##### Table of Contents

---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C.
20549

FORM 10-Q

(Mark One)

| | x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ---------------------------------------------------------------------------------------

| |  | FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002
| |  | -------------------------------------------------

OR

| | o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
| | - | --------------------------------------------------------------------------------------------

| |  | FOR THE TRANSITION PERIOD FROMTO
| |  | --------------------------------

Commission File Number: 000-24373

GLOBAL IMAGING SYSTEMS, INC.(EXACT NAME OF REGISTRANT
AS SPECIFIED IN ITS CHARTER)

| | DELAWARE                                                      |  | 59-3247752                           | 
| | ------------------------------------------------------------- |  | ------------------------------------ | 
| |                                                               |  |                                      | 
| | (STATE OR OTHER JURISDICTION OFINCORPORATION OR ORGANIZATION) |  | (I.R.S. EMPLOYER IDENTIFICATION NO.) | 

| | 3820 Northdale Boulevard, Suite 200ATampa, Florida |  | 33624      | 
| | -------------------------------------------------- |  | ---------- | 
| |                                                    |  |            | 
| | (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)           |  | (ZIP CODE) | 

REGISTRANTS TELEPONE NUMBER, INCLUDING AREA CODE: 813-960-5508

_____________________________________________________________________________________________(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)

Indicate by 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 o

Indicate by check mark whether the registrant is an
accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No o

The registrant had 21,195,197 shares of common stock, $.01 par value,
outstanding as of November 6, 2002.

---



---

##### Table of Contents



INDEX

|        |  |                       |  |                                                                                                          | Page
|------- |  | --------------------- |  | -------------------------------------------------------------------------------------------------------- | ----
|        |  |                       |  |                                                                                                          |     
|PART I  |  | FINANCIAL INFORMATION | 
|        |  |                       |  |                                                                                                          |     
|        |  | ITEM 1                |  | Consolidated Financial Statements                                                                        |     
|        |  |                       |  |                                                                                                          |     
|        |  |                       |  | Consolidated Balance Sheets as of September 30, 2002 (Unaudited) and March 31, 2002                      | 3   
|        |  |                       |  |                                                                                                          |     
|        |  |                       |  | Consolidated Statements of Operations for the three months ended September 30, 2002 and 2001 (Unaudited) | 4   
|        |  |                       |  |                                                                                                          |     
|        |  |                       |  | Consolidated Statements of Operations for the six months ended September 30, 2002 and 2001 (Unaudited)   | 5   
|        |  |                       |  |                                                                                                          |     
|        |  |                       |  | Consolidated Statements of Cash Flows for the six months ended September 30, 2002 and 2001 (Unaudited)   | 6   
|        |  |                       |  |                                                                                                          |     
|        |  |                       |  | Consolidated Statement of Stockholders Equity for the six months ended September 30, 2002 (Unaudited)   | 7   
|        |  |                       |  |                                                                                                          |     
|        |  |                       |  | Notes to Consolidated Financial Statements (Unaudited)                                                   | 8   
|        |  |                       |  |                                                                                                          |     
|        |  | ITEM 2                |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                    | 11  
|        |  |                       |  |                                                                                                          |     
|        |  | ITEM 3                |  | Quantitative and Qualitative Disclosures about Market Risk                                               | 18  
|        |  |                       |  |                                                                                                          |     
|        |  | ITEM 4                |  | Controls and Procedures                                                                                  | 19  
|        |  |                       |  |                                                                                                          |     
|PART II |  | OTHER INFORMATION     | 
|        |  |                       |  |                                                                                                          |     
|        |  | ITEM 2                |  | Changes in Securities and Use of Proceeds                                                                | 19  
|        |  |                       |  |                                                                                                          |     
|        |  | ITEM 4                |  | Submission of Matters to a Vote of Security Holders                                                      | 20  
|        |  |                       |  |                                                                                                          |     
|        |  | ITEM 6                |  | Exhibits and Reports on Form 8-K                                                                         | 20  

|               |   
|-------------- | --
|SIGNATURE      | 21
|               |   
|               |   
|               |   
|CERTIFICATIONS | 22
|               |   
|               |   
|               |   
|EXHIBIT INDEX  | 26



---

##### Table of Contents

PART I 
FINANCIAL INFORMATION

|ITEM 1. | Consolidated Financial Statements
|------- | ---------------------------------

GLOBAL IMAGING SYSTEMS, INC.CONSOLIDATED BALANCE SHEETS(IN
THOUSANDS, EXCEPT SHARE AMOUNTS)

