UNITED STATES OF AMERICA
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

                     ANNUAL REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                     FOR THE FISCAL YEAR ENDED JUNE 30, 2002

                           COMMISSION FILE NO. 0-12641



                                                [GRAPHIC OMITED]



                        IMAGING TECHNOLOGIES CORPORATION
             (Exact Name of Registrant as Specified in its Charter)

                   DELAWARE                         33-0021693
               (State  or  Other  Jurisdiction of Incorporation or Organization)
(IRS  Employer  ID  No.)

                               17075 Via Del Campo
                           San Diego, California 92127
                                 (858) 451-6120
    (Address of Principal Executive Offices and Registrant's Telephone Number,
                              Including Area Code)

       Securities registered under Section 12(b) of the Exchange Act: NONE
         Securities registered under Section 12(g) of the Exchange Act:

                         Common Stock, $0.005 par value

Indicate  by  a  check  mark  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  preceding  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

Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-K  is  not contained herein, and will not be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form  10-K.  Yes  X  No

At  November  15,  2002  the  aggregate market value of the voting stock held by
non-affiliates  of  the  registrant was approximately $757,537 based on the last
trade  price  as reported on the NASD Electronic Bulletin Board. For purposes of
this  calculation,  shares  owned  by  officers, directors, and 10% shareholders
known  to the registrant have been excluded. Such exclusion is not intended, nor
shall  it  be deemed, to be an admission that such persons are affiliates of the
registrant.

At  November  15,  2002, there were 92,838,396 shares of the registrant's Common
Stock,  $0.005  par  value,  issued  and  outstanding.

<PAGE>

FORWARD-LOOKING  STATEMENTS

This  document 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  document.

PART  I
=======

ITEM  1.

BUSINESS
--------

     Imaging  Technologies  Corporation  (OTCBB  symbol:  IMTO)  ("ITEC"  or the
"Company")  was  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. The Company's principal executive offices are located at 17075 via Del
Campo,  San  Diego, CA 92127. The Company's main phone number is (858) 451-6120.
We  distribute  high-quality  digital  imaging  solutions  and  color management
software  products  for  use  in  graphics, publishing, digital photography, and
other  business  and  technical markets. In the 1980's, we began developing core
technologies  related to the design and functionality of non-impact printers and
multi-function  peripheral devices (printer/copier/fax). Our ColorBlind software
provides  color  management  to  improve  the  accuracy  of color reproduction -
especially  as  it  relates  to  matching  color  between different devices in a
network,  such as monitors and printers. Additionally, we market products on the
Internet  through  our  dealseekers.com  and  color.com  websites.

     In  November  2001,  we  embarked  on  an expansion program to provide more
services  to  help  with  tasks  that  have  negatively  impacted  the  business
operations  of  its  existing and potential customers. To this end, the Company,
through  strategic  acquisitions,  became  a  professional employer organization
("PEO").

     ITEC  now  provides comprehensive personnel management services through its
wholly-owned  SourceOne  Group  and  EnStructure  subsidiaries.  Each  of  these
subsidiaries  provides a broad range of services, including benefits and payroll
administration,  health  and workers' compensation insurance programs, personnel
records  management, and employer liability management to small and medium-sized
businesses.

     In  May 2002, ITEC entered into an agreement to acquire Dream Canvas, Inc.,
a  Japanese  corporation  that  has  developed  machines  currently used for the
automated  printing of custom stickers, popular in the Japanese consumer market.
We  expect  to  complete  the  acquisition in the second quarter of fiscal 2003.

     In  July  2002,  ITEC  entered  into  an  agreement  to acquire controlling
interest  in  Quik  Pix,  Inc.  ("QPI").  QPI  shares are traded on the National
Quotation  Bureau  Pink Sheets under the symbol QPIX. We anticipate closing this
transaction  in  the  second  quarter  of  fiscal  2003.

     In  August  2002,  ITEC  entered  into  an agreement to acquire controlling
interest in Greenland Corporation. Greenland shares are traded on the Electronic
Bulletin  Board under the symbol GRLC. We anticipate closing this transaction in
the  second  quarter  of  fiscal  2003.

MARKET  OVERVIEW  -  IMAGING  TECHNOLOGY  PRODUCTS
--------------------------------------------------

     ITEC's  technology  markets encompass desktop digital imaging and printing.
Our traditional market segment has been image management to enhance the function
of printers and/or digital copiers. We provide a variety of technical solutions,
including software, systems integration, and training to meet the changing needs
of  this  market.

     According  to  various market research companies such as International Data
Corporation  ("IDC")  and  The  Gartner  Group  ("Gartner"),  the  worldwide
document/imaging  market  is  expected to grow to over $200 billion by 2003. The
global  office  market  is  forecast  to  increase  to over $40 billion in 2003.
In-house color document production is expected to grow at a compound annual rate
of  40% over the next few years. Various underlying industries may have a direct
impact  on  ITEC's  market  potential.  For  example,  according  to  Gartner,
approximately  13  million  of  the  103 million households in the United States
currently have a digital camera. Worldwide digital camera shipments are forecast
to  increase dramatically to approximately 42 million by 2004, according to IDC.

     Changes in the technology of document creation, management, production, and
transmittal  (including  the  Internet)  have  been changing the dynamics of the
imaging  market.  The  greater  bandwidth  now  available  to even small desktop
computers  has  facilitated the movement of color images, which has resulting in
increased  demand  for  cross  platform  color  reproduction.

     The  growth  of  networks,  the increased availability and dissemination of
documents  on  the Internet, and the rapid adoption of color at the desktop have
changed  printing and document management. In the last few years, the market has
migrated  from  one  dominated  by  dedicated  printers  and  scanners  at  the
workstation,  to  an  emphasis  on document workflow using imaging products that
enable  remote  document  delivery  and  distribution  through  networks.

     The  direct-to-plate  and  direct-to-print  trends in the printing industry
have  created  more  demand  for  digital  color  proofing.

     The  market  growth  and  acceptance of the digital camera and the improved
resolution  of these cameras have created larger demand for color management and
accurate  color  printing.

     Accordingly,  color integrity is an important underlying requirement in the
imaging process. The widespread use of color applications at the desktop, demand
for higher quality color reproduction, expanded use of the Internet for document
dissemination  and  e-commerce,  growth  of  office  networks, and the increased
acceptance and use of digital photography are some of the factors that influence
our  markets.

     ITEC  is  working  to  deliver  solutions  that  meet  the needs of imaging
markets.  Our  objective  is to be a successful provider of products for digital
imaging  by delivering high-quality, easy-to-use products and technology. We are
focused  on continuing to provide digital imaging solutions, including hardware,
software,  and  training.

MARKET  OVERVIEW  -  PEO  SERVICES
----------------------------------

     In  November  2001,  we  expanded  into  the  business  services  market by
providing  PEO  services.

     The  PEO  industry  emerged  in the early 1980's largely in response to the
burdens  placed  on  small  and  medium-sized employers by the complex legal and
regulatory  issues  related to human resources management. While various service
providers  were  available  to assist these businesses with specific tasks, PEOs
emerged  as  providers of a more comprehensive range of services relating to the
employer/employee  relationship.  In  a  PEO  arrangement, the PEO assumes broad
aspects  of  the  employer/employee  relationship.  Because  PEOs  provide
employee-related  services  to  a  large  number  of employees, they can achieve
economies  of scale that allow them to perform employment-related functions more
efficiently,  provide  a  greater  variety  of employee benefits and devote more
attention  to  human  resources  management.

     We  believe  that the demand for PEO services is driven by (1) the trend by
small and medium-sized businesses toward outsourcing management tasks outside of
core  competencies ; (2) the difficulty of providing competitive health care and
related  benefits  to  attract and retain employees; (3) the increasing costs of
health  and  workers'  compensation  insurance  coverage  and  workplace  safety
programs;  and  (4)  complex  regulation  of labor and employment issues and the
related  costs  of  compliance.

     Growing pressure from federal agencies such as the Department of Labor, the
Immigration  and  Naturalization  Service,  and the Equal Employment Opportunity
Commission,  and  the  burdens  of  employment-related compliance such as COBRA,
OSHA,  workers'  compensation,  unemployment compensation, wrongful termination,
ADA  ("Americans  with  Disabilities  Act"), and FMLA ("Family and Medical Leave
Act")  demand  increasing  levels  of  resources  from  small  businesses.

     According  to  the  National  Association  of  Professional  Employer
Organizations  ("NAPEO"),  the  PEO industry collectively serves approximately 4
million  work site employees in the United States. The target market for the PEO
industry  is  represented  by companies with 100 or fewer employees; a market of
approximately  60  million  people.

     NAPEO also reports that current PEO industry revenues are approximately $18
billion.  The  average  annual growth rate of the industry, since 1985, has been
15%.  A  typical  PEO  client  company has 12 work site employees and an average
annual  pay  per  work  site  employee  of  $22,517.

     According  to  the U.S. Small Business Administration ("SBA"), the U.S. has
over  6  million  small businesses, defined as those companies with 100 or fewer
employees,  representing  over  99%  of  all  businesses. The U.S. Census Bureau
reports  that  small  businesses  represent  the fastest growing segment of U.S.
employment  and  commerce,  representing  an  estimated  annual  payroll of $1.4
trillion.

BUSINESS  STRATEGY
------------------

OFFICE  PRODUCTS  AND  SYSTEMS

     The  office  products  and  systems  industry  is  undergoing a fundamental
transformation  characterized  by  a  transition from analog to digital systems,
management  of  publishing  and  printing  over  the  Internet,  reliance  on
outsourcing,  and  the  rapid  transition  to  color  output.

      Our  operations  in  this  area integrate a variety of products, including
printers, plotters, copiers, and software for clients who are generally small to
medium  sized  businesses. Hardware, software, supplies, and service are bundled
together  as  a  systems  solution.

COLOR  MANAGEMENT  SOFTWARE

     Accurate  color reproduction is one of the largest single challenges facing
the imaging industry. Customers demand systems that are easy to use, predictable
and  consistent.  A color management system is needed so users can convert files
for  use  with different devices. The varying characteristics of each device are
captured  in  a  device  profile. The International Color Consortium ("ICC") has
established  a  standard  for  the  format  for  these  profiles.

     Our  ColorBlind  color  management  software  is  a  pre-packaged  suite of
applications,  utilities,  and  tools  that  allow users to precisely create ICC
profiles  for  each  device  in the color workflow including scanners, monitors,
digital  cameras, printers, and other specialized digital color input and output
devices.  Once profiled, ColorBlind balances these profiles to produce accurate,
consistent,  and  reliable  color  rendering  from  input  to output. ColorBlind
software is sold as a stand-alone application or licensed to OEM's for resale to
be  bundled  with  peripheral  devices.

     We  operate  an  Internet  site, color.com, as a resource center to provide
information  on the highest quality correct color. This site allows consumers to
purchase  our  products,  including  ColorBlind  software;  and  serves  as  an
information  resource for color imaging, including white papers on color imaging
and  management,  links  to  color  consultants  and  experts,  and  products.

     In  July  2001,  we  organized  ColorBlind Academy, which provides advanced
color  management  training  for  resellers of color imaging products, including
printers,  copiers,  monitors  and  other  imaging  products.

PERSONNEL  MANAGEMENT  SYSTEMS

     The  PEO  business provides a broad range of services associated with human
resources  management. These include benefits and payroll administration, health
and  workers'  compensation  insurance  programs,  personnel records management,
employer  liability  management,  employee recruiting and selection, performance
management,  and  training  and  development  services.

     Administrative  Functions.  We  perform  a  wide  variety of processing and
record  keeping  tasks,  mostly related to payroll administration and government
compliance.  Specific examples include payroll processing, payroll tax deposits,
quarterly  payroll tax reporting, employee file maintenance, unemployment claims
processing  and  workers'  compensation  claims  reporting.

     Benefit  Plans  Administration.  We  sponsor  benefit plans including group
health  coverage.  We are responsible for the costs and premiums associated with
these  plans,  act as plan sponsor and administrator of the plans, negotiate the
terms  and  costs of the plans, maintain the plans in accordance with applicable
federal  and  state  regulations,  and serve as liaison for the delivery of such
benefits  to  worksite  employees.

     Personnel  Management.  We  provide  a  variety  of  personnel  management
services,  which provide our client companies access to resources normally found
in  the  human  resources  departments of larger companies. Our client companies
will  have  access  to  a  personnel  guide,  which  will set forth a systematic
approach  to  administering  personnel  policies  and  practices.

     Employer Liability Management. Under our Client Services Agreement ("CSA"),
we  assume  many  employment-related  responsibilities  associated  with
administrative  functions and benefit plans administration. Upon request, we can
also  provide  our  clients  guidance  on avoiding liability for discrimination,
sexual  harassment,  and civil rights violations. We employ counsel specializing
in  employment  law.

     Client Service Agreement. All clients enter into our CSA, which establishes
our  service  fee.  The  CSA  is  subject to periodic adjustments to account for
changes  in the composition of the client's workforce and statutory changes that
affect  our  costs.  The  CSA  also establishes the division of responsibilities
between  our Company and the client as co-employers. Pursuant to the CSA, we are
responsible  for  personnel  administration  and  are  liable  for  certain
employment-related  government  regulation. In addition, we assume liability for
payment  of  salaries, wages (including payroll taxes), and employee benefits of
worksite  employees.  The  client  retains  the  employees' services and remains
liable  for  the  purposes  of  certain  government  regulations.

     The  PEO  business  is  growing  rapidly,  but  profit  margins  are small.
Consequently, profitability depends on (1) economies of scale leading to greater
operating  efficiencies;  and  (2)  value-added  services  such  as  training,
education,  Internet  support,  and other services that may be used by employers
and  employees.

     The  income  model for this business generally revolves around fees charged
per  employee. While gross profit is low, revenues are generally substantial. To
this  end,  the Company intends to pursue  acquisitions of small PEO firms. Each
acquisition  is  expected  to  include retention of some existing management and
staff  in  order  to  assure  continuity  of  operations.

DREAM  CANVAS

     The  potential  acquisition of Dream Canvas Technology ("DCT") will help to
expand  our  imaging  products  business. DCT is a Japanese corporation that has
developed machines currently used for the automated printing of custom stickers,
popular in the Japanese consumer market. Known as Senjya, printed stickers began
as a part of religious practices; however, the use of custom stickers has become
a  popular  social  practice  today.

     DCT  has currently placed over 260 of its printing kiosks throughout Japan.
Through  its Senjya Fuda business unit, consumers can design and print their own
custom  stickers.  Through  its  Print  Club business unit, the same kiosks will
allow  consumers  to  use  their  own digital images, such as those from digital
cameras,  to  include  pictures  on  their  custom  stickers.

     The  Dream  Canvas  technology  will also enable end-users to customize and
print  photos  on specialty photographic paper. ITEC will work with Dream Canvas
to  implement  this  application  in  the existing Dream Canvas locations and to
expand  the  technology  into  new  markets.

QPI  -  PHOTOMOTION

     The  potential  acquisition  of  QPI  is  expected  to  advance our imaging
products  business,  particularly  as  it  related  to  the  advertising  and
merchandising  industry.

     QPI's Photomotion Images  are based upon patented technology. The resulting
product  is  a  unique color medium that uses existing original images to create
the  illusion  of  movement  that  allows  three  to  five distinct images to be
displayed  in an existing light box. The images appear to change, or "morph," as
a  viewer  passes  the  display. This ability to put multiple images in a single
space,  without  the  need for mechanical devices, allows for the creation of an
active  and entertaining display. The product is currently marketed in the U.S.,
Europe,  Asia  and  Latin  America.

     Visual  marketing,  including  out-of-home  media,  is a large and growing,
multi-billion  dollar  worldwide  industry. An industry survey suggests that the
field of visual marketing will increase at a rate of 50% annual for the next ten
years.  Out-of-home  media  plays a critical role in the media plans of national
and  international  advertisers.

GREENLAND  CORPORATION

     The  potential  acquisition of Greenland Corporation is expected to advance
our  PEO  business  and  to  provide  additional  value-added services to client
companies.  Greenland  has  established  a wholly-owned subsidiary, ExpertHR, to
pursue  core PEO business. We believe that there is considerable synergy between
the  PEO  business  and  Greenland's  check  cashing  technology  and  systems

     Greenland's wholly owned subsidiary, Check Central, is the developer of the
Check  Central  Solutions'  transaction  processing  system software and related
MAXcash  Automated  Banking  Machine  (ABM  )  kiosk  designed  to  provide
self-service  check  cashing  and  ATM-banking functionality. The MAXcash system
provides  full ATM functionality, phone card, and money order dispensing and, in
the  near  future,  will  offer  bill  paying,  and  wire  transfer  services.

     The  payroll  check-cashing  industry  continues  to  expand,  serving  a
population  that  now  numbers  35%  of  working  Americans.

COMPETITION
-----------

     The  markets for the Company's products and services are highly competitive
and rapidly changing. The Company's ability to compete in its markets depends on
a  number  of  factors, including the success and timing of product and services
introductions  by  the Company and its competitors, selling prices, performance,
distribution,  marketing  ability,  and  customer  support. A key element of the
Company's  strategy  is  to  provide  competitively-priced, quality products and
services.

     The  PEO  business is also highly competitive, with approximately 900 firms
operating in the U.S. There are several firms that operate on a nationwide basis
with  revenues and resources far greater than ours. Some large PEO companies are
owned  by insurance carriers and some are public companies whose shares trade on
Nasdaq,  including  Administaff,  Inc.,  Team  Staff,  Inc.,  Barrett  Business
Services,  and  Staff  Leasing,  Inc.  Also  see  "Risks  and  Uncertainties."

OPERATIONS
----------

     The  Company's  3,000  square  foot  corporate headquarters facility in San
Diego,  California  houses  most  of  our  administrative operations. During the
fiscal  year  ended  June  30,  2002,  until  October  22, 2002, we had a second
facility  in  San Diego, which housed our office products and services. In order
to  reduce  expenses,  the  Company  has  moved  most  of  its operations to its
corporate headquarters location. PEO operations are conducted from the Company's
headquarter  offices and small branch offices in Richmond, Virginia, Scottsdale,
Arizona,  and  Troy, Michigan. Additional sales offices for imaging products are
maintained  in  Mexico  City  and  Guadalajara,  Mexico.

MANUFACTURING,  PRODUCTION,  AND  SOURCES  OF  SUPPLY
-----------------------------------------------------

     ITEC  has traditionally outsourced nearly all of its manufacturing. In June
2001,  the Company suspended manufacturing of ITEC-branded products. The Company
will continue to manufacture its software products in-house and through selected
outside  vendors.  Also  see  "Risks  and  Uncertainties."

RESEARCH  AND  DEVELOPMENT
--------------------------

     The  markets  for  the  Company's  products  are  characterized  by rapidly
evolving  technology,  frequent new product introductions, and significant price
competition.  Accordingly,  the Company monitors new technology developments and
coordinates  with  suppliers,  distributors  and  dealers  to  enhance  existing
products  and  lower  costs.  Advances in technology require ongoing investment.
Also  see  "Risks  and  Uncertainties."

INTELLECTUAL  PROPERTY
----------------------

     ITEC's  software  products  are  copyrighted. However, copyright protection
does  not  prevent  other  companies  from  emulating  the features and benefits
provided  by  the  Company's  software. The Company protects its software source
code as trade secrets and makes its Company proprietary source code available to
OEM  customers  only  under  limited  circumstances  and  specific  security and
confidentiality  constraints. The Company currently holds no patents. Technology
products  exist  in  a  rapidly changing business environment. Consequently, the
Company  believes  the  effectiveness  of  patents, trade secrets, and copyright
protection  are  less  important  in  influencing  long  term  success  than the
experience  of  the  Company's  employees  and  its  contractual  relationships.

     The  Company  has obtained U.S. registration for several of its trade names
or  trademarks,  including  PCPI,  NewGen,  ColorBlind,  LaserImage, ColorImage,
ImageScript,  ImageFont, ImagePress, and ImageNet. These trade names are used to
distinguish  the  Company's  products  in  the  marketplace.

     Competitors  may  assert  that  we  infringe  their  patent rights.  If the
Company  fails  to  establish  that  it has not violated the asserted rights, it
could  be  prohibited  from  marketing  the  product  lines that incorporate the
technology  and  it  could  be  liable  for  damages.  The  Company  relies on a
combination  of  trade  secret,  copyright  and  trademark  protection,  and
non-disclosure agreements to protect its proprietary rights. Also see "Risks and
Uncertainties."

PERSONNEL
---------

ITEC  employed  a total of 61 individuals worldwide as of June 30, 2002. Of this
number,  58  were  involved  in  sales,  marketing, corporate administration and
finance,  and  3  were  in  engineering, research and development, and technical
support.  There  is  no  union  representation  for  any  of  ITEC's  employees.

GOING  CONCERN  CONSIDERATIONS
------------------------------

     At  June  30,  2002, and for the fiscal year then ended, 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 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. We have reduced and/or
discontinued  some  of  our  operations and, if we are unable to raise or obtain
needed  funding,  we  may  be  forced  to  discontinue  operations.

     For  the  year  ended June 30, 2002, our net loss was $13.3 million and our
decrease  in  net worth was $3.9 million.  At June 30, 2002 our negative working
capital  was  $20.4  million. Specific steps that we have taken to address these
problems  include  obtaining  working capital through the issuance and sale of a
convertible  debenture,  which  is  dependent  upon the approval by the SEC of a
pending  S-1  registration  statement,  reduction in overhead costs through such
actions  as  reductions  in  our work force, the relocation of our facilities to
reduce  rent  payments,  and  rebuilding  our  distribution  channels.

     Furthermore,  we plan to overcome the circumstances that impact our ability
to  remain  a  going  concern  through  a  combination of increased revenues and
decreased  costs  with  interim  cash  flow deficiencies being addressed through
additional  equity  financing. We have been able to reduce our costs by reducing
our  number  of  employees  and terminating unprofitable operations, such as the
design and fabrication of controller boards as an OEM supplier to other computer
printer manufacturers, which had greatly diminished revenues over the past three
years.  We  commenced  a  program to reduce our debt, which we will address more
aggressively  in  our  current  fiscal  year,  partially  through debt-to-equity
conversions.  Finally,  we  continue to pursue the acquisition of business units
that  will  be  consistent  with these measures. We anticipate that all of these
initiatives will be carried out throughout the fiscal year ending June 30, 2003.

RISKS  AND  UNCERTAINTIES
-------------------------

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.

