<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, 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 JUNE 30, 2003

                                       OR

     [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

          FOR THE TRANSITION PERIOD FROM ___________ TO ______________

                         COMMISSION FILE NUMBER 0-49710

                            PRINTCAFE SOFTWARE, INC.

             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                 DELAWARE                                     25-1854929
      (State or Other Jurisdiction of                      (I.R.S. Employer
      Incorporation or Organization)                      Identification No.)

             FORTY 24TH STREET
         PITTSBURGH, PENNSYLVANIA                                15222
 (Address of Principal Executive Offices)                     (Zip Code)

       Registrant's Telephone Number, Including Area Code: (412) 456-1141

Indicate by check whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

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

The number of shares of the registrant's common stock, $.0001 par value,
outstanding as of the close of business on August 14, 2003 was 12,874,928.


<PAGE>





                            PRINTCAFE SOFTWARE, INC.

                                      INDEX
<TABLE>
PART I     FINANCIAL INFORMATION                                                    PAGE NO.
                                                                                    --------
<S>                                                                                 <C>
  ITEM 1 - Financial Statements:
        Consolidated Balance Sheets -
         December 31, 2002 and June 30, 2003 ......................................     3
        Consolidated Statements of Operations -
         Three months and Six months ended June 30, 2002 and 2003 .................     4
        Consolidated Statements of Cash Flows -
         Six months ended June 30, 2002 and 2003 ..................................     5
        Notes to Consolidated Financial Statements ................................     6
  ITEM 2 - Management's Discussion and Analysis of Financial Condition
           and Results of Operations ..............................................    11
  ITEM 3 - Quantitative and Qualitative Disclosures About Market Risk .............    23
  ITEM 4 - Controls and Procedures ................................................    23
PART II OTHER INFORMATION
ITEM 1 Legal Proceedings ..........................................................    24
ITEM 2 Changes in Securities and Use of Proceeds ..................................    24
ITEM 4 Submission of Matters to a Vote of Security Holders ........................    24
ITEM 6 - Exhibits and Reports on Form 8-K .........................................    24
  Signatures ......................................................................    26
</TABLE>



                                       2
<PAGE>



                            PRINTCAFE SOFTWARE, INC.
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                            PRINTCAFE SOFTWARE, INC.
                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                       DECEMBER 31, 2002 JUNE 30, 2003
                                                                          (UNAUDITED)
                                                       -----------------   ---------
<S>                                                        <C>             <C>
                           ASSETS
Current assets:
   Cash and cash equivalents ........................      $   8,775       $   6,982
   Accounts receivable, net .........................         12,896          10,115
   Other current assets .............................          1,361           1,576
                                                           ---------       ---------
       Total current assets .........................         23,032          18,673
                                                           ---------       ---------
Property and equipment, net .........................          2,706           1,988
Purchased technology, net ...........................          2,806              --
Customer lists, net .................................          2,487             272
Goodwill ............................................         22,480          22,480
Other intangibles, net ..............................            162              93
                                                           ---------       ---------
      Total assets ..................................      $  53,673       $  43,506
                                                           =========       =========
            LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Line of credit ...................................      $   2,000              --
   Accounts payable .................................          2,099       $   2,245
   Accrued compensation and related liabilities .....          1,470           2,054
   Accrued and other liabilities ....................          1,221           1,350
   Deferred revenue .................................          9,653           8,904
   Restructuring reserve ............................             67              36
   Current portion of long term debt- related party,
     (net of Debt origination costs of $1,764 at
     June 30, 2003)..................................          2,100          14,486
    Current portion of long term debt ...............            326             228
   Current portion of capital lease obligations .....             33              10
                                                           ---------       ---------
       Total current liabilities ....................         18,969          29,313
                                                           ---------       ---------

Long-term debt-related party, (net of debt
  origination costs of $3,507 at December 31,
  2002) .............................................         12,745           1,050
Commitments and contingencies (Note 5) ..............             --              --
Stockholders' equity:
   Common stock .....................................              1               1
   Additional paid-in capital .......................        253,823         258,611
   Warrants .........................................          8,677           8,677
   Deferred compensation ............................         (3,836)         (2,494)
   Accumulated other comprehensive loss:
   Foreign translation adjustment ...................            (46)            (83)
   Retained deficit .................................       (234,690)       (249,599)
   Treasury stock ...................................         (1,930)         (1,930)
   Notes receivable from stockholders ...............            (40)            (40)
                                                           ---------       ---------
      Total stockholders' equity ....................         21,959          13,143
                                                           ---------       ---------
      Total liabilities and stockholders' equity ....      $  53,673       $  43,506
                                                           =========       =========
</TABLE>

          See accompanying notes to consolidated financial statements.



                                       3
<PAGE>



                            PRINTCAFE SOFTWARE, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED            SIX MONTHS ENDED
                                                                      JUNE 30,                      JUNE 30,
                                                              -----------------------       -----------------------
                                                                2002           2003           2002           2003
                                                              --------       --------       --------       --------
<S>                                                           <C>            <C>            <C>            <C>
Revenue:
   License and subscription ............................      $  5,671       $  2,391       $ 11,284       $  4,955
   Maintenance .........................................         5,386          5,576         10,763         11,319
   Professional services and other .....................         1,149          1,098          1,874          2,194
                                                              --------       --------       --------       --------
     Total revenue .....................................        12,206          9,065         23,921         18,468
Cost of revenue:
   License and subscription ............................           928            496          1,926          1,084
   Maintenance .........................................         1,296          1,215          2,605          2,469
   Professional services and other .....................           499            421            873            855
                                                              --------       --------       --------       --------
     Total cost of revenue .............................         2,723          2,132          5,404          4,408
                                                              --------       --------       --------       --------
Gross profit ...........................................         9,483          6,933         18,517         14,060
Operating expenses:
   Sales and marketing(1) ..............................         4,574          4,421          8,521          8,630
   Research and development ............................         3,092          2,979          6,126          6,003
   General and administrative(1) .......................         1,451          2,653          3,234          5,630
   Depreciation ........................................           707            286          1,470            879
   Amortization ........................................         7,392             43         14,780          5,133
   Stock-based compensation and warrants ...............           334            102            537            483
                                                              --------       --------       --------       --------
     Total operating expenses ..........................        17,550         10,484         34,668         26,758
                                                              --------       --------       --------       --------
Loss from operations ...................................        (8,067)        (3,551)       (16,151)       (12,698)
Amortization of debt origination fees and other expense.        (1,520)          (833)        (1,759)        (1,684)
Interest expense, related party ........................        (1,546)          (263)        (3,103)          (527)
                                                              --------       --------       --------       --------
Net loss ...............................................       (11,133)        (4,647)       (21,013)       (14,909)
                                                              --------       --------       --------       --------
Accretion of redeemable preferred stock ................        (2,860)            --         (6,200)            --
                                                              --------                      --------       --------
Net loss attributable to common stock ..................      $(13,993)      $ (4,647)      $(27,213)      $(14,909)
                                                              ========       ========       ========       ========
Net loss per share, basic and diluted ..................      $  (9.00)      $  (0.42)      $ (31.68)      $  (1.37)
Weighted average shares used to compute basic and
  diluted loss per share ..............................         1,555         11,153            859         10,896

(1) Amounts exclude stock-based compensation as follows:
General and administrative .............................           334            102            537            483
</TABLE>



          See accompanying notes to consolidated financial statements.



                                       4
<PAGE>



                            PRINTCAFE SOFTWARE, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (UNAUDITED, IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                  SIX MONTHS ENDED
                                                                      JUNE 30,
                                                             -------------------------
                                                                2002            2003
                                                             ---------       ---------
<S>                                                          <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ..............................................      $ (21,013)      $ (14,909)
Adjustments to reconcile net loss to net cash used in
  operating activities:
   Depreciation and amortization ......................         16,251           6,012
   Provision for doubtful accounts ....................              6             642
   Write-down of shareholder note principal ...........            197              --
   Stock-based compensation ...........................            537             483
   Interest on note receivable from stockholders ......            (13)             --
   Interest accretion on related party debt discount ..          1,572           1,743
Changes in assets and liabilities:
   Accounts receivable ................................         (4,453)          2,139
   Other assets .......................................            (86)           (297)
   Accounts payable ...................................           (419)            146
   Accrued liabilities ................................         (1,073)            713
   Restructuring reserve ..............................           (262)            (31)
   Deferred revenue ...................................            412            (749)
                                                             ---------       ---------
     Net cash used in operating activities ............         (8,344)         (4,108)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment ............           (640)           (161)
                                                             ---------       ---------
     Net cash used in investing activities ............           (640)           (161)

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on debt - related party ............        (17,800)         (1,050)
Principal payments on debt ............................            (66)            (98)
Repayment on line of credit ...........................             --          (2,000)
Principal payments on capital lease obligations .......            (42)            (23)
Net proceeds from initial public offering .............         32,950              --
Issuance of redeemable preferred stock ................            755              --
Proceeds from note receivable repayment by stockholder              56              --
Debt origination costs ................................           (188)             --
Payment of debt restructuring fee to related party ....         (3,700)             --
Proceeds from exercise of stock options ...............             --           5,532
Proceeds from issuance of stock under employee stock
  purchase plan .......................................             --             115
                                                             ---------       ---------
     Net cash provided by financing activities ........         11,965           2,476
                                                             ---------       ---------
Increase (decrease) in cash and cash equivalents ......          2,981          (1,793)
Cash and cash equivalents - beginning of period .......          8,648           8,775
                                                             ---------       ---------
Cash and cash equivalents - end of period .............      $  11,629       $   6,982
                                                             =========       =========

NON-CASH INVESTING AND FINANCING ACTIVITIES:
     Deferred compensation ............................      $   5,176        $     --
     Accretion of preferred stock .....................          6,201              --
     Conversion of preferred stock to common stock upon        139,529              --
       initial public offering
</TABLE>

          See accompanying notes to consolidated financial statements.