|                                                                                                                                                                                                                          |  | September 30,2002 |         | March 31,2002 |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | ------------- | -
|                                                                                                                                                                                                                          |  |                   |         |               |  
|                                                                                                                                                                                                                          |  | (Unaudited)       |         |               |  
|                                                                                                                                                                                                                          |  |                   |         |               |  
|ASSETS                                                                                                                                                                                                                    |  |                   |         |               |  
|                                                                                                                                                                                                                          |  |                   |         |               |  
|Current assets:                                                                                                                                                                                                           |  |                   |         |               |  
|Accounts receivable, net of allowance for doubtful accounts ($2,907 and $2,376        at September 30, 2002 and March 31, 2002,
respectively)                                                                             |  | $                 | 80,554  |               | $
|Inventories                                                                                                                                                                                                               |  |                   | 87,999  |               |  
|Deferred income taxes                                                                                                                                                                                                     |  |                   | 5,171   |               |  
|Prepaid expenses and other current assets                                                                                                                                                                                 |  |                   | 3,003   |               |  
|                                                                                                                                                                                                                          |  |                   |         |               |  
|Total current assets                                                                                                                                                                                                      |  |                   | 176,727 |               |  
|Rental equipment, net                                                                                                                                                                                                     |  |                   | 13,501  |               |  
|Property and equipment, net                                                                                                                                                                                               |  |                   | 12,198  |               |  
|Other assets                                                                                                                                                                                                              |  |                   | 1,164   |               |  
|Related party notes receivable                                                                                                                                                                                            |  |                   | 615     |               |  
|Intangible assets, net:                                                                                                                                                                                                   |  |                   |         |               |  
|Goodwill                                                                                                                                                                                                                  |  |                   | 325,758 |               |  
|Noncompete agreements                                                                                                                                                                                                     |  |                   | 846     |               |  
|Financing fees                                                                                                                                                                                                            |  |                   | 3,943   |               |  
|                                                                                                                                                                                                                          |  |                   |         |               |  
|Total assets                                                                                                                                                                                                              |  | $                 | 534,752 |               | $
|                                                                                                                                                                                                                          |  |                   |         |               |  
|                                                                                                                                                                                                                          |  |                   |         |               |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                                      |  |                   |         |               |  
|                                                                                                                                                                                                                          |  |                   |         |               |  
|Current liabilities:                                                                                                                                                                                                      |  |                   |         |               |  
|Accounts payable                                                                                                                                                                                                          |  | $                 | 41,812  |               | $
|Accrued liabilities                                                                                                                                                                                                       |  |                   | 9,215   |               |  
|Accrued compensation and benefits                                                                                                                                                                                         |  |                   | 12,312  |               |  
|Accrued interest                                                                                                                                                                                                          |  |                   | 1,424   |               |  
|Current maturities of long-term debt                                                                                                                                                                                      |  |                   | 838     |               |  
|Deferred revenue                                                                                                                                                                                                          |  |                   | 23,841  |               |  
|Income taxes payable                                                                                                                                                                                                      |  |                   | 8,714   |               |  
|                                                                                                                                                                                                                          |  |                   |         |               |  
|Total current liabilities                                                                                                                                                                                                 |  |                   | 98,156  |               |  
|Deferred income taxes                                                                                                                                                                                                     |  |                   | 8,813   |               |  
|Long-term debt, less current maturities                                                                                                                                                                                   |  |                   | 216,154 |               |  
|                                                                                                                                                                                                                          |  |                   |         |               |  
|Total liabilities                                                                                                                                                                                                         |  |                   | 323,123 |               |  
|Stockholders equity:                                                                                                                                                                                                     |  |                   |         |               |  
|Preferred stock, $.01 par value: 10,000,000 shares authorized: No shares issued.                                                                                                                                          |  |                   |        |               |  
|Common stock, $.01 par value: 50,000,000 shares authorized: 22,172,057 and        22,051,668 shares issued and 21,189,737 and 20,876,029 shares
outstanding at        September 30, 2002 and March 31, 2002, respectively |  |                   | 222     |               |  
|Common stock held in treasury, at cost                                                                                                                                                                                    |  |                   | (8,638  | )             |  
|Additional paid-in capital                                                                                                                                                                                                |  |                   | 135,198 |               |  
|Retained earnings                                                                                                                                                                                                         |  |                   | 85,879  |               |  
|Unearned compensation                                                                                                                                                                                                     |  |                   | (1,032  | )             |  
|Accumulated other comprehensive loss                                                                                                                                                                                      |  |                   |        |               |  
|                                                                                                                                                                                                                          |  |                   |         |               |  
|Total stockholders equity                                                                                                                                                                                                |  |                   | 211,629 |               |  
|                                                                                                                                                                                                                          |  |                   |         |               |  
|Total liabilities and stockholders equity                                                                                                                                                                                |  | $                 | 534,752 |               | $
|                                                                                                                                                                                                                          |  |                   |         |               |  

See accompanying notes.



---

##### Table of Contents

GLOBAL IMAGING SYSTEMS, INC.CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

|                                               |  | Three Months EndedSeptember 30, |        
|---------------------------------------------- |  | ------------------------------- | -------
|                                               |  |                                 |        
|                                               |  | 2002                            |        
|                                               |  |                                 |        
|Revenues:                                      |  |                                 |        
|Equipment and supplies sales                   |  | $                               | 130,284
|Service and rentals                            |  |                                 | 43,126 
|                                               |  |                                 |        
|Total revenues                                 |  |                                 | 173,410
|Costs and operating expenses:                  |  |                                 |        
|Cost of equipment and supplies sales           |  |                                 | 87,428 
|Service and rental costs                       |  |                                 | 21,704 
|Selling, general and administrative expenses   |  |                                 | 44,982 
|Intangible asset amortization                  |  |                                 | 156    
|                                               |  |                                 |        
|Total costs and operating expenses             |  |                                 | 154,270
|                                               |  |                                 |        
|Income from operations                         |  |                                 | 19,140 
|Interest expense                               |  |                                 | 4,955  
|                                               |  |                                 |        
|Income before income taxes                     |  |                                 | 14,185 
|Income taxes                                   |  |                                 | 5,689  
|                                               |  |                                 |        
|Net income                                     |  | $                               | 8,496  
|                                               |  |                                 |        
|                                               |  |                                 |        
|Net income per common share:                   |  |                                 |        
|Basic                                          |  | $                               | .40    
|                                               |  |                                 |        
|Diluted                                        |  | $                               | .39    
|                                               |  |                                 |        
|                                               |  |                                 |        
|Weighted average number of shares outstanding: |  |                                 |        
|Basic                                          |  |                                 | 21,123 
|Diluted                                        |  |                                 | 21,732 

See accompanying notes.



---

##### Table of Contents

GLOBAL IMAGING SYSTEMS, INC.CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

|                                               |  | Six Months EndedSeptember 30, |        
|---------------------------------------------- |  | ----------------------------- | -------
|                                               |  |                               |        
|                                               |  | 2002                          |        
|                                               |  |                               |        
|Revenues:                                      |  |                               |        
|Equipment and supplies sales                   |  | $                             | 243,847
|Service and rentals                            |  |                               | 83,225 
|                                               |  |                               |        
|Total revenues                                 |  |                               | 327,072
|Costs and operating expenses:                  |  |                               |        
|Cost of equipment and supplies sales           |  |                               | 161,513
|Service and rental costs                       |  |                               | 41,618 
|Selling, general and administrative expenses   |  |                               | 86,632 
|Intangible asset amortization                  |  |                               | 350    
|                                               |  |                               |        
|Total costs and operating expenses             |  |                               | 290,113
|                                               |  |                               |        
|Income from operations                         |  |                               | 36,959 
|Interest expense                               |  |                               | 9,940  
|                                               |  |                               |        
|Income before income taxes                     |  |                               | 27,019 
|Income taxes                                   |  |                               | 10,835 
|                                               |  |                               |        
|Net income                                     |  | $                             | 16,184 
|                                               |  |                               |        
|                                               |  |                               |        
|Net income per common share:                   |  |                               |        
|Basic                                          |  | $                             | .77    
|                                               |  |                               |        
|Diluted                                        |  | $                             | .75    
|                                               |  |                               |        
|                                               |  |                               |        
|Weighted average number of shares outstanding: |  |                               |        
|Basic                                          |  |                               | 21,008 
|Diluted                                        |  |                               | 21,622 

See accompanying notes.