ITEM  2
-------

PROPERTIES
----------

ITEC owns no real property. We lease approximately 3,000 square feet of space in
a  facility  located  at  17075 Via Del Campo, San Diego, California 92127, at a
monthly  lease rate of $6,000, adjusting in March, 2003 to $6,500. This facility
houses corporate management, marketing, sales, engineering, and support offices.
The  lease  expires  in  September  2005.

The  Company  also  has  month-to-month  leases  on  its small branch offices in
Richmond,  Virginia,  Scottsdale,  Arizona, Troy, Michigan, Mexico City, Mexico,
and  Guadalajara,  Mexico.

ITEM  3
-------

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
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 by
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.

     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  4
-------

SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS
-----------------------------------------------------------

None.

<PAGE>

PART  II
========

ITEM  5
-------

MARKET  FOR  REGISTRANT'S  COMMON  EQUITY  AND  RELATED  SHAREHOLDER  MATTERS
-----------------------------------------------------------------------------

     The  Company's  Common  Stock is traded in the over-the-counter market, and
quoted  on  the  NASD  Electronic  Bulletin  Board  under  the  symbol:  "ITEC."

     The  following  table  sets  forth  the  high and low bid quotations of the
Company's  Common  Stock  for  the  periods  indicated as reported by the Nasdaq
SmallCap Market or the NASD Electronic Bulletin Board. Prices shown in the table
represent  inter-dealer  quotations,  without  adjustment  for  retail  markup,
markdown,  or  commission, and do not necessarily represent actual transactions.

<TABLE>
<CAPTION>
<S>                       <C>     <C>
                          High    Low
                          ------  -----
Year ended June 30, 2000
     First quarter . . .  $32.60  $5.60
     Second quarter. . .   42.60   1.80
     Third quarter . . .   64.40   7.20
     Fourth quarter. . .   19.40   3.80
Year ended June 30, 2001
     First quarter . . .  $18.40  $1.00
     Second quarter. . .    6.00   1.00
     Third quarter . . .    7.60   1.00
     Fourth quarter. . .    2.60   1.20
Year ended June 30, 2002
     First quarter . . .  $18.40  $1.00
     Second quarter. . .    6.00   1.00
     Third quarter . . .    7.60   1.00
     Fourth quarter. . .    2.60   1.20
</TABLE>

     The  number  of  holders of record of the Company's Common Stock, $.005 par
value,  was  approximately  45,000  at  June  30,  2002.

DIVIDENDS

     The  Company  has  never declared nor paid any cash dividends on its Common
Stock.  ITEC  currently intends to retain earnings, if any, after any payment of
dividends  on  its  5%  Convertible Preferred Stock, for use in its business and
therefore,  does  not  anticipate paying any cash dividends on its Common Stock.

     Holders of the 5% Convertible Preferred Stock are entitled to receive, when
and  as  declared  by  the  Board  of Directors, but only out of amounts legally
available  for the payment thereof, cumulative cash dividends at the annual rate
of $50.00 per share, payable semi-annually, commencing on October 15, 1986. ITEC
has  never  declared nor paid any cash dividends on the 5% Convertible Preferred
Stock.  Dividends  in  arrears  at  June  30,  2001  were  $330,000.

     The  Company  does  not  anticipate  paying dividends on the 5% Convertible
Preferred  Stock in the near future. However, the 5% Convertible Preferred Stock
is  convertible,  at  any  time, into shares of the Company's common stock, at a
price  of  $350.00 per common share. This conversion price is subject to certain
anti-dilution  adjustments,  in  the  event  of  certain  future stock splits or
dividends,  mergers,  consolidations  or  other similar events. In addition, the
Company  shall  reserve,  and keep reserved, out of its authorized but un-issued
shares of common stock, sufficient shares to effect the conversion of all shares
of  the  5%  convertible  preferred  stock.

     Subsequent  to  June  30,  2002, on August 9, 2002, pursuant to shareholder
authorization,  the  Company  implemented a 1-for-20 reverse split of its common
stock.  All  share  and per share data in this Form 10-K have been retroactively
restated  to  reflect  this  reverse  stock  split.

ITEM  6.

SELECTED  FINANCIAL  DATA
-------------------------

     The  consolidated  statement  of  operations  data with respect to the five
years  ended  June  30,  2002, and the consolidated balance sheet data for those
five  years  at  June  30,  set  forth  below  are derived from the consolidated
financial  statements  of  the Company included in Item 8 below, which have been
audited  by  Boros  &  Farrington  APC,  independent accountants (except for the
period  ended  June  30,  2002, which have been audited by Stonefield Josephson,
Inc.).  The selected consolidated financial data set forth (in thousands, except
per  share data) should be read in conjunction with "Management's Discussion and
Analysis  of  Financial Condition and Results of Operations" contained in Item 7
below, and the Company's consolidated financial statements and the notes thereto
contained  in Item 8 below. Historical results are not necessarily indicative of
future  results  of  operations.

<TABLE>
<CAPTION>
<S>                                         <C>        <C>        <C>        <C>        <C>

STATEMENT OF OPERATIONS DATA:
------------------------------------------
In thousands (except per share data)
                                                2002       2001       2000       1999       1998
                                            ---------  ---------  ---------  ---------  ---------
NET REVENUES
     Sales of products . . . . . . . . . .  $  3,574   $  2,897   $  1,634   $ 16,417   $ 30,740
     Engineering Fees. . . . . . . . . . .         -          -          -          -      2,327
     License fees and royalties. . . . . .       580        555        788        730      1,350
     PEO services. . . . . . . . . . . . .    21,100          -          -          -          -
                                            ---------  ---------  ---------  ---------  ---------
     Net total revenues. . . . . . . . . .    25,254      3,452      2,422     17,147     34,417
                                            ---------  ---------  ---------  ---------  ---------

COSTS AND EXPENSES
     Cost of products sold . . . . . . . .     2,868      2,742      5,197     18,015     22,536
     Cost of licenses and royalties. . . .        99          -          -          -          -
     Cost of PEO services. . . . . . . . .    20,235          -          -          -          -
     Selling, general, and administrative.    12,442      8,720      7,780     13,707     10,269
     Research and development. . . . . . .         -        250      1,929      2,033      2,475
     Special charges . . . . . . . . . . .         -          -          -      5,181      8,941
                                            ---------  ---------  ---------  ---------  ---------

INCOME (LOSS) FROM
OPERATIONS . . . . . . . . . . . . . . . .   (10,390)    (8,260)   (12,484)   (21,789)    (9,804)
                                            ---------  ---------  ---------  ---------  ---------
NET LOSS . . . . . . . . . . . . . . . . .  $(13,688)  $ (9,888)  $(14,198)  $(25,129)  $(10,163)
                                            =========  =========  =========  =========  =========

LOSS PER COMMON SHARE
     Basic . . . . . . . . . . . . . . . .  $  (1.12)  $  (1.51)  $  (4.05)  $ (37.60)  $ (18.00)
     Diluted . . . . . . . . . . . . . . .  $  (1.12)  $  (1.51)  $  (4.05)  $ (37.60)  $ (18.00)

BALANCE SHEET DATA:
------------------------------------------
In thousands
                                                2002       2001       2000       1999       1998
                                            ---------  ---------  ---------  ---------  ---------

     Cash and cash equivalents . . . . . .  $     43   $     35   $    291   $     75   $  3,023
     Working Capital . . . . . . . . . . .   (20,751)   (16,110)   (14,532)   (16,519)       315
     Total assets. . . . . . . . . . . . .     1,180      1,212      1,683      7,250     20,961
     Long-term obligations . . . . . . . .         -          -          -          -      1,828
     Preferred stock . . . . . . . . . . .       420        420        420      6,875        420
     Total shareholders' deficit . . . . .   (20,427)   (16,110)   (13,854)   (12,432)     4,604
</TABLE>

ITEM  7

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION
-----------------------------------------------------------------
AND  RESULTS  OF  OPERATIONS
----------------------------

     Imaging  Technologies Corporation develops and distributes imaging software
and  distributes  digital imaging products. The Company sells a range of imaging
products  for  use  in  graphics  and publishing, digital photography, and other
niche  business  and  technical  markets.  The  Company's  core technologies are
related  to  the  design  and  development of software products that improve the
accuracy  of  color  reproduction.

     In  November  2001,  we  embarked  on  an expansion program to provide more
services  to  help  with  tasks  that  have  negatively  impacted  the  business
operations  of  its  existing and potential customers. To this end, the Company,
through  strategic  acquisitions,  became  a  professional employer organization
("PEO").

     ITEC  now  provides comprehensive personnel management services through its
wholly-owned  SourceOne  Group  and  EnStructure  subsidiaries.  Each  of  these
subsidiaries  provides a broad range of services, including benefits and payroll
administration,  health  and workers' compensation insurance programs, personnel
records  management, and employer liability management to small and medium-sized
businesses.

     In  May 2002, ITEC entered into an agreement to acquire Dream Canvas, Inc.,
a  Japanese  corporation  that  has  developed  machines  currently used for the
automated  printing of custom stickers, popular in the Japanese consumer market.
We  expect  to  complete  the  acquisition  in the first quarter of fiscal 2003.

     In  July  2002,  ITEC  entered  into  an  agreement  to acquire controlling
interest  in  Quik  Pix,  Inc.  ("QPI").  QPI  shares are traded on the National
Quotation  Bureau  Pink Sheets under the symbol QPIX. We anticipate closing this
transaction  in  the  second  quarter  of  fiscal  2003.

     In  August  2002,  ITEC  entered  into  an agreement to acquire controlling
interest in Greenland Corporation. Greenland shares are traded on the Electronic
Bulletin  Board under the symbol GRLC. We anticipate closing this transaction in
the  second  quarter  of  fiscal  2003.

     As  of  the  end  of  fiscal  2002,  the  Company's  business  continues to
experience  operational  and  liquidity  challenges.  Accordingly,  year-to-year
financial  comparisons may be of limited usefulness now and for the next several
periods  due  to  anticipated changes in the Company's business as these changes
relate  to  potential  acquisitions of new businesses, changes in product lines,
and  the  potential  for  discontinuing  certain  components  of  the  business.

     The  Company's  current strategy is: (1) to expand its PEO business; (2) to
commercialize  its  own  technology,  which  is embodied in its ColorBlind Color
Management  software and other products obtained through strategic acquisitions,
(3)  to  market imaging products, including products from other manufacturers to
its  customers,  and  (4) to continue to operate and improve e-commerce sites in
order  to  sell  imaging  products to resellers and other imaging professionals.

     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, 2002 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. The Company plans to overcome
the  circumstances  that  impact our ability to remain a going concern through a
combination  of  achieving  profitability,  raising  additional  debt and equity
financing,  and  renegotiating  existing  obligations.

     Since the removal of the court appointed operational receiver in June 2000,
the  Company has been able to reestablish relationships with some past customers
and  distributors  and  to  establish  relationships  with  new  customers.
Additionally,  the Company has been working to reduce costs though the reduction
in  staff  and the suspension of certain research and development programs, such
as  the  design  and  manufacture of controller boards and printers. The Company
began  a  program  to  reduce  its  debt  through  debt  to  equity conversions.
Management  continues to pursue the acquisition of businesses that will grow the
Company's  business.

     There  can  be  no  assurance,  however,  that  the Company will be able to
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 shareholders.
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. Also see
"Liquidity  and  Capital  Resources."  and  "Item  1.  Business  -  Risks  and
Uncertainties  -  Future  Capital  Needs."

RESTRUCTURING  AND  NEW  BUSINESS  UNITS

     During  fiscal 1999, the Company began the development of an e-commerce web
site designed to offer computer and imaging hardware, software, and consumables.
The  Internet  address is www.dealseekers.com. These operations are still in the
                          -------------------
development  stage.

     From  August  20,  1999 until June 21, 2000, the Company had been under the
control of an operational receiver appointed by the Court pursuant to litigation
between  the  Company  and Imperial Bank. The litigation has been dismissed, and
Company  management  has  reassumed control. Accordingly, Company management did
not  have  operational  control  for  nearly  all  of  fiscal  2000.

     In  July 2001, the Company suspended its printer controller development and
manufacturing  operations  in  favor of selling products from other companies to
its  customers.

ACQUISITION  AND  SALE  OF  BUSINESS  UNITS

     In  December  2000,  the  Company  acquired  all  of  the  shares  of
EduAdvantage.com,  Inc.,  an  internet  sales  organization  that sells computer
hardware  and  software products to educational institutions and other customers
via  its  websites: www.eduadvantage.com and www.soft4u.com. During fiscal 2001,
the Company began integrating EduAdvantage operations. However, these operations
have  not  been  profitable  and  management  is  evaluating  the future of this
business  unit.

     In October 2001, the Company acquired certain assets, for stock, related to
the  Company's  office  products  and services business activities, representing
$250,000  of  inventories,  fixed  assets,  and  accounts  receivable.

     In  November  2001, the Company acquired SourceOne Group, Inc. and operates
it  as  a  wholly-owned  subsidiary.  SourceOne provides PEO services, including
benefits  and payroll administration, health and workers' compensation insurance
programs,  personnel  records  management,  and employer liability management to
small  and  medium-sized  businesses.

     In  March 2002, ITEC acquired all of the outstanding shares of EnStructure,
Inc.  ("EnStructure), a PEO company, for restricted common stock of the Company.
The  purchase  price  may  be  increased  or  decreased based upon EnStructure's
representations  of  projected  revenues  and  profits, which are defined in the
acquisition  agreement,  which  was exhibited as part of the Company's Form 8-K,
dated  March 28, 2002.     EnStructure is operated as a wholly-owned subsidiary.

     In  May 2002, ITEC entered into an agreement to acquire Dream Canvas, Inc.,
a  Japanese  corporation  that  has  developed  machines  currently used for the
automated  printing of custom stickers, popular in the Japanese consumer market.
We  expect  to  complete  the  acquisition in the second quarter of fiscal 2003.

     In  July  2002,  ITEC  entered  into  an  agreement  to acquire controlling
interest  in  Quik  Pix,  Inc.  ("QPI").  QPI  shares are traded on the National
Quotation  Bureau  Pink Sheets under the symbol QPIX. We anticipate closing this
transaction  in  the  second  quarter  of  fiscal  2003.

     In  August  2002,  ITEC  entered  into  an agreement to acquire controlling
interest in Greenland Corporation. Greenland shares are traded on the Electronic
Bulletin  Board under the symbol GRLC. We anticipate closing this transaction in
the  second  quarter  of  fiscal  2003.

SPECIAL  CHARGES

     In  fiscal 1999, the Company took a charge for uncollectible receivables of
$2.2  million.  The  charge resulted primarily because, in management's opinion,
certain  distributors  and  other customers took advantage of the Company's poor
financial  condition  and  the  presence  of  the operational receiver to refuse
payment  on  various  grounds  including  charge  backs and product performance.

     In  fiscal  1999,  the  Company incurred additional charges relating to its
restructuring plan including $1.4 million relating to personnel reduction costs,
$1.2 million relating to the write-down of inventory, licenses, and other assets
that  are not central to the Company's core business; and $374 thousand relating
to  the  consolidation  of  facilities.

     All of the above restructuring charges were paid in the period in which the
charges  were  recorded.  Management  expects  that  the  restructuring  and
consolidation  of  operations would result in personnel savings of approximately
$1.1  million  and  facility  savings  of  approximately  $300  thousand.

RESULTS  OF  OPERATIONS
-----------------------

NET  REVENUES

     Revenues were  $25.3 million, $3.5 million, and $2.4 million for the fiscal
years  ended  June 30, 2002, 2001, and 2000, respectively. The increase in total
revenues  in  fiscal  2002 as compared with the prior years was due primarily to
revenues  associated  with  the  Company's  PEO  operations.

Imaging  Products
-----------------

     Sales  of  imaging  products,  including  software  sales,  were $3.6, $2.9
million,  and  $1.6  million for the fiscal years ended June 30, 2002, 2001, and
2000,  respectively.  The increase in product sales from fiscal 2002 as compared
to  fiscal  2001  was due to increased sales of imaging products such as copiers
and  printers. The Company's lack of sufficient working capital has had, and may
continue  to  have,  a  negative  adverse  effect on imaging products sales. The
increase  in  product  sales  in  fiscal  2001 from the previous year was due to
renewed  management control (after the departure of the operational receiver) of
its  sales  operations.

License  fees  and  royalties,  were  $580,000,  $555,000, and $788,000, for the
fiscal  years  ended  June  30,  2002,  2001,  and 2000, respectively. Since the
Company  suspended  its  controller technology development efforts, license fees
and  royalties  have  been  associated  with  the  Company's ColorBlind software
technology.  These  revenues,  however, continue to decline, and are expected to
decline  in  the  future  due  to  the  Company's focus on product sales and the
Company's  PEO  operations  as  opposed  to  technology  licensing  activities.

PEO  Services
-------------

     PEO  revenues  were  $21.1  million  for  the year ended June 30, 2002. The
Company  entered  this  business  segment through acquisitions in November 2001.
Consequently,  there  were  no  reported  PEO  revenues  in  the  prior  year.

     Shortly  after  the  acquisition  of  SourceOne  Group, we lost most of the
customer  base,  due  to  a  number  of factors, including increases in workers'
compensation  insurance  premiums  and  customers  who  elected  to  allow their
contracts  with  us  to  expire.  Consequently,  we have been rebuilding our PEO
business  without  the  benefit  of  customers  acquired  in  the acquisition of
SourceOne  Group.  (Also  see  "Risk Factors" and the "Notes to the Consolidated
Financial  Statements"  related  to  the  Company's  PEO  business.)

COST  OF  PRODUCTS  SOLD

Imaging  Products
-----------------

     Cost  of  products  sold  were  $2.9 million or 80% of product sales,  $2.7
million  or 95% of product sales, and $5.2 million or 318% of product sales, for
the fiscal years ended June 30, 2002, 2001, and 2000, respectively. The increase
in  profitability over the three-year period was due primarily to changes in the
mix  of products sold by the Company, which had the effect of increasing overall
profit  margins. The Company has been able to maintain reasonable profit margins
on  sales  of  products. However, software products provide significantly higher
profit  margins  than hardware products such as printers, plotters, and copiers.

     In  the  year  ended  June  30, 2000, the company amortized $2.9 million of
capitalized software. There was no such amortization in the 2002 and 2001 fiscal
years.

     Costs  associated  with  licensing  and  royalties  was  $99,000, or 17% of
licensing  and  royalty  revenues  in  fiscal 2002 as compared to no cost in the
prior  two  fiscal  years.

PEO  Services
-------------

     Cost  of PEO services were $20.2 million (96% of PEO revenues) for the year
ended  June  30,  2002.  The  Company began providing these services pursuant to
acquisitions  in  the current fiscal year. Accordingly, there are no comparative
results  for  the  prior  year  periods. (Also see "Risk Factors" related to the
Company's  PEO  business.)

SELLING,  GENERAL,  AND  ADMINISTRATIVE  EXPENSES

     Selling,  general  and administrative expenses were $12.4 million or 49% of
total revenues, $8.7 million or 253% of total revenues, and $7.8 million or 305%
of  total  revenues,  for  the fiscal years ended June 30, 2002, 2001, and 2000,
respectively.  Selling,  general and administrative expenses consisted primarily
of  salaries  and  commissions  of  sales  and marketing personnel, salaries and
related  costs  for  general corporate functions, including finance, accounting,
facilities,  advertising,  and other marketing related expenses. During the year
ended  June  30, 2002, we took a charge of $1.9 million related to the write off
of goodwill associated with our acquisition of EduAdvantage.com in December 2000
and  SourceOne  Group  in  November  2001.  The decrease in selling, general and
administrative  expenses  as a percentage of revenues in fiscal 2002 as compared
to  fiscal  2001 is due primarily to the additional revenues associated with the
Company's  PEO  business.  The  increase  in selling, general and administrative
expenses  over  the  past  three  years  was  due  primarily  to increased costs
associated  with  financing  the  Company,  larger  write-offs for bad debt, and
penalties associated with servicing the Company's debt. Expenses as a percentage
of  total  revenues  decreased due primarily to increased sales. The Company was
under  the management of the court-appointed operational receiver who controlled
the operations of the Company for nearly all of fiscal 2000. During this period,
the  Company  vastly  cut  its  overall  activities,  including  manufacturing,
engineering,  and  sales  and  marketing.

RESEARCH  AND  DEVELOPMENT

     There were no research and development expenses for the year ended June 30,
2002  as  compared  with $250 thousand for the year ended June 30, 2001 and $1.9
million  in  the  year  ended  June  30,  2000.  In  fiscal  2001  the  Company
substantially reduced its research and development activities and, in July 2001,
suspended  its  printer  controller  development  and  manufacturing operations.
Current  research  and development activities are associated with our ColorBlind
software  product  line.

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.

     On  August 20, 1999, at the request of Imperial Bank, the primary lender to
the  Company,  the  Court  appointed an operational receiver for the Company. On
August  23,  1999,  the  operational  receiver  took  control  of the day-to-day
operations  of the Company. On June 21, 2000, the Court dismissed the litigation
between  the  Company and Imperial Bank and relieved the operational receiver of
his  responsibilities,  thereby  returning  control  of  the  Company  to  its
management.

     On  July  12,  2000, the Company announced it had signed an agreement for a
financing  facility  providing  commitments to purchase up to $36 million of its
common  shares  over  the  next  two  years  after  the  effective  date  of the
registration  statement, September 25, 2000. As of October 2000, the Company had
received  $750,000  in  funding pursuant to the agreement. No further funds have
been  received  and  the  Company  has not pursued, nor do we expect any further
proceeds.

     In  December  2000,  the  Company  entered into a Convertible Note Purchase
Agreement  for  $850,000,  bearing  an  annual interest rate of 8%, due December
2003.  The  Note  is convertible into the Company's common stock. As of November
15,  2002,  $675,000  had  been  converted  into  common  stock.

     In  July  2001,  the  Company  entered  into  a  Convertible  Note Purchase
Agreement  for $1,000,000, bearing an annual interest rate of 8%, due July 2004.
The  Note  is  convertible  into the Company's common stock. No conversions have
been  made  as  of  November  15,  2002.

     In  September  2001,  the  Company entered into a Convertible Note Purchase
Agreement for $300,000, bearing an interest rate of 8%, due September 2004.  The
Note  is  convertible into the Company's common stock.  As of November 15, 2002,
$70,000  had  been  converted  into  common  stock.

     In  November  2001,  the  Company  entered into a Convertible Note Purchase
Agreement for $200,000, bearing an interest rate of 8% due November 7, 2004. The
Note  is  convertible  into the Company's common stock. No conversions have been
made  as  of  November  15,  2002.