                                       5
<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Printcafe Software, Inc. is a provider of software solutions designed
specifically for the printing industry supply chain. Our enterprise resource
planning and collaborative supply chain software solutions enable printers and
print buyers to lower costs and improve productivity. Our procurement
applications, which are designed for print buyers, facilitate collaboration
between printers and print buyers over the Web. Our software solutions have been
installed by more than 4,000 customers in over 8,000 facilities worldwide,
including 24 of the 25 largest printing companies in North America and over 50
businesses in the Fortune 1000.

On February 26, 2003, we entered into a merger agreement with Electronics for
Imaging, Inc., or EFI. If the merger is completed, Printcafe would become a
wholly-owned subsidiary of EFI. Under the terms of the merger agreement, each
share of our common stock will be converted into $2.60 of consideration which
will be paid, at the election of each of our stockholders, in shares of EFI's
common stock or cash. EFI's common stock is traded on the NASDAQ National Market
under the symbol "EFII". Our board of directors has approved the merger with EFI
and has called a special meeting of our stockholders to vote on the merger. The
merger will be adopted if the holders of a majority of our outstanding shares of
common stock vote for the proposed merger with EFI.

LIQUIDITY
The Company believes that, based on current levels of operations and
anticipated growth, cash from operations, together with cash currently
available, will suffice to fund our operations through January 1, 2004. Poor
financial results, unanticipated expenses or unanticipated opportunities that
require financial commitments could give rise to additional financing
requirements sooner than the Company expected. If the Company does not raise
additional funds when needed, expenditures for expansion of product plans and
other strategic initiatives might have to be delayed, scaled back or
eliminated. If the Company does not complete the merger with EFI or complete a
similar transaction with a third party, the Company does not expect to have
sufficient cash to repay the $14,200 outstanding debt which becomes due and
payable in January 2, 2004 without securing additional debt or equity
financing. It is not expected that additional debt or equity financing would
be available. If the Company is unable to pay these amounts when due, the
lenders could proceed against the collateral. Should the merger with EFI not be
successful, there is uncertainty as to the Company's ability to continue as a
going concern through the year ending December 31, 2004.

The financial statements do not include any adjustments relating to the
recoverability and classification of assets or the amount and classification
of liabilities that might be necessary should the Company be unable to continue
as a going concern. The Company's continued existence is dependent upon its
ability to generate sufficient cash flows from equity financing and
successfully concluding additional license agreements.

USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

INTERIM BASIS OF PRESENTATION
The Company's financial statements include the accounts of the Company and its
wholly-owned subsidiaries after the elimination of all significant intercompany
balances and transactions. Amounts within the financial statements and footnote
disclosures have been recorded in thousands except for the share and per share
data.

The accompanying consolidated financial statements as of June 30, 2003, and for
the three and six month periods ended June 30, 2002 and 2003, respectively, are
unaudited. The unaudited interim consolidated financial statements have been
prepared on the same basis as the annual consolidated financial statements and,
in the opinion of management, reflect all adjustments, which include only
normal, recurring accruals necessary to state fairly the Company's financial
position as of June 30, 2003, and the results of operations and cash flows for
the three and six month periods ended June 30, 2002 and 2003, respectively.
These consolidated financial statements and notes thereto should be read in
conjunction with the Company's audited consolidated financial statements and
related notes included in its Form 10K, as filed with the Securities and
Exchange Commission on March 21, 2003. The results for interim periods are not
necessarily indicative of the expected results for any other interim period or
the year ending December 31, 2003. The amounts included in the consolidated
balance sheet at December 31, 2002 were derived from our audited financial
statements.

REVENUE RECOGNITION
The Company's revenue recognition policy is governed by Statement of Position
(SOP) 97-2, Software Revenue Recognition, issued by the American Institute of
Certified Public Accountants (AICPA). The Company derives its revenues from
licenses and subscriptions for its products as well as from the provision of
related services, including installation and training, consulting, customer
support, and maintenance contracts. Revenues are recognized only if persuasive
evidence of an agreement exists, delivery has occurred, all significant vendor
obligations are satisfied, the fee is fixed, determinable, and collectible and
there is vendor-specific objective evidence (VSOE) to support the allocation of
the total fee to a multi-element arrangement. The Company does not have VSOE for
the license component or the fixed price installation component and these have
historically been sold bundled together with post-contract support. Therefore,
the Company follows the residual method as outlined in SOP 98-9, Modification of
SOP 97-2, Software Revenue Recognition with Respect to Certain Transactions,
under which revenue is allocated to the undelivered elements and the residual
amounts of revenue are allocated to the delivered elements. Many of the
Company's agreements include warranty provisions. Historically, these provisions
have not had a significant impact on the Company's revenue recognition. In those
instances where customer acceptance may be in question, all revenue relating to
that arrangement is deferred until the warranty period has expired. Additional
revenue recognition criteria by revenue type are listed below.



                                       6
<PAGE>

LICENSE AND SUBSCRIPTION REVENUE:
License and subscription revenue includes fees for perpetual licenses and
periodic subscriptions. The Company recognizes revenues on license fees after a
license agreement has been signed, the product has been delivered, the fee is
fixed, determinable and collectible, and there is VSOE to support the allocation
of the total fee to a multielement arrangement (if applicable). If VSOE cannot
be obtained for certain elements of the contract, the Company recognizes revenue
using the residual method under which revenue is allocated to the undelivered
elements and the residual amounts of revenue are allocated to the delivered
elements. The Company recognizes revenues on periodic subscriptions over the
subscription term for unlimited subscriptions and based on the value of orders
processed for its customers through the system for limited subscriptions.
Revenue is recognized for subscription orders processed through resellers over
the subscription term of the underlying agreement, beginning upon installation.

MAINTENANCE REVENUE:
Maintenance revenue is derived from the sale of maintenance and support
contracts, which provide customers with the right to receive maintenance
releases of the licensed products and access to customer support staff.
Maintenance revenue is recognized on a straight-line basis over the term of the
contract, which is typically one year. Payments for maintenance revenue are
normally received in advance and are nonrefundable.

PROFESSIONAL SERVICES AND OTHER REVENUE:
Professional services and other revenue are derived from variable fees for
installation, training, and consulting. Revenue for professional services such
as installation and training, system integration projects, and consulting is
primarily recognized as the services are performed. If these services are part
of a multielement contract under which VSOE cannot be obtained for certain
elements, they may be deferred either until acceptance of any related software
or over the license period.

FAIR VALUE OF FINANCIAL INSTRUMENTS

For certain financial instruments, including cash and cash equivalents, accounts
receivable, accounts payable, and accrued liabilities, recorded amounts
approximate fair value due to the relative short maturity period. On May 31,
2002 and June 10, 2002, the Company entered into new agreements for its related
party debt. As a result, the carrying amount of this debt approximates market
value as of June 30, 2003. The carrying amount of the line of credit
approximates market value because it has an interest rate that varies with
market interest rates. The fair values of the obligations under capital leases
are estimated based on current interest rates available to the Company for debt
instruments with similar terms, degrees of risk, and remaining maturities. The
carrying values of these obligations approximate their respective fair values.
The estimated fair values may not be representative of the actual values of
these financial instruments that could have been realized as of the period end
or that will be realized in the future.

STOCK-BASED COMPENSATION AND WARRANTS
Effective December 2002, the Company adopted the disclosure-only provisions of
SFAS No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure
(SFAS No. 148), which is consistent with the Company's utilization of the
disclosure-only provisions of SFAS No. 123, Accounting for Stock-Based
Compensation (SFAS No. 123). The Company accounts for equity instruments issued
to non-employees and pursuant to strategic alliance arrangements in accordance
with the provisions of SFAS No. 123, Emerging Issues Task Force (EITF) No.
96-18, Accounting for Equity Instruments that are Issued to Other than Employees
for Acquiring or in Conjunction with Selling Goods or Services, and Emerging
Issues Task Force (EITF) No. 01-9, Accounting for Consideration Given by Vendor
to a Customer or a Reseller of the Vendor's Product.

The following table illustrates the effect on net loss and loss per share if the
Company had applied the fair value recognition provisions of SFAS No. 123 to
employee stock-based awards:


<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED                    SIX MONTHS ENDED
                                                          JUNE 30,                              JUNE 30,
                                            ----------------------------------     ----------------------------------
                                                 2002                 2003              2002                 2003
                                            ----------------    --------------     --------------     ---------------
                                                              (in thousands, except per share data)
<S>                                        <C>                     <C>                 <C>                <C>
Reported net loss attributable
to common stock                                  $13,993            $ 4,647            $27,213            $14,909

Eliminate:  Stock-based compensation
expense included in reported net loss                334                102                537                483

Apply:  Total stock-based
compensation income (expense) determined
under fair value method for all awards            (1,698)               760             (2,920)                16

Pro Forma net loss                                15,357              3,785             29,596             14,410

Basic and diluted loss per share:
Basic and diluted, as reported                     (9.00)             (0.42)            (31.68)             (1.37)
Basic and diluted, pro forma                       (9.88)             (0.34)            (34.45)             (1.32)
</TABLE>

The stock-based compensation income is a result of forfeitures upon termination
of nonvested options.


