings  on favorable
terms or at all, or that any such financings,  if completed, will be adequate to
meet the Company's  capital  requirements.  Any additional equity or convertible
debt  financings   could  result  in  substantial   dilution  to  the  Company's
stockholders.  If adequate funds are not available,  the Company may be required
to delay, reduce or eliminate some or all of its planned  activities,  including
any  potential  mergers or  acquisitions.  The  Company's  inability to fund its
capital  requirements  would have a material adverse effect on the Company.  The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

NOTE 3.  EARNINGS (LOSS) PER COMMON SHARE

Basic earnings  (loss) per common share ("Basic EPS")  excludes  dilution and is
computed by dividing net income  (loss)  available to common  shareholders  (the
"numerator") by the weighted  average number of common shares  outstanding  (the
"denominator")  during the  period.  Diluted  earnings  (loss) per common  share
("Diluted  EPS") is similar  to the  computation  of Basic EPS  except  that the
denominator is increased to include the number of additional  common shares that
would have been  outstanding  if the dilutive  potential  common shares had been
issued. In addition, in computing the dilutive effect of convertible securities,
the  numerator  is  adjusted  to add  back  the  after-tax  amount  of  interest
recognized in the period  associated with any convertible  debt. The computation
of Diluted EPS does not assume  exercise or conversion of securities  that would
have an anti-dilutive  effect on net earnings (loss) per share. The following is
a reconciliation of Basic EPS to Diluted EPS:
<TABLE>
<CAPTION>
                                                           EARNINGS (LOSS)        SHARES           PER-SHARE
                                                             (NUMERATOR)       (DENOMINATOR)        AMOUNT
SEPTEMBER 30, 2000
<S>                                                        <C>
   Net loss                                                $     (2,378)
     Preferred dividends                                             (6)
                                                           -------------
   Basic and diluted EPS                                   $     (2,384)         103,160       $     (0.02)
                                                              ==========      ==========             ======
</TABLE>

NOTE 4.  INVENTORIES
<TABLE>
<CAPTION>
                                                                              SEPTEMBER 30,      JUNE 30,
                                                                                  2000             2000
     Inventories
<S>                                                                         <C>              <C>
         Materials and supplies                                             $         24     $          87
         Finished goods                                                               40               116
                                                                                --------         ---------
                                                                            $         65      $        203
                                                                                ========          ========
</TABLE>

                                       6
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS

         The following  discussion  and analysis  should be read in  conjunction
with the consolidated financial statements and notes thereto appearing elsewhere
in this Quarterly Report on Form 10-Q. The discussion of the Company's  business
contained in this Quarterly Report on Form 10-Q may contain certain projections,
estimates and other  forward-looking  statements  that involve a number of risks
and uncertainties, including those discussed below at "Risks and Uncertainties."
While  this  outlook  represents  management's  current  judgment  on the future
direction  of the  business,  such risks and  uncertainties  could cause  actual
results to differ  materially from any future  performance  suggested below. The
Company  undertakes  no  obligation  to  release  publicly  the  results  of any
revisions to these forward-looking statements to reflect events or circumstances
arising after the date hereof.

OVERVIEW

         Imaging   Technologies   Corporation   develops,    manufactures,   and
distributes high-quality digital imaging solutions. The Company produces printer
and imaging products for use in graphics and publishing, digital photography and
other niche business and technical markets.  Beginning with a core technology in
the  design  and  development  of  controllers   for  non-impact   printers  and
multifunction  peripherals,  the Company has expanded  its product  offerings to
include  monochrome and color  printers,  external print servers,  digital image
storage devices, and software to improve the accuracy of color reproduction.

         The Company's  business  continues to be in a significant  transitional
phase and there are important short-term  operational and liquidity  challenges.
Accordingly,   quarter-to-quarter   financial  comparisons  may  be  of  limited
usefulness now and for the next several quarters due to these important  changes
in the Company's business.

         Historically,  a portion  of the  Company's  income  was  derived  from
non-recurring engineering fees and royalty income from a relatively small number
of original equipment  manufacturing  ("OEM")  customers.  Over the past several
years,  the  Company  has  experienced  shortfalls  in  income  as a  result  of
engineering  contracts  with OEM  manufacturers  for  products  that were  never
completed by the OEM, were never  introduced into the market and shipped or were
cancelled by the customer before ITEC completed the deliverables  portion of the
contract.  Failure  of these  OEMs to  achieve  significant  sales  of  products
incorporating the Company's technology and fluctuations in the timing and volume
of such sales had a materially adverse effect on the Company.