     In  January  2002,  the  Company  entered  into a Convertible Note Purchase
Agreement for $500,000, bearing an interest rate of 8% due January 22, 2002. The
Note  is  convertible  into the Company's common stock. No conversions have been
made  as  of  November  15,  2002.

     The  Company  continues  to  pursue  additional  financings  to  fund  its
operations and growth. There can be no assurance, however, that the Company will
be  able to 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 shareholders.
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.  Also  see  "Item 1. Business--Risks and Uncertainties--Future
Capital  Needs."

     As  of  June  30,  2002,  the  Company  had  negative  working  capital  of
approximately  $20.4 million, a increase of $4.6 million from June 30, 2001. The
increase  is  primarily due to the effect of operating losses and the difficulty
in  obtaining  sufficient  long-term  debt  and  equity  financing.

     Net  cash  used  for operating activities was $2.5 million compared to $5.3
million  in fiscal 2001 and $6.7 million during fiscal 2000. The changes are due
to  increased  use  of  the  Company's common stock to pay for services, and the
valuation  of  warrants.

     Net cash used for investing activities was $197,000 in fiscal 2002 compared
to  cash  used  in  investing  activities  of  $171 thousand in fiscal 2001. The
increase  of  $368,000  (215%)  was  due  to  cash  acquired  in  the  Company's
acquisition  of SourceOne Group. Net cash used in investing activities in fiscal
2000  was  $23  thousand.

     The  Company  has  no  material  commitments  for capital expenditures. 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
June  30,  2002,  was  approximately  $330,000.

     The  Company's  capital  requirements depend on numerous factors, including
market  acceptance  of the Company's products, 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
reduces  its  debt  and increases its sales and marketing efforts. The report of
the  Company's  independent  auditors  accompanying  the Company's June 30, 2002
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.

     The  Company plans to overcome the circumstances that impact its ability to
remain a going concern through a combination of increased revenues and decreased
costs,  with  interim  cash flow deficiencies being addressed through additional
equity  financing.

     Subsequent  to  June  30, 2002, the Company issued an additional 52,530,309
shares of its common stock. Of this amount, 13,560,900 shares were used to repay
indebtedness;  the  balance  to  pay  consultants.

ITEM  7A.

QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

Not  applicable.

<PAGE>

             RESPONSIBILITIES FOR CONSOLIDATED FINANCIAL STATEMENTS

The  following  consolidated  financial  statements  of  Imaging  Technologies
Corporation  and  subsidiaries were prepared by management, which is responsible
for  their  integrity  and  objectivity.  The  statements  have been prepared in
conformity with accounting principles generally accepted in the United States of
America  and,  as  such,  include  amounts  based  on  judgments  of management.

Management  is further responsible for maintaining internal controls designed to
provide reasonable assurance that the books and records reflect the transactions
of  the  companies  and  that  established policies and procedures are carefully
followed. From a shareholder's point of view, perhaps the most important feature
in  internal control is that it is continually reviewed for effectiveness and is
augmented by written policies and guidelines, the careful selection and training
of  qualified  personnel,  and  a  strong  program  of  internal  audit.

Stonefield  Josephson,  Inc.,  an independent auditing firm, is engaged to audit
the  consolidated  financial  statements of Imaging Technologies Corporation and
subsidiaries  and  issue  reports  thereon. The audit is conducted in accordance
with  auditing standards generally accepted in the United States of America that
comprehend  the  consideration  of internal control and tests of transactions to
the  extent necessary to form an independent opinion on the financial statements
prepared  by  management.

The  Board  of  Directors,  through  the  Audit  Committee (composed entirely of
independent Directors), is responsible for assuring that management fulfills its
responsibilities  in  the  preparation of the consolidated financial statements.
The  Audit Committee annually recommends to the Board of Directors the selection
of  the  independent  auditors  and  submits  the  selection for ratification by
shareholders  at  the Company's annual meeting. In addition, the Audit Committee
reviews  the  scope of the audits and the accounting principles being applied in
financial  reporting.  The  independent auditors, representatives of management,
and the internal auditors meet regularly (separately and jointly) with the Audit
Committee  to  review  the  activities  of each, to ensure that each is properly
discharging  its  responsibilities,  and to assess the effectiveness of internal
control.  It  is  management's conclusion that internal control at June 30, 2002
provides  reasonable  assurance  that  the  books  and  records  reflect  the
transactions  of  the companies and that established policies and procedures are
complied  with.  To  reinforce complete independence, Stonefield Josephson, Inc.
has  full  and  free access to meet with the Audit Committee, without management
representatives  present,  to  discuss the results of the audit, the adequacy of
internal  control,  and  the  quality  of  financial  reporting.

By:/s/  BRIAN  BONAR
   -----------------
                         Brian  Bonar
Chairman  of  the  Board,  President,  and  Chief  Executive  Officer

<PAGE>

ITEM  8.

CONSOLIDATED  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

                        IMAGING TECHNOLOGIES CORPORATION
                                AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS

                               FOR THE YEARS ENDED
                          JUNE 30, 2002, 2001 AND 2000

                                    CONTENTS

Independent Auditors' Report -June 30, 2002
Independent Auditors' Report -June 30, 2001 and 2000
  Consolidated Balance Sheets
  Consolidated Statements of Operations
  Consolidated Statement of Shareholders' Deficiency
  Consolidated Statements of Cash Flows
  Notes to Consolidated Financial Statements

<PAGE>

                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

To  the  Board  of  Directors  and  Shareholders  of
Imaging  Technologies  Corporation

We  have  audited  the  accompanying  consolidated  balance  sheet  of  Imaging
Technologies  Corporation  and  Subsidiaries as of June 30, 2002 and the related
consolidated  statements  of operations, shareholders' deficiency and cash flows
for  the year then ended.  These financials statements are the responsibility of
the  Company's management.  Our responsibility is to express an opinion on these
consolidated  financial  statements  based  on  our  audit.

We  conducted our audit in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the audit to obtain reasonable assurance about whether the consolidated
financial  statements  are  free  of  material  misstatement.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  financial  statements.  An  audit  also  includes  assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the  overall  financial statement presentation.  We believe that our
audit  provides  a  reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Imaging
Technologies  Corporation  and  Subsidiaries  as  of  June  30,  2002  and  the
consolidated  results  of their operations and their consolidated cash flows for
the  year then ended in conformity with auditing standards generally accepted in
the  United  States.

The  accompanying  consolidated financial statements have been prepared assuming
that  the  Company  will continue as a going concern.  As discussed in Note 1 to
the  accompanying consolidated financial statements, for the year ended June 30,
2002, the Company experienced a net loss of $13,688,000 and as of June 30, 2002,
the  Company  had a negative working capital deficiency of $20,751,000 and had a
negative  shareholders'  deficiency of $20,427,000.  In addition, the Company is
in  default  on  certain  note payable obligations and is being sued by numerous
trade creditors for nonpayment of amounts due.  The Company is also deficient in
its  filings  and  its  payments  relaing  to  payroll  tax  liabilities.  These
conditions  raise  substantial  doubt  about  its ability to continue as a going
concern.  Management's plan in regard to these matters is also discussed in Note
1.   These consolidated financial statements do not include any adjustments that
might  result  from  the  outcome  of  this  uncertainty.

/s/  STONEFIELD  JOSEPHSON,  INC.
STONEFIELD  JOSEPHSON,  INC.
CERTIFIED  PUBLIC  ACCOUNTANTS

Irvine,  California
November  7,  2002

<PAGE>

                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

TO  THE  BOARD  OF  DIRECTORS  AND  SHAREHOLDERS
OF  IMAGING  TECHNOLOGIES  CORPORATION

We  have  audited  the  consolidated  balance  sheets  of  Imaging  Technologies
Corporation  and  its  subsidiaries  as  of  June  30,  2001  and  the  related
consolidated  statements of operations, shareholders' deficiency, and cash flows
for  each of the two years in the period ended June 30, 2001. These consolidated
financial  statements  are  the  responsibility of the Company's management. Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements  based  on  our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audits  to obtain reasonable assurance about whether the financial
statements  are free of material misstatement. An audit includes examining, on a
test  basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles
used  and  significant  estimates  made by management, as well as evaluating the
overall  financial  statement presentation. We believe that our audits provide a
reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Imaging
Technologies  Corporation  and  its  subsidiaries  as  of June 30, 2001, and the
results  of  their  operations and their cash flows for each of the two years in
the  period  ended  June  30,  2001  in  conformity  with  accounting principles
generally  accepted  in  the  United  States  of  America.

The  accompanying  consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated  financial  statements  the  Company has various factors that raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 1.  The consolidated
financial  statements  do not include any adjustments that might result from the
outcome  of  this  uncertainty.

/s/  BOROS  &  FARRINGTON  APC

BOROS  &  FARRINGTON  APC
San  Diego,  California
October  10,  2001

<PAGE>

                IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)

<TABLE>
<CAPTION>
<S>                                                                                       <C>               <C>
                                                                                          JUNE 30,
                                                                                          ----------------
ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             2002              2001
                                                                                          ----------------  ----------------

Current assets
     Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $            43   $            35
     Accounts receivable, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              629                58
     Inventory, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              151                50
     Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . .               33               259
                                                                                          ----------------  ----------------
          Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              856               402

Goodwill, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                -               569

Property and equipment, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              212               241

Worker's compensation deposit and other assets . . . . . . . . . . . . . . . . . . . . .              112                 -
                                                                                          ----------------  ----------------

 Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $         1,180   $         1,212
                                                                                          ================  ================

LIABILITIES AND SHAREHOLDERS' DEFICIENCY

Current liabilities
     Borrowings under bank notes payable . . . . . . . . . . . . . . . . . . . . . . . .  $         3,295   $         4,318
     Short-term notes payable, including amounts due
        to related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            2,796             3,204
     Convertible debentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              803               175
     Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            7,343             6,450
     PEO payroll taxes and other payroll deductions. . . . . . . . . . . . . . . . . . .              690                 -
     PEO accrued worksite employee . . . . . . . . . . . . . . . . . . . . . . . . . . .              644                 -
     Other accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            6,036             3,175
                                                                                          ----------------  ----------------
          Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . .           21,607            17,322
                                                                                          ----------------  ----------------

Commitments and contingencies (Note 12)

Shareholders' deficiency
     Series A convertible, redeemable preferred stock, $1,000
        par  value, 7,500 shares authorized, 420.5 shares issued
        and outstanding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              420               420
     Common stock, $0.005 par value, 500,000,000 shares
           authorized; 21,929,365 and 8,545,053 shares
           issued and outstanding, respectively. . . . . . . . . . . . . . . . . . . . .              110                44
     Common stock warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              475               475
     Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           79,492            70,292
     Shareholder loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                -              (105)
     Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         (100,924)          (87,236)
                                                                                          ----------------  ----------------
          Total shareholders' deficiency . . . . . . . . . . . . . . . . . . . . . . . .          (20,427)          (16,110)
                                                                                          ----------------  ----------------
 Total liabilities and shareholders' deficiency. . . . . . . . . . . . . . . . . . . . .  $         1,180   $         1,212
                                                                                          ================  ================

The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

<PAGE>

                IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        (in thousands, except share data)

<TABLE>
<CAPTION>



<S>                                                                                      <C>
                                                                                         FOR THE YEARS ENDED JUNE 30,
                                                                                                                  2002
                                                                                         ------------------------------
Revenues
     Sales of products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $                       3,574
     Software sales, licenses and royalties . . . . . . . . . . . . . . . . . . . . . .                            580
     PEO services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         21,100
                                                                                         ------------------------------
 Total revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         25,254
                                                                                         ------------------------------

Costs of revenues
     Cost of products sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          2,868
     Cost of software sales, licenses and royalties . . . . . . . . . . . . . . . . . .                             99
     Cost of PEO services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         20,235
                                                                                         ------------------------------
 Total cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         23,202
                                                                                         ------------------------------

Operating expenses
     Selling, general, and administrative . . . . . . . . . . . . . . . . . . . . . . .                         12,442
     Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              -
                                                                                         ------------------------------
                                                                                                                12,442
                                                                                         ------------------------------

Loss from operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        (10,390)
                                                                                         ------------------------------

Other income (expense):
     Interest and finance costs, net. . . . . . . . . . . . . . . . . . . . . . . . . .                         (3,298)
     Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              -
                                                                                         ------------------------------
                                                                                                                (3,298)
                                                                                         ------------------------------

Loss before provision for income taxes. . . . . . . . . . . . . . . . . . . . . . . . .                        (13,688)

Provision for income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              -
                                                                                         ------------------------------

Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        (13,688)
Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            (21)
                                                                                         ------------------------------
Net loss attributed to common shareholders. . . . . . . . . . . . . . . . . . . . . . .  $                     (13,709)
                                                                                         ==============================

Loss per common shares
     Basic and diluted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $                       (1.12)
                                                                                         ==============================

Weighted average common shares -
     Basic and diluted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         12,201
                                                                                         ==============================

The accompanying notes are an integral part of these consolidated financial statements.


<S>                                                                                      <C>              <C>

                                                                                                   2001             2000
                                                                                         ---------------  ---------------
Revenues
     Sales of products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $        2,897   $        1,634
     Software sales, licenses and royalties . . . . . . . . . . . . . . . . . . . . . .             555              788
     PEO services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               -                -
                                                                                         ---------------  ---------------
 Total revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           3,452            2,422
                                                                                         ---------------  ---------------

Costs of revenues
     Cost of products sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           2,742            5,197
     Cost of software sales, licenses and royalties . . . . . . . . . . . . . . . . . .               -                -
     Cost of PEO services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               -                -
                                                                                         ---------------  ---------------
 Total cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           2,742            5,197
                                                                                         ---------------  ---------------

Operating expenses
     Selling, general, and administrative . . . . . . . . . . . . . . . . . . . . . . .           8,720            7,780
     Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             250            1,929
                                                                                         ---------------  ---------------
                                                                                                  8,970            9,709
                                                                                         ---------------  ---------------

Loss from operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          (8,260)         (12,484)
                                                                                         ---------------  ---------------

Other income (expense):
     Interest and finance costs, net. . . . . . . . . . . . . . . . . . . . . . . . . .          (1,628)          (1,853)
     Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               -              139
                                                                                         ---------------  ---------------
                                                                                                 (1,628)          (1,714)
                                                                                         ---------------  ---------------

Loss before provision for income taxes. . . . . . . . . . . . . . . . . . . . . . . . .          (9,888)         (14,198)

Provision for income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               -                -
                                                                                         ---------------  ---------------

Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          (9,888)         (14,198)
Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             (21)             (21)
                                                                                         ---------------  ---------------
Net loss attributed to common shareholders. . . . . . . . . . . . . . . . . . . . . . .  $       (9,909)  $      (14,219)
                                                                                         ===============  ===============

Loss per common shares
     Basic and diluted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $        (1.51)  $        (4.05)
                                                                                         ===============  ===============

Weighted average common shares -
     Basic and diluted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           6,574            3,513
                                                                                         ===============  ===============

The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

<PAGE>

                IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIENCY
                    YEARS ENDED JUNE 30, 2002, 2001, AND 2000
                        (in thousands, except share data)
<TABLE>
<CAPTION>
<S>                                <C>          <C>           <C>         <C>       <C>       <C>      <C>             <C>

                                   Series A     Series D&E    Common      Common    Paid In             Accum.
                                   Preferred    Preferred     Stock       Stock     Capital    Loans    Deficit        Total
                                   Stock        Stock         Warrants
                                   ----------   ---------     ---------   -------   -------    -------  --------   ---------

BALANCE, 6/30/1999                 $      420   $   6,455     $      -    $    5    $49,943   $(105)   $(63,150)   $(12,432)
Conversion Series D
and E Preferred
(900 and 931 shares)                        -     (6,455)            -        15      6,440        -           -           -
Issuance common
   Cash (784,318)                           -          -             -         4      7,972        -           -       7,976
   Services (122,261)                       -          -             -         1      2,051        -           -       2,052
   Conversion of liabilities
   (112,992)                                -          -             -         1      2,750        -           -       2,751
Net loss                                    -          -             -         -          -        -    (14,198)    (14,198)
                                   ----------   ---------     ---------   -------   -------    -------  --------   ---------
BALANCE, 6/30/2000                        420          -             -        26     63,156     (105)   (77,348)    (13,851)
Issuance of common
   Cash (2,185,910)                         -          -             -        11      5,200         -          -       5,211
   Acquisition (187,500)                    -          -             -         1        272         -          -         273
   Software (60,000)                        -          -             -         -        225         -          -         225
   Services (219,333)                       -          -             -         1        372         -          -         373
   Conversion of liabilities
   (913,757)                                -          -             -         5        670         -          -         675
Issuance of warrants                        -          -           508         -          -         -          -         508
Exercise of warrants                        -          -          (33)         -         33         -          -           -
Beneficial conversion
   on notes                                 -          -             -         -        364         -          -         364
Net loss                                    -          -             -         -          -         -    (9,888)     (9,888)
                                   ----------   ---------     ---------   -------   -------    -------  --------   ---------
BALANCE, 6/30/2001                        420          -           475        44     70,292     (105)   (87,236)    (16,110)
Issuance of common
   Cash - exercise of
     options and warrants
     (6,754,739)                            -          -             -        34      1,635         -          -       1,669
   Business acquisition
   (500,000)                                -          -             -         1        299         -          -         300
   Asset purchase
   (250,000)                                -          -             -         1        172         -          -         173
   Services (3,179,978)                     -          -             -        16      1,359         -          -       1,375
   Conversion of liabilities
   (2,375,706)                              -          -             -        12      1,281         -          -       1,293
   Exercise of warrants
     for services
     (323,889)                              -          -             -         2        105         -          -         107
Re-priced warrants &
   Options                                  -          -             -         -        215         -          -         215
Beneficial conversion on
   Notes                                    -          -             -         -        791         -          -         791
Value of warrants issued
   with notes                               -          -             -         -      1,209         -          -       1,209
Value of warrants issued
   for services                             -          -             -         -      1,584         -          -       1,584
Value of options granted
   below fair value                         -          -             -         -        550         -          -         550
Write-off of shareholder
   Loan                                     -          -             -         -          -       105          -         105
Net loss                                    -          -             -         -          -         -   (13,688)    (13,688)
                                   ----------   ---------     ---------   -------   -------    -------  --------   ---------
BALANCE, 6/30/2002                $       420  $       -      $    475     $  110   $79,492    $      $(100,924)   $(20,427)
                                 ============  ==========      =======     ======   =======    ======= =========   =========
</TABLE>

The  accompanying  notes  are  an  integral part of these consolidated financial
statements.

<PAGE>

                IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (in thousands, except share data)

<TABLE>
<CAPTION>




<S>                                                                                      <C>

                                                                                         FOR THE YEARS ENDED JUNE 30,
                                                                                         ------------------------------

                                                                                                                  2002
                                                                                         ------------------------------
Cash flows used for operating activities
---------------------------------------------------------------------------------------
   Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $                     (13,688)
---------------------------------------------------------------------------------------  ------------------------------

   Adjustments to reconcile net loss to net
     cash used for operating activities
---------------------------------------------------------------------------------------
        Impairment expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          1,750
---------------------------------------------------------------------------------------  ------------------------------
        Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . .                            274
---------------------------------------------------------------------------------------  ------------------------------
        Inventory reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            275
---------------------------------------------------------------------------------------  ------------------------------
        Change in allowance for doubtful accounts . . . . . . . . . . . . . . . . . . .                            (37)
---------------------------------------------------------------------------------------  ------------------------------
        Bad debt expense - shareholder loan . . . . . . . . . . . . . . . . . . . . . .                            105
---------------------------------------------------------------------------------------  ------------------------------
        Amortization of capitalized software. . . . . . . . . . . . . . . . . . . . . .                              -
---------------------------------------------------------------------------------------  ------------------------------
        Stock issued for services . . . . . . . . . . . . . . . . . . . . . . . . . . .                          1,375
---------------------------------------------------------------------------------------  ------------------------------
        Value of services for exercise price of warrants. . . . . . . . . . . . . . . .                            107
---------------------------------------------------------------------------------------  ------------------------------
        Value attributed to warrants issued for services. . . . . . . . . . . . . . . .                          1,584
---------------------------------------------------------------------------------------  ------------------------------
        Value of options granted below fair value . . . . . . . . . . . . . . . . . . .                            550
---------------------------------------------------------------------------------------  ------------------------------
        Value of re-priced options and warrants . . . . . . . . . . . . . . . . . . . .                            215
---------------------------------------------------------------------------------------  ------------------------------
        Amortization from beneficial conversion feature . . . . . . . . . . . . . . . .                            261
---------------------------------------------------------------------------------------  ------------------------------
        Amortization of warrants issued with notes. . . . . . . . . . . . . . . . . . .                            437
---------------------------------------------------------------------------------------  ------------------------------
        Changes in operating assets and liabilities
---------------------------------------------------------------------------------------
           Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            628
---------------------------------------------------------------------------------------  ------------------------------
           Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                           (326)
---------------------------------------------------------------------------------------  ------------------------------
           Prepaid expenses and other current assets. . . . . . . . . . . . . . . . . .                            281
---------------------------------------------------------------------------------------  ------------------------------
           Worker's compensation deposit and other. . . . . . . . . . . . . . . . . . .                            112
---------------------------------------------------------------------------------------  ------------------------------
           PEO liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            (45)
---------------------------------------------------------------------------------------  ------------------------------
           Accounts payable and accrued expenses. . . . . . . . . . . . . . . . . . . .                          3,602
---------------------------------------------------------------------------------------  ------------------------------
               Net cash used for operating activities . . . . . . . . . . . . . . . . .                         (2,540)
---------------------------------------------------------------------------------------  ------------------------------

Cash flows provided by (used for) investing activities
---------------------------------------------------------------------------------------
   Cash acquired in acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            215
---------------------------------------------------------------------------------------  ------------------------------
   Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            (18)
---------------------------------------------------------------------------------------  ------------------------------
               Net cash provided by (used for) investing
activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            197
---------------------------------------------------------------------------------------  ------------------------------

Cash flows provided by financing activities
---------------------------------------------------------------------------------------
   Payments under bank notes payable. . . . . . . . . . . . . . . . . . . . . . . . . .                         (1,023)
---------------------------------------------------------------------------------------  ------------------------------
   Issuance of short term notes payable . . . . . . . . . . . . . . . . . . . . . . . .                            555
---------------------------------------------------------------------------------------  ------------------------------
   Net proceeds from issuance of common stock . . . . . . . . . . . . . . . . . . . . .                          1,669
---------------------------------------------------------------------------------------  ------------------------------
   Proceeds from convertible debentures . . . . . . . . . . . . . . . . . . . . . . . .                          1,400
---------------------------------------------------------------------------------------  ------------------------------
   Repayment of short term notes payable. . . . . . . . . . . . . . . . . . . . . . . .                           (250)
---------------------------------------------------------------------------------------  ------------------------------
               Net cash provided by financing activities. . . . . . . . . . . . . . . .                          2,351
---------------------------------------------------------------------------------------  ------------------------------

Net increase (decrease) in cash and cash
    equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              8
---------------------------------------------------------------------------------------  ------------------------------
Cash and cash equivalents, beginning of year. . . . . . . . . . . . . . . . . . . . . .                             35
---------------------------------------------------------------------------------------  ------------------------------
Cash and cash equivalents, end of year. . . . . . . . . . . . . . . . . . . . . . . . .  $                          43
---------------------------------------------------------------------------------------  ==============================

The accompanying notes are an integral part of these consolidated financial statements.