---

##### Table of Contents

GLOBAL IMAGING SYSTEMS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)(IN THOUSANDS)

|                                                                                                           |  | Six Months EndedSeptember 30, |        
|---------------------------------------------------------------------------------------------------------- |  | ----------------------------- | -------
|                                                                                                           |  |                               |        
|                                                                                                           |  | 2002                          |        
|                                                                                                           |  |                               |        
|OPERATING ACTIVITIES:                                                                                      |  |                               |        
|Net income                                                                                                 |  | $                             | 16,184 
|Adjustments to reconcile net income to net cash provided by operating activities:                          |  |                               |        
|Depreciation                                                                                               |  |                               | 6,837  
|Amortization                                                                                               |  |                               | 962    
|Deferred income taxes                                                                                      |  |                               | 1,789  
|Unearned compensation                                                                                      |  |                               | 143    
|Changes in operating assets and liabilities, net of amounts acquired in    purchase business combinations: |  |                               |        
|Accounts receivable                                                                                        |  |                               | (5,359 
|Inventories                                                                                                |  |                               | (19,762
|Prepaid expenses and other current assets                                                                  |  |                               | 1,314  
|Other assets                                                                                               |  |                               | 182    
|Accounts payable                                                                                           |  |                               | 17,813 
|Accrued liabilities, compensation and benefits and interest                                                |  |                               | (528   
|Deferred revenue                                                                                           |  |                               | (568   
|Income taxes payable                                                                                       |  |                               | 5,177  
|                                                                                                           |  |                               |        
|Net cash provided by operating activities                                                                  |  |                               | 24,184 
|                                                                                                           |  |                               |        
|INVESTING ACTIVITIES:                                                                                      |  |                               |        
|Purchase of property, equipment and rental equipment                                                       |  |                               | (5,564 
|Payment for purchase of businesses, net of cash acquired                                                   |  |                               | (31,804
|                                                                                                           |  |                               |        
|Net cash used in investing activities                                                                      |  |                               | (37,368
|                                                                                                           |  |                               |        
|FINANCING ACTIVITIES:                                                                                      |  |                               |        
|Net borrowings (payments) on revolving line of credit                                                      |  |                               | 9,445  
|Net (payments) on other long-term debt                                                                     |  |                               | (375   
|Financing fees                                                                                             |  |                               | (166   
|Common stock issued for cash                                                                               |  |                               | 675    
|Treasury shares reissued                                                                                   |  |                               | 3,605  
|                                                                                                           |  |                               |        
|Net cash provided by (used in) financing activities                                                        |  |                               | 13,184 
|                                                                                                           |  |                               |        
|Net increase (decrease) in cash and cash equivalents                                                       |  |                               |       
|Cash and cash equivalents, beginning of period                                                             |  |                               |       
|                                                                                                           |  |                               |        
|Cash and cash equivalents, end of period                                                                   |  | $                             |       
|                                                                                                           |  |                               |        
|                                                                                                           |  |                               |        
|Supplemental disclosure of non-cash financing activities:                                                  |  |                               |        
|Issuance of restricted stock                                                                               |  | $                             | 1,175  
|                                                                                                           |  |                               |        

See accompanying notes.



---

##### Table of Contents

GLOBAL IMAGING SYSTEMS, INC.CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (Unaudited)(IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS)

|                                                           |  | Common Stock    |            |           |   |                         |  |                          |         |                  |   |                      |  
|---------------------------------------------------------- |  | --------------- | ---------- | --------- | - | ----------------------- |  | ------------------------ | ------- | ---------------- | - | -------------------- | -
|                                                           |  |                 |            |           |   |                         |  |                          |         |                  |   |                      |  
|                                                           |  | Number ofShares |            | Par Value |   | Held inTreasury,at cost |  | AdditionalPaid-inCapital |         | RetainedEarnings |   | UnearnedCompensation |  
|                                                           |  |                 |            |           |   |                         |  |                          |         |                  |   |                      |  
|                                                           |  |                 |            |           |   |                         |  |                          |         |                  |   |                      |  
|Balances at March 31, 2002                                 |  |                 | 20,876,029 |           | $ | 221                     |  | $                        | (10,352 | )                | $ | 131,468              |  
|                                                           |  |                 |            |           |   |                         |  |                          |         |                  |   |                      |  
|Comprehensive income:                                      |  |                 |            |           |   |                         |  |                          |         |                  |   |                      |  
|Net income                                                 |  |                 |            |           |   |                         |  |                          |         |                  |   |                      |  
|Gain on expiration of derivative        instruments        |  |                 |            |           |   |                         |  |                          |         |                  |   |                      |  
|                                                           |  |                 |            |           |   |                         |  |                          |         |                  |   |                      |  
|Total comprehensive income                                 |  |                 |            |           |   |                         |  |                          |         |                  |   |                      |  
|                                                           |  |                 |            |           |   |                         |  |                          |         |                  |   |                      |  
|Stock options exercised                                    |  |                 | 57,889     |           |   | 1                       |  |                          |         |                  |   | 674                  |  
|Treasury stock issued in conjunction with     acquisitions |  |                 | 193,319    |           |   |                        |  |                          | 1,714   |                  |   | 1,891                |  
|Common stock issued under restricted stock     plan        |  |                 | 62,500     |           |   |                        |  |                          |         |                  |   | 1,175                |  
|Amortization of unearned compensation                      |  |                 |            |           |   |                         |  |                          |         |                  |   |                      |  
|Cost of public equity offering                             |  |                 |            |           |   |                         |  |                          |         |                  |   | (10                  | )
|                                                           |  |                 |            |           |   |                         |  |                          |         |                  |   |                      |  
|                                                           |  |                 |            |           |   |                         |  |                          |         |                  |   |                      |  
|Balances at September 30, 2002                             |  |                 | 21,189,737 |           | $ | 222                     |  | $                        | (8,638  | )                | $ | 135,198              |  
|                                                           |  |                 |            |           |   |                         |  |                          |         |                  |   |                      |  

See accompanying notes.



---

##### Table of Contents

GLOBAL IMAGING SYSTEMS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

NOTE 1.   BASIS OF PRESENTATION

The accompanying consolidated balance sheet as of September 30, 2002, consolidated statements of
operations for the three and six months ended September 30, 2002 and 2001, consolidated statements of cash flows for the six months ended September 30, 2002 and 2001, and the consolidated statement of stockholders equity for the six months
ended September 30, 2002 are unaudited. In the opinion of management, all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results of operations for the interim periods presented have been reflected
herein. The results of operations for the interim periods are not necessarily indicative of the results which may be expected for the entire fiscal year. The consolidated financial statements should be read in conjunction with the consolidated
financial statements and the notes thereto included in Global Imaging Systems, Inc.s (together with its subsidiaries, Global or the Company) Annual Report for the year ended March 31, 2002. Certain prior year amounts
have been reclassified to conform to the current year presentation.

NOTE 2.   EARNINGS PER SHARE

Basic earnings per share (EPS) is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution from the exercise of stock options or the
conversion of securities into common stock.