                                       7
<PAGE>




RECENT ACCOUNTING PRONOUNCEMENTS

VARIABLE INTEREST ENTITIES
In January 2003, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 46, "Consolidation of Variable Interest Entities". This
Interpretation applies immediately to variable interest entities created after
January 31, 2003, and to variable interest entities in which an enterprise
obtains an interest after that date. It applies in the first fiscal year or
interim period beginning after June 15, 2003, to variable interest entities in
which an enterprise holds a variable interest that is acquired before February
1, 2003. The Company does not believe the provisions of this Interpretation
Standard have an impact on its consolidated financial statements upon adoption.

FINANCIAL INSTRUMENTS

In May 2003, the FASB issued Statement of Financial Accounting Standards No.
150, "Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity" ("SFAS No. 150"). The Statement improves the accounting
for certain financial instruments that, under previous guidance, issuers
could account for as equity. The new Statement requires those instruments be
classified as liabilities in statements of financial position. SFAS No. 150
also requires disclosures about alternative ways of settling financial
instruments and the capital structure of entities whose shares are mandatorily
redeemable. Most of the guidance in SFAS No. 150 is effective for all financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of the first interim period beginning after June 15,
2003. The Company does not believe the provisions of this Statement will have an
impact on its consolidated financial statements upon adoption.

2. NET LOSS PER SHARE

Basic and diluted net loss per share have been computed using the weighted
average number of shares of common stock outstanding during the period.
Potential common shares issuable upon conversion of convertible preferred stock
and exercise of stock options and warrants are excluded from historical diluted
net loss per share because they would be antidilutive. At June 30, 2002 and
2003, 1,596,855 and 1,426,254 potential common shares, respectively, are
excluded from the determination of diluted net loss per share, as the effect of
such shares is antidilutive.

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED                SIX MONTHS ENDED
                                                      JUNE 30,                         JUNE 30,
                                             -------------------------         -------------------------
                                               2002             2003             2002             2003
                                             --------         --------         --------         --------
                                                        (in thousands, except per share data)
<S>                                          <C>              <C>              <C>              <C>
Numerator:
     Net loss .........................      $(11,133)        $ (4,647)        $(21,013)        $(14,909)
     Preferred stock accretion ........        (2,860)              --           (6,200)              --
                                             --------         --------         --------         --------
Net loss attributable to common stock..       (13,993)          (4,647)         (27,213)         (14,909)

Denominator:
Weighted average shares ...............         1,555           11,153              859           10,896

Basic and diluted net loss per share         $  (9.00)        $  (0.42)        $ (31.68)        $  (1.37)
</TABLE>


                                       8
<PAGE>

3. GOODWILL AND OTHER INTANGIBLE ASSETS

Intangible assets and purchased technology are related mainly to the business
acquisitions consummated in early 2000. Amortization is recorded on a
straight-line basis over the estimated useful lives (generally three years) of
the remaining assets and consists of the following at December 31, 2002 and June
30, 2003:

<TABLE>
<CAPTION>
                                                 DECEMBER 31,        JUNE 30,
                                                     2002              2003
                                                 ------------     -------------
<S>                                               <C>               <C>
 Customer list ...........................        $  42,713         $  42,713
 Purchased technology ....................           44,023            44,023
 Patent ..................................            2,065             2,107
 Goodwill ................................           58,730            58,730
                                                  ---------         ---------
                                                    147,531           147,573
 Less: accumulated amortization ..........         (119,596)         (124,728)
                                                  ---------         ---------
 Goodwill and other intangible assets, net        $  27,935         $  22,845
                                                  =========         =========
</TABLE>

The Company previously adopted SFAS No. 142, Goodwill and Other Intangible
Assets, which prohibits companies from amortizing goodwill and instead requires
annual impairment testing of the goodwill. As a result, beginning January 1,
2002, the Company no longer amortizes goodwill. As of the adoption date,
December 31, 2002 and June 30, 2003, the unamortized balance of goodwill was
$22,480. Goodwill is subject to annual impairment testing.

The Company previously adopted SFAS 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which requires the Company to review its
long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of long-lived assets may not be recoverable.
No impairment charge has been recorded in any periods presented.

4. INITIAL PUBLIC OFFERING

In June 2002, the Company issued 3,750,000 shares of its common stock at a price
of $10.00 per share in its initial public offering. The Company received
approximately $33,000 in proceeds, net of underwriting discounts, commissions,
and offering expenses. Simultaneously with the closing of the initial public
offering, each outstanding share of preferred stock was automatically converted
into common stock based on the applicable conversion ratio. In connection with
the offering, the Company repaid approximately $17,800 of related party debt.

5. COMMITMENTS AND CONTINGENCIES

On February 19, 2003, Creo Inc. commenced an action in The Court of Chancery of
the State of Delaware in and for New Castle County captioned Creo, Inc. v.
Printcafe Software, Inc., Electronics For Imaging, Inc. (EFI), Marc D. Olin,
Charles J. Billerbeck, Victor A. Cohn and Thomas J. Gill. Creo requested a
temporary restraining order with respect to (a) triggering, exercising or
otherwise giving effect to the stockholders' rights plan adopted by the Company,
(b) enforcing any action taken or to be taken by us "with the intent or effect
of impeding the operation of market forces in an open bidding contest for
Printcafe," (c) taking any steps or actions to enforce the fee provided for in a
letter agreement the Company entered into with EFI, (d) taking any steps or any
actions to enforce an option the Company granted to EFI, (e) taking any steps or
actions to enforce the no solicitation provisions of the standby credit letter
that the Company entered into with EFI, (f) engaging in any "conduct intended to
cause or having the effect of causing Printcafe to forgo the opportunity to
explore and enter into economically more favorable transactions" and (g)
entering into, or purporting to enter into, a merger agreement between EFI and
the Company before the court finally rules on the action. On February 21, 2003
the court denied Creo's request for a temporary restraining order. The matter is
still pending in the Delaware Chancery Court with respect to the other relief
sought by Creo. The Company believes that the lawsuit is completely without
merit and intends to vigorously defend itself. If this lawsuit is resolved
unfavorably to us, our business and financial condition could be adversely
affected and we may not be able to complete the merger.

On June 25,2003 a securities class action complaint was filed against the
Company, Marc Olin, President and Chief Executive Officer, and Joseph Whang,
Chief Financial Officer and Chief Operating Officer, in the United States
District Court for the Western District of Pennsylvania. The complaint alleges
that the defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act
of 1933 due to allegedly false and misleading statements in connection with the
Company's initial public offering and subsequent press releases. The Company
believes that the lawsuit is completely without merit and intends to vigorously
defend itself. To date, the Company has not been required to file a response to
the complaint and has not done so. In light of the early stage of this
proceeding, the Company cannot predict with certainty the likely outcome of the
action or the likely value of any of the related claims.

The Company is involved in disputes and litigation in the normal course of
business. In the opinion of management, the ultimate disposition of these
matters is not expected to have a material adverse effect on the Company's
business, financial condition, or results of operations. The Company has accrued
for estimated losses in the accompanying financial statements for those matters
where it believes that the likelihood that a loss has occurred is probable and
the amount of loss is reasonably estimable. Although management currently
believes the outcome of other outstanding legal proceedings, claims, and
litigation involving the Company will not have a material adverse effect on its
business, financial condition, or results of operations, litigation is
inherently uncertain and there can be no assurance that existing or future
litigation will not have a material adverse effect on the Company's business,
financial condition, or results of operations.

                                       9
<PAGE>


6. COMPREHENSIVE LOSS

The components of the Company's comprehensive loss for each period presented
are as follows:

<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED                       SIX MONTHS ENDED
                                                         JUNE 30,                                JUNE 30,
                                               ----------------------------            ----------------------------
                                                 2002                2003                2002                2003
                                               --------            --------            --------            --------
<S>                                            <C>                 <C>                 <C>                 <C>
Net loss ...................................   $(11,133)          $  (4,647)           $(21,013)           $(14,909)
Foreign currency translation adjustments ...          7                 (61)                  6                 (37)
                                               --------            --------            --------            --------
Comprehensive loss .........................   $(11,126)           $ (4,708)           $(21,007)           $(14,946)
                                               ========            ========            ========            ========
</TABLE>


7. LINE OF CREDIT AND LONG-TERM DEBT

On February 13, 2003, the Company entered into an agreement with EFI for a
standby credit facility in the amount of $11,000 plus a working capital facility
which will provide up to an additional $3,000 under certain circumstances. Under
the terms of the standby credit facility, EFI is obligated to disburse up to
$11,000 to the Company in the event that certain amounts under the Company's
existing credit facilities become due and payable as a result of any action
taken by the Company in order to facilitate the proposed business combination
with EFI or certain other criteria. All loans made under this facility bear
interest at the rate of 8% per annum payable on January 2, 2004. With certain
exceptions, the maturity date would be accelerated if a business combination
with EFI is not consummated on or before August 31, 2003 or upon the termination
of the agreement. Subject to certain conditions, the credit facility also
provides the Company with a working capital facility up to an aggregate amount
of $3,000 to be disbursed in the event that, among other things, the Company's
cash balance as of the close of business on the date notice is given by the
Company is less than $1,000. The Company is obligated to use the proceeds of any
exercise by EFI of the option agreement entered into on February 13, 2003 to pay
down outstanding amounts under the standby credit facility. All loans under the
working capital facility bear interest at a rate per annum equal to the prime
rate as published, from time to time, by Citibank, plus two percent payable on
the maturity date of the loans.

In June 2003, the Company repaid the entire amount outstanding of $2,000 on its
line of credit with National City Bank. After repayment, this facility was
closed by the Company and National City Bank.