<PAGE>



<S>                                                                                      <C>              <C>




                                                                                                   2001          2000
                                                                                         ---------------  ------------
Cash flows used for operating activities
---------------------------------------------------------------------------------------
   Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $       (9,888)  $   (14,198)
---------------------------------------------------------------------------------------  ---------------  ------------

   Adjustments to reconcile net loss to net
     cash used for operating activities
---------------------------------------------------------------------------------------
        Impairment expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               -             -
---------------------------------------------------------------------------------------  ---------------  ------------
        Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . .             806           478
---------------------------------------------------------------------------------------  ---------------  ------------
        Inventory reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               -             -
---------------------------------------------------------------------------------------  ---------------  ------------
        Change in allowance for doubtful accounts . . . . . . . . . . . . . . . . . . .               -             -
---------------------------------------------------------------------------------------  ---------------  ------------
        Bad debt expense - shareholder loan . . . . . . . . . . . . . . . . . . . . . .               -             -
---------------------------------------------------------------------------------------  ---------------  ------------
        Amortization of capitalized software. . . . . . . . . . . . . . . . . . . . . .               -         2,851
---------------------------------------------------------------------------------------  ---------------  ------------
        Stock issued for services . . . . . . . . . . . . . . . . . . . . . . . . . . .             373         2,052
---------------------------------------------------------------------------------------  ---------------  ------------
        Value of services for exercise price of warrants. . . . . . . . . . . . . . . .               -             -
---------------------------------------------------------------------------------------  ---------------  ------------
        Value attributed to warrants issued for services. . . . . . . . . . . . . . . .             508             -
---------------------------------------------------------------------------------------  ---------------  ------------
        Value of options granted below fair value . . . . . . . . . . . . . . . . . . .               -             -
---------------------------------------------------------------------------------------  ---------------  ------------
        Value of re-priced options and warrants . . . . . . . . . . . . . . . . . . . .               -             -
---------------------------------------------------------------------------------------  ---------------  ------------
        Amortization from beneficial conversion feature . . . . . . . . . . . . . . . .             364             -
---------------------------------------------------------------------------------------  ---------------  ------------
        Amortization of warrants issued with notes. . . . . . . . . . . . . . . . . . .               -             -
---------------------------------------------------------------------------------------  ---------------  ------------
        Changes in operating assets and liabilities
---------------------------------------------------------------------------------------
           Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . .             117         1,784
---------------------------------------------------------------------------------------  ---------------  ------------
           Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             153           349
---------------------------------------------------------------------------------------  ---------------  ------------
           Prepaid expenses and other current assets. . . . . . . . . . . . . . . . . .             303           344
---------------------------------------------------------------------------------------  ---------------  ------------
           Worker's compensation deposit and other. . . . . . . . . . . . . . . . . . .               -             -
---------------------------------------------------------------------------------------  ---------------  ------------
           PEO liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               -             -
---------------------------------------------------------------------------------------  ---------------  ------------
           Accounts payable and accrued expenses. . . . . . . . . . . . . . . . . . . .           1,924          (347)
---------------------------------------------------------------------------------------  ---------------  ------------
               Net cash used for operating activities . . . . . . . . . . . . . . . . .          (5,340)       (6,687)
---------------------------------------------------------------------------------------  ---------------  ------------

Cash flows provided by (used for) investing activities
---------------------------------------------------------------------------------------
   Cash acquired in acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . .               -             -
---------------------------------------------------------------------------------------  ---------------  ------------
   Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            (171)          (23)
---------------------------------------------------------------------------------------  ---------------  ------------
               Net cash provided by (used for) investing
activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            (171)          (23)
---------------------------------------------------------------------------------------  ---------------  ------------

Cash flows provided by financing activities
---------------------------------------------------------------------------------------
   Payments under bank notes payable. . . . . . . . . . . . . . . . . . . . . . . . . .          (1,447)         (704)
---------------------------------------------------------------------------------------  ---------------  ------------
   Issuance of short term notes payable . . . . . . . . . . . . . . . . . . . . . . . .           1,491             -
---------------------------------------------------------------------------------------  ---------------  ------------
   Net proceeds from issuance of common stock . . . . . . . . . . . . . . . . . . . . .           5,211         7,976
---------------------------------------------------------------------------------------  ---------------  ------------
   Proceeds from convertible debentures . . . . . . . . . . . . . . . . . . . . . . . .               -             -
---------------------------------------------------------------------------------------  ---------------  ------------
   Repayment of short term notes payable. . . . . . . . . . . . . . . . . . . . . . . .               -          (346)
---------------------------------------------------------------------------------------  ---------------  ------------
               Net cash provided by financing activities. . . . . . . . . . . . . . . .           5,255         6,926
---------------------------------------------------------------------------------------  ---------------  ------------

Net increase (decrease) in cash and cash
    equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            (256)          216
---------------------------------------------------------------------------------------  ---------------  ------------
Cash and cash equivalents, beginning of year. . . . . . . . . . . . . . . . . . . . . .             291            75
---------------------------------------------------------------------------------------  ---------------  ------------
Cash and cash equivalents, end of year. . . . . . . . . . . . . . . . . . . . . . . . .  $           35   $       291
---------------------------------------------------------------------------------------  ===============  ============

The accompanying notes are an integral part of these consolidated financial statements.

</TABLE>

<TABLE>
<CAPTION>



<S>                                                                                      <C>                             <C>
NON-CASH FINANCING ACTIVITIES:
---------------------------------------------------------------------------------------
                                                                                         FOR THE YEARS ENDED JUNE 30,
                                                                                                                  2002    2001
                                                                                         ------------------------------  ------

     Conversion of preferred stock into common stock. . . . . . . . . . . . . . . . . .  $                           -   $   -
     Conversion of convertible debentures into
        common stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                             70     675
     Conversion of   notes payable into common stock. . . . . . . . . . . . . . . . . .                          1,043       -
     Conversion of accounts payable and accrued
          liabilities into common/preferred stock . . . . . . . . . . . . . . . . . . .                            160       -
     Stock issued for purchase of assets. . . . . . . . . . . . . . . . . . . . . . . .                            173     225
     Net assets acquired in business combinations
          Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            215       -
          Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          1,162       -
          Prepaid and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            206      79
          Property and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . .                             21       3
          Goodwill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          1,337     686
          Accounts payable and accrued liabilities. . . . . . . . . . . . . . . . . . .                         (1,493)   (495)
          Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                           (200)      -

Supplemental disclosure of cash flow information
          Cash paid during the year for interest. . . . . . . . . . . . . . . . . . . .                              -     283
          Cash paid during the year for income taxes. . . . . . . . . . . . . . . . . .                              -       -

The accompanying notes are an integral part of these consolidated financial statements.
<PAGE>



<S>                                                                                      <C>
NON-CASH FINANCING ACTIVITIES:
---------------------------------------------------------------------------------------

                                                                                           2000
                                                                                         ------

     Conversion of preferred stock into common stock. . . . . . . . . . . . . . . . . .  $6,455
     Conversion of convertible debentures into
        common stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       -
     Conversion of   notes payable into common stock. . . . . . . . . . . . . . . . . .   2,101
     Conversion of accounts payable and accrued
          liabilities into common/preferred stock . . . . . . . . . . . . . . . . . . .     650
     Stock issued for purchase of assets. . . . . . . . . . . . . . . . . . . . . . . .       -
     Net assets acquired in business combinations
          Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       -
          Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       -
          Prepaid and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       -
          Property and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . .       -
          Goodwill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       -
          Accounts payable and accrued liabilities. . . . . . . . . . . . . . . . . . .       -
          Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       -

Supplemental disclosure of cash flow information
          Cash paid during the year for interest. . . . . . . . . . . . . . . . . . . .   1,455
          Cash paid during the year for income taxes. . . . . . . . . . . . . . . . . .       5

The accompanying notes are an integral part of these consolidated financial statements.
<PAGE>

</TABLE>

<PAGE>

                IMAGING TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                FOR THE YEARS ENDED JUNE 30, 2002, 2001, AND 2000

NOTE  1          SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

BASIS  OF  PRESENTATION
-----------------------

The  accompanying  consolidated  financial  statements  include  the accounts of
Imaging  Technologies  Corporation,  ("ITEC" or the "Company") formerly Personal
Computer  Products, Inc., incorporated under the laws of the state of California
during March 1982 and subsequently reincorporated under the laws of the state of
Delaware  during  May 1983, and its following active majority owned subsidiaries
(there  are  six  inactive  subsidiaries  not  listed):

a)     SoureOne  Group,  Inc., ("SourceOne"), incorporated under the laws of the
state  of  Delaware  on  November  9,  2001  (owned  100%  by  the  Company);

b)     EnStructure,  Inc.  ("EnStructure"),  incorporated  under the laws of the
state  of  Nevada  on  May  10,  2001  (owned  100%  by  the  Company);

c)     EduAdvantage.com, Inc., ("Edu"), incorporated under the laws of the state
of  California  on  November  15,  2000  (owned  100%  by  the  Company);

d)     Dealseekers.com,  Inc.,  ("Dealseekers"),  incorporated under the laws of
the  state  of  Delaware  on  May  7,  1999  (owned  71.4%  by the Company); and

e)     Color Solutions, Inc. ("Color Solutions"), incorporated under the laws of
the  state  of  California  on(owned  100%  by  the  Company).

All  significant  inter-company  accounts and transactions have been eliminated.

The  accompanying  consolidated financial statements have been prepared assuming
that  the  Company will continue as a going concern. For the year ended June 30,
2002, the Company experienced a net loss of $13,688,000 and as of June 30, 2002,
the  Company  had a negative working capital deficiency of $20,751,000 and had a
negative  shareholders'  deficiency of $20,427,000.  In addition, the Company is
in  default  on  certain  note payable obligations and is being sued by numerous
trade creditors for nonpayment of amounts due.  The Company is also deficient in
its  filings  and  its  payments  relating  to  payroll  tax  liabilities. These
conditions  raise  substantial  doubt  about  its ability to continue as a going
concern.

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
(see  Note  8),  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,  shareholders 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.

In  order  for  the  Company to continue in existence, it must obtain additional
funds  to  provide  adequate working capital to finance operations, and begin to
generate  positive  cash  flows  from its operations. During the past two fiscal
years  the  Company  has  raised  $2,850,000 through the issuance of convertible
debentures.  The  Company  is  currently in the process of filing a registration
statement  to  register  shares underlying the convertible debentures.  In order
for  the  Company to raise additional funds through a convertible debenture, the
Company  must  get it current registration statement filed with the SEC declared
effective.  However,  there can be no assurance that the Company will be able to
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  including  compliance  with  the Imperial Bank
settlement agreement. Any additional equity or convertible debt financings could
result  in substantial dilution to the Company's shareholders. 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 Company is also looking at
making  strategic  acquisitions  of  companies  that  have  positive cash flows.
Specifically,  the  Company  has  letters  of  intent  to  acquire a controlling
interest  in Quik Pix, Inc., a controlling interest in Greenland Corporation and
has  entered  into  an  agreement  to  acquire  Dream  Canvas,  Inc., a Japanese
corporation  that  has  developed  machines  currently  used  for  the automated
printing  of  custom  stickers,  popular  in  the  Japanese consumer market. The
Company  has  also  reduced  is  personnel  and moved its corporate office in an
effort  to  reduce operating costs.  The financial statements do not include any
adjustments  that  might  result  from  the  outcome  of  this  going  concern
uncertainty.

NATURE  OF  BUSINESS
--------------------

The  Company  business  operations  are  as  follows:

     (a)  The Company designs, develops, and sells digital imaging solutions and
color  management  software  products  for  use in graphics, publishing, digital
photography,  and  other  business  and  technical  markets;  and

     (b)  The  Company  is  a  professional  employer  organization  (PEO)  that
provides a comprehensive personnel management system encompasssing a broad range
of  services including benefits and payroll administration, medical and workers'
compensation  insurance  programs,  personnel  records  management  and employer
liability  management.

USE  OF  ESTIMATES
------------------

The preparation of financial statements in conformity with accounting principles
generally  accepted  in the United States of America requires management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and  disclosure of contingent assets and liabilities at the date of
the  financial  statements,  and  the  reported amounts of revenues and expenses
during  the  reported  periods.  Significant  estimates  made  by  the Company's
management  include  but  are  not  limited  to  recoverability  of property and
equipment  and  proprietary  products  through future operating profits.  Actual
results  could  materially  differ  from  those  estimates.

REVENUE  RECOGNITION
--------------------

Sales  of  Products
-------------------

Revenue  is  recognized  when earned. The Company's revenue recognition policies
are in compliance with all applicable accounting regulations, including American
Institute  of  Certified  Public Accountants (AICPA) Statement of Position (SOP)
97-2, Software Revenue Recognition, and SOP 98-9, Modification of SOP 97-2, With
Respect  to  Certain  Transactions.  Revenue  from products licensed to original
equipment  manufacturers  is  recorded  when  OEMs  ship licensed products while
revenue  from  certain  license  programs is recorded when the software has been
delivered  and  the customer is invoiced. Revenue from packaged product sales to
and  through  distributors  and  resellers is recorded when related products are
shipped.  Maintenance  and  subscription  revenue is recognized ratably over the
contract  period. When the revenue recognition criteria required for distributor
and  reseller  arrangements  are  not met, revenue is recognized as payments are
received.  Provisions  are  recorded  for  returns  and bad debts. The Company's
software arrangements do not contain multiple elements, and the Company does not
offer  post  contract  support.

PEO  Service  Fees  and  Worksite  Employee  Payroll  Costs
-----------------------------------------------------------

The  Company's  revenue  consists  of service fees paid by its clients under its
Client  Service  Agreements.  In consideration for payment of such service fees,
the  Company  agrees  to  pay  the  following  direct  costs associated with the
worksite employees: (i) salaries and wages; (ii) employment-related taxes; (iii)
employee  benefit  plan  premiums;  and  (iv)  workers'  compensation  insurance
premiums.  The  Company  accounts  for  PEO  service fees and the related direct
payroll  costs  using the accrual method.  Under the accrual method, PEO service
fees  relating  to worksite employees with earned but unpaid wages at the end of
each  period  are recognized as unbilled revenues and the related direct payroll
costs for such wages are accrued as a liability during the period in which wages
are earned by the worksite employee.  Subsequent to the end of each period, such
wages  are  paid  and  the  related  PEO  service  fees  are  billed.

RECLASSIFICATIONS
-----------------

Certain  reclassifications  have  been  made  to  the  prior  year  consolidated
financial  statements  to  conform  with  the  current  year's  presentation.

CASH  AND  CASH  EQUIVALENTS
----------------------------

The  Company  considers  all  highly  liquid investments purchased with original
maturities  of  three  months  or  less  to  be  cash  equivalents.

CONCENTRATION  OF  CREDIT  RISK
-------------------------------

The  Company  places  its cash in what it believes to be credit-worthy financial
institutions.  However, cash balances may exceed FDIC and SPIC insured levels at
various  times  during  the  year.

Financial  instruments  that  could  potentially  subject  the  Company  to
concentration of credit risk include accounts receivable.  The Company generally
requires clients to pay invoices for service fees no later than one day prior to
the  applicable  payroll  date.  As such, the Company generally does not require
collateral.

INVENTORY
---------

Inventory  are  valued  at the lower of cost or market; cost being determined by
the  first-in,  first-out  method.

IMPAIRMENT  OF  LONG-LIVED  ASSETS
----------------------------------

In  accordance with Statement of Financial Accounting Standard ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be  Disposed  Of,"  long-lived  assets  to  be  held  and  used are analyzed for
impairment whenever events or changes in circumstances indicate that the related
carrying  amounts may not be recoverable.  The Company evaluates at each balance
sheet  date  whether  events  and  circumstances  have  occurred  that  indicate
possible  impairment.  If  there are indications of impairment, the Company uses
future  undiscounted  cash flows of the related asset or asset grouping over the
remaining  life  in  measuring  whether  the  assets  are  recoverable.  In  the
event  such  cash  flows  are  not  expected  to be sufficient  to  recover  the
recorded  asset  values,  the  assets  are written down to their  estimated fair
value.  Long-lived  assets  to  be  disposed  of  are  reported  at the lower of
carrying  amount  or  fair value of asset less cost to sell. As of July 1, 2001,
the  Company  adopted  SFAS  No.  144.

PROPERTY  AND  EQUIPMENT
------------------------

Property  and  equipment  are  recorded  at  cost.  Depreciation,  including
amortization  of assets recorded under capitalized leases, is generally computed
on  a straight-line basis over the estimated useful lives of assets ranging from
three  to  seven  years. Amortization of leasehold improvements is provided over
the  initial  term of the lease, on a straight-line basis. Maintenance, repairs,
and  minor  renewals  and  betterments  are  charged  to  expense.

GOODWILL  AND  CUSTOMER  LISTS
------------------------------

The  Company  continually  monitors  its  goodwill and other intangible asset to
determine whether any impairment has occurred. In making such determination with
respect  to this asset, the Company evaluates the performance on an undiscounted
cash flow basis, of the underlying assets or group of assets, which gave rise to
the intangible. Should impairment be identified, a loss would be reported to the
extent  that the carrying value of the related intangible asset exceeds the fair
value of the underlying assets or group of assets using the discounted cash flow
method.  As  of  June  30,  2002, the Company wrote off $1,750,000 of related to
intangible  assets  as  the  Company determined that such intangible assets have
been  impaired.  The  write  off  consisted  of  $569,000  of  goodwill that was
recorded  as  a  result  of  the  Company's  acquisition  of Eduadvantage.com in
December  2000  and  $1,181,000 of the customer list recorded as a result of the
Company's  acquisition  of  SourceOne  Group  in  November 2001.  The underlying
businesses  of  both  Eduadvantage.com  and  SourceOne  Group lost a significant
amount  of  the  revenue  base  that was originally purchased by the Company and
therefore,  a write down of the intangible assets purchased in these acquisition
is  necessary  since  the  performance on an undiscounted cash flow basis of the
assets  purchased  is not sufficient to recover the intangible assets.  See Note
6.

CAPITALIZED  SOFTWARE  AND  DEVELOPMENT  COSTS
----------------------------------------------

During  fiscal  1999  the  Company developed software technology and capitalized
certain  qualifying  costs  pursuant to the provisions of Statement of Financial
Accounting  Standards  No.  86  "Accounting for Costs of Computer Software to be
Sold, Leased, or Otherwise Marketed". The capitalized software development costs
were  related to software contained in laser printer controllers. Costs incurred
prior  to  the  establishment of technological feasibility, or subsequent to the
release to customers, were expensed as incurred. Capitalized software costs were
amortized on a product-by-product basis. The annual amortization was the greater
of  the  amount  computed  using (a) the ratio that current gross revenues for a
product  bear  to the total of current and anticipated future gross revenues for
that  product,  or (b) the straight-line method over the estimated economic life
of  the  product, generally three years. Amortization began when the product was
available  for  general  release to customers. Due to the financial difficulties
discussed  above,  the Company has been unable to meet its sales goals regarding
these  products and management cannot provide any assurance that the Company can
obtain  the  resources necessary to achieve future sales goals. Accordingly, the
unamortized  balance  of  capitalized  software  costs was charged to expense in
fiscal  2000.

ADVERTISING  COSTS
------------------

The  Company expenses advertising and promotion costs as incurred. During fiscal
2002,  2001,  and  2000, the Company incurred advertising and promotion costs of
approximately  $66,000,  $224,000,  and  $243,000,  respectively.

RESEARCH  AND  DEVELOPMENT
--------------------------

Research  and  development  costs  are  charged  to  expense  as  incurred.

LOSS  PER  COMMON  SHARE
------------------------

The  Company  reports earnings (loss) per share in accordance with SFAS No. 128,
"Earnings  per  Share."  Basic earnings (loss) per share is computed by dividing
income (loss) available to common shareholders by the weighted average number of
common  shares  available. Diluted earnings (loss) per share is computed similar
to  basic  earnings (loss) per share except that the denominator is increased to
include  the number of additional common shares that would have been outstanding
if  the  potential  common  shares  had been issued and if the additional common
shares  were dilutive.  Diluted earnings (loss) per share has not been presented
since  the  effect of the assumed conversion of options and warrants to purchase
common  shares  would  have  an  anti-dilutive  effect.  The following potential
common  shares  have  been excluded from the computation of diluted net loss per
share  for the year ended June 30, 2002:  warrants - 6,102,350 and stock options
-  13,600.

OFFERING  COSTS
---------------

Offering  costs  including  distribution  fees,  due diligence fees, wholesaling
costs,  legal  and accounting fees, and printing are capitalized before the sale
of  the  related stock and then charged against gross proceeds when the stock is
sold.

DEBT  ISSUANCE  COSTS
---------------------

Debt  issuance  costs  are  principally  the values attributed to the detachable
warrants  issued  in connection with the convertible debentures and the value of
the  preferential conversion feature associated with the convertible debentures.
These  debt  issuance  costs  are account for in accordance with emerging issues
task  force  ("EITF") 00-27 issued by the American Institute of Certified Public
Accountants  ("AICPA").

INCOME  TAXES
-------------

The Company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires
the  recognition  of deferred tax assets and liabilities for the expected future
tax  consequences  of events that have been included in the financial statements
or  tax returns. Under this method, deferred income taxes are recognized for the
tax  consequences in future years of differences between the tax bases of assets
and  liabilities  and their financial reporting amounts at each period end based
on  enacted  tax laws and statutory tax rates applicable to the periods in which
the  differences are expected to affect taxable income. Valuation allowances are
established,  when  necessary,  to  reduce  deferred  tax  assets  to the amount
expected  to  be  realized.