The following table reconciles the numerators and denominators of the basic and diluted EPS computations (shares
in thousands):

|                                                          |  | For Three Months Ended |        | For Six Months Ended |  
|--------------------------------------------------------- |  | ---------------------- | ------ | -------------------- | -
|                                                          |  |                        |        |                      |  
|                                                          |  | September 30,2002      |        | September 30,2001    |  
|                                                          |  |                        |        |                      |  
|Numerator:                                                |  |                        |        |                      |  
|Numerator for basic and diluted earnings per        share |  | $                      | 8,496  |                      | $
|                                                          |  |                        |        |                      |  
|Denominator:                                              |  |                        |        |                      |  
|Denominator for basic earnings per share                  |  |                        | 21,123 |                      |  
|Effect of dilutive securities:                            |  |                        |        |                      |  
|Employee stock options                                    |  |                        | 609    |                      |  
|                                                          |  |                        |        |                      |  
|Denominator for diluted earnings per share                |  |                        | 21,732 |                      |  
|                                                          |  |                        |        |                      |  

NOTE 3.   ACQUISITIONS

During the six months ended September 30, 2002
the Company acquired five businesses that provide office-imaging solutions. Aggregate consideration, net of cash acquired, for these acquisitions was approximately $31,331 consisting of cash, 193,319 shares of the Companys common stock (valued
at $3,605, based on the fair value of the stock) and acquisition related expenses. The Company, in connection with these acquisitions, assumed liabilities totaling approximately $6,721. Goodwill of approximately $28,377 was recorded related to these
acquisitions. These acquisitions were accounted for by the purchase method of accounting and accordingly are included in the results of operations from the date of acquisition.



---

##### Table of Contents

During the six months ended September 30, 2002, the Company paid $500 in cash to the former owners of Lewan & Associates, Inc.,
one of its acquired businesses, to terminate and satisfy in full a $20,000 contingent payment (earnout) liability.

The unaudited pro forma results presented
below include the effects of the Companys acquisitions for fiscal years 2003 and 2002 as if they had been consummated as of April 1, 2001. The unaudited pro forma financial information below is not necessarily indicative of either future
results of operations or results that might have been achieved had the acquisitions been consummated at the beginning of the year prior to acquisition.

|                             |  | Unaudited Pro formaSix Months ended September 30, |        
|---------------------------- |  | ------------------------------------------------- | -------
|                             |  | 2002                                              |        
|                             |  |                                                   |        
|Revenues                     |  | $                                                 | 340,249
|Net income                   |  | $                                                 | 15,968 
|                             |  |                                                   |        
|Net income per common share: |  |                                                   |        
|Basic                        |  | $                                                 | .76    
|Diluted                      |  | $                                                 | .73    

NOTE 4.   STOCK OPTION PLANS

In 1998, the Board of Directors
adopted a stock option plan under which, as amended, 2,520,000 shares of the Companys common stock may be sold pursuant to stock options granted or sold as restricted stock to directors, officers, employees and consultants to the Company. As
of September 30, 2002, options to purchase 1,984,602 shares of the Companys common stock were outstanding under the stock option plan. During the six months ended September 30, 2002, options to purchase an aggregate of 678,000 shares were
granted under the 1998 stock option plan with exercise prices ranging from $17.88 to $20.00 per share. During the six months ended September 30, 2002, 62,500 restricted shares were granted for a purchase price of $.01 per share.

On January 25, 2001, the Board of Directors adopted the Global Imaging Systems, Inc. 2001 Stock Option Plan under which Global may grant options to purchase up to 300,000
shares of Globals common stock to employees of and service providers to Global, except for executive officers and directors. Stock options granted under the 2001 stock option plan have the same terms as those granted under the 1998 plan. As of
September 30, 2002, options to purchase 267,640 shares were outstanding under the 2001 stock option plan. During the six months ended September 30, 2002, no options were granted under the 2001 stock option plan.

In addition to options outstanding under Globals stock option plans, 10,000 shares of Globals common stock are issuable upon the exercise of an option granted
outside Globals stock option plans. This option is exercisable at a price of $12.00 per share.

NOTE 5.   DERIVATIVES

On April 1, 2001, the Company adopted Statement of Financial Accounting Standard (SFAS) No. 133,Accounting for Derivative Instruments and Hedging
Activities, as amended. SFAS No. 133 requires the recognition of all derivative instruments as either assets or liabilities in the consolidated balance sheet at fair value. The accounting for changes in the fair value (i.e.,
gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging



---

##### Table of Contents

relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the
hedging instrument, based on the exposure being hedged, as either a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation.

For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk, such as interest rate risk), the effective
portion of the gain or loss on the derivative instrument is reported as a component of comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The remaining gain or loss
on the derivative instrument in excess of the cumulative change in the present value of the future cash flows of the hedged item, if any, is recognized in current earnings during the period of change.

The Company had entered into interest rate swap agreements that effectively converted a portion of its floating-rate debt to a fixed-rate basis until September 2002, thus
reducing the impact of interest-rate changes on past interest expense. During the quarter ended September 30, 2002, those interest rate swap agreements expired. There are no other interest rate swap agreements outstanding as of September 30, 2002.
Under those swap agreements, the Company received an average variable rate of 2.0% and paid an average fixed rate of 6.6% during the six months ended September 30, 2002. The Company has recognized a gain, net of tax, of approximately $855 for the
six months ended September 30, 2002 related to the portion of the hedging instrument included in the assessment of hedge effectiveness, which has been recorded in comprehensive income.

The Company had entered into an interest rate cap agreement (cap) in the total notional amount of approximately $22,000, which was not designated as a hedging instrument.
The cap expired in September 2002 and no payments were received under the cap. The cap limited the Companys interest rate risk exposure to 9% for the related notional amount.

The Company recently entered into a three-year swap agreement that will become effective November 12, 2002. This agreement will effectively convert $20,000 of our
variable rate debt to fixed rate debt and reduce our exposure to changes in interest rates.

NOTE 6.   COMPREHENSIVE INCOME

The following table presents a reconciliation of comprehensive income, comprised of net income, the cumulative effect of adopting SFAS No. 133 on April 1, 2001 and the
unrealized gain (loss) on cash flow hedges.

|                                                       |  | Three Months Ended |       | Six Months Ended  |  
|------------------------------------------------------ |  | ------------------ | ----- | ----------------- | -
|                                                       |  |                    |       |                   |  
|                                                       |  | September 30,2002  |       | September 30,2001 |  
|                                                       |  |                    |       |                   |  
|Net income                                             |  | $                  | 8,496 |                   | $
|Cumulative effect of adopting SFAS No. 133, net of tax |  |                    |      |                   |  
|Unrealized gain (loss) on cash flow hedges, net of tax |  |                    | 780   |                   |  
|                                                       |  |                    |       |                   |  
|                                                       |  |                    |       |                   |  
|Total comprehensive income                             |  | $                  | 9,276 |                   | $
|                                                       |  |                    |       |                   |  



---

##### Table of Contents

NOTE 7.   RECENT ACCOUNTING PRONOUNCEMENTS

In June 2002, the Financial
Accounting Standards Board (FASB) issued SFAS No. 146,Accounting for Costs Associated with Exit or Disposal Activities(SFAS 146). SFAS 146 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), as liabilities for these costs are now recognized when incurred rather than at the date an entity commits to an exit plan. The provisions of SFAS 146 are
effective, on a prospective basis, for exit or disposal activities initiated by the Company after December 31, 2002. The Company does not expect the adoption of this standard to have a material impact on its financial statements.