         The  Company's  current  strategy is to continue to focus on rebuilding
its OEM business and develop,  commercialize  and  distribute its own technology
products,  including its software  products.  The Company intends to continue to
develop  its target  markets and to pursue  clearly  defined  commercial  market
opportunities in order to leverage its core technologies.

         To successfully execute its current strategy,  the Company will need to
improve its working capital  position.  The report of the Company's  independent
auditors  accompanying the Company's June 30, 2000 financial statements includes
an  explanatory  paragraph  indicating  there is a  substantial  doubt about the
Company's ability to continue as a going concern, due primarily to the decreases
in the Company's  working  capital and net worth. At September 30, 2000, and for
the three  months then  ended,  the  Company  had a net loss,  negative  working
capital,  and a decline in net worth which continue to raise  substantial  doubt
about its ability to continue as a going concern.

         The Company needs to raise additional funds to operate its business and
has been actively pursuing solutions to its liquidity  difficulties.  To address
the Company's working capital needs, on July 12, 2000, it announced an agreement
for a financing facility providing  commitments,  under specific conditions,  to
purchase  up to $36  million  of its  common  shares  over the two  years  after
September 27, 2000, the effective date of a  registration  statement  filed with
the SEC.  The  Company  has also  engaged a  financial  advisor  to assist  with
additional  fund raising  efforts and to help  identify  merger and  acquisition
candidates. There can be no assurance, however, that the Company will be able to
complete this or any additional  debt or equity  financing on favorable terms or
at all, or that any such financings,  if completed, will be adequate to meet the
Company's  capital  requirements.  Any  additional  equity or  convertible  debt
financings could result in substantial  dilution to the Company's  stockholders.
If adequate  funds are not  available,  the  Company  will be required to delay,
reduce  or  eliminate  some  or all of its  planned  activities.  The  Company's
inability to fund its capital  requirements would have a material adverse effect
on  the  Company.   See  "Liquidity  and  Capital   Resources"  and  "Risks  and
Uncertainties -- Future Capital Needs."

                                       7
<PAGE>

RESULTS OF OPERATIONS NET REVENUES

         Revenues were $837  thousand and $1.05  million for the quarters  ended
September  30, 2000 and 1999,  respectively.  The 20%  decrease in sales was due
primarily to the  Company's  ongoing  liquidity  shortage,  which  substantially
reduces its ability to purchase components to build inventories for sale. During
most of the previous  fiscal year and for the period ended  September  30, 1999,
the  Company was under the control of a  court-appointed  operational  receiver.
Management resumed control of the Company on June 21, 2000.

COST OF PRODUCTS SOLD

         Cost of products  sold were $443  thousand or 53% of product  sales and
$693 thousand or 74% of product sales for the quarters ended  September 30, 2000
and 1999, respectively.  The percentage decrease in 2000 as compared to 1999 was
primarily  due to  improved  margins  on  product  sales.  During the prior year
period, when the Company was being operated by the  court-appointed  operational
receiver,  products were sold at smaller  profit  margins;  in some cases,  at a
loss.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         Selling,  general and administrative expenses were $2.4 million or 281%
of total  revenue and $3.4  million or 321% of total  revenues  for the quarters
ended  September  30,  2000  and  1999,   respectively.   Selling,  general  and
administrative  expenses consisted primarily of general  corporation  functions,
salaries,  facilities,  and  fees for  professional  services,  including  legal
expenses.  The decrease in selling,  general and administrative  expenses in the
period ended September 30, 2000 as compared to the  year-earlier  period was due
primarily  to  management's  reduction  of  associated   activities,   including
reductions in personnel,  marketing expenses,  and facilities,  due to a lack of
working capital.

COST OF ENGINEERING AND RESEARCH AND DEVELOPMENT

         Engineering and research and development expenses were $239 thousand or
29% of total revenue and $649 thousand or 62% of total revenues for the quarters
ended  September 30, 2000 and September 30, 1999.  The decrease in expenses 2000
compared to 1999 resulted  primarily from reductions in engineering and research
and  development  activity  during the  period  that the  Company  was under the
control of the court-appointed operational receiver and the associated reduction
in  engineering  personnel to support  such  activities,  including  the sale of
engineering development contracts with OEM customers.

LIQUIDITY AND CAPITAL RESOURCES

     Historically,  the Company has financed its  operations  primarily  through
cash  generated from  operations,  debt  financing,  and from the sale of equity
securities.