STOCK-BASED  COMPENSATION
-------------------------

The  Company  accounts  for employee stock options in accordance with Accounting
Principles  Board  Opinion  ("APB")  No.  25,  "Accounting  for  Stock Issued to
Employees".  Under  APB  25, the Company does not recognize compensation expense
related  to  options  issued  under  the  Company's employee stock option plans,
unless the option is granted at a price below market price on the date of grant.
In  1996,  SFAS  No.  123  "Accounting  for  Stock-Based  Compensation",  became
effective  for  the  Company.  SFAS No. 123, which prescribes the recognition of
compensation  expense  based  on  the  fair  value of options on the grant date,
allows  companies  to  continue applying APB 25 if certain pro forma disclosures
are made assuming hypothetical fair value method, for which the Company uses the
Black-Scholes  option-pricing  model.

For  non-employee stock based compensation, the Company recognizes an expense in
accordance with SFAS No.  123 and values the equity securities based on the fair
value of the security on the date of grant. For stock-based awards, the value is
based  on  the  market value for the stock on the date of grant and if the stock
has  restrictions  as  to  transferability,  a  discount is provided for lack of
tradability.  Stock  option  awards  are  valued  using  the  Black-Scholes
option-pricing  model.

FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS
---------------------------------------

For  certain  of  the  Company's  financial  instruments,  including  accounts
receivable,  bank  overdraft  and  accounts  payable  and  accrued expenses, the
carrying  amounts  approximate  fair  value,  due  to  their  relatively  short
maturities.  The  amounts  owed  for  long-term debt also approximate fair value
because  current  interest rates and terms offered to the Company are at current
market  rates.

COMPREHENSIVE  LOSS
-------------------

The  Company  adopted  SFAS  No.  130,  "Reporting  Comprehensive Income."  This
statement establishes standards for reporting other comprehensive income and its
components in a financial statement.  Comprehensive income, as defined, includes
all  changes  in  equity  (net  assets)  during a period from non-owner sources.
Examples  of  items  to  be included in comprehensive income, which are excluded
from net income, include foreign currency translation adjustments and unrealized
gains  and losses on available-for-sale securities.  Comprehensive income is not
presented  in  the Company's financial statements since the Company did not have
any  of  the  items  of  other  comprehensive  income  in  any period presented.

SEGMENT  DISCLOSURE
-------------------

SFAS  No.  131,  "Disclosure  about  Segments  of  an  Enterprise  and  Related
Information,"  was  issued,  which  changes  the  way  public  companies  report
information about segments. SFAS No. 131, which is based on the selected segment
information,  requires  quarterly and entity-wide disclosures about products and
services,  major customers, and the material countries in which the entity holds
assets  and  reports  revenues.

RECENT  ACCOUNTING  PRONOUNCEMENTS
----------------------------------

In July 2001, the FASB issued SFAS No. 141 "Business Combinations." SFAS No. 141
supersedes  Accounting  Principles  Board  ("APB")  No. 16 and requires that any
business  combinations  initiated  after  June  30,  2001  be accounted for as a
purchase;  therefore,  eliminating the pooling-of-interest method defined in APB
16. The statement is effective for any business combination initiated after June
30,  2001  and  shall  apply  to  all business combinations accounted for by the
purchase method for which the date of acquisition is July 1, 2001 or later.  The
Company  has  implemented this pronouncement and has concluded that the adoption
has  no  material  impact  to  the  financial  statements.

In  July  2001, the FASB issued SFAS No. 142,  "Goodwill and Other Intangibles."
SFAS  No. 142 addresses the initial recognition; measurement and amortization of
intangible  assets  acquired  individually or with a group of other assets  (but
not those acquired in a business combination) and   addresses   the amortization
provisions  for  excess  cost  over  fair  value  of  net assets   acquired   or
intangibles   acquired   in  a  business combination. The statement is effective
for  fiscal  years  beginning  after December 15, 2001, and is effective July 1,
2001 for any intangibles acquired in a business combination initiated after June
30,  2001. The Company has implemented this pronouncement and has concluded that
the  adoption  has  no  material  impact  to  the  financial  statements.

In October 2001, the FASB recently   issued SFAS No.  143, "Accounting for Asset
Retirement  Obligations," which requires companies to record the fair value of a
liability  for  asset  retirement  obligations  in  the period in which they are
incurred. The statement applies to a company's legal obligations associated with
the retirement of a tangible long-lived asset that results from the acquisition,
construction,  and  development  or through the normal operation of a long-lived
asset.  When a liability is initially recorded, the company would capitalize the
cost,  thereby  increasing  the  carrying  amount  of  the  related  asset.  The
capitalized asset retirement cost is depreciated over the life of the respective
asset  while the liability is accreted to its present value.  Upon settlement of
the  liability,  the obligation is settled at its recorded amount or the company
incurs  a  gain  or  loss. The statement is effective for fiscal years beginning
after June 30, 2002. The Company does not expect the adoption to have a material
impact  to  the  Company's  financial  position  or  results  of  operations.

In  October  2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment
or  Disposal  of Long-Lived Assets".  Statement 144 addresses the accounting and
reporting  for  the  impairment or disposal of long-lived assets.  The statement
provides  a single accounting model for long-lived assets to be disposed of. New
criteria   must  be  met  to classify the asset as an asset held-for-sale.  This
statement  also focuses on reporting the effects of a disposal of a segment of a
business.  This statement is effective for fiscal years beginning after December
15,  2001. The Company has implemented this pronouncement and has concluded that
the  adoption  has  no  material  impact  to  the  financial  statements.

In April 2002, the FASB issued Statement No. 145, "Rescission of FASB Statements
No.  4,  44,  and  64,  Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections."  This  Statement  rescinds  FASB Statement No. 4, "Reporting Gains
and  Losses  from  Extinguishment  of Debt", and an amendment of that Statement,
FASB  Statement  No.  64,  "Extinguishments of Debt Made to Satisfy Sinking-Fund
Requirements"  and  FASB  Statement No. 44, "Accounting for Intangible Assets of
Motor  Carriers".  This  Statement amends FASB Statement No. 13, "Accounting for
Leases",  to  eliminate  an  inconsistency  between  the required accounting for
sale-leaseback  transactions  and  the  required  accounting  for  certain lease
modifications  that  have  economic  effects  that are similar to sale-leaseback
transactions. The Company does not expect the adoption to have a material impact
to  the  Company's  financial  position  or  results  of  operations.

In  June  2002,  the  FASB  issued  Statement  No.  146,  "Accounting  for Costs
Associated with Exit or Disposal Activities." This Statement addresses financial
accounting  and  reporting  for  costs associated with exit or          disposal
activities  and  nullifies  Emerging Issues Task Force ("EITF") Issue No.  94-3,
"Liability   Recognition  for  Certain  Employee  Termination Benefits and Other
Costs  to  Exit  an  Activity  (including  Certain  Costs  Incurred  in  a
Restructuring)."  The  provisions  of  this  Statement are effective for exit or
disposal  activities  that  are  initiated  after  December 31, 2002, with early
application  encouraged.  The  Company  does  not  expect the adoption to have a
material  impact  to  the Company's financial position or results of operations.

NOTE  2          ACCOUNTS  RECEIVABLE

Accounts  receivable  consisted  of  the  following  as  of:

<TABLE>
<CAPTION>
<S>                                   <C>              <C>
                                      June 30,
                                                2002            2001
                                      ---------------  --------------
 Accounts receivable:
        Billed . . . . . . . . . . .  $      501,000   $     375,000
        Unbilled . . . . . . . . . .         408,000               -
                                      ---------------  --------------
                                             909,000         375,000
                                      ---------------  --------------
Less allowance for doubtful accounts        (280,000)       (317,000)
                                      ---------------  --------------

         Accounts receivable, net. .  $      629,000   $      58,000
                                      ===============  ==============
</TABLE>

The  Company  reviews  accounts  receivable  periodically  during  the  year for
collectability.  An  allowance  for  doubtful  accounts  and  sales  returns  is
established  for  any  receivables whose collection is in doubt or for estimated
returns.

The  change in the allowance for doubtful accounts consisted of the following as
of:

<TABLE>
<CAPTION>
<S>                                        <C>         <C>
                                           June 30,
                                                2002        2001
                                           ----------  ----------
Change in allowance for doubtful accounts
          Balance, beginning of year. . .  $ 317,000   $ 159,000
          Provision for bad debts . . . .    389,000     266,000
          Write-off of bad debts. . . . .   (426,000)   (108,000)
                                           ----------  ----------
          Balance, end of year. . . . . .  $ 280,000   $ 317,000
                                           ==========  ==========
</TABLE>

NOTE  3          INVENTORY

Inventory  consisted  of  the  following  as  of:

<TABLE>
<CAPTION>
<S>                                <C>             <C>
                                   June 30,
Inventory . . . . . . . . . . . .           2002             2001
                                   --------------  --------------
          Materials and supplies.  $     261,000   $       10,000
          Finished goods. . . . .        165,000           40,000
                                   --------------  --------------
                                         426,000           50,000
                                   --------------  --------------
          Less: Inventory reserve       (275,000)               -
                                   --------------  --------------
 Inventory, net . . . . . . . . .  $     151,000   $       50,000
                                   ==============  ==============
</TABLE>

NOTE  4          RELATED  PARTY  TRANSACTIONS

A  former  director  receives  compensation  as  a  consultant to the Company on
corporate  matters  and investment banking issues under an agreement expiring in
June 2002. These consulting fees amounted to $56,000 in fiscal 2000 and 1999 and
$120,000 in fiscal 1998. Effective July 1, 1998, the annual consulting fee under
the  agreement has been reduced to $56,000. During fiscal 1998, as consideration
for  services  provided  relating  to  the  private  placement  of  the Series C
Preferred  Stock,  this  former  director  received  commissions  and  expense
reimbursement  totaling $200,000 of which $100,000 was paid in cash and $100,000
was  used  to exercise warrants for 5,000 shares at a price of $20.00 per share.

In June 1998, a director of the Company loaned $1,000,000 to the Company under a
10%  note  payable  due  on  or after December 31, 1998 and convertible into the
Company's  common  stock  at  the lesser of $2.36 per share or 85% of the volume
weighted  trade  price on the date of conversion. In fiscal 1999, this loan plus
accrued  interest  and  directors fees totaling $265,000 were converted into 253
shares  of  Series  E  Preferred  Stock.

The  Company pays $6,000 monthly to a company owned by a Director for consulting
services.

NOTE  5          PROPERTY  AND  EQUIPMENT

Property  and  equipment  consisted  of  the  following  as  of:

<TABLE>
<CAPTION>
<S>                                                       <C>             <C>
                                                          June 30,
                                                                   2002           2001
                                                          --------------  -------------
Property and equipment
          Computers and other equipment. . . . . . . . .  $   1,004,000   $    915,000
          Office furniture and fixtures. . . . . . . . .         57,000         57,000
          Leasehold improvements . . . . . . . . . . . .              -              -
                                                          --------------  -------------
                                                              1,061,000        972,000
          Less accumulated depreciation and amortization       (849,000)      (731,000)
                                                          --------------  -------------
                                                          $     212,000   $    241,000
                                                          ==============  =============
</TABLE>

Depreciation  and  amortization  expense for the years ended June 30, 2002, 2001
and  2000  was  approximately  $118,000,  $806,000,  and $478,000, respectively.

NOTE  6          ACQUISITIONS/INTANGIBLE  ASSETS

EDUADVANTAGE  ACQUISITION
-------------------------

Effective  December  1, 2000, the Company acquired all of the outstanding shares
of  Eduadvantage.com  in  exchange  for  175,000  of the Company's common stock.
EduAdvantage.com  is  a  California  corporation  that is primarily engaged in a
web-based  business.  The  acquisition  has  been  accounted  for  as a purchase
transaction.  The  following  summarized  the  net  assets  acquired:

<TABLE>
<CAPTION>
<S>                             <C>
Assets
     Receivables . . . . . . .  $  78,000
     Equipment . . . . . . . .      3,000
     Goodwill. . . . . . . . .    687,000
                                ----------
                                  768,000
Less assumption of liabilities   (495,000)
                                ----------
Net assets acquired. . . . . .  $ 273,000
                                ==========
</TABLE>

The  goodwill  associated  with the above acquisition was being amortized over a
period  of  three  years.

ASSET  ACQUISITION
------------------

On  October  25,  2001,  the  Company acquired certain assets from three related
parties.  These  assets  related  to  the Company's office products and services
business  activities  and  represent  an  aggregate  of $250,000, which included
inventory,  fixed  assets,  and  accounts  receivable. The purchase price of the
assets  was  375,000 shares of the Company's common stock that was determined by
the  market  price of the Company's common stock at the date of acquisition. The
transaction  was completed on arms length terms.  The number of shares issued in
this transaction was subsequently reduced to $250,000 thus reducing the purchase
price  to  $173,333.

SOURCEONE  ACQUISITION
----------------------

On  November  12,  2001,  the  Company acquired all of the outstanding shares of
SourceOne, Inc. ("SourceOne") from Neotactix, Inc. for 500,000 shares (valued at
$300,000)  of  the  Company's  common  stock  and  the assumption of $750,000 of
payments  due  SourceOne  from  Neotactix.  The Company paid $250,000 in cash at
closing.  The  balance  of  $500,000  is payable in cash or stock on a quarterly
payment  schedule  beginning  in  April 2002. If the Company chooses to pay this
debt  in  stock,  the stock issued must be registered with the SEC and the price
per share will be the best bid price on the day the payment is made.  As of June
30, 2002, the Company has not made any additional payments as there is currently
a  dispute  over  certain  liabilities that have arisen since the purchase date.

SourceOne  is  a  professional  employer  organization  ("PEO")  that  provides
comprehensive  personnel  management  services,  including  benefits and payroll
administration,  health  and workers' compensation insurance programs, personnel
records  management,  and  employer  liability  management.

The  following  summarized  the  fair  market  values  net  assets  acquired:

<TABLE>
<CAPTION>
<S>                                         <C>
ASSETS
     Cash and cash equivalents . . . . . .  $   215,000
     Accounts receivables. . . . . . . . .    1,162,000
     Equipment . . . . . . . . . . . . . .       21,000
     Other assets. . . . . . . . . . . . .      206,000
                                            ------------
        Total assets . . . . . . . . . . .    1,604,000
LIABILITIES

     Accounts payable. . . . . . . . . . .      (99,000)
     Payroll liabilities . . . . . . . . .   (1,379,000)
     Notes payable . . . . . . . . . . . .     (200,000)
     Other liabilities . . . . . . . . . .     (213,000)
                                            ------------
        Total liabilities. . . . . . . . .   (1,891,000)

Excess of liabilities over assets acquired      287,000
Total consideration given. . . . . . . . .    1,050,000
                                            ------------
        Customer list. . . . . . . . . . .  $ 1,337,000
                                            ------------
</TABLE>

The  customer list purchased in the above acquisition was being amortized over a
period of five years.  The value of the customer list at the date of acquisition
was  greater  than  the  excess purchase price so the entire excess purchase was
allocated  to  the  customer  list.

The  following  table  presents  the  unaudited pro forma condensed statement of
operations  for  the years ended June 30, 2002 and 2001 and reflects the results
of  operations  of  the  Company  as  if  the  acquisition of SourceOne had been
effective  February  1,  2001 (the inception date of SourceOne).   The pro forma
amounts are not necessarily indicative of the combined results of operations had
the acquisition been effective as of that date, or of the anticipated results of
operations,  due to cost reductions and operating efficiencies that are expected
as  a  result  of  the  acquisition.

<TABLE>
<CAPTION>
<S>                                             <C>           <C>

                                                        2002         2001
                                                ------------  -----------
  (unaudited). . . . . . . . . . . . . . . . .   (unaudited)
Revenues . . . . . . . . . . . . . . . . . . .  $ 38,576,000  $20,104,000
Cost of revenues . . . . . . . . . . . . . . .    36,262,000   19,067,000
Selling, general, and administrative expenses.    12,830,000    9,206,000
Net loss . . . . . . . . . . . . . . . . . . .    13,819,000   10,052,000
Basic loss per share . . . . . . . . . . . . .          1.12         1.48
</TABLE>

ENSTRUCTURE  ACQUISITION
------------------------

On  March  8,  2002, ITEC acquired all of the outstanding shares of EnStructure,
Inc.  ("EnStructure),  a Nevada corporation, for $250,000, payable in restricted
common  stock  of  the Company. The purchase price may be increased or decreased
based  upon  EnStructure's  representations  of  projected revenues and profits,
which  are  defined  in  the  acquisition  agreement.

EnStructure  is  a  PEO  that  intends to provide personnel management services,
including  benefits and payroll administration, health and workers' compensation
insurance  programs,  personnel  records  management,  and  employer  liability
management.

EnStructure,  Inc. is operated by ITEC as a wholly owned subsidiary. EnStructure
will  be  the  operating  unit  into  which  the  Company  will  place  new
California-based  PEO  clients.  The  acquisition  agreement  provides  for  the
purchase price to be tied to selling PEO services of $20 million in annual value
during  a  certain  period  of  time.

EnStructure was incorporated in May 2001 and has had limited operations to date.
It  was  established  to  market  PEO  services,  primarily  in  California.
EnStructure's  sole  property  is  a  qualified  first-dollar-coverage  workers'
compensation insurance agreement with California's State Fund Insurance Company.

The  purchase price of EnStructure has subsequently been reduced to $0 since the
representations  of  projected  revenues did not materialized.  No consideration
was  given  in connection to this acquisition. There is currently a dispute over
who  owns  the  name  of  "EnStructure,  Inc."

GOODWILL  AND  CUSTOMER  LISTS

The  following  is  a  recap  of  the  goodwill  and customer list transactions:

<TABLE>
<CAPTION>
<S>                         <C>            <C>

                            June 30,
                            -------------
                                    2002           2001
                            -------------  -------------

EduAdvantage (goodwill). .  $    687,000   $    687,000
SourceOne  (customer list)     1,337,000              -
                            -------------  -------------
    Total. . . . . . . . .     2,024,000        687,000
Accumulated amortization .   (   274,000)   (   118,000)
                            -------------  -------------
    Net. . . . . . . . . .     1,750,000        569,000
Impairment . . . . . . . .    (1,750,000)             -
                            -------------  -------------
    Goodwill, net. . . . .  $          -   $    569,000
                            =============  =============
</TABLE>

NOTE  7          OTHER  ACCRUED  EXPENSES

Other  accrued  expenses  consisted  of  the  following  as  of:

<TABLE>
<CAPTION>
<S>                                           <C>            <C>
                                              June 30,
                                                       2002           2001
                                              -------------  -------------

          Compensation and employee benefits  $   1,822,000  $     977,000
          Interest . . . . . . . . . . . . .      3,858,000      1,998,000
          Other. . . . . . . . . . . . . . .        356,000        200,000
                                              -------------  -------------
                                              $   6,036,000  $   3,175,000
                                              =============  =============
</TABLE>

NOTE  8          DEBT

BORROWINGS  UNDER  BANKS  NOTES  PAYABLE
----------------------------------------

On  June  6, 2000, the Company entered into a settlement agreement with Imperial
Bank  ("Imperial").  Under  this  agreement,  the Company would pay $150,000 per
month until the balance was paid in full. Payments have been reduced to $100,000
per  month  through  January  2002  and further reduced to $50,000 subsequent to
January  2002.  During the year ended June 30, 2002, the Company paid $1,023,000
toward  this obligation.  Due to the uncertainty regarding the Company's ability
to  meet its obligations and certain defaults under this agreement, the debt has
been  classified  as  current.  The debt is accruing interest at 12.9% per annum
which  will  be  waived  if  all  principal  payments  are made timely.  Accrued
interest  totaling  $1,180,000 is included in other accrued expenses.   The debt
is  collateralized by substantially all assets of the Company.   The balance due
to  Imperial  at  June  30,  2002  and  2001  was  $1,615,000  and  $2,638,000.

As  of  June  30,  2002  and 2001, the Company owed Export-Import Bank ("Ex-Im")
$1,680,000  plus  interest  under  a  Working Capital Guarantee Facility whereby
Imperial  made  a  demand  upon Ex-Im who responded by making a claim payment to
Imperial. The note bears interest at 10% per annum.  Ex-Im has made a demand for
immediate  payment  and  note  is  currently  in  default.

The  following  is  a  summary  of  the  borrowings  under  bank  notes payable:

<TABLE>
<CAPTION>
<S>        <C>         <C>

           June 30,
           ----------
                 2002        2001
           ----------  ----------

Imperial.  $1,615,000  $2,638,000
Ex-Im . .   1,680,000   1,680,000
           ----------  ----------
    Total  $3,295,000  $4,318,000
           ==========  ==========
</TABLE>

SHORT-TERM  NOTES  PAYABLE,  INCLUDING  AMOUNTS  DUE  TO  RELATED  PARTIES
--------------------------------------------------------------------------

The  following  summarizes short-term notes payable which are in default and due
on  demand:

<TABLE>
<CAPTION>
<S>                                                    <C>           <C>
                                                       JUNE 30,
                                                       ------------
                                                               2002          2001
                                                       ------------  ------------

Payable to suppliers, 10% . . . . . . . . . . . . . .  $     41,000  $     41,000
Advances from shareholders, 8%. . . . . . . . . . . .       515,000       750,000
Payable in connection with SourceOne acquisition, 10%       700,000             -
Payable to individual, 10%. . . . . . . . . . . . . .        40,000             -
Advances from shareholders, 10% . . . . . . . . . . .             -       913,000
Payable to a former director, 16% . . . . . . . . . .     1,500,000     1,500,000
                                                       ------------  ------------
                                                       $  2,796,000  $  3,204,000
                                                       ============  ============
</TABLE>

CONVERTIBLE  DEBENTURES
-----------------------

On  December  12,  2000,  the  Company  entered into a Convertible Note Purchase
Agreement  with  Amro International, S.A., Balmore Funds, S.A. and Celeste Trust
Reg.  Pursuant  to  this  agreement,  the Company sold to each of the purchasers
convertible  promissory  notes  in  the  aggregate  principal amount of $850,000
bearing  interest  at the rate of eight percent (8%) per annum, due December 12,
2003, each convertible into shares of the Company's common stock. Interest shall
be  payable, at the option of the purchasers, in cash or shares of common stock.
At  any time after the issuance of the notes, each note is convertible into such
number  of  shares of common stock as is determined by dividing (a) that portion
of the outstanding principal balance of the note as of the date of conversion by
(b)  the  lesser  of (x) an amount equal to seventy percent (70%) of the average
closing bid prices for the three (3) trading days prior to December 12, 2000 and
(y)  an  amount equal to seventy percent (70%) of the average closing bid prices
for  the  three (3) trading days having the lowest closing bid prices during the
thirty  (30)  trading  days  prior  to  the  conversion  date.  The  Company has
recognized  interest  expense  of $364,000 relating to the beneficial conversion
feature  of  the above notes. Additionally, the Company issued a warrant to each
of the purchasers to purchase 502,008 shares of the Company's common stock at an
exercise  price  equal  to  $1.50  per  share.  The  purchasers may exercise the
warrants  through  December  12,  2005.  During  fiscal  2001,  notes payable of
$675,000  was  converted  into  the  Company's  common  stock.