NOTE 8.   SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

The Company has issued $100,000 of 10.75% Senior
Subordinated Notes that are fully and unconditionally guaranteed on a joint and several basis by all the Companys existing subsidiaries (the Guarantors), each of which is wholly owned, directly or indirectly, by the Company. The Company is a
holding company all of whose operations are conducted by the Guarantors and the Company has no operations or assets separate from its investment in its subsidiaries.

|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
|------- | ------------------------------------------------------------------------------------------------------------------------------------

The following discussion and analysis should be read in conjunction with the accompanying financial statements and related notes included elsewhere in this Report on Form
10-Q and our annual report for the year ended March 31, 2002. The discussion in this section contains forward-looking statements, including statements relating to the pace of our future acquisitions and overall growth, the benefits that will be
realized by businesses we have acquired or may acquire, our future product and service offerings, pace of borrowings and rate of internally generated cash flows and time frame for seeking additional financing. These forward-looking statements are
based largely on managements current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subject to risks, uncertainties and assumptions,
which could cause our actual results to differ materially from the results suggested by these forward-looking statements. Some factors that may cause our results to differ materially from these statements are:

| |  |  | downturns in general economic and business conditions, either nationally or in our markets, which could reduce our revenue, restrict revenue growth or increase
costs.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | changes in our competitive climate, which could require us to lower prices and therefore would reduce our revenues with no corresponding reduction in cost.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | fewer than expected acquisition opportunities or difficulty obtaining additional financing on satisfactory terms, which could slow our growth through
acquisitions.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | recognition of unanticipated costs and delays associated with ongoing integration efforts.
| | - |  | ------------------------------------------------------------------------------------------

| |  |  | inability to obtain financing on satisfactory terms due to our substantial indebtedness or fluctuations in our common stock price.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------

| |  |  | increases in borrowing rates and costs which could limit our acquisitions, cause us to reduce our pace of acquisitions or growth, or accelerate the time in which we need to obtain new
financing.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

##### Table of Contents

| |  |  | technological developments that may reduce demand for the products and services we sell or results in us facing increased competition to sell those products and
services.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | economic and other disruptions and uncertainties resulting from a continuing war on terrorism, including military action, new terrorist attacks, actual or threatened, and related political
events.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Information regarding many of these factors and other factors that may cause our actual results to differ materially from
those contained in the forward-looking statements is presented in the Risk Factors section of our Annual Report on Form 10-K/A for the year ended March 31, 2002. We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.

Overview

We are a leading
provider of a number of office technology solutions. We sell and service automated office equipment, network integration solutions and electronic presentation systems. We offer solutions incorporating products from Konica, Canon, Ricoh, Sharp,
Hewlett-Packard, IBM, Microsoft, InFocus, Sony and other leading companies. We also offer a variety of ongoing contract services, including service, supply, network management, technical support and training. We currently operate from 140 locations
in 27 states and the District of Columbia. Since our founding in June 1994, we have acquired 57 businesses, all within the United States, and presently operate 15 core companies and 42 satellite companies. The first acquisition was completed in
August 1994. We believe the businesses we have acquired and other businesses we acquire in the future will benefit from our various programs and operating strategies. These benefits include increased operating efficiencies, the support of
experienced and professional senior management, expansion of the types of office imaging products and services offered, increased access to capital, and enhanced financial management.

Our revenues come from two sources: (1) sales of equipment and supplies and (2) sales of complementary services and equipment rentals. The growth of equipment revenues and
the complementary supplies, parts and service revenues depends on several factors, including the demand for equipment, our reputation for providing timely and reliable service, and general economic conditions. Revenues generated from the sale of
equipment and complementary supplies, parts and services are affected by price, general economic conditions, service reputation, and competitors actions in the marketplace. Sales of complementary supplies, parts and services are affected by
equipment sales and rental volumes.

Gross profit as a percentage of revenues varies from period to period depending on a number of variables. Those variables
include the mix of revenues from equipment, supplies, service and rentals; the mix of revenues among the markets served by us; and the mix of revenues of the businesses acquired by us. As we acquire businesses, the percentage of our revenues that
comes from sales of equipment and supplies, as opposed to service and rentals, fluctuates depending on whether the businesses acquired are automated office equipment dealers or are network integrators or electronic presentation systems dealers.
Automated office equipment dealers typically derive a higher percentage of their revenues from service and rentals, and a lower percentage from sales of equipment and supplies, than do network integrators or electronic presentation system dealers.
Generally, sales of equipment and supplies have lower gross profit margins than revenues from service and rentals. In addition, equipment sales in the automated office equipment market generally have higher gross profit margins than equipment sales
in the network integration or electronic presentation systems markets. While the focus of our acquisition strategy is to acquire businesses in the automated office equipment market, to the extent the network integration and electronic presentation
markets grow faster than the automated office equipment market, over time a larger percentage of our revenues and gross profits may be derived from sales that have lower gross profit margins than our current gross profit margins.



---

##### Table of Contents

Cost of goods sold consists primarily of the cost of new equipment, cost of supplies and parts, labor costs to provide services,
rental equipment depreciation and other direct operating costs. We depreciate our rental equipment primarily over a three-year period on a straight-line basis.

Critical Accounting Policies and
Estimates

Managements discussion and analysis of our financial condition and results of operations are based upon our consolidated financial
statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosures. On an on-going basis, we evaluate these estimates, including those related to accounts receivable, inventories, vendor incentives, intangible assets and contingencies. Our
estimates and judgments are based on currently available information, historical results and other assumptions we believe are reasonable. Actual results could differ materially from these estimates. We believe the following critical accounting
policies affect the more significant judgments and estimates used in the preparation of our consolidated financial statements:

Accounts Receivable

We maintain allowances for doubtful accounts for estimated losses arising from the inability of our customers to make required payments. Our estimate of losses is based
upon prior collection experience, a review of specific customers and their ability to pay, and an overall appraisal of current economic conditions. If the financial condition of our customers were to deteriorate, resulting in a reduced ability to
make payments, additional allowances may be required which would reduce net income.

Inventories

Inventories are
valued at the lower of cost (specific identification and/or average cost for equipment and average cost for related parts and supplies) or market value. We write down our inventories for estimated obsolescence equal to the difference between the
cost of inventories and the estimated market values based upon an aging analysis of the inventories on hand, specifically known inventory-related risks and assumptions about future demand and market conditions. These write-downs are reflected in our
cost of sales. If actual market conditions are less favorable than those projected by management, additional write-downs may be required which could have an adverse effect on our financial results.

Vendor
Incentives

We receive incentives from some of our vendors related to volume rebates, cooperative advertising allowances and other programs or agreements.
We record unrestricted volume rebates received as a reduction of inventories and recognize the incentives as a reduction to cost of sales when the related inventories are sold. Cooperative advertising allowances are generally required by the vendor
to be used by us exclusively for advertising or other marketing programs. These restricted cooperative advertising allowances are recognized as a reduction to selling, general and administrative expenses as the related marketing expenses are
incurred. Amounts received or receivable from vendors that are not yet earned are deferred in the consolidated balance sheet.