As of June 30, 2003, the Company had a total of $1,764 of unamortized deferred
interest and debt discount fees, which are reflected within the short-term debt
related-party section of the Company's balance sheet.

8. NON-CASH DEFERRED STOCK-BASED COMPENSATION

In February 2002, the Company's board of directors adopted the 2002 Key
Executive Stock Incentive Plan. The Company reserved 766,520 shares of common
stock for grants under the plan. During fiscal year 2002, the Company granted
options to purchase 766,520 shares of common stock with an exercise price of
$4.21 per share. In March 2002, the Company's board of directors adopted the
2002 Stock Incentive Plan. The Company has reserved 765,765 shares of common
stock for grants under the plan. In April 2002, the Company granted options to
purchase 381,603 shares of common stock, with an exercise price of $15.54 per
share, to certain employees. In June 2002, the Company granted an additional
92,910 options to purchase common stock at an exercise price of $2.00 per share.
These option grants, adjusted for any terminations and forfeitures during the
period, resulted in $102 and $483 in non-cash stock compensation for the three
and six months ended June 30, 2003, respectively.



                                       10
<PAGE>

9. STOCK OPTION

On February 13, 2003, the Company entered into a stock option agreement with EFI
granting them an option to purchase up to 2,126,574 shares of Common Stock at a
purchase price equal to $2.60 per share. Subject to certain conditions, the
option shares must be repurchased by the Company, at the request of EFI, at a
price equal to the aggregate purchase price paid for such shares by EFI. In
addition, subject to certain conditions, the Company may repurchase from EFI the
option shares at a price equal to the price paid by EFI for those shares. In
June 2003, EFI exercised this option and the Company received $5,529 in exchange
for 2,126,574 shares of its common stock.

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

The information in this discussion contains forward-looking statements that
involve risks and uncertainties. These statements involve known and unknown
risks, uncertainties, and other factors that may cause our actual results,
performance, or achievements to be materially different from any future results,
performances, or achievements expressed or implied by the forward-looking
statements. In some cases, you can identify forward-looking statements by terms
such as "may," "might," "will," "should," "could," "would," "plan," "expect,"
"intend," "believe," "goal," "estimate," "anticipate," "predict," "potential,"
or the negative of these terms, and similar expressions intended to identify
forward-looking statements. These statements reflect our current views with
respect to future events and are based on assumptions and subject to risks and
uncertainties. Given these uncertainties, you should not place undue reliance on
these forward-looking statements. Also, these forward-looking statements
represent our estimates and assumptions only as of the date of this Quarterly
Report on Form 10-Q ("Form 10-Q"). You should read this Form 10-Q completely and
with the understanding that our actual future results may be materially
different from what we currently expect. We qualify all of our forward-looking
statements by these cautionary statements. Factors that might cause or
contribute to such a discrepancy include, but are not limited to, those
discussed under the heading "Risk Factors That May Affect Future Results and
Market Price of Stock" elsewhere in this Form 10-Q and the Risk Factors in our
Form 10K dated March 21, 2003 and all other filings filed with the Securities
and Exchange Commission.

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our condensed consolidated
financial statements and related notes contained in this Form 10-Q.

OVERVIEW

GENERAL
We have focused on developing software solutions designed specifically for the
printing industry supply chain since our inception in 1987. In February 2000,
Prograph Systems, our predecessor company, changed its name to printCafe, Inc.,
and we launched our Web-based products to complement our enterprise resource
planning software. From February through April 2000, we acquired five
complementary businesses for an aggregate purchase price of $137,300. We have
also committed significant resources to develop, integrate, and market our
products, expand our management team, and hire additional personnel. On June 18,
2002, we completed our initial public offering by issuing 3,750,000 shares of
our common stock at a price of $10.00 per share. We incurred a net loss of
$40,797 for the year ended December 31, 2002 and $14,909 in the first six months
of 2003 and had an accumulated deficit of $249,599 as of June 30, 2003.

The acquisitions we completed in early 2000 generated goodwill of $57,700, of
which $22,480 remained unamortized as of June 30, 2003, and other intangible
assets of $86,400, none of which remained unamortized as of June 30, 2003. In
accordance with SFAS No. 142, we have performed the required annual impairment
test of goodwill as of December 31, 2002 and determined that no impairment loss
is required to be recognized. The other intangible assets are being amortized
over a three-year period. Any future write-off of goodwill or other intangible
assets as a non-cash charge could be significant and would likely harm our
operating results. In addition, any future impairment loss recognition may
adversely affect our ability to comply with the financial covenants in our
installment note with National City Bank. As of June 30, 2003, we were not in
compliance with the debt service coverage covenants of the installment note. We
have received a waiver with respect to this default from National City Bank,
which expires January 1, 2004. As of June 30, 2003, the outstanding principal
balance of this note was $228.

On February 26, 2003, we entered into a merger agreement with EFI. Upon
completion of the merger, we would become a wholly-owned subsidiary of EFI. Our
board of directors has approved the merger with EFI and has called a special
meeting of our stockholders to vote on the merger. The merger will be adopted if
the holders of a majority of our outstanding shares of common stock vote for the
proposed merger with EFI. We will incur significant costs associated with the
merger, including legal, accounting, financial printing and financial advisory
fees. Many of these fees must be paid regardless of whether the merger is
completed. We also may incur significant costs in defending ourselves in the
lawsuit brought against us by Creo in February 2003 related to our transactions
with EFI or the securities class action complaint filed against the Company in
the June 2003 related to our initial public offering and certain subsequent
press releases. In addition, our relationships with customers may be disrupted
because of the diversion of management attention while negotiating the merger
and as a result of any perceived uncertainty regarding the outcome of the
merger. If customers delay decisions to license our products due to this
uncertainty, our results of operations would be adversely affected.


                                       11
<PAGE>

SOURCES OF REVENUE
Our revenue is derived principally from licenses and subscriptions of our
products, maintenance contracts, and professional and other services, including
implementation, consulting, and training. Our products are typically purchased
under either a perpetual license or a time-based or usage-based subscription. We
offer our enterprise resource planning and other client/server software to
printers and print buyers under license agreements. We offer our Web-based
products to printers and print buyers under subscription agreements, which
typically have a term of three years. Our print buyer customers pay a
subscription fee for our Web-based products based on the number of users of the
website. Our printer customers can purchase either an unlimited subscription or
a limited subscription for our Web-based products. The fee for the limited
subscription is based on the value of print orders processed through the
customer's website. Maintenance contracts are sold to customers, usually at the
time of sale of a software license, under annual agreements that provide for
automatic renewal, unless the customer cancels. We also provide professional
services, which are offered at an hourly rate.

We have derived most of our revenue from licenses of our software and the sale
of related maintenance to printers. In the first quarter of 2001, we began to
recognize revenue from the sale of our Web-based products to printers and began
to market our Web-based solutions for print buyers.

For the three and six months ended June 30, 2003 revenues from foreign customers
approximated 15% of our total revenues.

CRITICAL ACCOUNTING POLICIES AND ASSUMPTIONS

Our discussion and analysis of the 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 management to
make estimates and judgments that affect the reported amount of assets,
liabilities, revenues, and expenses, and related disclosure of contingent assets
and liabilities. Our actual results may differ from those estimates.

The following critical accounting policies affect the significant judgments and
estimates we use in preparing our consolidated financial statements.

ACCOUNTS RECEIVABLE
The Company records an allowance against gross accounts receivable to provide
for doubtful accounts. The allowance is estimated based on the age of the
receivable, specific circumstances surrounding the collection of an invoice, and
historical data on allowances as a percentage of aged accounts receivable
balances. Actual collection on accounts may differ from the allowance the
Company has estimated.

REVENUE RECOGNITION
We recognize revenue on our software products in accordance with Statement of
Position (SOP) 97-2, Software Revenue Recognition, which provides for
recognition of revenue when persuasive evidence of an arrangement exists,
delivery of the product has occurred, no significant obligations remain on our
part with regard to implementation, the fee is fixed and determinable, and
collectibility is probable. Our normal and customary payment terms provide for
collection of the fee over fixed time periods, generally between one and six
months. SOP 97-2 generally requires revenue earned on software arrangements
involving multiple elements to be allocated to each element based on the
relative fair value of each element. Revenue recognized from multiple-element
arrangements is allocated to undelivered elements of the arrangement, such as
maintenance and professional services, based on the relative fair value of each
element. Our determination of fair value of each element in multi-element
arrangements is based on vendor-specific objective evidence (VSOE). We limit our
assessment of VSOE for each element to either the price charged when the same
element is sold separately or the price established by management for an element
not yet sold separately. We have VSOE for maintenance services and professional
services.

If evidence of fair value of all undelivered elements exists but evidence does
not exist for one or more delivered elements, then revenue is recognized using
the residual method. Under the residual method, the fair value of the
undelivered elements is deferred and the remaining portion of the total fee is
recognized as revenue. We generally recognize license revenue under the residual
method upon delivery of our software to the customer, provided collection is
probable. Revenue allocated to maintenance is recognized ratably over the
maintenance term and revenue allocated to training and other service elements is
recognized as the services are performed. Revenue from Web-based products is
recognized ratably over the term of the subscription for unlimited subscriptions
and is recognized based on usage, subject to a fixed term, for limited
subscriptions. Many of our agreements include warranty provisions. Historically,
these provisions have not had a significant impact on our revenue recognition.
In those instances where customer acceptance may be in question, all revenue
relating to that arrangement is deferred until the warranty period has expired.