On July 26, 2001, the Company entered into a convertible note purchase agreement
with  certain  investors whereby the Company sold to the investors a convertible
debenture  in  the  aggregate principal amount of $1,000,000 bearing interest at
the  rate  of  eight percent (8%) per annum, due July 26, 2004, convertible into
shares  of our common stock. Interest is payable, at the option of the investor,
in  cash or shares of our common stock. The note is convertible into such number
of  shares  of our common stock as is determined by dividing (a) that portion of
the  outstanding  principal balance of the note by (b) the conversion price. The
conversion  price  equals  the lesser of (x) $1.30 and (y) 70% of the average of
the  3  lowest  closing  bid  prices  during  the  30  trading days prior to the
conversion  date.  Additionally, we issued a warrant to the investor to purchase
769,231  shares  of  our  common  stock  at an exercise price equal to $1.30 per
share.  The  investor  may  exercise  the  warrant  through  July  26, 2006.  In
accordance  with  EITF 00-27, the Company first determined the value of the note
and  the  fair  value  of the detachable warrants issued in connection with this
convertible  debenture.  The proportionate value of the note and the warrants is
$492,000  and  $508,000, respectively.  The value of the note was then allocated
between  the  note and the preferential conversion feature, which amounted to $0
and  $492,000,  respectively.

On  September  21,  2001,  the  Company entered into a convertible note purchase
agreement  with  an  investor  whereby  we  sold  to  the investor a convertible
promissory  note  in the aggregate principal amount of $300,000 bearing interest
at the rate of eight percent (8%) per annum, due September 21, 2004, convertible
into  shares  of  our  common  stock.  Interest is payable, at the option of the
investor,  in  cash  or shares of our common stock. The note is convertible into
such  number of shares of our common stock as is determined by dividing (a) that
portion  of  the outstanding principal balance of the note by (b) the conversion
price.  The  conversion price equals the lesser of (x) $0.532 and (y) 70% of the
average  of  the 3 lowest closing bid prices during the 30 trading days prior to
the  conversion  date.  Additionally,  we  issued  a  warrant to the investor to
purchase  565,410 shares of our common stock at an exercise price equal to $0.76
per share. The investor may exercise the warrant through September 21, 2006.  In
December  2001, $70,000 of this note was converted into 209,039 shares of common
stock.  In accordance with EITF 00-27, the Company first determined the value of
the note and the fair value of the detachable warrants issued in connection with
this  convertible  debenture.  The  proportionate  value  of  the  note  and the
warrants is $106,000 and $194,000, respectively.  The value of the note was then
allocated  between  the  note  and  the  preferential  conversion  feature which
amounted  to  $0  and  $194,000,  respectively.

On  November  7,  2001,  the  Company  entered  into a convertible note purchase
agreement  with  an  investor  whereby  we  sold  to  the investor a convertible
promissory  note  in the aggregate principal amount of $200,000 bearing interest
at  the  rate of eight percent (8%) per annum, due November 7, 2004, convertible
into  shares  of  our  common  stock.  Interest is payable, at the option of the
investor,  in  cash  or shares of our common stock. The note is convertible into
such  number of shares of our common stock as is determined by dividing (a) that
portion  of  the outstanding principal balance of the note by (b) the conversion
price.  The  conversion price equals the lesser of (x) $0.532 and (y) 70% of the
average  of  the 3 lowest closing bid prices during the 30 trading days prior to
the  conversion  date.  Additionally,  we  issued  a  warrant to the investor to
purchase  413,534 shares of our common stock at an exercise price equal to $0.76
per  share.  The investor may exercise the warrant through November 7, 2006.  In
accordance  with  EITF 00-27, the Company first determined the value of the note
and  the  fair  value  of the detachable warrants issued in connection with this
convertible  debenture.  The proportionate value of the note and the warrants is
$92,000  and  $108,000,  respectively.  The value of the note was then allocated
between  the  note  and the preferential conversion feature which amounted to $0
and  $92,000,  respectively.

On  January  22,  2002,  the  Company  entered  into a convertible note purchase
agreement  with  an  investor  whereby  we  sold  to  the investor a convertible
promissory  note  in the aggregate principal amount of $500,000 bearing interest
at  the  rate of eight percent (8%) per annum, due January 22, 2003, convertible
into  shares  of  our  common  stock.  Interest is payable, at the option of the
investor,  in  cash  or shares of our common stock. The note is convertible into
such  number of shares of our common stock as is determined by dividing (a) that
portion  of  the outstanding principal balance of the note by (b) the conversion
price.  The  conversion price equals the lesser of (x) $0.332 and (y) 70% of the
average  of  the 3 lowest closing bid prices during the 30 trading days prior to
the  conversion  date.  Additionally,  we  issued  a  warrant to the investor to
purchase  3,313,253  shares  of  our  common stock at an exercise price equal to
$0.332  per  share.  The  investor  may exercise the warrant through January 22,
2009.  In  accordance with EITF 00-27, the Company first determined the value of
the note and the fair value of the detachable warrants issued in connection with
this  convertible  debenture.  The  proportionate  value  of  the  note  and the
warrants is $101,000 and $399,000, respectively.  The value of the note was then
allocated  between  the  note  and  the  preferential  conversion feature, which
amounted  to  $0  and  $101,000,  respectively.

All  the  convertible  debentures  are  shown  as  a  current  liability  in the
accompanying  consolidated  balance  sheets  since each debenture is convertible
into  common  stock  at  any  time.

Below  is  a  roll-forward  of  the  convertible  debentures:

<TABLE>
<CAPTION>
<S>                                                       <C>
Balance at June 30, 2001 . . . . . . . . . . . . . . . .  $      175,000
Issuance of convertible debentures during the year . . .       2,000,000
Converted into common stock. . . . . . . . . . . . . . .         (70,000)
Value of warrants issued with convertible debentures . .      (1,209,000)
Value of preferential conversion feature . . . . . . . .        (791,000)
Amortization of value of warrants. . . . . . . . . . . .         437,000
Amortization of value of preferential conversion feature         261,000
                                                          ---------------
Balance at June 30, 2002 . . . . . . . . . . . . . . . .  $      803,000
                                                          ===============
</TABLE>

The weighted average interest rate on notes payable outstanding at June 30, 2002
and  2001  was  9.67%  and  11.1%,  respectively.

NOTE  9.     SHAREHOLDERS'  DEFICIENCY

AMENDMENT  TO  THE  CERTIFICATE  OF  INCORPORATION.
---------------------------------------------------

On September 28, 2001, the Company's shareholders authorized an amendment to the
Certificate  of Incorporation to: (i) effect a stock combination (reverse split)
of  the Company's common stock in an exchange ratio to be approved by the Board,
ranging  from one (1) newly issued share for each ten (10) outstanding shares of
common  stock  to  one (1) newly  issued  share for each twenty (20) outstanding
shares  of  common  stock  (the  "Reverse  Split");  and  (ii)  provide  that no
fractional  shares  or  scrip representing fractions of a share shall be issued,
but  in  lieu  thereof,  each  fraction  of  a  share that any shareholder would
otherwise be entitled to receive shall be rounded up to the nearest whole share.
There  will  be  no  change  in the number of the Company's authorized shares of
common  stock  and  no  change  in  the  par  value  of a share of Common Stock.

On  September  28, 2001, the Company's shareholders approved a Board proposal to
amend  the  Certificate  of  Incorporation  to  increase the number of shares of
common  stock  that  the  Company  is  authorized  to  issue from 200,000,000 to
500,000,000  shares.

On  August  9,  2002, the Company's board of directors approved and effected a 1
for  20  reverse  stock  split.  All  share  and  per  share  data  have  been
retroactively  restated  to  reflect  this  stock  split.

5%  SERIES  A  CONVERTIBLE,  REEDEMABLE  PREFERRED  STOCK
---------------------------------------------------------

Holders  of  the  5%  convertible  preferred  stock ("Series A") are entitled to
receive, when and as declared by the Board of Directors, but only out of amounts
legally  available  for  the  payment  thereof, cumulative cash dividends at the
annual  rate  of  $50.00  per  share,  payable  semi-annually.

The  5%  convertible preferred stock is convertible, at any time, into shares of
the  Company's  common  stock,  at  a  price  of  $17.50  per common share. This
conversion  price  is subject to certain anti-dilution adjustments, in the event
of  certain  future  stock splits or dividends, mergers, consolidations or other
similar  events.  In addition, the Company shall reserve, and keep reserved, out
of  its  authorized  but  un-issued shares of common stock, sufficient shares to
effect  the  conversion  of  all  shares  of the 5% convertible preferred stock.

In  the  event  of  any  involuntary  or  voluntary liquidation, dissolution, or
winding  up  of  the  affairs  of  the  Company,  the  5%  convertible preferred
shareholders  shall  be  entitled  to  receive  $1,000  per share, together with
accrued dividends, to the date of distribution or payment, whether or not earned
or  declared.

The 5% convertible preferred stock is callable, at the Company's option, at call
prices  ranging  from  $1,050 to $1,100 per share. No call on the 5% convertible
preferred stock was made during fiscal 2002, 2001 and 2000. As of June 30, 2002,
the  accumulated dividend in arrears was approximately $330,000 on the Series A.

SERIES  D  CONVERTIBLE  PREFERRED  STOCK
----------------------------------------

On  January  13,  1999, the Company entered into a Securities Purchase Agreement
(the  "Series  D  Agreement")  with  certain investors contemplating a potential
funding  of  up  to  $2.4 million (the "Series D Funding"). The Series D Funding
provides  for  the  private  placement  by the Company of up to 1,200 units (the
"Units"),  each  Unit  consisting  of  (i)  one  share  of  Series D Convertible
Preferred  Stock  (the  "Series  D  Stock") and (ii) 100 warrants (the "Series D
Warrants" and, collectively, with the Series D Stock, the "Series D Securities")
exercisable  for shares of Common Stock. Pursuant to the Series D Agreement, the
Company  issued  900  units  during  fiscal  1999  for  consideration  totaling
$1,800,000.  The  Series  D  Stock  is  convertible into shares of the Company's
Common  Stock  at the lesser of (A) $10.00 and (B) an amount equal to 70 percent
of the closing bid price per share of Common Stock on the Nasdaq SmallCap Market
(the  "Series  D  Closing  Price")  for the three trading days having the lowest
closing price during the 30 trading days prior to the date on which the investor
gives  to  the Company a notice of conversion of Series D Stock; except that all
Series  D  Stock  converted  prior  to  February  26, 1999 would be converted at
$10.00.  However,  each of the investors has agreed that in no event shall it be
permitted  to  convert  any  shares of Series D Stock in excess of the number of
such shares upon the conversion of which, the sum of (i) the number of shares of
Common  Stock owned by such investor (other than shares of Common Stock issuable
upon  conversion  of  Series D Stock or upon exercise of Series D Warrants) plus
(ii)  the  number  of  shares  of  Common Stock issuable upon conversion of such
shares  of  Series  D Preferred Stock or exercise of Series D Warrants, would be
equal  to  or  exceed 9.999 percent of the number of shares of Common Stock then
issued  and  outstanding,  including  the  shares  that  would  be issuable upon
conversion  of  the Series D Stock or exercise of Series D Warrants held by such
investor.  Each  investor in Series D Stock shall have the right to vote, except
as otherwise required by Delaware law, on all matters on which holders of Common
Stock have the right to vote on with each such investor having the right to cast
one  vote  for  each  whole  share  of Common Stock into which each share of the
Series  D Preferred Stock held by such investor is convertible immediately prior
to  the  record  date  for  the  determination of shareholders entitled to vote;
provided, however, that in no event shall a holder be entitled to vote more than
9.999 percent of the number of shares entitled to be voted on any matter. Series
D  Warrants  are  immediately  exercisable upon issuance at an exercise price of
$17.50  per  share  and  expire  five years after the date of their issuance. In
fiscal  2000, the issued and outstanding shares of Series D Stock were converted
into  990,620  shares  of  common  stock.

SERIES  E  CONVERTIBLE  PREFERRED  STOCK
----------------------------------------

In  fiscal  1999,  the Company entered into a Securities Purchase Agreement (the
"Series  E  Agreement")  and  an  Exchange  Agreement (the "Exchange Agreement")
(together  the "Series E Funding") with certain investors (including one of whom
is a director of the Company) that provided funding and exchange of indebtedness
of  $4,655,000.  The  Series E Funding provided for the private placement by the
Company  of  up  to  1,250  units (the "Units"), each Unit consisting of (i) one
share  of  Series  E Convertible Preferred Stock (the "Series E Stock") and (ii)
5,000  warrants  (the  "Series  E Warrants" and, collectively, with the Series E
Stock,  the  "Series  E Securities") exercisable for shares of Common Stock. The
Series  E  Stock is convertible into shares of the Company's Common Stock at the
lesser  of  (A)  $10.00 and (B) an amount equal to 70 percent of the closing bid
price  per  share  of  Common Stock on the Nasdaq SmallCap Market (the "Series E
Closing  Price")  for  the  three  trading  days having the lowest closing price
during  the  30  trading days prior to the date on which the applicable investor
gives  to  the  Company  notice of conversion of Series E Stock; except that all
Series  E  Stock  converted  prior  to  February  26, 1999 would be converted at
$10.00.  Each investor in Series E Stock shall have the right to vote, except as
otherwise  required  by  Delaware law, on all matters on which holders of Common
Stock have the right to vote on with each such investor having the right to cast
one  vote  for  each  whole  share  of Common Stock into which each share of the
Series  E Preferred Stock held by such investor is convertible immediately prior
to  the  record date for the determination of shareholders entitled to vote. The
Series E Warrants are immediately exercisable upon issuance at an exercise price
of  $17.50  per  share  and  expire  five years after their date of issuance. In
fiscal  2000, the issued and outstanding shares of Series E Stock were converted
into  1,692,052  shares  of  common  stock.

PRIVATE  EQUITY  LINE  OF  CREDIT  AGREEMENT
--------------------------------------------

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. (This registration statement has not yet been declared effective
by  the  SEC).  Beginning  on  the  date  the registration statement is 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 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.  During  fiscal  2001, the Company sold $750,000 of common stock
under this agreement. Funding under this agreement is not currently available to
the  Company  since  the  Company  has  not  been  able  to get its registration
statement  declared  effective  by  the  SEC.

COMMON  STOCK  WARRANTS
-----------------------

The Company, from time-to-time, grants warrants to employees, directors, outside
consultants  and  other  key persons, to purchase shares of the Company's common
stock.  The  Board of Directors on a case-by-case basis determines the terms and
vesting  of  these warrants. The vesting period is generally 48 months. However,
during  fiscal  2000  the  Board  has accelerated vesting in order to induce the
exercise  of  warrants  and  thereby  raise  needed  capital.  Accordingly,  all
outstanding  warrants  have  been  treated  as  exercisable  at  June  30, 2001.

In  August 2000, the Company issued "retention" warrants to employees that allow
the  purchase  of  up  to  166,050 shares of common stock at a purchase price of
$0.20  per  share.  These  warrants became exercisable in January 2001 for those
employees  who  have remained employed by the Company through that period.   The
Company  took a charge of approximately $175,000 since the exercise price of the
warrants  was  less  than the value of the Company's common stock at the date of
issuance.

In  August  2000, the Company issued warrants to officers and key employees that
allow  the  purchase  of  106,800  shares of common stock at a purchase price of
$6.00  per  share.  These  warrants  are  exercisable  immediately.

In  December 2000 in connection with the issuance of a convertible note payable,
the  Company  issued warrants to purchase 502,000 shares of the Company's common
stock at an exercise price equal to $1.50 per share. The purchasers may exercise
the  warrants  through  December  12,  2005.  The  value  of  these warrants was
estimated  at  $123,000  using  the  Black-Scholes  option-pricing  model.  The
following  assumptions  were  used:  average  risk-free  interest rate of  4.0%;
expected  life  of 1 year; dividend yield of 0%; and expected volatility of 30%.

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 100,000 shares of
its  common  stock  at  an  exercise price equal to $11.40 per share. Impany may
exercise  the  warrant  through January 5, 2003. The value of these warrants was
estimated  at  $145,000  using  the  Black-Scholes  option-pricing  model.  The
following  assumptions  were  used:  average  risk-free  interest  rate of 4.0%;
expected  life  of 1 year; dividend yield of 0%; and expected volatility of 30%.

In connection with certain convertible debentures issued during fiscal 2002, the
Company  issued  to  the  debenture holders warrants to purchase up to 5,061,450
shares  of its common stock at an exercise prices ranging from $0.0332 to $1.30.
The  warrants  expire  between  July 26, 2006 and January 22, 2009. The value of
these  warrants  was  estimated at $1,209,000.  The Black-Scholes option pricing
model  was  used  to  determine  the  value  of  these  warrants.  The following
assumptions were used: average risk-free interest rate of 3.5%; expected life of
5  years;  dividend  yield of 0%; and expected volatility of 179%. The value was
then  compared  to  the  value  of  the underlying convertible debenture and the
proportionate  value  was assigned to the detachable warrants and the underlying
convertible  debenture.  The  value  of  the  warrants  of  $1,209,000  is being
amortized  over  the  term  of  the  underlying  convertible  debenture.  The
amortization  expense  for  fiscal  2002  was  $437,000.

In  fiscal  2002,  the  Company  also  issued  4,750,300  warrants  to  certain
consultants.  The  exercise  prices  ranging  from  $0.10  to  $0.80.  All these
warrants  were  exercised  during  fiscal 2002.  The value of these warrants was
estimated  at  $1,584,000  using  the  Black-Scholes  option-pricing model.  The
following  assumptions  were  used:  average  risk-free  interest  rate of 3.5%;
expected  life of 1 year; dividend yield of 0%; and expected volatility of 179%.

The  following  is  a  summary  of  the  warrant  activity:

<TABLE>
<CAPTION>
<S>                           <C>               <C>

                              PRICE PER SHARE   UNDERLYING COMMON SHARES
                              ----------------  -------------------------

June 30, 1999. . . . . . . .  $20.00 - $150.00                   287,000
          Granted. . . . . .  $  8.00 - $18.20                   438,650
          Exercised. . . . .  $ 17.40 - $40.60                  (178,500)
          Canceled . . . . .  $20.00 - $125.00                   (29,250)
                                                -------------------------

June 30, 2000. . . . . . . .  $   8.20 - $1.50                   517,900
          Granted. . . . . .  $  0.20 - $11.80                   874,850
          Exercised. . . . .  $   0.20 - $8.00                  (317,950)
          Canceled . . . . .  $20.00 - $125.00                   (33,850)
                                                -------------------------

June 30, 2001. . . . . . . .  $ 0.20 - $125.00                 1,040,950
          Granted. . . . . .  $  0.102 - $1.30                 9,811,700
          Exercised. . . . .  $   0.20 - $8.00                (4,750,300)
          Canceled . . . . .  $20.00 - $150.00                        (0)
                                                -------------------------

June 30, 2002. . . . . . . .  $ 0.20 - $125.00                 6,102,350
                                                =========================

Exercisable at June 30, 2002  $ 0.20 - $125.00                 6,102,350
                                                =========================
</TABLE>

The  weighted average remaining contractual life of warrants outstanding at June
30,  2002 is 5.4 years.  Of the warrants exercisable at June 30, 2002, 5,836,250
have  an  exercise  price  ranging from $0.20 to $1.50 and the remaining 266,100
have  an  exercise  price  ranging  from  $1.50  to  $125.00.

For  warrants  granted  during  the  year ended June 30, 2002 where the exercise
price  was  less  than  the  stock  price  at  the  date  of  the  grant,  the
weighted-average  fair value of such options was $0.332 and the weighted-average
exercise  price  of such options was $0.256.  In connection with the issuance of
these warrants, the Company recognized an expense of $1,584,000.  The fair value
of  these  warrants  was  determined  using  the  Black-Scholes  pricing  model.

COMMON  STOCK  OPTION  PLANS
----------------------------

In  July  1984  ("1984  Plan"),  November 1987 ("1988 Plan") and September, 1996
("1997  Plan"),  the  Company  adopted stock option plans, under which incentive
stock  options  and  non-qualified  stock  options  may be granted to employees,
directors,  and  other  key  persons, to purchase shares of the Company's common
stock,  at an exercise price equal to no less than the fair market value of such
stock  on  the  date  of grant, with such options exercisable in installments at
dates  typically  ranging  from one to not more than ten years after the date of
grant.

Under the terms of the 1988 and 1997 Plans, loans may be made to option holders,
which  permit  the  option  holders  to  pay the option price, upon exercise, in
installments. A total of 10,600 and 50,000 shares of common stock are authorized
for  issuance  under  the  1988  and  1997  Plans,  respectively.

No  shares  are  available  for  future  issuance under the 1984 Plan due to the
expiration  of the plan during 1994. As of June 30, 1999, options to acquire 100
shares were outstanding under the 1984 Plan and options to acquire 33,500 shares
remained  available  for  grant  under  the  1988  and  1997  Plans.

In  addition,  the  Board  of  Directors,  outside the 1984, 1988 and 1997 Plans
("Outside  Plan"), granted to employees, directors and other key persons of ITEC
or its subsidiaries options to purchase shares of the Company's common stock, at
an  exercise  price equal to no less than the fair market value of such stock on
the  date  of  grant. Options are exercisable in installments at dates typically
ranging  from  one  to  not  more  than  ten  years  after  the  date  of grant.

In  October  1995,  the  Board  of  Directors  authorized the exercise price for
employee  options  and  warrants  to  be  reduced  to  the current market value.
Accordingly,  the exercise price on an aggregate of 911 and 13,750 options under
the  1988  and  Outside  Plans,  respectively,  were canceled and reissued at an
exercise  price  of  $20.00  per  share.