---

##### Table of Contents

In addition, we receive early payment discounts from certain vendors. We record early payment discounts received as a reduction of
inventories and recognize the discount as a reduction to cost of sales when the related inventories are sold.

Intangible Assets

We examine the carrying value of our excess of cost over fair value of acquired net assets (goodwill) and other intangible assets as current events and circumstances
warrant to determine whether there are any impairment losses. For goodwill, we test the recorded amount annually, or more frequently if conditions change, for impairment by comparing the recorded value to estimated fair value. If indicators of
impairment were present relating to other intangible assets and future cash flows were not expected to be sufficient to recover the assets carrying amount, an impairment loss would be charged to expense in the period identified. No event has
been identified that would indicate an impairment of the value of goodwill recorded in the consolidated financial statements.

Contingencies

We accrue for contingent obligations, including estimated legal costs, when the obligations are probable and the amounts are reasonably estimable. As facts concerning
contingencies become known, we reassess our position and make appropriate adjustments to the financial statements. Estimates that are particularly sensitive to future charges include tax, legal and other regulatory matters which are subject to
change as events evolve and as additional information becomes available during the administrative and litigation process.

RESULTS OF OPERATIONS

The following table sets forth selected consolidated financial information as a percentage of total revenues.

|                                             |  | Three Months Ended |       | Six Months Ended  | 
|-------------------------------------------- |  | ------------------ | ----- | ----------------- | 
|                                             |  |                    |       |                   | 
|                                             |  | September 30,2002  |       | September 30,2001 | 
|                                             |  |                    |       |                   | 
|Revenues:                                    |  |                    |       |                   | 
|Equipment and supplies sales                 |  |                    | 75.1  | %                 | 
|Service and rentals                          |  |                    | 24.9  |                   | 
|                                             |  |                    |       |                   | 
|Total revenues                               |  |                    | 100.0 |                   | 
|Cost and operating expenses:                 |  |                    |       |                   | 
|Cost of equipment and supplies sales         |  |                    | 50.4  |                   | 
|Service and rental costs                     |  |                    | 12.5  |                   | 
|Selling, general and administrative expenses |  |                    | 26.0  |                   | 
|Intangible asset amortization                |  |                    | .1    |                   | 
|                                             |  |                    |       |                   | 
|Total costs and operating expenses           |  |                    | 89.0  |                   | 
|                                             |  |                    |       |                   | 
|Income from operations                       |  |                    | 11.0  |                   | 
|Interest expense                             |  |                    | 2.8   |                   | 
|                                             |  |                    |       |                   | 
|Income before income taxes                   |  |                    | 8.2   |                   | 
|Income taxes                                 |  |                    | 3.3   |                   | 
|                                             |  |                    |       |                   | 
|Net income                                   |  |                    | 4.9   | %                 | 
|                                             |  |                    |       |                   | 

14



---

##### Table of Contents

THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2001

| | Revenues | 
| | -------- | 

Total revenues for the three months ended September 30, 2002 increased to $173,410, 8.3% higher than total revenues of $160,122
for the same period in 2001. This was due to an increase in automated office equipment and electronic presentation systems revenues and the acquisition of businesses during fiscal years 2003 and 2002, partially offset by a decline in network
integration solutions revenues.

Equipment and supplies revenues for the three months ended September 30, 2002 increased to $130,284, 6.4% higher than
equipment and supplies revenues of $122,426 for the same period in 2001. In fiscal years 2003 and 2002, we acquired businesses that added proportionately more equipment and supplies revenues than we had in our existing businesses. In addition, the
increase was partially due to revenue growth of automated office equipment and electronic presentation systems equipment and supplies revenues, offset by a decline in network integration solutions equipment and supplies revenues.

Service and rental revenues for the three months ended September 30, 2002 increased to $43,126, 14.4% higher than service and rental revenues of $37,696 for the same
period in 2001. In fiscal years 2003 and 2002, we acquired businesses that added proportionately more service and rental revenues than we had in our existing businesses. In addition, the increase was partially due to revenue growth of automated
office equipment and electronic presentation systems service and rental revenues, partially offset by a decline in network integration solutions service and rental revenues.

| | Gross Profit | 
| | ------------ | 

Gross profit of $64,278 for the three months ended September 30, 2002 reflected a 12.0% increase over the same period in 2001.
Expressed as a percent of total revenue, gross profit was 37.1% for the three months ended September 30, 2002 compared to 35.9% for the same period in 2001. Automated office equipment dealers typically derive a higher percentage of revenues and
gross profit from service and rentals, while network integration solutions and electronic presentation systems dealers derive a higher percentage of revenues and gross profit from sales of equipment and supplies. For our existing businesses, the
sales internal growth rate of the automated office equipment dealers was higher than that of the network integration solutions and electronic presentation systems dealers. The combined equipment and supplies gross profit as a percentage of combined
equipment and supplies revenues increased to 32.9% for the three months ended September 30, 2002 from 32.2% for the same period one year ago. This was due mostly to automated office equipment revenues being a larger percentage of total equipment
revenues.

As a percentage of combined service and rental revenue, the combined service and rental gross profit margin increased to 49.7% for the three months
ended September 30, 2002 from 47.7% for the same period one year ago. This was due to an increase in service and rental revenues and gross profit at both the automated office equipment and electronic presentation systems dealers.

| | Selling, General and Administrative Expenses
| | --------------------------------------------

Selling, general and administrative, or SG&A, expenses
for the three months ended September 30, 2002 increased to $44,982, 12.3% higher than SG&A expenses of $40,053 for the same period in 2001. This increase was primarily due to acquisitions of automated office equipment dealers during fiscal years
2003 and 2002, which typically incur higher SG&A expenses as a percentage of revenue than network integration solutions and electronic presentation systems dealers. Other SG&A expenses that increased are payroll wages and commissions,
professional fees, insurance and occupancy expenses.



---

##### Table of Contents

| | Intangible Asset Amortization | 
| | ----------------------------- | 

Intangible asset amortization was $156 for the three months ended September 30, 2002. During the same period in 2001, intangible
asset amortization was $248. This amortization is for non-compete agreements.

| | Income From Operations | 
| | ---------------------- | 

Income from operations for the three months ended September 30, 2002 was $19,140, 11.9% higher than $17,099 from the same period
in 2001. This was due to an increase in gross profit as discussed above.

| | Interest Expense | 
| | ---------------- | 

Interest expense for the three months ended September 30, 2002 was $4,955, compared to $6,291 from the same period in 2001. The
decrease in interest expense was due to a lower average level of borrowings and lower interest rates. Interest expense includes the amortization of financing fees incurred in connection with our current credit facility, the senior subordinated notes
and ineffective hedging activities.

| | Income Taxes | 
| | ------------ | 

The provision for income taxes for the three months ended September 30, 2002 was $5,689, 30.0% higher than $4,377 from the same
period in 2001. The increase in income taxes was primarily due to higher pre-tax income in 2002, offset by the reduction in the effective income tax rate. The effective income tax rate was 40.1% for the three months ended September 30, 2002 and
40.5% for the same period in 2001. The effective income tax rate was higher than the federal statutory rate of 35% due to state and local taxes.