                                       12
<PAGE>


CONTINGENCIES
We are involved in disputes and litigation in the normal course of business. We
are required to assess the likelihood of any adverse judgments or outcomes to
these matters as well as potential ranges of probable losses. A determination of
the amount of reserves required, if any, for these contingencies are made after
careful analysis of each individual issue. The required reserves may change in
the future due to new developments in each matter or changes in insurance
coverage or our approach, such as a change in settlement strategy.

STOCK-BASED COMPENSATION
We have elected to follow Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees, and related interpretations for our employee
stock options because the alternative fair value accounting provided under SFAS
No. 123, Accounting for Stock Based Compensation (SFAS 123), requires use of
valuation models that were not developed for use in valuing employee stock
options.

In the first quarter of 2002, we granted options to purchase 766,520 shares of
common stock, with an exercise price of $4.21 per share, to certain employees
and directors. As a result, we recorded approximately $4,300 of deferred
compensation. This amount represents the difference between the exercise price
and the fair market value of our common stock on the date we granted these stock
options. We will record stock-based compensation expense of approximately $1,100
annually over the vesting period of these options, which is generally four
years.

In April 2002, we granted options to purchase 381,603 shares of common stock,
with an exercise price of $15.54 per share, to certain employees. We do not
expect to record any stock-based compensation expense related to these options.
We also granted options to purchase 92,910 shares of common stock to employees
in June 2002, with an exercise price of $2.00 per share. As a result, we will
record approximately $200 of stock-based compensation expense annually over the
vesting period of these options, which is three years.

For the three and six months ended June 30, 2003, we recorded $102 and $483,
respectively, of stock-based compensation expense.

WARRANTS
We account for equity instruments issued to nonemployees and pursuant to
strategic alliance agreements in accordance with the provisions of SFAS No. 123,
Emerging Issues Task Force No. 96-18, Accounting for Equity Instruments that are
Issued to Other than Employees for Acquiring or in Conjunction with Selling
Goods or Services, and Emerging Issues Task Force No. 01-9, Accounting for
Consideration Given by Vendor to a Customer or a Reseller of the Vendor's
Product. Warrant expense represents charges associated with the issuance of
warrants to purchase our common stock. To the extent that we derive revenue from
agreements entered into in connection with the issuance of warrants, we offset
this revenue by the expense associated with these warrants. Any amount of
expense that exceeds revenue is recorded in sales and marketing, general and
administrative, or interest expense, based upon the nature of the agreement. The
amount of expense is equal to the fair value of vested warrants determined using
Black-Scholes pricing models. During the quarters ending June 30, 2002 and 2003,
there was no reduction of revenue or recognition of expense related to warrants.

As of June 30, 2003, we had unvested warrants to purchase 43,899 shares of
common stock, which have exercise prices ranging from $266.40 to $592.07 and
vest upon attainment of performance criteria. Upon the vesting of warrants to
purchase 13,119 of these shares of common stock, we will record warrant expense
based upon fair value for each warrant, and upon the vesting of warrants to
purchase 30,780 of these shares of common stock, we will reduce revenue
generated from the warrant holder during the period when vesting occurs. We
cannot predict the timing or amount of this reduction in revenue and increase in
expense because the amount is calculated using the fair market value at the time
of vesting.



                                       13
<PAGE>

INCOME TAXES
Deferred income taxes are recognized for all temporary differences between tax
and financial bases of our assets and liabilities, using the tax laws and
statutory rates applicable to the periods in which the differences are expected
to affect taxable income. As of June 30, 2003, we had significant net operating
loss carryforwards available to offset future taxable income. The net operating
loss carryforwards will expire beginning in 2011 through 2022. Federal and state
tax rules impose substantial restrictions on the utilization of net operating
loss and tax credit carryforwards in certain situations where changes occur in
the stock ownership of a company. Utilization of our carryforwards is limited
because of past ownership changes. In the event that we have a future change in
ownership, utilization of these carryforwards could be further limited.

We have established a 100% valuation allowance against deferred tax assets due
to the uncertainty that future tax benefits can be realized from our net
operating loss carryforwards and other deferred tax assets.

RESTRUCTURING
In August 2002, the Company announced a restructuring effecting an
organizational realignment of the product management and customer service and
support operations. This resulted in a restructuring charge of $525 in the
quarter ended September 30, 2002. This charge consisted primarily of severance
and benefits including involuntary termination and COBRA benefits, outplacement
costs, and payroll taxes for the approximately 40 employees impacted by this
restructuring. During the six months ended June 30, 2003, the Company paid all
remaining expenditures relating to this restructuring.

In May 2001, the Company announced a restructuring that primarily related to the
consolidation of certain client support operations into existing facilities,
resulting in a restructuring charge of $2,098. The plan included terminations of
45 employees and the reduction of leased office space. All remaining cash
expenditures relating to these lease obligations were made during the first six
months of 2003.

We believe that these actions will not adversely impact our operations in the
future because we have undertaken initiatives to manage and monitor our client
and employee relations during the execution of these plans and subsequent to
their completion.

RESULTS OF OPERATIONS

The following table sets forth statements of operations data for the periods
indicated. The data has been derived from the unaudited consolidated financial
statements contained in this Form 10-Q which, in the opinion of our management,
include all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the financial position and results of operations for
the interim periods. The operating results for any period should not be
considered indicative of results for any future period. This information should
be read in conjunction with the unaudited consolidated financial statements
contained elsewhere in this Form 10-Q, the Consolidated Financial Statements and
Notes thereto included in our financial statements for the fiscal year ended
December 31, 2002 filed on March 21, 2003 with the Securities and Exchange
Commission as part of our Form 10-K and all other filings.

<TABLE>
<CAPTION>
                                                                            THREE MONTHS ENDED                SIX MONTHS ENDED
                                                                                 JUNE 30,                         JUNE 30,
                                                                        -------------------------         -------------------------
                                                                          2002             2003             2002             2003
                                                                        --------         --------         --------         --------
                                                                                   (in thousands, except per share data)
<S>                                                                     <C>              <C>              <C>              <C>
Revenue:
   License and subscription ....................................        $  5,671         $  2,391         $ 11,284         $  4,955
   Maintenance .................................................           5,386            5,576           10,763           11,319
   Professional services and other .............................           1,149            1,098            1,874            2,194
                                                                        --------         --------         --------         --------
     Total revenue .............................................          12,206            9,065           23,921           18,468
Cost of revenue:
   License and subscription ....................................             928              496            1,926            1,084
   Maintenance .................................................           1,296            1,215            2,605            2,469
   Professional services and other .............................             499              421              873              855
                                                                        --------         --------         --------         --------
     Total cost of revenue .....................................           2,723            2,132            5,404            4,408
                                                                        --------         --------         --------         --------

Gross profit ...................................................           9,483            6,933           18,517           14,060
Operating expenses:
Sales and marketing(1) .........................................           4,574            4,421            8,521            8,630
Research and development .......................................           3,092            2,979            6,126            6,003
General and administrative(1) ..................................           1,451            2,653            3,234            5,630
Depreciation ...................................................             707              286            1,470              879
Amortization ...................................................           7,392               43           14,780            5,133
Stock-based compensation and warrants ..........................             334              102              537              483
                                                                        --------         --------         --------         --------
     Total operating expenses ..................................          17,550           10,484           34,668           26,758
                                                                        --------         --------         --------         --------
Loss from operations ...........................................          (8,067)          (3,551)         (16,151)         (12,698)
Amortization of debt origination fees and other expense ........          (1,520)            (833)          (1,759)          (1,684)
Interest, net ..................................................          (1,546)            (263)          (3,103)            (527)
                                                                        --------         --------         --------         --------
Net loss .......................................................         (11,133)          (4,647)         (21,013)         (14,909)
                                                                        --------         --------         --------         --------
Accretion of redeemable preferred stock ........................          (2,860)              --           (6,200)
                                                                        --------         --------         --------         --------
Net loss attributable to common stock ..........................        $(13,993)        $ (4,647)        $(27,213)        $(14,909)
                                                                        ========         ========         ========         ========
Net loss per share, basic and diluted ..........................        $  (9.00)        $  (0.42)        $ (31.68)        $  (1.37)
Weighted average shares used to compute basic and
diluted loss per share .........................................           1,555           11,153              859           10,896

(1) Amounts exclude stock-based compensation as follows:

General and administrative .....................................        $    334         $    102         $    537         $    483
</TABLE>



                                       14
<PAGE>


COMPARISON OF THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2003

REVENUE

LICENSE AND SUBSCRIPTION
License and subscription revenue for the three months ended June 30, 2003 was
$2,391, a 58% decrease from license and subscription revenue of $5,671 for the
quarter ended June 30, 2002. License and subscription revenue for the six months
ended June 30, 2003 was $4,955, a 56% decrease from license and subscription
revenue of $11,284 for the six months ended June 30, 2002. The decrease in
license and subscription revenue was primarily due to a reduction in the number
of software licenses and subscriptions sold during 2003 as compared to 2002. The
decrease primarily resulted from uncertainty surrounding the pending acquisition
that was announced early in the first quarter as well as overall economic
conditions.

MAINTENANCE
Maintenance revenue for the three months ended June 30, 2003 was $5,576, a 4%
increase from maintenance revenue of $5,386 for the quarter ended June 30, 2002.
Maintenance revenue for the six months ended June 30, 2003 was $11,319, a 5%
increase from maintenance revenue of $10,763 for the six months ended June 30,
2002. The increase in maintenance revenue was primarily due to the increased
number of license sales of our enterprise resource planning products in 2002
that, in turn, resulted in an increase in the number of our customers paying
maintenance fees.