         The Company  has  received  and  anticipates  that it will  continue to
receive  cash  from  collections  of  accounts  receivable  from its  customers,
distributors,  and  OEMs.  These  groups  generally  have a  history  of  timely
payments;  however,  an increasing  amount of  international  sales can increase
accounts   receivable   balances  due  to   traditionally   slower  payments  by
international customers. Any failure of the Company's customers, distributors or
OEMs to pay, or any significant  delay in the payment of, a material  portion of
the amounts  owing to the Company  could have a material  adverse  effect on the
Company.

          In the  near-term,  however,  the Company must rely on generating  the
majority of its cash from the sale of equity securities. To address these needs,
on July 12, 2000,  the Company  announced an agreement for a financing  facility
providing commitments,  under specific conditions, to purchase up to $36 million
of its common shares over the two years after  September 27, 2000, the effective
date of a registration statement filed with the SEC.

         As of September 30, 2000, the Company had negative  working  capital of
approximately  $15.2  million,  a  decrease  of  approximately  $0.7  million as
compared  to June 30,  1999.  The  decrease is  primarily  due to an increase in
accrued expenses.

         To date, through further equity infusion into the Company, primarily in
the form of the  exercise  of  warrants  to  purchase  the  common  stock of the
Company,  operations  have  continued.  Without  additional  funding in the near
future, sufficient to satisfy the creditors of the Company, as well as providing
working capital for the Company,  the

                                       8
<PAGE>

Company  will cease to operate.  The  Company  continues  to actively  work with
entities capable of providing such funding.

         Net cash used in operating activities decreased to $1.05 million during
the quarter ended September 30, 2000, from $1.6 million during the quarter ended
September 30, 1999, due primarily to a decrease in available cash.

         Net cash used in investing  activities decreased to $55 thousand during
the quarter  ended  September 30, 2000,  from $358  thousand  during the quarter
ended September 30, 1999, due primarily to decreases in capitalized software.

         Net cash from financing activities decreased to $1.2 million during the
quarter ended  September  30, 2000,  from $1.9 million  during the  year-earlier
quarter,  due to a decrease in proceeds on the issuance of common  stock,  which
has been the Company's primary source of liquidity.

         The Company's 5% convertible  preferred stock (which ranks prior to the
Company's common stock) carries cumulative  dividends,  when and as declared, at
an annual rate of $50.00 per share.  The aggregate  amount of such  dividends in
arrears at September 30, 2000, was approximately $500 thousand.

         The Company has no material commitments for capital expenditures.

         The  Company's  capital   requirements   depend  on  numerous  factors,
including market acceptance of the Company's products,  the scope and success of
the Company's product development  efforts, the resources the Company devotes to
marketing and selling its products,  and other factors.  The Company anticipates
that its capital requirements will increase in future periods as it continues to
develop new products and increases its sales and marketing  efforts.  The report
of the Company's  independent auditors  accompanying the Company's June 30, 2000
financial  statements  includes an explanatory  paragraph  indicating there is a
substantial  doubt about the Company's  ability to continue as a going  concern,
due primarily to the decreases in the Company's  working  capital and net worth.
If  adequate  funds are not  available,  the  Company  may be required to delay,
reduce  or  eliminate  some  or all of its  planned  activities.  The  Company's
inability to fund its capital  requirements would have a material adverse effect
on the Company. See "Risks and Uncertainties--Future Capital Needs."

RISKS AND UNCERTAINTIES FUTURE CAPITAL NEEDS

Need for Future Capital

         ITEC's  business has not been  profitable in the past and it may not be
profitable in the future.  The Company may incur losses on a quarterly or annual
basis for a number of reasons,  some within and others outside its control.  See
"Potential  Fluctuation  in  Our  Quarterly  Performance."  The  growth  of  the
Company's business will require the commitment of substantial capital resources.
If funds are not available  from  operations,  the Company will need  additional
funds.  ITEC 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 needed.  Even if funds are  available,  the terms under which the
funds are available may not be acceptable to the Company. Insufficient funds may
require the delay,  reduction,  or  elimination  of some or all of the Company's
planned activities.  Also see "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources."

Potential Fluctuation in Quarterly Performance

         Quarterly operating results can fluctuate  significantly depending on a
number of factors,  any one of which could have a material adverse effect on the
Company's  results of  operations.  The factors  include:  the timing of product
announcements  and subsequent  introductions of new or enhanced  products by the
Company and by its competitors,  the  availability  and cost of components,  the
timing and mix of shipments of the Company's products,  the market acceptance of
new  products,  seasonality,  currency  fluctuations,  changes in the  Company's
prices and in the Company's  competitors'  prices,  price protection  offered to
distributors and OEMs for product price  reductions,  the timing of expenditures
for staffing and related  support costs,  the extent and success of advertising,
research  and  development   expenditures,   and  changes  in  general  economic
conditions.