COMMON  STOCK  PURCHASE  PLAN
-----------------------------

The  1997  Employee  Stock  Purchase  Plan ("Purchase Plan") was approved by the
Company's shareholders in September 1996. The Purchase Plan permits employees to
purchase the Company's common stock at a 15% discounted price. The Purchase Plan
is designed to encourage and assist a broad spectrum of employees of the Company
to  acquire an equity interest in the Company through the purchase of its common
stock.  It  is also intended to provide participating employees the tax benefits
under  Section  421 of the Code. The Purchase Plan covers an aggregate of 25,000
shares  of  the  Company's  common  stock.

All  employees,  including  executive  officers and directors who are employees,
customarily  employed  more than 20 hours per week and more than five months per
year  by  the  Company  are  eligible to participate in the Purchase Plan on the
first  enrollment  date  following  employment.  However,  employees  who  hold,
directly  or  through  options, five percent or more of the stock of the Company
are  not  eligible  to  participate.

Participants may elect to participate in the Purchase Plan by contributing up to
a  maximum of 15 percent of their compensation, or such lesser percentage as the
Board  may  establish  from time to time. Enrollment dates are the first trading
day  of  January,  April,  July  and  October  or  such  other  dates  as may be
established  by  the  Board  from  time to time. On the last trading day of each
December,  March,  June and September, or such other dates as may be established
by  the  Board  from time to time, the Company will apply the funds then in each
participant's  account  to  the  purchase  of  shares.  The  cost  of each share
purchased is 85 percent of the lower of the fair market value of common stock on
(i)  the enrollment date or (ii) the purchase date. The length of the enrollment
period  may not exceed a maximum of 24 months. No participant's right to acquire
shares  may  accrue  at  a rate exceeding $25,000 of fair market value of common
stock  (determined  as  of the first trading day in an enrollment period) in any
calendar  year.  No  shares  have  been  issued  under  the  Purchase  Plan.

2001  STOCK  OPTION  AND  STOCK  PURCHASE  PLANS.
-------------------------------------------------

The  Company's  shareholders  approved  the  2001 Stock Option Plan, pursuant to
which  250,000  shares  of common stock (subject to adjustment for the effect of
the reverse stock split) will be reserved for issuance to eligible employees and
directors  of,  and consultants to, the Company or any of its subsidiaries. Upon
expiration,  cancellation  or  termination of unexercised options, the shares of
the  Company's  Common Stock subject to such options will again be available for
the grant of options under the 2001 Stock Option Plan. Options granted under the
2001  Stock  Option  Plan may either be incentive or nonqualified stock options.

The  Company's  shareholders  approved  the  2001  Stock  Compensation  Plan, as
amended,  which  enables  eligible  employees to purchase in the aggregate up to
3,000,000  shares  of common stock. The Company's shareholders also approved the
2002 Stock Compensation Plan which enables eligible employees to purchase in the
aggregate  up  to  450,000  shares  of  common  stock.

STOCK  OPTION  ACTIVITY
-----------------------

The  following  is  a  summary  of  the  stock  option  activity:

<TABLE>
<CAPTION>
<S>                           <C>                  <C>                        <C>     <C>
                              STOCK OPTION PLANS   OTHER OPTIONS
                              PRICE
                              PER                  PRICE PER
                              SHARE                UNDERLYING COMMON SHARES   SHARE   UNDERLYING COMMON SHARES
                                                                                      -------------------------

JUNE 30, 1999. . . . . . . .  $   18.20 - $169.00                    41,000   $20.00                     9,650
          Granted. . . . . .  $      2.80 - $6.80                    67,000
          Exercised. . . . .  $     2.80 - $23.80                   (63,250)  $20.00                    (6,900)
          Canceled . . . . .  $   18.20 - $169.00                   (33,000)  $20.00                    (2,750)
                                                   -------------------------          -------------------------

JUNE 30, 2000. . . . . . . .  $   18.20 - $169.00                    11,750        -
          Granted. . . . . .  $      2.80 - $6.80                         -        -
          Exercised. . . . .  $     2.80 - $23.80                         -        -
          Canceled . . . . .  $   18.20 - $169.00                    (3,650)       -
                                                   -------------------------  ------

JUNE 30, 2001. . . . . . . .  $    6.80 - $150.00                     8,100        -
          Granted. . . . . .  $      0.60 - $0.60                 2,750,000        -
          Exercised. . . . .  $      0.20 - $2.00                (2,744,500)       -
          Canceled . . . . .                    -                         -
                              -------------------  -------------------------

JUNE 30, 2002. . . . . . . .  $    0.60 - $150.00                    13,600
                                                   -------------------------

EXERCISABLE AT JUNE 30, 2002  $    0.60 - $150.00                    13,600        -
                                                   =========================  ======
</TABLE>

The  weighted  average  remaining contractual life of options outstanding issued
under  the  Stock  Option  Plans  is  1.3  years  at  June  30,  2002.

For options granted during the year ended June 30, 2002 where the exercise price
was  less  than  the  stock price at the date of the grant, the weighted-average
fair  value of such options was $0.56 and the weighted-average exercise price of
such  options  was  $0.60. In connection with the issuance of these options, the
Company  recognized  an expense of $550,000 related since the exercise price was
less  than  the  value  of  the  Company's  stock  at  the  date  of  issuance.

ACCOUNTING  FOR  STOCK-BASED  COMPENSATION

The  Company  applies  Accounting  Principles  Board  Opinion No. 25 and related
Interpretations  in accounting for its stock option plans. The Company has opted
under  SFAS  No.  123 to disclose its stock-based compensation with no financial
effect.  The pro forma effects of applying SFAS No. 123 in this initial phase-in
period  are not necessarily representative of the effects on reported net income
or  loss  for  future  years.  Had  compensation expense for the Company's stock
option  plans  been  determined  based upon the fair value at the grant date for
awards  under  these plans consistent with the methodology prescribed under SFAS
No.  123,  the  Company's  pro forma net income (loss) and net income (loss) per
share  would  have  been  as  follows  for  the  years  ended  June  30:

<TABLE>
<CAPTION>
<S>                               <C>            <C>           <C>
                                          2002          2001           2000
                                  -------------  ------------  -------------
Net income (loss)
          As reported. . . . . .  $(13,709,000)  $(9,909,000)  $(14,219,000)
          Pro forma. . . . . . .   (14,651,000)   (9,909,000)   (16,000,000)

Basic earnings (loss) per share
          As reported. . . . . .  $      (1.12)  $     (1.51)  $      (4.05)
          Pro forma. . . . . . .         (1.20)        (1.51)         (4.55)
</TABLE>

The  weighted average fair value of the options granted during fiscal years 2002
and  2000  is  estimated  on  the  date  of  grant  using  the  Black-Scholes
option-pricing  model.  No  options  were  granted  in fiscal 2001. The weighted
average  fair  values  and  weighted average assumptions used in calculating the
fair  values  were  as  follows  for  the  years  ended  June  30:

<TABLE>
<CAPTION>
<S>                             <C>     <C>   <C>
                                 2002   2001    2000
                                ------  ----  -------

Fair Value of options granted.  $0.56   N/A   $50.00
Risk free interest rate. . . .    3.5%  N/A        6%
Expected life (years). . . . .      1   N/A        3
Expected volatility. . . . . .    179%  N/A       95%
Expected dividends . . . . . .      -   N/A        -
</TABLE>

COMMON  STOCK  ISSUED  FOR  SERVICES  AND  COMPENSATION
-------------------------------------------------------

The  table below shows all the issuances of common stock for services during the
year  ended June 30, 2002.  The value of the services was derived by multiplying
the  market  value  of  the Company's common stock at the date a transaction for
services  was  entered  into  by  the  number  of  shares  issued.

<TABLE>
<CAPTION>
<S>            <C>                            <C>            <C>
ISSUE DATE. .  DESCRIPTION                    SHARES ISSUED  VALUE
-------------  -----------------------------  -------------  --------

7/9/01. . . .  Strategic planning/marketing         250,000  $350,000
10/16/01. . .  Legal services                        21,600    13,000
11/1/01 . . .  Legal services                        16,667    10,000
11/1/01 . . .  Strategic planning/marketing         400,000   240,000
11/14/01. . .  Legal services                         6,667     5,000
12/17/01. . .  Employee compensation                  6,500     1,000
1/8/02. . . .  Legal services                        14,306     9,000
3/12/02 . . .  Strategic planning/marketing          31,487     6,000
3/14/02 . . .  Strategic planning/marketing         300,000    60,000
4/24/02 . . .  Compensation                          10,000     5,000
5/2/02. . . .  Strategic planning/marketing       1,250,000   250,000
5/21/02 . . .  Strategic planning/marketing         200,000    80,000
6/3/02. . . .  Strategic planning/marketing         339,368    68,000
6/18/02 . . .  Employee compensation                333,333   278,000
    3,179,978  $                   1,375,000
=============  =============================
</TABLE>

NOTE  10.     SEGMENT  AND  GEOGRAPHIC  INFORMATION

During  fiscal  2002,  the Company managed and internally reported the Company's
business  as  four  (4)  reportable  segments  as  follows:

     (1)     imaging  products  and  accessories;
     (2)     imaging  software;
     (3)     e-commerce;  and
     (4)     professional  employer  organization

During  fiscal  2001  the  Company  only  had  three  reported segments since it
acquired  the  PEO  business during fiscal 2002 and during fiscal 2000 it is not
practicable  to  discern  revenues  and  operating results by segment due to the
prior  organizational  structure  and  accounting  systems.

Segment  information  for  the  fiscal  year ended June 30, 2002 and 2001 was as
follows:

<TABLE>
<CAPTION>
<S>                                <C>            <C>                       <C>                 <C>           <C>
                                   IMAGING
FISCAL YEAR ENDED JUNE 30,. . . .  PEO BUSINESS   PRODUCTS & ACCESSORIES    IMAGING SOFTWARE    E-COMMERCE    TOTAL
                                            2002
                                   -------------
Selected statement of operations
 activity:
    Revenues. . . . . . . . . . .  $  21,100,000  $             3,574,000   $         580,000   $         -   $ 25,254,000
    Cost of revenues. . . . . . .     20,235,000                2,868,000              99,000             -     23,202,000
    Operating income (loss) . . .        194,000               (9,454,000)         (1,470,000)            -    (10,390,000)

Segment assets. . . . . . . . . .  $     493,000  $               591,000   $          96,000   $         -   $  1,180,000

                                            2001
                                   -------------
    Revenues. . . . . . . . . . .  $           -  $             1,973,000   $         559,000   $   920,000   $  3,452,000
    Operating income (loss) . . .              -               (8,341,000)            387,000      (306,000)    (8,260,000)
</TABLE>

Additional  information  regarding revenue by products and service groups is not
presented  for  the  fiscal  year  ended  June  30, 2001 because it is currently
impracticable  to  do  so  due  to  various  reorganizations  of  the  Company's
accounting  systems.  A  comprehensive  accounting system was implemented during
fiscal  2002  that enables the Company to report such information in the future.

As  of  and  during  the  years  ended June 30, 2002, 2001, and 2000 no customer
accounted  for  more  than  10%  of  consolidated  accounts  receivable or total
consolidated  revenues.

Net  sales  from  principal  geographic  areas  were  as  follows:

<TABLE>
<CAPTION>
<S>                 <C>           <C>           <C>
                            2002          2001          2000
                    ------------  ------------  ------------
Europe . . . . . .  $    299,000  $     82,000  $     28,000
Asia . . . . . . .       328,000       633,000        23,000
Others . . . . . .       295,000        34,000        41,000
                    ------------  ------------  ------------
Total export sales       922,000       749,000        92,000
Domestic sales . .    24,332,000     2,703,000     2,330,000
                    ------------  ------------  ------------
 Total sales . . .  $ 25,254,000  $  3,452,000  $  2,422,000
                    ============  ============  ============
</TABLE>

NOTE  11.     INCOME  TAXES

The  Company's  provision  for  income taxes is accounted for in accordance with
SFAS  109.  SFAS 109 requires recognition of deferred tax assets and liabilities
for  the  expected  future tax consequences of events that have been included in
the  financial statements or tax returns. Under the SFAS 109 asset and liability
method,  deferred  tax  assets  and  liabilities  are  determined based upon the
difference  between  the  financial  statement  and  tax  bases  of  assets  and
liabilities  using  the  enacted  tax  rates in effect for the year in which the
differences  are expected to reverse. A valuation allowance is then provided for
deferred  tax  assets  that  are  more  likely  than  not  to  not  be realized.

The  provision (benefit) for income taxes is as follows for the years ended June
30:

<TABLE>
<CAPTION>
<S>               <C>             <C>             <C>
                            2002            2001            2000
                  --------------  --------------  --------------

Current - State.  $            -  $            -  $            -
Deferred benefit               -               -               -
                  --------------  --------------  --------------
                  $            -  $            -  $            -
                  ==============  ==============  ==============
</TABLE>

The  components  of  deferred  income  taxes  are  as  follows  at  June  30:

<TABLE>
<CAPTION>
<S>                                    <C>                     <C>                     <C>
                                                        2002                    2001                    2000
                                       ----------------------  ----------------------  ----------------------
Deferred tax assets
     Net operating loss carryforwards  $          34,500,000   $          30,000,000   $          25,000,000
     Other. . . . . . . . . . . . . .                500,000                 500,000                 850,000
                                       ----------------------  ----------------------  ----------------------
                                                  35,000,000              30,500,000              25,850,000
Valuation allowance . . . . . . . . .            (35,000,000)            (30,500,000)            (25,850,000)
                                       ----------------------  ----------------------  ----------------------
                                                          -                      -                      -
                                       ======================  ======================  ======================
</TABLE>

The  Company's  federal  and  state  net  operating loss carryforwards expire in
various  years through 2017. The Company has made numerous equity issuances that
could  result  in  limitations  on  the  annual utilization of the Company's net
operating  loss  carryforwards.  The  Company  has  not performed an analysis to
determine  the  effect  of  such  changes.

The  provision  for  income taxes results in an effective rate that differs from
the  federal  statutory  rate. A reconciliation between the actual tax provision
and  taxes computed at the statutory rate is as follows for the years ended June
30:

<TABLE>
<CAPTION>
<S>                                                       <C>                    <C>                    <C>
                                                                          2002                   2001                   2000
                                                          ---------------------  ---------------------  ---------------------

Benefit (provision) at federal statutory income tax rate  $          4,500,000   $          2,808,000   $          4,827,000
Losses for which no current benefit is available . . . .            (4,500,000)            (2,808,000)            (4,827,000)
State income taxes . . . . . . . . . . . . . . . . . . .                     -                      -                      -
                                                          ---------------------  ---------------------  ---------------------
                                                          $                  -   $                  -   $                  -
                                                          =====================  =====================  =====================
</TABLE>

NOTE  12.     COMMITMENTS  AND  CONTINGENCIES

LEASE  COMMITMENT
-----------------

The Company leases its operating facilities under a lease agreement that expires
in  March  2006 (See Note 13). Subsequent to June 30, 2002, the Company signed a
new  a new lease for its corporate facility that expires in October 2005 that is
included in the future minimum lease payments in that table below.  In addition,
the  Company  leases  other  facilities  and  equipment under short-term leases.

Total  rental  expense was approximately $492,000, $457,000 and $606,000 for the
years  ended  June  30,  2002,  2001  and  2000,  respectively.

Future  minimum  lease  payments  under  this long-term non-cancelable operating
lease  was  as  follows:

<TABLE>
<CAPTION>
<S>                    <C>
YEAR ENDING JUNE 30,
2003. . . . . . . . .  $597,000
2004. . . . . . . . .   770,000
2005. . . . . . . . .   798,000
2006. . . . . . . . .   575,000
                       --------
   2,740,000
=====================
</TABLE>

LEGAL  MATTERS
--------------

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. A motion to dismiss the lawsuit
was  granted  on  February 16, 2001 on the Company's behalf and those individual
defendants  that  have  been  served.  However,  on  or about March 19, 2001, an
amended  complaint  was  filed  by  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, the Company 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. The Company believes these claims are without
merit and the Company intends to vigorously defend against them on the Company's
behalf  as well as on behalf of the other defendants. The defense of this action
has  been  tendered  to  the  Company's  insurance  carriers.

The  Company  is  also  a  party  to  a lawsuit filed by Symphony Partners, L.P.
related  to  its  acquisition  of  SourceOne  Group,  LLC. The Company has hired
counsel  to represent it in this action and believes 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. The Company believes 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, approximately fifty trade creditors have
made  claims and/or filed actions alleging the failure of the Company to pay its
obligations  and accrued interest to them in a total amount exceeding $3 million
which  the  Company has incldued in accounts payable and accrued expenses. These
actions  are  in  various stages of litigation, with many resulting in judgments
being  entered against the Company. Several of those who have obtained judgments
have  filed  judgment liens on the Company's assets. These claims range in value
from  less  than  $1,000  to over $1,000,000, with the great majority being less
than  $20,000.

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.

LETTERS  OF  INTENT
-------------------

In  May  2002,  ITEC  entered into an agreement to acquire Dream Canvas, Inc., a
Japanese  corporation  that  has  developed  machines  currently  used  for  the
automated  printing of custom stickers, popular in the Japanese consumer market.
We  expect  to  complete  the  acquisition in the second quarter of fiscal 2003.

NOTE  13     SUBSEQUENT  EVENTS

In  July  2002,  the  Company  entered  into an agreement to acquire controlling
interest  in  Quik  Pix,  Inc.  ("QPI").  QPI  shares are traded on the National
Quotation  Bureau  Pink  Sheets  under  the symbol QPIX. The Company anticipates
closing  this  transaction  in  the  second  quarter  of  fiscal  2003.

In  August  2002, ITEC entered into an agreement to acquire controlling interest
in Greenland Corporation. Greenland shares are traded on the Electronic Bulletin
Board  under  the  symbol  GRLC.  We  anticipate closing this transaction in the
second  quarter  of  fiscal  2003.

On August 22, 2002, the Company was sued by its former landlord, Carmel Mountain
#8  Associates,  L.P.  for  past  due  rent  on  its  former facilities at 15175
Innovation  Drive,  San Diego, CA 92127.  The Company moved out of this facility
and  signed  a  new  lease  agreement  for  its  corporate  office.

Stonestreet  Ltd.,  the  holder of the convertible debenture issued on September
21,  2001, notified the Company that it wanted to rescind the $70,000 conversion
of  its  convertible debenture into common stock and returned the 209,039 shares
that  were  previously issued.  The Company has agreed to honor their rescission
request.

From  June  30,  2002 to November 15, 2002, the Company has issued approximately
52,530,309  shares  of  its common stock to consultants and for the reduction of
debt.

<PAGE>

PART  III
=========

ITEM  10.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT.
--------   --------------------------------------------------------

DIRECTORS

     The  directors  and  executive  officers  of  the  Company,  their ages and
positions  with  the  Company  as  of  June  30,  2002  are  as  follows:

<TABLE>
<CAPTION>
<S>                 <C>  <C>    <C>
Name . . . . . . .  Age  Since  Director Title

Brian Bonar. . . .   55   1995  Chief Executive Officer
Richard H. Green .   66   2000  Director
Robert A. Dietrich   57   2000  Director
Eric W. Gaer . . .   54   2000  Director
Stephen J. Fryer .   64   2000  Director
</TABLE>

     Brian  Bonar  has served as a director of the Company since August 1995 and
became  the  Company's Chairman of the Board in December 1999.  From August 1992
through  April  1994,  Mr.  Bonar served as the Company's Director of Technology
Sales  and  from  April  1994  through  September  1994  as  the  Company's Vice
President,  Sales  and  Marketing.  In  September  1994,  Mr.  Bonar  became the
Company's  Executive  Vice  President  and,  in  July 1997, was appointed as the
Company's President and Chief Operating Officer. In April 1998 Mr. Bonar assumed
the  post  of CEO.  From 1991 to 1992, Mr. Bonar was Vice President of Worldwide
Sales  and  Marketing  for  Bezier  Systems,  Inc., a San Jose, California-based
manufacturer and marketer of laser printers. From 1990 to 1991, he was Worldwide
Sales  Manager  for  Adaptec,  Inc.,  a  San Jose-based laser printer controller
developer.  From  1988  to  1990,  Mr.  Bonar  was  Vice  President of Sales and
Marketing  for  Rastek Corporation, a laser printer controller developed located
in  Huntsville,  Alabama. From 1984 to 1988, Mr. Bonar was employed as Executive
Director  of  Engineering  at  QMS,  Inc.,  an  Alabama-based  developer  and
manufacturer  of high-performance color and monochrome printing solutions. Prior
to  these  positions, Mr. Bonar was employed by IBM, U.K. Ltd. for approximately
17  years.

     Dr.  Richard H. Green has served as a director since September 2000.  He is
currently the President of International Power & Environmental Company (IPEC), a
consulting company located in San Diego, California.  From 1993 through 1995, he
served  as  Deputy Secretary of the State of California Environmental Protection
Agency (Cal/EPA).  From 1988 through 1993 Dr. Green served as Manager of Program
Engineering  and  Review  Office in the Office of Technology and Applications at
the  Jet  Propulsion Laboratory (JPL) in Pasadena, California, where he had held
various  management  positions  since  1967.  From  1965 through 1967, Dr. Green
served  as  Senior  Engineer for The Boeing Company,  Space Division.  From 1983
through  1985,  Dr.  Green held the Corwin D. Denny Chair as Professor of Energy
and Director of the Energy Institute at the University of LaVerne, and from 1961
through  1964  served as Assistant Professor of Civil Engineering (Environmental
Sciences)  at  Washington  State University.  Dr. Green currently is a member of
the  Governing  Board  of  Pasadena  City  College.  Dr.  Green  completed  his
bachelor's  degree  at  Whitman  College  in  1958,  his  Master  of  Science at
Washington  State  University  in  1961,  and  his  Ph.D.  at  Washington  State
University,  under  a  United  States  Public Health Services Career Development
Award,  in  1965.