PROFESSIONAL SERVICES AND OTHER
Professional services and other revenue for the three months ended June 30, 2003
was $1,098 a 4% decrease from professional services and other revenue of $1,149
for the quarter ended June 30, 2002. Professional services and other revenue for
the six months ended June 30, 2003 was $2,194, a 17% increase from professional
services and other revenue of $1,874 for the six months ended June 30, 2002.
This increase in professional services and other revenue was primarily due to
training and implementation services provided to customers who purchased
licenses for our enterprise resource planning products during the latter part of
2002 and first half of 2003. The increase from the first to the second quarter
in each of 2003 and 2002 is attributable to revenue generated by our annual user
conference which took place in the second quarter of each year.

TOTAL COST OF REVENUE
Cost of revenue includes direct labor and other direct costs relating to the
delivery of our products and services. The cost of license and subscription
revenue is primarily related to third party licenses that we resell with
licenses and subscriptions of our products, as well as any hosting and
communication costs. Cost of revenue for the quarter ended June 30, 2003 was
$2,132, a 22% decrease from cost of revenue of $2,723 for the quarter ended June
30, 2002. Cost of revenue for the six months ended June 30, 2003 was $4,408, an
18% decrease from cost of revenue of $5,404 for the six months ended June 30,
2002. This decrease is due primarily to the decrease in license and subscription
revenues. Cost of revenue as a percentage of revenue increased from 22% and 23%
for the three and six months ended June 30, 2002, respectively, to 23% and 24%
for the three and six months ended June 30, 2003. This increase is mainly
attributable to the shift in the product mix as a higher percentage of revenue
was provided by professional services in 2003 as compared to 2002. These
services have a higher cost of goods sold as compared to licenses and
subscriptions.

OPERATING EXPENSES
We classify our operating expenses into six general categories, based on the
nature of the expenditure: sales and marketing, research and development,
general and administrative, depreciation, amortization, and stock-based
compensation and warrants. We allocate our total costs for overhead and
facilities to each of the functional areas of our business that use these
services based upon estimated usage. These allocated charges include general
overhead items such as administrative salaries, professional fees, building
rent, equipment leasing costs, and telecommunication charges.

SALES AND MARKETING
Sales and marketing expenses consist primarily of costs related to sales and
marketing, employee compensation, travel, public relations, trade shows, and
advertising. Sales and marketing expenses for the quarter ended June 30, 2003
were $4,421, a 3% decrease from sales and marketing expenses of $4,574 for the
quarter ended June 30, 2002. Sales and marketing expenses for the six months
ended June 30, 2003 were $8,630, a 1% increase from sales and marketing expenses
of $8,521 for the six months ended June 30, 2002. These decrease in the second
quarter was primarily due to reduced marketing expenditures mainly related to
the user conference. The increase for the six months of 2003 compared to 2002
was mainly a result salary increases for employees. Sales and marketing expenses
as a percentage of revenue increased from 38% and 36% for the three months and
six months ended June 30, 2002, respectively, to 49% and 47% for the three and
six months ended June 30, 2003, respectively, primarily due to a decrease in
revenues.



                                       15
<PAGE>

RESEARCH AND DEVELOPMENT
Research and development expenses consist primarily of expenses related to the
development and upgrade of our existing proprietary software and expenses
related to research and development for new product offerings. These expenses
include employee compensation for research and development and third-party
contract development costs. Research and development expenses for the quarter
ended June 30, 2003 were $2,979, a 4% decrease from research and development
expenses of $3,092 for the quarter ended June 30, 2002. Research and development
expenses for the six months ended June 30, 2003 were $6,003, a 2% decrease from
research and development expenses of $6,126 for the six months ended June 30,
2002. These decreases were mainly the result of small reductions in personnel
offset by increased salary costs. Research and development expenses as a
percentage of revenue increased from 25% and 26% for the three and six months
ended June 30, 2002, respectively, to 33% for each of the three and six months
ended June 30, 2003, resulting primarily from a decrease in revenue.

GENERAL AND ADMINISTRATIVE
General and administrative expenses consist primarily of compensation for
executive and administrative personnel, travel expenses, professional advisory
fees, and general overhead expenses that are not allocated to cost of revenue,
product development, or sales and marketing. General and administrative expenses
for the quarter ended June 30, 2003 were $2,653, an increase of 83% from general
and administrative expenses of $1,451 for the quarter ended June 30, 2002.
General and administrative expenses for the six months ended June 30, 2003 were
$5,630, an increase of 74% from general and administrative expenses of $3,234
for the six months ended June 30, 2002. The increase in absolute dollars was
primarily due to merger related fees of approximately $1,800 in the first half
of 2003 that include investment banking, legal and accounting fees, expenses
associated with being a public company that were not incurred during the first
half of 2002 and additional bad debt expense recognized during the second
quarter mainly resulting from uncertainty surrounding the merger with EFI.
General and administrative expenses as a percentage of revenue increased from
12% and 13% for the three and six months ended June 30, 2002, respectively, to
29% and 30% for the three and six months ended June 30, 2003. The increase as a
percentage of revenue resulted from these additional costs combined with the
decrease in revenue.

DEPRECIATION
Depreciation expense consists primarily of the depreciation of equipment,
furniture, fixtures, and leasehold improvements. Depreciation expense for the
quarter ended June 30, 2003 was $286, a decrease of 60% from depreciation
expense of $707 for the quarter ended June 30, 2002. Depreciation expense for
the six months ended June 30, 2003 was $879, a decrease of 40% from depreciation
expense of $1,470 for the six months ended June 30, 2002. These decreases are
primarily attributable to certain computer equipment becoming fully depreciated
and new equipment being purchased at a slower rate compared to prior periods.

AMORTIZATION
Amortization expense consists of the amortization of intangible assets such as
purchased technology, customer lists, and patents. Amortization expense for the
quarter ended June 30, 2003 was $43, a decrease of 99% from amortization expense
of $7,392 for the quarter ended June 30, 2002. Amortization expense for the six
months ended June 30, 2003 was $5,133, a decrease of 65% from amortization
expense of $14,780 for the six months ended June 30, 2002. This decrease is
primarily attributable to intangible assets relating to the acquisitions made
during 2000 becoming fully amortized during the first six months of 2003.

STOCK-BASED COMPENSATION AND WARRANTS
Stock-based compensation and warrant expense relates to grants of employee stock
options and issuances of stock with exercise prices lower than the fair value of
the underlying shares at the time of grant or issuance, issuance of stock to
employees as compensation and the issuance of options and warrants to third
parties for services rendered. Stock-based compensation and warrants expense for
the quarter ended June 30, 2003 was $102, a decrease from $334 for the quarter
ended June 30, 2002. Stock-based compensation and warrants expense for the six
months ended June 30, 2003 was $483, a decrease from stock-based compensation
of $537 for the six months ended June 30, 2002. These changes are primarily
attributable to the vesting provisions of the options granted in the first half
of 2002.

OTHER INCOME (EXPENSE)
Other income (expense) consists primarily of interest expense related to our
borrowings and amortization of debt origination fees. Interest expense for the
quarter ended June 30, 2003 was $263, a decrease of $1,283 from the quarter
ended June 30, 2002. Interest expense for the six months ended June 30, 2003 was
$527, a decrease of $2,576 from the six months ended June 30, 2002. This
decrease is primarily due to the repayment of $17,800 of indebtedness upon
completion of our initial public offering and repayment of $1,050 of
related-party debt during the first six months of 2003. Amortization of debt
origination fees for the three and six months ended June 30, 2003 of $873 and
$1,743, respectively, was recorded as a result of the restructuring of debt
during the second quarter of 2002.


                                       16
<PAGE>

INCOME TAXES
During the three and six months ended June 30, 2003, we incurred net losses for
federal and state tax purposes and have not recognized any tax provision or
benefits. At June 30, 2003, we had significant accumulated net operating loss
carryforwards for federal and state tax purposes. The federal tax carryforwards
expire in various years beginning in 2011 through 2022. Utilization of certain
net operating loss carryforwards is subject to certain limitations. Events which
cause limitations on the amount of net operating losses that we may use in any
one year include, but are not limited to, a cumulative ownership change of more
than 50% over a three-year period.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2003, we had $6,982 in cash and cash equivalents, a decrease of
$1,793 from December 31, 2002. This decrease was primarily attributable to cash
used by operations during the period including expenses related to the proposed
merger of the Company with EFI, debt repayments of approximately $1,100,
repayment of the line of credit of $2,000 offset by the proceeds received from
the exercise of a stock option by EFI of $5,529.

Net cash used by operating activities totaled $4,108 for the six months ended
June 30, 2003, compared to $8,344 million of net cash used by operating
activities for the quarter ended June 30, 2002. Net cash used in operating
activities for the six months ended June 30, 2003 is primarily attributable to
the net loss for the period (less non-cash expenses) in addition to an increase
in other assets related to certain annual prepaid contracts offset by a
reduction in accounts receivable resulting from the decrease in revenue. The
Company has experienced some slowdown in collections due to the general economic
condition of the printing industry; however, the Company is not aware of any
material collectibility or billing issues with its customers.

Net cash used by investing activities totaled $161 for the six months ended June
30, 2003, compared to $640 of net cash used by investing activities for the six
months ended June 30, 2002. Cash used by investing activities during the first
six months of 2003 and 2002 was primarily the result of the purchase of
miscellaneous computer equipment.

Net cash provided by financing activities was $2,476 for the six months ended
June 30, 2003, compared to $11,965 for the six months ended June 30, 2002. Cash
provided by financing activities during the first six months of 2003 was
primarily attributable to the exercise of the EFI stock option offset by debt
repayments of $1,100 and repayment of the line of credit of $2,000. Cash from
financing activities in 2002 was primarily attributable to our initial public
offering. The line of credit was subsequently closed after the repayment.