         The  Company  may  experience  significant  quarterly  fluctuations  in
revenues and  operating  expenses as it introduces  new  products.  In addition,
component purchases,  production and spending levels are based upon management's
forecast  of  future  demand  for  the  Company's  products.   Accordingly,  any
inaccuracy  in the  Company's  forecasts  could  adversely  affect its financial
condition and results of operations.  Demand for the

                                       9
<PAGE>

Company's  products  could be  adversely  affected  by a slowdown in the overall
demand for computer systems,  printer products or digitally printed images.  The
Company's  failure to complete  shipments during a quarter could have a material
adverse effect on its results of operations for that quarter.  Quarterly results
are not necessarily indicative of future performance for any particular period.

Highly Competitive Industry

         The  markets  for ITEC  products  are highly  competitive  and  rapidly
changing.  Some  of the  Company's  current  and  prospective  competitors  have
significantly   greater  financial,   technical,   manufacturing  and  marketing
resources than ITEC. The Company's  ability to compete in its markets depends on
a number of factors,  some within and others outside its control.  These factors
include:  the frequency and success of product  introductions by the Company and
by its competitors,  the selling prices of ITEC products and of its competitors'
products,  the  performance of ITEC products and of its  competitors'  products,
product  distribution by ITEC and by its competitors,  ITEC's marketing  ability
and the  marketing  ability of its  competitors,  and the  quality  of  customer
support offered by ITEC and by its competitors.

         A key element of ITEC's  strategy is to provide  competitively  priced,
quality products.  The Company cannot be certain that its products will continue
to be competitively  priced.  The Company has reduced prices on certain 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 gross margins
and may  adversely  affect the  Company's  financial  condition  and  results of
operations.

Short Product Lives and Technological Change

         The markets for ITEC's 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. The future success of the Company will depend on its ability to continue
to develop and manufacture  competitive products and achieve cost reductions for
existing products. In addition, the Company monitors new technology developments
and coordinates with suppliers, distributors and dealers to enhance its existing
products  and to lower costs.  Advances in  technology  will  require  increased
investment in product development to maintain the Company's market position.  If
the Company is unable to develop and manufacture new,  competitive products in a
timely  manner,  its  financial  condition  and  results of  operations  will be
adversely affected.

Developing Markets and Applications

         The  markets  for  ITEC  products  are  relatively  new and  are  still
developing.  Management  believes that there has been growing market  acceptance
for color printers,  color management software and supplies.  The Company cannot
be  certain,   however,   that  these  markets  will  continue  to  grow.  Other
technologies  are  constantly  evolving  and  improving.  The Company  cannot be
certain that products based on these other technologies will not have a material
adverse effect on the demand for its products.

Dependence Upon Suppliers

         At  present,  many of ITEC's  products  use  technology  licensed  from
outside  suppliers.  The Company relies heavily on these  suppliers for upgrades
and support.  In the case of ITEC font products,  the Company licenses the fonts
from outside  suppliers,  who also own the  intellectual  property rights to the
fonts.  The Company's  reliance on  third-party  suppliers  involves many risks,
including limited control over potential hardware and software incompatibilities
with ITEC products.  Furthermore,  the Company cannot be certain that all of the
suppliers  of products it markets  will  continue to license  their  products to
ITEC, or that these suppliers will not license their products to other companies
simultaneously.

Risks Related to Acquisitions

         In order to grow the business,  the Company may acquire businesses that
management believes are complementary.  To successfully implement this strategy,
the  Company  must  identify  suitable  acquisition  candidates,  acquire  these
candidates  on acceptable  terms,  integrate  their  operations  and  technology
successfully  with the  Company,  retain  existing  customers  and  maintain the
goodwill  of the  acquired  business.  The  Company  may fail in its  efforts to
implement  one or  more  of  these  tasks.  Moreover,  in  pursuing  acquisition
opportunities,  the  Company  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 those of the Company.
Competition for these

                                       10
<PAGE>

acquisition  targets likely could also result in increased prices of acquisition
targets and a diminished pool of companies  available for  acquisition.  Overall
financial  performance will be materially and adversely  affected if the Company
is unable to manage internal or acquisition-based growth effectively.