SIX MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO SIX MONTHS
ENDED SEPTEMBER 30, 2001

| | Revenues | 
| | -------- | 

Total revenues for the six months ended September 30, 2002 increased to $327,072, 3.6% higher than total revenues of $315,571 for
the same period in 2001. This was due to an increase in automated office equipment revenues and the acquisition of businesses during fiscal years 2003 and 2002, partially offset by declines in network integration solutions and electronic
presentation systems revenues.

Equipment and supplies revenues for the six months ended September 30, 2002 increased to $243,847, 2.0% higher than equipment
and supplies revenues of $238,989 for the same period in 2001. In fiscal years 2003 and 2002, we acquired businesses that added proportionately more equipment and supplies revenues than we had in our existing businesses. In addition, the increase
was partially due to internal growth of automated office equipment and supplies revenues, partially offset by a decline in network integration solutions and electronic presentation systems equipment and supplies revenues.



---

##### Table of Contents

Service and rental revenues for the six months ended September 30, 2002 increased to $83,225, 8.7% higher than service and rental
revenues of $76,582 for the same period in 2001. In fiscal years 2003 and 2002, we acquired businesses that added proportionately more service and rental revenues than we had in our existing businesses. In addition, the increase was partially due to
revenue growth of automated office equipment and electronic presentation systems service revenues, partially offset by a decline in network integration solutions service revenues.

| | Gross Profit | 
| | ------------ | 

Gross profit of $123,941 for the six months ended September 30, 2002 reflected an 8.8% increase over the same period in 2001.
Expressed as a percent of total revenue, gross profit was 37.9% for the six months ended September 30, 2002 compared to 36.1% for the same period in 2001. Automated office equipment dealers typically derive a higher percentage of revenues and gross
profit from service and rentals, while network integration solutions and electronic presentation systems dealers derive a higher percentage of revenues and gross profit from sales of equipment and supplies. For our existing businesses, the sales
internal growth rate of the automated office equipment dealers was higher than that of the network integration solutions and electronic presentation systems dealers. The combined equipment and supplies gross profit as a percentage of combined
equipment and supplies revenues increased to 33.8% for the six months ended September 30, 2002 from 32.5% for the same period one year ago. This was due mostly to automated office equipment revenues being a larger percentage of total equipment
revenues.

As a percentage of combined service and rental revenue, the combined service and rental gross profit margin increased to 50.0% for the six months
ended September 30, 2002 from 47.2% for the same period one year ago. This was due to an increase in service revenues and gross profit at both the automated office equipment and electronic presentation systems dealers.

| | Selling, General and Administrative Expenses
| | --------------------------------------------

Selling, general and administrative, or SG&A, expenses
for the six months ended September 30, 2002 increased to $86,632, 8.4% higher than SG&A expenses of $79,900 for the same period in 2001. This increase was primarily due to acquisitions of automated office equipment dealers during fiscal years
2003 and 2002, which typically incur higher SG&A expenses as a percentage of revenue than network integration solutions and electronic presentation systems dealers. Other SG&A expenses that increased are payroll wages and commissions,
professional fees, insurance and occupancy expenses.

| | Intangible Asset Amortization | 
| | ----------------------------- | 

Intangible asset amortization was $350 for the six months ended September 30, 2002. During the same period in 2001, intangible
asset amortization was $512. This amortization is for non-compete agreements.

| | Income From Operations | 
| | ---------------------- | 

Income from operations for the six months ended September 30, 2002 was $36,959, 10.3% higher than $33,518 from the same period in
2001. This was due to an increase in gross profit as discussed above.

| | Interest Expense | 
| | ---------------- | 

Interest expense for the six months ended September 30, 2002 was $9,940, compared to $12,957 from the same period in 2001. The
decrease in interest expense was due to a lower average level of



---

##### Table of Contents

borrowings and lower interest rates. Interest expense includes the amortization of financing fees incurred in connection with our current credit facility, the senior subordinated notes
and ineffective hedging activities.

| | Income Taxes | 
| | ------------ | 

The provision for income taxes for the six months ended September 30, 2002 was $10,835, 30.1% higher than $8,327 from the same
period in 2001. The increase in income taxes was primarily due to higher pre-tax income in 2002, offset by the reduction in the effective income tax rate. The effective income tax rate was 40.1% for the six months ended September 30, 2002 and 40.5%
for the same period in 2001. The effective income tax rate was higher than the federal statutory rate of 35% due to state and local taxes.

LIQUIDITY AND CAPITAL RESOURCES

Historically, Global has financed its operations primarily through internal cash flow, sales of equity and debt securities and bank financing, including the financing
facility described below. These sources of funds have been used to fund our growth both internally and through acquisitions. We are pursuing an acquisition strategy and expect to acquire more businesses. As we continue to acquire more businesses, it
is likely we will incur additional debt and seek additional equity capital.

Under the terms of two of our acquisition agreements, we may be required to make
additional payments of up to $4,298 in cash over the next year to some of the former owners of the businesses we have acquired based on the profitability of those businesses since we acquired them. During the three months ended September 30, 2002,
we paid $500 in cash to the former owners of Lewan & Associates, Inc., one of our acquired businesses, to terminate and satisfy in full a $20,000 contingent payment (earnout) liability.

For the six months ended September 30, 2002 the net cash provided by operations was $24,184 and for the six months ended September 30, 2001 the net cash provided by
operations was $14,650. For the six months ended September 30, 2002 and September 30, 2001 Globals net cash used in investing activities was $37,368 and $9,583, respectively, primarily for property, equipment and rental equipment expenditures
in 2002 and 2001 and the purchase of businesses in 2002. For the six months ended September 30, 2002 and the six months ended September 30, 2001, Globals net cash provided by (used in) financing activities was $13,184 and $(5,067),
respectively.

As of September 30, 2002, we had $100,927 borrowing availability under our senior credit facility. This amount has been reduced by $700 to
reflect the aggregate amount of an outstanding standby letter of credit issued under the credit facility to support our obligations incurred in the ordinary course of business. As of September 30, 2002, no amounts had been paid under this letter of
credit.

We believe that cash flows from future operations, together with funds available under our senior credit agreement, will be sufficient to fund our
current and foreseeable operational needs and acquisition growth strategy.

|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

Our market risk is primarily limited to fluctuations
in interest rates as it pertains to our borrowings under our senior credit agreement and the long-term note that bears a fixed rate. There have been no material changes, other than described below, to the information in the Item 7A disclosure made
in Globals Annual Report on Form 10-K/A for the fiscal year ended March 31, 2002.