We have entered into a $900 commercial installment note with National City Bank,
which is payable monthly and matures on July 1, 2004. Borrowings under the
installment note bear interest, which is payable monthly, at the annual rate of
7.62%. As of June 30, 2003, the outstanding principal balance of this note was
$228. The installment note contains restrictive covenants, including a
limitation on our ability to incur additional indebtedness or grant security
interests in our assets, as well as requirements that we satisfy various
financial conditions, including minimum tangible net worth and debt service
coverage. As of June 30, 2003, we were not in compliance with the debt service
coverage covenant of the installment note. We have received a waiver with
respect to this default from National City Bank, which expires January 1, 2004.
If we violate any of these financial covenants and are unable to obtain a waiver
from National City Bank, then National City Bank could declare all amounts
outstanding, together with accrued interest, to be immediately due and payable.
Obligations under the installment note and line of credit are secured by all of
our tangible and intangible personal property.


On February 13, 2003, the Company entered into an agreement with EFI for a
standby credit facility in the amount of $11,000 plus a working capital
facility, which will provide up to an additional $3,000 under certain
circumstances. Under the terms of the standby credit facility, EFI is obligated
to disburse up to $11,000 to the Company in the event that certain amounts under
the Company's existing credit facilities become due and payable as a result of
any action taken by the Company in order to facilitate the proposed business
combination with EFI or certain other criteria. All loans made under this
facility bear interest at the rate of 8% per annum payable on January 2, 2004.
With certain exceptions, the maturity date would be accelerated if a business
combination with EFI is not consummated on or before August 31, 2003 or upon the
termination of the agreement. Subject to certain conditions, the credit facility
also provides the Company with a working capital facility up to an aggregate
amount of $3,000 to be disbursed in the event that, among other things, the
Company's cash balance as of the close of business on the date notice is given
by the Company is less than $1,000. The Company is obligated to use the proceeds
of any exercise by EFI of the option agreement entered into on February 13, 2003
to pay down outstanding amounts under the standby credit facility. All loans
under the working capital facility bear interest at a rate per annum equal to
the prime rate as published, from time to time, by Citibank, plus two percent
payable on the maturity date of the loans.


                                       17
<PAGE>

We also have a license agreement with Creo Inc. which permits us to use some
software owned by Creo in Web-based solutions we offer to printers. If the
proposed merger with EFI is completed, Creo could terminate this license
agreement. Creo must provide us with notice of its intention to terminate the
license within 30 days after the consummation of the merger. The license would
then terminate after the expiration of a 180-day transition period. During this
180-day transition period, the license fee we pay to Creo would increase from
10% to 25% of the revenue we generate from the sale of products using Creo's
technology. During the three and six months ended June 30, 2003, we paid license
fees to Creo of less than $100. We believe the 180-day transition period will be
sufficient for us or EFI to develop software which provides substantially
similar functionality to the technology we license from Creo. Accordingly, we do
not believe that Creo's termination of the license agreement or the increased
license fee percentage would have a material impact on our financial position,
results of operations or liquidity in future periods.

We believe that, based on current levels of operations and anticipated growth,
our cash from operations, together with cash currently available, will suffice
to fund our operations through January 1, 2004. Poor financial results,
unanticipated expenses or unanticipated opportunities that require financial
commitments could give rise to additional financing requirements sooner than we
expect. If we do not raise additional funds when we need them, we might have to
delay, scale back or eliminate expenditures for expansion of our product plans
and other strategic initiatives. If we do not complete the merger with EFI or
complete a similar transaction with a third party, we do not expect to have
sufficient cash to repay the $14,200 of our outstanding debt which becomes due
and payable in January 2004 without securing additional debt or equity
financing; we do not expect that additional debt or equity financing would be
available to us. If we are unable to pay these amounts when due, the lenders
could proceed against the collateral.

RISK FACTORS THAT MAY AFFECT FUTURE RESULTS AND MARKET PRICE OF STOCK

In addition to other information in this Form 10-Q, the following risk factors
should be carefully considered in evaluating our business because such factors
currently may have a significant impact on our business, operating results and
financial condition. As a result of the risk factors set forth below and
elsewhere in this Form 10-Q and in any other documents we file with the SEC,
actual results could differ materially from those projected in any
forward-looking statements.

IF WE FAIL TO COMPLETE THE MERGER WITH EFI, WE MAY BE UNABLE TO REPAY $14.2
MILLION OF OUR OUTSTANDING DEBT WHICH BECOMES DUE IN JANUARY 2004 AND MAY NEED
ADDITIONAL DEBT OR EQUITY FINANCING WHICH WE DO NOT EXPECT TO BE AVAILABLE. IF
WE ARE UNABLE TO PAY THESE AMOUNTS WHEN DUE, THE LENDERS COULD PROCEED AGAINST
THE COLLATERAL FOR THEIR LOANS.

We entered into a merger agreement with EFI in February 2003. Under the terms of
the merger agreement, we will become a wholly-owned subsidiary of EFI and EFI
will assume all of our outstanding liabilities, including our debt obligations.
The merger is subject to standard closing conditions, including the approval of
the holders of a majority of our outstanding shares of common stock. If we do
not complete the merger with EFI or complete a similar transaction with a third
party, we do not expect to have sufficient cash to repay $14.2 million of our
outstanding debt which becomes due and payable in January 2004 without securing
additional debt or equity financing; we do not expect that debt or equity
financing would be available. In addition, we cannot assure you that another
company will be interested in acquiring us. We will incur significant costs
associated with the merger, including legal, accounting, financial printing and
financial advisory fees, which must be paid whether or not the merger is
completed.

IF WE FAIL TO COMPLETE THE MERGER WITH EFI, OUR STOCK PRICE MAY FALL.

Under the terms of the EFI merger agreement, our stockholders will receive $2.60
per share in cash or EFI common stock at the closing of the merger. If EFI does
not complete the merger for any reason, the price of a share of our common stock
on the NASDAQ National Market may decline substantially.

OUR PROPOSED MERGER WITH EFI MAY ADVERSELY AFFECT OUR SALES DUE TO CONCERNS OF
OUR CUSTOMERS ABOUT OUR PRODUCT OFFERINGS AFTER COMPLETION OF THE MERGER.

We receive a significant amount of our new sales from commercial printers.
Although EFI is a leading provider of imaging solutions for network printing,
EFI does not have a substantial base of customers in the commercial printing
industry. The announcement of our merger with EFI may result in commercial
printers delaying their decision to license our enterprise resource planning
software, which would adversely impact our sales revenue.


                                       18
<PAGE>

THE SLOWDOWN IN THE ECONOMY HAS AFFECTED THE MARKET FOR INFORMATION TECHNOLOGY
SOLUTIONS, INCLUDING DEMAND FOR OUR SOFTWARE PRODUCTS, AND OUR FUTURE FINANCIAL
RESULTS MAY DEPEND, IN PART, UPON WHETHER THIS SLOWDOWN CONTINUES.

A downturn in the demand for information technology products among our current
and potential customers may result in decreased revenues or a lower growth rate
for us. Potential customers may delay or forego the purchase of our products or
may demand lower prices in order to purchase our products. A reduction in the
demand for our software products or in the average selling price of our products
would reduce our operating margins and adversely affect our operating results.

IF OUR SOFTWARE PRODUCTS DO NOT ACHIEVE BROAD MARKET ACCEPTANCE, WE MAY NOT
BECOME PROFITABLE AND OUR STOCK PRICE COULD DECLINE.

Most print buyers, printers, and print industry raw material suppliers currently
coordinate the design, specification, purchasing, and manufacture of print
orders either through a combination of telephone, facsimile, e-mail, and
paperwork or through proprietary software solutions. Web-based products are
relatively new and rapidly evolving, and these products change the way in which
print buyers, printers, and print industry raw material suppliers interact with
one another. Widespread commercial acceptance of our Web-based products is
important to our future success. If the market for Web-based print management
products fails to grow or grows more slowly than we anticipate, then our
operating results could be adversely affected. To date, most of our sales have
been to printers, and our future growth is dependent upon our ability to
increase sales to print buyers. The growth of our business also depends on our
ability to enhance and develop our software products and to identify and develop
new products that serve the needs of our customers. If our existing and
potential customers do not adopt our software products, we may be unable to
continue to grow our business and increase our revenues. As a result, we may not
become profitable, or maintain profitability, and our stock price could decline.

THE SALES CYCLE FOR MANY OF OUR PRODUCTS IS LONG, WHICH COULD CAUSE OUR REVENUE
AND OPERATING RESULTS TO VARY SIGNIFICANTLY AND INCREASE THE RISK OF AN
OPERATING LOSS FOR ANY GIVEN FISCAL QUARTER.

A customer's decision to purchase and implement many of our products often
involves a significant commitment of its resources and a lengthy product
evaluation and qualification process. Approval at a number of management levels
within a customer's organization is typical for many of our products. Companies
often consider a wide range of issues before committing to purchase our
software, including anticipated benefits and cost savings, ease of installation,
ability to work with existing computer systems, functionality, and reliability.
Many of our potential customers may be addressing these issues for the first
time, and the use of our products may represent a significant change in their
current print management practices. As a result, we often devote significant
time and resources to educate potential customers about the use and benefits of
our products. The sales process for most of our products frequently takes
several months to complete, which may have an adverse impact on the timing of
our revenue, and our operating results could be adversely affected.