         Acquisitions involve a number of risks, including: integrating acquired
products  and  technologies  in a  timely  manner;  integrating  businesses  and
employees  with  the  Company's  business;   managing   geographically-dispersed
operations;   reductions  in  the  Company's  reported  operating  results  from
acquisition-related charges and amortization of goodwill; potential increases in
stock  compensation  expense and increased  compensation  expense resulting from
newly-hired employees;  the diversion of management attention; the assumption of
unknown liabilities; potential disputes with the sellers of one or more acquired
entities;  the  Company's  inability  to  maintain  customers  or goodwill of an
acquired  business;  the need to divest  unwanted  assets or  products;  and 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 the Company's  reputation,  and any
acquired  business could  significantly  under perform relative to expectations.
The Company is currently  facing all of these challenges and its ability to meet
them  over the long term has not been  established.  As a  result,  the  Company
cannot  be  certain  that it will be  able  to  integrate  acquired  businesses,
products or  technologies  successfully or in a timely manner in accordance with
its strategic objectives,  which could have a material adverse effect on overall
financial performance.

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

Dependence on Key Personnel

         The success of the Company is dependent,  in part,  upon its ability to
attract and retain qualified management and technical personnel. Competition for
these personnel is intense,  and the Company will be adversely affected if it is
unable  to  attract  additional  key  employees  or if it loses  one or more key
employees. The Company may not be able to retain its key personnel.

Component Availability and Cost; Dependence on Single Sources

         The  Company  presently  out-sources  the  production  of  some  of its
manufactured  products through a number of vendors located in California.  These
vendors assemble products,  using components purchased by the Company from other
sources  or from  their  own  inventory.  The  terms  of  supply  contracts  are
negotiated separately in each instance. Although the Company has not experienced
any  difficulty  over  the past  several  years in  engaging  contractors  or in
purchasing components,  present vendors may not have sufficient capacity to meet
projected market demand for ITEC products and alternative production sources may
not be available without undue disruption.

         Contract vendors generally perform  multi-step  quality control testing
prior to shipping their products to the Company.  The Company, in turn, includes
appropriate software,  performs additional tests on the products,  then packages
and ships products into the  distribution  channels.  In addition to buying such
items as printed circuit boards and other components from outside  vendors,  the
Company purchases and/or licenses software programs, including operating systems
and  intellectual  property  modules  (pre-written  software  code to  execute a
specifically  defined  operation).  The Company  purchases  these  products from
vendors  who  have  licenses  to sell  the  software  to the  Company  from  the
originators  of the software,  and have,  from time to time,  directly  licensed
system  software that is either  embedded or otherwise  incorporated  in certain
ITEC products.

         While most  components  are available  locally from  multiple  vendors,
certain components used in ITEC products are only available from single sources.
Although  alternative  suppliers are readily available for many components,  for
some  components  the process of  qualifying  replacement  suppliers,  replacing
tooling or ordering  and  receiving  replacement  components  could take several
months and cause substantial disruption to operations.  Any significant increase
in component prices or decrease in component  availability could have a material
adverse effect on the Company's business and overall financial performance.

Possibility of Challenge to Products or Intellectual Property Rights

         The  Company  currently  holds  no  patents.   The  Company's  software
products,  hardware  designs,  and  circuit  layouts are  copyrighted.  However,
copyright  protection  does not  prevent  other  companies  from  emulating  the
features  and  benefits  provided  by  its  software,  hardware  designs  or the
integration of the two. The Company  protects

                                       11
<PAGE>

its software source code as trade secrets and makes its proprietary  source code
available  to OEM  customers  only  under  limited  circumstances  and  specific
security and confidentiality  constraints. In many product hardware designs, the
Company  develops   application-specific   integrated   circuits  (ASICs)  which
encapsulate  proprietary technology and are installed on the circuit board. This
can serve to significantly reduce the risk of duplication by competitors, but in
no way ensures  that a  competitor  will be unable to replicate a feature or the
benefit in a similar product.

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

Risks Associated with International Operations

         The Company conducts  business  globally.  Accordingly,  future results
could be adversely  affected by a variety of uncontrollable and changing factors
including:  foreign currency  exchange  fluctuations;  regulatory,  political or
economic  conditions  in  a  specific  country  or  region;  the  imposition  of
governmental controls;  export license requirements;  restrictions on the export
of critical  technology;  trade  restrictions;  changes in  tariffs;  government
spending  patterns;  natural  disasters;  difficulties  in staffing and managing
international operations; and difficulties in collecting accounts receivable.