     Robert  A.  Dietrich  has served as a director of the Company since January
2000.  Mr.  Dietrich  is  President  and  CEO of Cyberair Communications Inc., a
privately-held  telecommunications  company with strategic interests in Internet
communications  and  "bandwidth" expansion technologies, as well as domestic and
international  telephone services, in Irvine, California. Recently, Mr. Dietrich
was  named  President  and CEO of Semper Resources Corporation, a public natural
resources holding company in Irvine, California. From 1996 to 2000, Mr. Dietrich
was  Managing  Director  and  CFO  of  Ventana  International,  Ltd.,  Irvine,
California, a venture capital and private investment banking firm.  From 1990 to
1994,  Mr. Dietrich was Vice President and Chief Financial Officer of CEI, Inc.,
in  Santa  Ana,  California,  a  commercial  furnishings  firm, prior to joining
Ventana.  Mr.  Dietrich  is  a  graduate of the University of Notre Dame, with a
bachelor's  degree in accounting, and the University of Detroit, with a master's
degree in finance. He served as a lieutenant in the U.S. Navy's Atlantic Command
Operations  Control  Center.

Eric  W.  Gaer  has served as a director since March 2000.  Since 1998, Mr. Gaer
has  been  the  President  and  CEO  of  Arroyo  Development  Corporation,  a
privately-held,  San  Diego-based  management  consulting  company. From 1996 to
1998,  he  was  Chairman,  President  and  CEO  of  Greenland  Corporation,  a
publicly-held high technology company in San Diego, California.  In 1995, he was
CEO  of Ariel Systems, Inc., a privately-held engineering development company in
Vista,  California.  Over  the  past  25 years, Mr. Gaer has served in executive
management  positions at a variety of high-technology companies, including ITEC,
Daybreak  Technologies, Inc., Venture Software, Inc., and Merisel, Inc. In 1970,
he  received  a  Bachelor  of Arts degree in mass communications from California
State  University,  Northridge.

Stephen  J.  Fryer has served as a director of the Company since March 2000.  He
is  currently Chairman of the Board and CEO of Pen Interconnect, Inc. ("Pen"), a
                                                                        ---
high  technology company in Irvine, California.  He began his employment service
at  Pen  in  1997  as  Senior Vice President of Sales and Marketing.  At Pen, he
became  a  director  in  1995 and was appointed President and CEO in 1998.  From
1989  to  1996,  Mr.  Fryer  was  a  principal in Ventana International, Ltd., a
venture  capital  and private investment banking firm in Irvine, California.  He
has over 28 years experience in the computer industry in the United States, Asia
and  Europe.  Mr. Fryer graduated from the University of California in 1960 with
a  bachelor's  degree  in  mechanical  engineering.

EXECUTIVE  OFFICERS

     The  executive officers of the Company as of June 30, 2002, are as follows:

NAME. . . . . . . . .AGE         POSITION
------------------   --------    -----------------------------------

                                 Chairman of the Board of Directors
Brian Bonar           55         and Chief Executive Officer

                                 Senior Vice President, General
Philip J. Englund     58         Counsel and Secretary

     Brian  Bonar  is also a director of the Company. See above for a discussion
of  Mr.  Bonar's  business  experience.

     Philip  J.  Englund  served  as  Senior Vice President, General Counsel and
Secretary of the Company since February 1999. He resigned his positions with the
Company  on  August  23,  2002.

ITEM  11.  EXECUTIVE  COMPENSATION.
--------   -----------------------

<TABLE>
<CAPTION>
<S>                              <C>        <C>            <C>                   <C>            <C>         <C>
SUMMARY COMPENSATION TABLE
                                 Long Term
                                 Annual     Compensation   Compensation Awards
                                 ---------  -------------  --------------------

                                 FISCAL     OTHER ANNUAL   OPTIONS/
NAME AND PRINCIPAL POSITION . .  YEAR       SALARY         BONUS                 COMPENSATION   SARS (#)    OTHER COMP
                                 ---------  -------------

Brian Bonar . . . . . . . . . .       2002  $     230,000  $                 --  $          --   1,750,000  $        --
Chairman, Board of Directors, .       2001        243,333                    --             --      31,250           --
President and C.E.O.. . . . . .       2000        178,333                    --             --          --           --

Christopher W. McKee (1). . . .       2002  $      17,625  $                 --  $          --          --           --
Senior Vice President . . . . .       2001        175,000                    --             --      20,763           --
                                      2000        104,125                    --             --       3,800           --

Philip J. Englund (2) . . . . .       2002  $     135,000                    --             --          --           --
Senior Vice President, General.       2001        165,000                    --             --      18,000           --
Counsel and Secretary . . . . .       2000        102,500                20,250             --       4,800           --
</TABLE>

(1)  Mr.  McKee  resigned  effective  August  3,  2001
(2)  Mr.  Englund  resigned  effective  August  23,  2002.

OPTION/SAR  GRANTS  IN  LAST  FISCAL  YEAR

     The  following  table  provides  information on Options/SARs granted in the
2002  Fiscal  Year  to  the  Named  Officers.

<TABLE>
<CAPTION>
<S>                       <C>            <C>            <C>                     <C>          <C>                 <C>

                          NUMBER OF      PERCENT OF     POTENTIAL REALIZABLE
                          SECURITIES     TOTAL          VALUE AT ASSUMED
                          UNDERLYING     OPTIONS/SARS   ANNUAL RATES OF
                          OPTIONS/SARS   GRANTED TO     EXERCISE OR             STOCK PRICE
                          GRANTED (#)    EMPLOYEES IN   BASE PRICE              EXPIRATION   APPRECIATION FOR
NAME . . . . . . . . . .            (3)  FISCAL YEAR                 ($/SHARE)  DATE         OPTION TERM (4)
------------------------  -------------                                                      ------------------
                                 5% ($)        10% ($)
                          -------------
Brian Bonar. . . . . . .     1,250,000              42  $                 0.40     11/15/03  $           25,000  $50,000

Christopher W. McKee (1)           ---             ---                     ---          ---                 ---      ---

Philip J. Englund (2). .       300,000              10                    0.40     11/15/03               6,000   12,000
</TABLE>

(1)  Mr.  McKee  resigned  effective  August  3,  2001
(2)  Mr.  Englund  resigned  effective  August  23,  2002.
(3)  Warrants/options  become exercisable monthly over a 3-year period from date
of  grant.  Adjusted  for  1-for-20  reverse  stock  split  at  August  9, 2002.
(4)  Calculated  based  on  the  closing  price of the Company's common stock on
November  15,  2002  ($0.02).

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES

     The  following  table  provides information on option exercises in the 2002
Fiscal  Year  by  the  Named  Officers  and  the  value  of such Named Officers'
unexercised  options  at  June  30,  2001. Warrants to purchase Common Stock are
included  as  options. No stock appreciation rights were held by them at the end
of  the  2002  Fiscal  Year.

<TABLE>
<CAPTION>
<S>                   <C>           <C>                     <C>                         <C>                           <C>  <C>

                      SHARES        NUMBER OF SECURITIES    VALUE OF UNEXERCISED
                      ACQUIRED ON   VALUE                   UNDERLYING UNEXERCISED      IN-THE-MONEY OPTIONS/SAR
NAME . . . . . . . .  EXERCISE (#)  REALIZED ($)            OPTIONS/SARS AT FY-END (#)  S AT FISCAL YEAR END ($) (3)
--------------------

                      EXERCISABLE   UNEXERCISABL            EXERCISABLE                 UNEXERCISABL
                      ------------
Brian Bonar              1,250,000  $               25,000                         ---                           ---  ---  ---

Christopher W. McKee           ---                     ---                         ---                           ---  ---  ---

Philip J. Englund          300,000                   6,000                         ---                           ---  ---  ---
</TABLE>

(1)  Mr.  McKee  resigned  effective  August  3,  2001
(2)  Mr.  Englund  resigned  effective  August  23,  2002.
(3)  At  the 2002 Fiscal Year end, the closing price of the Common Stock on that
date  as  quoted  by the NASD Electronic Bulletin Board was $0.01. Share amounts
have  been adjusted  for  the  1-for-20  reverse  split  at August  9,  2002

COMPENSATION  OF  DIRECTORS

     Each member of the Board of Directors of the Company receives a monthly fee
of  $2,500  from  the  Company.

EMPLOYMENT  CONTRACTS,  TERMINATION  OF  EMPLOYMENT,  AND  CHANGE-IN-CONTROL
ARRANGEMENTS

     None

COMPENSATION  COMMITTEE  INTERLOCKS  AND  INSIDER  PARTICIPATION

     The  Compensation  Committee currently consists of Messrs. Gaer, Green, and
Fryer.  None  of  these individuals was an officer or employee of the Company at
any  time  during  the  2002  Fiscal  Year.

ITEM  12.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND MANAGEMENT.
--------

     The following table sets forth certain information known to the best of the
Company's  knowledge with respect to the beneficial ownership of Common Stock as
of  November  15,  2002,  by  (i)  all persons who are beneficial owners of five
percent  (5 percent) or more of the Common Stock,  (ii) each director, and (iii)
all current directors and executive officers individually and as a group. Unless
otherwise  indicated,  each  of  the shareholders has sole voting and investment
power  with  respect  to  the  shares  beneficially  owned, subject to community
property  laws,  where  applicable.

<TABLE>
<CAPTION>
<S>                         <C>         <C>
NAME . . . . . . . . . . .  NO. SHARES  PERCENT OF CLASS (1)
--------------------------  ----------  --------------------

Brian Bonar (2)
                             8,007,500                 8.63%
Robert A. Dietrich (3)
                             2,387,500                 2.57%
Stephen J. Fryer (3)
                             2,453,250                 2.64%
Eric W. Gaer (3)
                             2,436,000                 2.62%
Richard Green (3)
                             2,469,500                 2.66%
All current directors and
executive officers
(group of 5) (4) . . . . .  17,753,750                19.12%
</TABLE>

     (1)  Percentage  of ownership is based on 92,838,396 shares of Common Stock
outstanding  on  November  15,  2002.  (Adjusted  for  a  1-for-20 reverse split
effective  August  9,  2002).  Shares  of Common Stock subject to stock options,
warrants  and  convertible  securities  which  are  currently  exercisable  or
convertible  or  will  become  exercisable  or  convertible within 60 days after
November  15,  2002  are  deemed outstanding for computing the percentage of the
person or group holding such options, warrants or convertible securities but are
not  deemed  outstanding  for  computing  the  percentage of any other person or
group.

     (2)  Includes  4,000,000 shares issuable upon exercise of warrants that are
currently  exercisable or will become  exercisable within 60 days after November
15,  2002.

     (3)  Includes  2,375,000 shares issuable  upon  exercise  of  options  that
are  currently  exercisable  or will  become  exercisable  within 60 days  after
November  15,  2002.

     (4)  Includes  17,753,750  shares  issuable  upon  exercise  of options and
warrants  that are currently  exercisable or will become  exercisable  within 60
days  after  November  15,  2002.

ITEM13.  CERTAINRELATIONSHIPSANDRELATEDTRANSACTIONS.
------   ------------------------------------------

     During  the  year  ended June 30, 2002, the Company paid Arroyo Development
Corporation, owned by Mr. Eric Gaer, a member of the Board of Directors, monthly
consulting  fees  of  six  thousand  dollars  ($6,000).  There was no officer or
director  indebtedness  to  the  Company  greater  than  $60,000.

<PAGE>

PART  IV
========

ITEM  14.

EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES,  AND  REPORTS  ON  FORM  8-K

(a)     DOCUMENTS  FILED  AS  PART  OF  THIS  FORM  10-K:

(1)  FINANCIAL  STATEMENTS

The  financial  statements  of the Company are included herein as required under
Item  8 of this Annual Report on Form 10-K. See Index to Financial Statements on
page  23.

(2)  FINANCIAL  STATEMENT  SCHEDULES:

Financial  Statement Schedules have been omitted because they are not applicable
or  not required or the information required to be set forth therein is included
in  the  financial  statements  or  notes  thereto.

(b)     REPORTS  ON  FORM  8-K.

               Form  8-K  filed  January  25,  2002
               Form  8-K  filed  May  17,  2002
               Form  8-K  filed  September  17,  2002

(c)     EXHIBITS.
The  following exhibits are filed as part of, or incorporated by reference into,
this  Form  10-K.

3(a)  Certificate  of Incorporation of the Company, as amended, and currently in
effect.  See also below. (Incorporated by reference to Exhibit 3(a) to 1988 Form
10-K)

3(b)  Certificate  of  Amendment of Certificate of Incorporation of the Company,
filed  February  8,  1995,  as amended, and currently in effect (Incorporated by
reference  to  Exhibit  3(b)  to  1995  Form  10-K)

3(c)  Certificate  of  Amendment of Certificate of Incorporation of the Company,
filed  May  23,  1997,  as  amended,  and  currently  in effect (Incorporated by
reference  to  1997  Form  10-K)

3(d) Certificate of Amendment of Certificate of Incorporation, filed January 12,
1999, as amended and currently in effect (Incorporated by reference to Form 10-Q
for  the  period  ended  December  31,

3(e) Certificate Eliminating Reference to Certain Series of Shares of Stock from
the  Certificate  of  Incorporation,  filed  January  12,  1999,  as amended and
currently in effect (Incorporated by reference to Form 10-Q for the period ended
December  31,  1998)

3(f)  By-Laws  of the Company, as amended, and currently in effect (Incorporated
by  reference  to Exhibit 3(b) to 1987 Form 10-K)

3(g)  Certificate  of  Amendment  of Certificate of Incorporation, filed May 12,
2000,  as  amended and currently in effect (Incorporated by reference to Exhibit
3(g)  to  2001  Form  10-K)

4(a) Amended Certificate of Designation of Imaging Technologies Corporation with
respect  to  the  5%  Convertible  Preferred Stock (Incorporated by reference to
Exhibit  4(d)  to  1987  Form  10-K)

4(b) Amended Certificate of Designation of Imaging Technologies Corporation with
respect  to  the  5%  Series  B  Convertible  Preferred  Stock  (Incorporated by
reference  to  Exhibit  4(b)  to  1988  Form  10-K)

4(c) Certificate of Designations, Preferences and Rights of Series C Convertible
Preferred  Stock  of Imaging Technologies Corporation (Incorporated by reference
to  Exhibit  4(c)  to  1998  Form  10-K)

4(d) Certificate of Designation, Powers, Preferences and Rights of the Series of
Preferred  Stock  to  be  Designated Series D Convertible Preferred Stock, filed
January  13,  1999  (Incorporated by reference to Form 10-Q for the period ended
December  31,  1998)

4(e) Certificate of Designation, Powers, Preferences and Rights of the Series of
Preferred  Stock  to  be  Designated Series E Convertible Preferred Stock, filed
January  28,  1999  (Incorporated by reference to Form 10-Q for the period ended
December  31,  1998)

10(a) Private Equity Line of Credit Agreement by and among certain Investors and
the  Company  (Incorporated  by  reference  to  Form  8-K,  filed July 26, 2000)

10(b)  Convertible  Note  Purchase Agreement dated December 12, 2000 between the
Company  and  Amro  International,  S.A., Balmore Funds, S.A., and Celeste Trust
Reg.  (Incorporated  by  reference  to  Form  8-K,  filed  January  19,  2001.

10(c)  Convertible  Note  Purchase  Agreement  dated  July  26, 2001 between the
Company  and  Balmore  Funds,  S.A. (Incorporated by reference to Form 8-K filed
August  2,  2001.

10(d)  Share  Purchase  Agreement,  dated  December  1,  2000,  between ITEC and
EduAdvantage.com,  Inc.  (Incorporated  by reference to Form 10-Q for the period
ended  September  30,  2000)

10(e) Agreement to Acquire Shares, dated December 1, 2000, between ITEC and Quik
Pix, Inc. (Incorporated by reference to Form 10-Q for the period ended September
30,  2000)  and  subsequently  cancelled.

10(f) Agreement to Acquire Shares, dated December 17, 2000, between ITEC and Pen
Internconnect, Inc. (Incorporated by reference to Form 10-Q for the period ended
September  30,  2000)  and  subsequently  cancelled.

10(g)  Share  Purchase  Agreement,  dated  December  1,  2000,  between ITEC and
EduAdvantage.com,  Inc.  (Incorporated  by reference to Form 10-Q for the period
ended  September  30,  2000)

10(h)  Convertible  Promissory Note dated September 21, 2001 between the Company
and Stonestreet Limited Partnership. (Incorporated by reference to Exhibit 10(u)
of  2001  Form  10-K)

10(i)  Convertible  Note Purchase Agreement dated September 21, 2001 between the
Company  and  Stonestreet  Limited  Partnership.  (Incorporated  by reference to
Exhibit  10(v)  of  2001  Form  10-K)

10(j) Registration Rights Agreement dated September 21, 2001 between the Company
and Stonestreet Limited Partnership. (Incorporated by reference to Exhibit 10(w)
of  2001  Form  10-K)

10(k)  Form  of  Warrant  to Purchase 11,278,195 Shares of Common Stock of ITEC,
dated  September  21,  2001,  between  ITEC and Stonestreet Limited Partnership.
(Incorporated  by  reference  to  Exhibit  10(x)  of  2001  Form  10-K)

10(l)  Asset  Purchase  Agreement, dated October 25, 2001, among the Company and
Lisa Lavin, Gary J. Lavin, and Roland A. Fernando. (Incorporated by reference to
Exhibit  10(a)  to  September  2001  Form  10-Q)

10(m)  Audited  Financial  Statements  of SourceOne Group, LLC. (Incorporated by
reference  to  Form  8-K  filed  on  January  25,  2002)

10(n)  Secured Convertible Debenture issued by the Company to Bristol Investment
Fund,  Ltd., dated January 22, 2002. (Incorporated by reference to Exhibit 10(a)
of  December  2001  Form  10-Q)

10(o)  Securities  Purchase Agreement between the Company and Bristol Investment
Fund,  Ltd., dated January 22, 2002. (Incorporated by reference to Exhibit 10(b)
of  December  2001  Form  10-Q)

10(p)  Registration  Rights Agreement between the Company and Bristol Investment
Fund,  Ltd., dated January 22, 2002. (Incorporated by reference to Exhibit 10(c)
of  December  2001  Form  10-Q)

10(q)  Transaction  Fee  Agreement  between  the  Company  and  Alexander Dunham
Securities,  Inc., dated January 22, 2002. (Incorporated by reference to Exhibit
10(d)  of  December  2001  Form  10-Q)

10(r)  Stock Purchase Warrant issued to Alexander Dunham Securities, Inc., dated
January  22,  2002. (Incorporated by reference to Exhibit 10(e) of December 2001
Form  10-Q)

10(s)  Stock  Purchase  Warrant  issued  to Bristol Investment Fund, Ltd., dated
January  22,  2002. (Incorporated by reference to Exhibit 10(f) of December 2001
Form  10-Q)

10(t)  Security Agreement between the Company and Bristol Investment Fund, Ltd.,
dated  January 22, 2002. (Incorporated by reference to Exhibit 10(g) of December
2001  Form  10-Q)

10(u)  Convertible  Promissory  Note between the Company and Stonestreet Limited
Partnership, dated November 7, 2001. (Incorporated by reference to Exhibit 10(h)
of  December  2001  Form  10-Q)

10(v)  Convertible  Note  Purchase Agreement between the Company and Stonestreet
Partnership, dated November 7, 2001. (Incorporated by reference to Exhibit 10(i)
of  December  2001  Form  10-Q)

10(w)  Registration Rights Agreement between the Company and Stonestreet Limited
Partnership, dated November 7, 2001. (Incorporated by reference to Exhibit 10(j)
of  December  2001  Form  10-Q)

10(x)  Stock  Purchase  Warrant issued to Stonestreet Limited Partnership, dated
November  7,  2001  (Incorporated by reference to Exhibit 10(k) of December 2001
Form  10-Q

10(y)  Acquisition  Agreement  between the Company and Dream Canvas, Inc., dated
May  17,  2002;  subject  to  completion  of  its  terms.  *

10(z)  Closing  Agreement between the Company and Quik Pix, Inc., dated July 23,
2002,  subject  to  completion  of  its  terms  *.

10(aa)  Agreement  to  Acquire  Shares  between  the  Company  and  Greenland
Corporation,  dated  August  5,  2002,  subject  to  completion  of its terms. *

21      List of Subsidiaries of the Company. *

23.1    Consent of Independent Accountants - Boros & Farrington. *

23.2    Consent of Independent Accountants - Stonefield Josephson, Inc. *

99.1  Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section
1350,  as  Adopted  Pursuant  to Section 906 of the Sarbanes-Oxley Act of 2002 *

99.2 Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

All  exhibits  except  those  followed  by  an  asterisk (*) are incorporated by
reference  only  and  a  copy  is  not  included  in  this  Form  10-K  filing.

The  Company will furnish a copy of any exhibit to a requesting shareholder upon
payment  of  the  Company's  reasonable  expenses  in  furnishing  such exhibit.

<PAGE>

SIGNATURES

Pursuant  to  the  requirements  of  the  Securities  Exchange  Act of 1934, the
Registrant  has  duly caused this Annual Report on Form 10-K to be signed on its
behalf  by  the  undersigned,  thereunto  duly  authorized.

Date:     November  18,  2002          IMAGING  TECHNOLOGIES  CORPORATION

                         By:/s/  BRIAN  BONAR
                            -----------------
                         Brian  Bonar
                         Chief  Executive  Officer

                                POWER OF ATTORNEY

KNOW  ALL  PERSONS  BY  THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints, Brian Bonar as his attorney-in-fact, each
with  full  power  of substitution and resubstitution, for him or her in any and
all  capacities,  to  sign  any and all amendments to this Annual Report on Form
10-K  (including post-effective amendments), 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 all intents and purposes as he
might  or  could  do  in  person,  hereby  ratifying  and  confirming  that said
attorney-in-fact,  or his substitute or substitutes, may lawfully do or cause to
be  done  by  virtue  hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual
Report  on  Form  10-K  has  been  signed  below by the following persons in the
capacities  and  on  the  dates  indicated.

<TABLE>
<CAPTION>



<S>                                     <C>                               <C>

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

  Chairman of the Board of Directors,
  Chief Executive Officer, and
/s/ Brian Bonar. . . . . . . . . . . .  Acting Chief Financial Officer
--------------------------------------
Brian Bonar. . . . . . . . . . . . . .  (Principal Executive Officer and  November 18, 2002
  Principal Accounting Officer)
/s/ Robert A. Dietrich
--------------------------------------
Robert A. Dietrich . . . . . . . . . .  November 18, 2002
  Director
/s/ Eric W. Gaer
--------------------------------------
Eric W. Gaer . . . . . . . . . . . . .  November 18, 2002
  Director
/s/ Stephen J. Fryer
--------------------------------------
Stephen J. Fryer . . . . . . . . . . .  November 18, 2002
  Director
/s/ Richard H. Green
--------------------------------------
Richard H. Green . . . . . . . . . . .  November 18, 2002
  Director
</TABLE>

<PAGE>