---

##### Table of Contents

On September 9, 2002, our interest rate swaps which effectively converted a portion of our variable rate debt to fixed rate debt
expired. As a result, the $116,665 balance of our variable rate debt as of September 30, 2002 was exposed to changes in interest rates. We recently, however, entered into a three-year swap agreement that will effectively convert $20,000 of our
variable rate debt to fixed rate debt and reduce our exposure to changes in interest rates going forward. This new swap agreement will become effective November 12, 2002.

|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

(a) Evaluation of disclosure controls and procedures. We maintain disclosure controls and
procedures designed to ensure that we are able to collect and record the information we are required to disclose in the reports we file with the Securities and Exchange Commission (SEC), and to process, summarize and disclose this information within
the time periods specified in the rules of the SEC. Based on their evaluation of our disclosure controls and procedures, which took place as of a date within 90 days of the filing date of this report, the chief executive officer and chief financial
officer believe that these controls and procedures are effective to ensure that we are able to collect, process and disclose the information we are required to disclose in the reports we file with the SEC within the required time periods.

(b) Changes in internal controls. There have been no significant changes in our internal controls or in other factors that could significantly affect these controls
subsequent to the date of the evaluation of those controls by the chief executive officer and chief financial officer.

PART II - OTHER INFORMATION

|ITEM 2. | CHANGES IN SECURITIES AND USE OF PROCEEDS.
|------- | ------------------------------------------

(c) On July 25, 2002 we issued 173,140 shares of our common stock to
the stockholders of The Reed Group (Reed) as payment for 14% of the outstanding stock of Reed. The offer and sale of the common stock was made to accredited investors and was exempt from registration under the Securities Act of 1933, as
amended, pursuant to Rule 506 thereunder.

On August 30, 2002 we issued 8,460 shares of our common stock to the stockholders of NuLaser Combined Companies
(NuLaser) as payment for 10% of the outstanding stock of NuLaser. The offer and sale of the common stock was made to accredited investors and was exempt from registration under the Securities Act of 1933, as amended, pursuant to Rule 506
thereunder.



---

##### Table of Contents

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

At Globals 2002 Annual Meeting of Stockholders held
August 19, 2002, our stockholders approved the following items:

| | 1. |  | Edward N. Patrone was re-elected to serve as our Director with a term to expire in 2005. The vote upon such proposal was as follows:
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------

|For      |  | 19,219,853
|-------- |  | ----------
|Withheld |  | 57,364    

| | 2. |  | Peter Dinan was elected to serve as our Director with a term to expire in 2005. The vote upon such proposal was as follows:
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------

|For      |  | 16,389,946
|-------- |  | ----------
|Withheld |  | 2,887,271 

|ITEM 6. | EXHIBITS AND REPORTS ON FORM 8-K
|------- | --------------------------------

| | (a)      Exhibits
| | -----------------

| |  | The Exhibit Index filed herewith is incorporated herein by reference.
| |  | ---------------------------------------------------------------------

| | (b)      Reports on Form 8-K.
| | -----------------------------

| |  | We did not file any Current Reports on Form 8-K during the three months ended September 30, 2002.
| |  | -------------------------------------------------------------------------------------------------



---

##### Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.

| |  |  |                             
| |  |  | ----------------------------
| |  |  | Global Imaging Systems, Inc.
| |  |  |                             
| |  |  | (Registrant)                

|                  |  |  |                                                                                                                                                                  
|----------------- |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|November 12, 2002 |  |  | /s/ RAYMONDSCHILLING                                                                                                                                             
|                  |  |  |                                                                                                                                                                  
|Date              |  |  | Raymond SchillingSenior Vice President, Chief Financial Officer, Secretary and Treasurer (Duly Authorized Officer and Principal Financial and Accounting
Officer)



---

##### Table of Contents

CERTIFICATIONS

I, Thomas S. Johnson, certify that:

| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Global Imaging Systems, Inc.;                                                                                                                                                                                                                                           
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | 
| | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this quarterly report;
| |    | 
| | 3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this quarterly report;                   
| |    | 
| | 4. |  | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:                                                                                                         

| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | 
| | b) |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and                                                                                                  
| |    | 
| | c) |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;                                                                                                                        

| | 5. |  | The registrants other certifying officer and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or persons
performing the equivalent functions):
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | 
| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and                                                                                                                                        



---

##### Table of Contents

| | 6. |  | The registrants other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                  |  |  |                                                       
|----------------- |  |  | ------------------------------------------------------
|November 12, 2002 |  |  | /s/ THOMASS.JOHNSON                                   
|                  |  |  |                                                       
|Date              |  |  | Thomas S. JohnsonPresident and Chief Executive Officer





---

##### Table of Contents

CERTIFICATIONS

I, Raymond Schilling, certify that:

| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Global Imaging Systems, Inc.;                                                                                                                                                                                                                                           
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | 
| | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this quarterly report;
| |    | 
| | 3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this quarterly report;                   
| |    | 
| | 4. |  | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:                                                                                                         

| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | 
| | b) |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and                                                                                                  
| |    | 
| | c) |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;                                                                                                                        

| | 5. |  | The registrants other certifying officer and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or persons
performing the equivalent functions):
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | 
| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and                                                                                                                                        



---

##### Table of Contents

| | 6. |  | The registrants other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                  |  |  |                                                                                        
|----------------- |  |  | ---------------------------------------------------------------------------------------
|November 12, 2002 |  |  | /s/ RAYMONDSCHILLING                                                                   
|                  |  |  |                                                                                        
|Date              |  |  | Raymond SchillingSenior Vice President, Chief Financial Officer,Secretary and Treasurer





---

##### Table of Contents

EXHIBIT INDEX(Pursuant to Item 601 of Regulation S-K)

|Number | Exhibit                                                                                                                            
|------ | -----------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                    
|3.1    | Amended and Restated Certificate of Incorporation (1)                                                                              
|       |                                                                                                                                    
|3.2    | Amended and Restated Bylaws (1)                                                                                                    
|       |                                                                                                                                    
|10.1   | Senior Executive Agreement, dated as of July 1, 2002, by and between Global and Cecil A. McClary. *                                
|       |                                                                                                                                    
|10.2   | Senior Executive Agreement, dated as of September 1, 2002, by and between Global and Michael Shea. *                               
|       |                                                                                                                                    
|10.3   | Senior Executive Agreement, dated as of October 1, 2002, by and between Global and Peter W. Shoemaker. *                           
|       |                                                                                                                                    
|99.1   | Written Statement of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

___________________

| | * |  |  |  | Management or compensatory contract.
| | - |  |  |  | ------------------------------------

| | (1) |  |  |  | Incorporated by reference to Globals Registration Statement on Form S-1, No. 333-48103, which was declared effective by the Securities and Exchange Commission on June 17, 1998.
| | --- |  |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------