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

Dependence on Export Sales

         The Company intends to pursue international  markets as key avenues for
growth and to  increase  the  percentage  of sales  generated  in  international
markets. In the Company's past few fiscal years, sales outside the United States
represented  over half of its net sales.  The Company  expects sales outside the
United  States to continue to represent a significant  portion of its sales.  As
the Company  continues to expand its  international  sales and  operations,  the
business and overall financial  performance may be adversely affected by factors
such as those described under "Risks Associated with International Operations."

Reliance on Indirect Distribution

         ITEC products are marketed and sold through an established distribution
channel  of  value  added  resellers,  manufacturers'  representatives,   retail
vendors,  and  systems  integrators.  The  Company  has 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.  The Company supports its
worldwide  distribution  network  and  end-user  customers  through  centralized
manufacturing,  distribution,  and repair operations headquartered in San Diego.
As of October 6, 2000, the Company directly  employed nine individuals  involved
in marketing and sales activities.

         Sales  are  principally  made  through  distributors,  which  may carry
competing product lines. These distributors could reduce or discontinue sales of
ITEC products,  which could materially and adversely  affect the Company.  These
independent  distributors  may not devote  the  resources  necessary  to provide
effective sales and marketing support of ITEC products. In addition, the Company
is 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 the Company's markets.  Management
believes  that the future  growth and  success of the Company  will  continue to
depend in large  part upon its  distribution  channels.  The  business  could be
materially  and  adversely  affected if the Company's  distributors  fail to pay
amounts to the Company that exceed  reserves it has  established.  To expand its
distribution channels, the Company has entered into select OEM arrangements that
allow it to address  specific  market  segments or geographic  areas. To prevent
inventory  write-downs in the event that OEM customers do not purchase  products
as  anticipated,  the  Company  may need to convert  such  products to make them
salable to other customers.

                                       12
<PAGE>

Volatility of Stock Price

         The market price of ITEC's  common stock  historically  has  fluctuated
significantly.  The Company's stock price could fluctuate  significantly  in the
future based upon any number of factors such as:  general  stock market  trends;
announcements of developments  related to ITEC's  business;  fluctuations in the
Company's operating results; a shortfall in revenues or earnings compared to the
estimates of securities  analysts;  announcements of technological  innovations,
new  products  or  enhancements  by  the  Company  or its  competitors,  general
conditions in the computer  peripheral  market and the imaging markets served by
the Company;  general  conditions  in the  worldwide  economy;  developments  in
patents or other intellectual property rights; and developments in the Company's
relationships with its 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 ITEC common  stock may
fluctuate  significantly based upon factors unrelated to the Company's operating
performance.

Absence of Dividends

         The Company has not paid any cash dividends on its common stock to date
and it does not anticipate paying cash dividends in the foreseeable future.

Appointment and Removal of Operational Receiver

         On August 20,  1999,  at the request of Imperial  Bank,  the  Company's
primary lender, the Superior Court, San Diego appointed an operational receiver.
On August 23, 1999, the operational  receiver took control of ITEC's  day-to-day
operations.  Through  further  equity  infusion,  primarily  in the  form of the
exercise of warrants to purchase ITEC common stock,  operations  have continued,
and on June 21, 2000, the Superior Court,  San Diego issued an order  dismissing
the operational  receiver.  However,  in the future,  without additional funding
sufficient to satisfy  Imperial Bank and other  creditors,  as well as providing
for  working  capital,  there  can be no  assurances  that such  operations  can
continue.  In  addition,  the Company may not be able to satisfy all  conditions
required to sell shares under the Private  Equity Line of Credit  Agreement.  In
that case,  the Company  would likely need to raise money from other  sources in
order to  continue  to fund  operations.  Such  alternative  funding  may not be
available.  If such funding is not obtained,  the Company will need to reduce or
suspend operations.

Nasdaq Listing and Liquidity of Common Stock

         The Nasdaq(R)  SmallCap(R)  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. On October 21, 1999, Nasdaq notified the Company that it no longer
complied  with the bid price and net tangible  assets/market  capitalization/net
income  requirements for continued  listing on The Nasdaq SmallCap Market.  At a
hearing on December 2, 1999, a Nasdaq Listing  Qualifications  Panel also raised
public interest concerns relating to the Company's  financial  viability.  While
the Panel acknowledged that ITEC was in technical  compliance with the bid price
and market  capitalization  requirements,  the Panel was of the opinion that the
continued  listing of ITEC common stock on The Nasdaq Stock Market was no longer
appropriate.  This  conclusion was based on the Panel's  concerns  regarding the
future viability of the Company.  ITEC common stock was delisted from The Nasdaq
Stock Market  effective with the close of business on March 1, 2000. As a result
of being delisted from The Nasdaq SmallCap Market, stockholders may find it more
difficult to sell ITEC common  stock.  This lack of  liquidity  also may make it
more difficult for the Company to raise capital in the future.

         Trading of ITEC 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.

                                       13
<PAGE>

         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 ITEC common stock falls within the  definition  of penny
stock,  these  regulations  require  the  delivery,  prior  to  any  transaction
involving ITEC 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 ITEC common stock and the ability of shareholders to sell
ITEC common stock in the  secondary  market would be limited.  As a result,  the
market liquidity for ITEC common stock would be severely and adversely affected.
The Company can provide no assurance  that trading in ITEC common stock will not
be subject to these or other  regulations in the future,  which would negatively
affect the market for ITEC common stock.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

            None

PART II - OTHER INFORMATION
--------------------------------------------------------------------------------

ITEM 1.  LEGAL PROCEEDINGS

         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  the Company 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 the  Company.  The Company has not yet
been  required to file an answer or other  pleading in response to the  lawsuit.
The Company  believes  these claims are without  merit and intends to vigorously
defend  against  them  on its own  behalf  as well  as on  behalf  of the  other
defendants.

         Throughout  fiscal 1999 and 2000,  and through the date of this filing,
various creditors of the Company have made claims and/or served the Company with
lawsuits alleging the failure of the Company to pay its obligations to them in a
total amount  exceeding $2.5 million.  The lawsuits are in various stages.  Some
have resulted in judgments being entered against the Company. Should the Company
be  required  to pay the  full  amount  demanded  in each of  these  claims  and
lawsuits,  such a  requirement  would  have a  material  adverse  impact  on the
operations  of the Company.  However,  the superior  security  interest  held by
Imperial Bank has prevented these creditors from collecting on their judgments.

         Furthermore,  from  time  to  time,  the  Company  may be  involved  in
litigation relating to claims arising out of its operations in the normal course
of business.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         On July 5, 2000,  the  Company  entered  into a Private  Equity Line of
Credit Agreement with Impany  Investment  Limited  ("Impany").  Pursuant to this
agreement, the Company has the right, subject to certain conditions,  to sell up
to $36,000,000  of common stock over the next two years to Impany,  which Impany
may resell to the public under a  registration  statement  filed with the SEC in
September 2000. Additionally, the Company issued a warrant to Impany to purchase
up to 2,000,000  shares of its common  stock at an exercise  price equal to $.57
per share.  Shares issuable upon exercise of Impany's warrant may also be resold
to the public under this registration statement.

         Beginning on September 27, 2000,  the date the  registration  statement
was declared effective by the SEC, and continuing for two years thereafter,  the
Company may in its sole  discretion  sell, or put, shares of our common stock to
Impany.  From time to time  during the  two-year  term,  the Company may make 18
monthly draw downs, by giving notice and requiring  Impany to purchase shares of
our common  stock,  for the draw down amount.  Impany's  purchase  price will be
based upon the  average  of the three  lowest  closing  bid prices of the common
stock over the period of five (5) trading days during  which the purchase  price
of the common stock is  determined  with  respect to

                                       14
<PAGE>

the put date,  which  period  shall begin two (2) trading  days prior to the put
date and end two (2) trading days following the put date. The maximum put amount
that we may sell is as set forth in the table below:
<TABLE>
<CAPTION>
----------------- ------------------ ------------------ ------------------- ------------------ ------------------
Bid                 Average Daily      Average Daily      Average Daily       Average Daily      Average Daily
Price              Trading Volume     Trading Volume    Trading Volume of    Trading Volume     Trading Volume
                   of up to 75,000   of 75,001-150,000   150,001-250,000       of 250,001-      of 400,001 and
                                                                                 400,000             above
----------------- ------------------ ------------------ ------------------- ------------------ ------------------
<S>                       <C>                <C>                 <C>                <C>                <C>
0.25-0.49                 $ 200,000          $ 300,000           $ 500,000          $ 650,000          $ 750,000
----------------- ------------------ ------------------ ------------------- ------------------ ------------------
0.50-0.74                 $ 300,000          $ 500,000           $ 650,000          $ 750,000        $ 1,000,000
----------------- ------------------ ------------------ ------------------- ------------------ ------------------
0.75-0.99                 $ 350,000          $ 550,000           $ 600,000          $ 800,000        $ 1,250,000
----------------- ------------------ ------------------ ------------------- ------------------ ------------------
1.00-1.24                 $ 400,000          $ 600,000           $ 750,000          $ 850,000        $ 1,500,000
----------------- ------------------ ------------------ ------------------- ------------------ ------------------
1.25-1.49                 $ 500,000          $ 675,000           $ 800,000          $ 925,000        $ 1,750,000
----------------- ------------------ ------------------ ------------------- ------------------ ------------------
1.50-1.99                 $ 600,000          $ 750,000           $ 850,000        $ 1,000,000        $ 2,000,000
----------------- ------------------ ------------------ ------------------- ------------------ ------------------
2.00-2.24                 $ 675,000          $ 825,000           $ 925,000        $ 1,000,000        $ 2,250,000
----------------- ------------------ ------------------ ------------------- ------------------ ------------------
2.25-2.49                 $ 700,000          $ 850,000           $ 950,000        $ 1,000,000        $ 2,500,000
----------------- ------------------ ------------------ ------------------- ------------------ ------------------
2.50-3.50                 $ 750,000          $ 900,000         $ 1,000,000        $ 1,000,000        $ 2,750,000
----------------- ------------------ ------------------ ------------------- ------------------ ------------------
Above 3.50                $ 800,000        $ 1,000,000         $ 1,250,000        $ 1,500,000        $ 3,000,000
----------------- ------------------ ------------------ ------------------- ------------------ ------------------
</TABLE>

         The Company's  ability to cause Impany to purchase shares of its common
stock under the Private  Equity Line of Credit  Agreement  is subject to certain
conditions,  including,  but not  limited to:

         o        The number of shares the Company may sell to Impany on any put
                  date,  when  aggregated  with all other  shares  then owned by
                  Impany,  cannot  exceed  9.9% of the total  common  stock then
                  outstanding.

         o        If we are  listed on The  Nasdaq  SmallCap  Market,  the total
                  number of shares that the Company may sell to Impany under the
                  agreement and warrant cannot exceed 19.9% of its common stock,
                  unless it has obtained shareholder approval as required by the
                  rules of the Nasdaq Stock Market Inc.

         o        The  registration  statement  must  remain  effective  so that
                  Impany may  publicly  resell the shares that it acquires  from
                  the Company under the agreement.

         o        There  has not been an  effect  on the  business,  operations,
                  properties,  prospects or  financial  condition of the Company
                  that is  material  and  adverse to the  Company and such other
                  entities controlling or controlled by the Company,  taken as a
                  whole,  and/or any condition,  circumstance  or situation that
                  would prohibit or otherwise  interfere with the ability of the
                  company to enter into and  perform its  obligations  under the
                  agreement.

         The Company may not be able to satisfy all  conditions  required to put
shares to Impany at any given time.  If this  occurs,  the Company  would likely
need to  raise  money  from  other  sources  in order  to  continue  to fund its
operations.  Such alternative funding may not be available.  Also, we cannot put
shares  to  Impany  at a time  when  we have  not  publicly  disclosed  material
information about our company.

         In connection  with the Private  Equity Line of Credit  Agreement,  the
Company  issued a warrant on July 5, 2000 to Impany to purchase up to  2,000,000
shares of its common stock at an exercise price equal to $.57 per share.  Impany
may exercise the warrant through January 5, 2003.

         Impany is an "underwriter"  within the meaning of the Securities Act in
connection with its resale of shares of the Company's common stock.

         To date, the Company has received $750,000 from a draw-down against the
equity line of credit, issuing 3,225,808 shares of common stock to Impany.

         In August 2000,  the Company issued  "retention"  warrants to employees
that allow the purchase of up to 2,821,000  shares of common stock at a purchase
price of $.01 per share.  These warrants become  exercisable in January 2001 for
those  employees who have remained  employed by the Company through that period.
In  addition,  subsequent  to June 30,  2000,  the  Company  issued  warrants to
officers and key employees that allow the purchase of 2,136,000 shares of common
stock at a purchase  price of $0.30 per share.  These  warrants are  exercisable
immediately.

                                       15
<PAGE>

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None

ITEM 5.  OTHER INFORMATION

         None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits:

           None.

(b)      Reports on Form 8-K

         The Company  filed a report on Form 8-K dated July 28, 2000  related to
its Private Equity Line of Credit  Agreement with Impany Investment  Limited.
(Also see, Item 2.)

                                       16
<PAGE>



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 thereunto duly authorized.

Dated: November 1, 2000

IMAGING TECHNOLOGIES CORPORATION (Registrant)

By: /s/ Brian Bonar
-------------------
Brian Bonar

Chairman and Chief Executive Officer

By: /s/ Scott Kiefer
--------------------
Scott Kiefer
Chief Accounting Officer

                                       17