AN ADVERSE RULING IN CREO'S LAWSUIT AGAINST US COULD RESULT IN OUR INABILITY TO
CONSUMMATE THE MERGER WITH EFI, WHICH MAY HAVE AN ADVERSE EFFECT ON OUR STOCK
PRICE

In February 2003 Creo Inc. sued us along with Marc Olin, EFI and our three
independent directors which formed a special committee of the board of directors
to consider strategic alternatives for Printcafe. The suit seeks to declare a
Stockholders Rights Plan adopted by the special committee as unlawful,
permanently bar the exercise of any rights under the Stockholders Rights Plan,
and have an Option Agreement, Standby Credit Agreement and No-Talk Agreement
with EFI declared unlawful and void. The matter is currently pending before
Delaware Chancery Court. We intend to vigorously defend ourselves in this
matter. If this lawsuit is resolved unfavorably to us, our business and
financial condition could be adversely affected and we may not be able to
complete our planned merger with EFI.

CREO'S LAWSUIT AND THE PLANNED MERGER WITH EFI COULD DIVERT THE ATTENTION OF OUR
KEY MANAGEMENT AND ADVERSELY AFFECT OUR OPERATING RESULTS

Our success depends on the services of our current key management personnel,
including Marc D. Olin, our Chairman, President and Chief Executive Officer, and
Joseph J. Whang, our Chief Financial Officer and Chief Operating Officer. The
lawsuit filed by Creo and the planned merger with EFI could divert the attention
of our management and resources from our business, which could adversely affect
our operating results. In addition, the litigation with Creo could be expensive
which would adversely impact our operating results.


                                       19
<PAGE>


COMPETITION IN THE PRINTING INDUSTRY SUPPLY CHAIN FOR SOFTWARE PRODUCTS IS
INTENSE, AND WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY.

Our current and potential competitors include companies that offer software
products and services to the printing industry supply chain, and companies that
offer software products for enterprise resource planning, supply chain
management, and procurement that are not customized for the printing industry.
We expect competition to increase in the future. Some of our current or
potential competitors have longer operating histories, larger customer bases,
greater brand recognition, and significantly greater financial, marketing, and
other resources. As a result, these competitors may be able to devote greater
resources to the development, promotion, sale, and support of their products. In
addition, these companies may adopt aggressive pricing policies and leverage
their customer bases to gain market share. Moreover, our current and potential
competitors may develop software products that are superior to or achieve
greater market acceptance than ours. If we are unable to offer competitive
software products and services, then our revenues will decline.

UNPLANNED SYSTEM INTERRUPTIONS, CAPACITY CONSTRAINTS, OR SECURITY BREACHES COULD
DISRUPT OUR BUSINESS AND DAMAGE OUR REPUTATION.

We must offer customers of our Web-based products reliable, secure, and
continuous service to attract and retain customers and persuade them to increase
their reliance on our software products. As the volume of data traffic on our
hosted Web sites increases, we must continually upgrade and enhance our
technical infrastructure to accommodate the increased demands placed on our
systems. Our operations also depend in part on our ability to protect our
systems against physical damage from fire, earthquakes, power loss,
telecommunications failures, computer viruses, unauthorized user access,
physical break-ins, and similar events. Any interruption or increase in response
time of our software products could damage our reputation, reduce customer
satisfaction, and decrease usage of our services and the purchase of our
products. The secure transmission of confidential information over public
networks is a fundamental requirement for online communications and
transactions. Third parties may attempt to breach our security or that of our
customers. Any breach in our online security could make us liable to our
customers, damage our reputation, and cause a decline in our revenues. We may
need to spend significant resources to license technologies to protect against
security breaches or to address problems caused by a security breach.

IF OUR TECHNOLOGIES CONTAIN UNDETECTED ERRORS OR DEFECTS, WHICH INTERRUPT OUR
OPERATIONS OR THOSE OF OUR CUSTOMERS, OUR BUSINESS COULD BE HARMED.

Our technologies are highly technical and may contain undetected software code
or other errors or suffer unexpected failures. Because of their nature, our
client/server-based enterprise resource planning and other products can only be
fully tested when deployed in our customers' networks. These errors or failures
may disrupt our operations or those of our customers, damage our reputation, and
result in loss of, or delay in, market acceptance of our software products. We
may discover software errors in new releases of our software products after
their introduction. We may experience delays in release, legal action by our
customers, lost revenues, and customer frustration during the period required to
correct these errors. Any of these problems could adversely affect our operating
results.

IF WE FAIL TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, OUR COMPETITIVE POSITION
COULD BE HARMED.

We regard our patents, copyrights, service marks, trademarks, trade secrets, and
similar intellectual property as critical to our success. We rely on patent,
trademark, and copyright law, trade secret protection, and confidentiality
and/or license agreements with our employees, customers, and strategic partners
to protect our proprietary rights. These precautions may not prevent
misappropriation or infringement of our intellectual property. In addition, the
status of United States patent protection in the software and Web industries is
not well defined and will evolve as the United States Patent and Trademark
Office grants additional patents. We do not know if any of our future patent
applications will result in a patent being issued within the scope of the claims
we seek, if at all, or whether any patents we may receive will be challenged or
invalidated. In addition, the laws in foreign countries may not protect our
proprietary rights to the same extent as laws in the United States.

WE MAY FACE INTELLECTUAL PROPERTY CLAIMS THAT COULD BE COSTLY TO DEFEND AND
COULD PREVENT US FROM SELLING OUR SOFTWARE PRODUCTS


                                       20
<PAGE>

Third parties may infringe or misappropriate our intellectual property or assert
infringement claims against us. In addition, because the contents of patent
applications in the United States are not publicly disclosed until the patent is
issued, applications may have been filed by others that relate to our software
products. From time to time we receive communications from third parties
asserting that our products infringe, or may infringe, the intellectual property
rights of third parties. Intellectual property litigation is expensive and time
consuming and could divert management's attention from our business operations.
This litigation could also require us to develop non-infringing technology or
enter into royalty or license agreements with third parties. These royalty or
license agreements, if required, may not then be available on acceptable terms,
if at all. If we cannot develop or license non-infringing technology, then our
operating results could be adversely affected.

CREO COULD SUBSTANTIALLY INFLUENCE CORPORATE ACTIONS THAT CONFLICT WITH THE
INTERESTS OF OUR PUBLIC STOCKHOLDERS. WE ALSO HAVE COMMERCIAL AGREEMENTS WITH
CREO THAT ARE IMPORTANT TO OUR BUSINESS.

Creo Inc. is our largest stockholder, has two representatives on our board of
directors, and is a party to several commercial agreements with us. Creo
beneficially owns 4,736,135 shares of our common stock which represents 44.5% of
the voting power of our outstanding common stock. In addition, the two members
of our board of directors appointed by Creo, Amos Michelson and Judi Hess, are
executive officers of Creo. Creo could use its stock ownership or representation
on our board of directors to substantially influence corporate actions that
conflict with the interests of our public stockholders.

In addition to the loan agreement we have with Iris Graphics, an affiliate of
Creo, we have a strategic alliance agreement and a software license agreement
with Creo. Under the strategic alliance agreement, we agreed with Creo to
undertake joint sales and marketing efforts, not to compete with each other's
business, and not to solicit the employment of each other's employees. In
addition, we granted Creo an exclusive and perpetual right to provide, and a
right of first refusal to develop, any content management and workflow products
for us. Because we have granted these rights to Creo, we may not be able to
obtain terms as favorable as those that might otherwise be available if we were
able to negotiate freely with third parties. Under the software license
agreement, Creo licenses us software which is used in our printChannel Classic
product and which will be used in our printChannel I/O product. Creo may
terminate the software license agreement in certain circumstances, including the
termination of the strategic alliance agreement and the acquisition by a third
party of more than fifty percent of our outstanding common stock. The strategic
alliance agreement does not specify a termination date. Creo may also terminate
the strategic alliance agreement or the software license agreement if we breach
any provision of the agreements and do not remedy that breach within a specified
period of time. If the agreements were to terminate, we could lose access to
Creo's sales force and the other benefits derived from our joint marketing
efforts, and Creo would be permitted to compete with us. Additionally, we would
be required to develop software to replace the functionality licensed to us by
Creo in our printChannel Classic product. The termination of the strategic
alliance agreement and software license agreements and the resulting loss of
these benefits could, among other things, reduce our revenues and significantly
harm our business.

WE MAY FAIL TO MEET QUARTERLY FINANCIAL EXPECTATIONS, WHICH MAY CAUSE THE MARKET
PRICE OF OUR COMMON STOCK TO DECLINE.

Our operating results are difficult to predict and may vary significantly from
quarter to quarter in the future. Our historical financial results are not
indicative of our future results. Our quarterly operating results may fluctuate
as a result of many factors, including, but not limited to:

     -    the size and timing of sales and deployment of our products;

     -    market acceptance of and demand for our products;

     -    variation in capital spending budgets of our customers;

     -    the mix of distribution channels through which our products are sold;

     -    the impairment of goodwill related to our past acquisitions;

     -    the costs of integrating acquired companies;

     -    technical difficulties or system outages;


                                       21
<PAGE>

     -    the amount and timing of operating costs and capital expenditures
          relating to expansion of our business;

     -    the announcement or introduction of new products or services by our
          competitors;

     -    changes in our pricing structure or that of our competitors; and

     -    the relatively fixed nature of our operating expenses.

As a result of the above factors, our quarterly operating results may fall below
market analysts' expectations in future quarters, which could lead to a decline
in the market price of our common stock.

IF OUR SOFTWARE PRODUCTS DO NOT INTEGRATE WITH OUR CUSTOMERS' EXISTING SYSTEMS,
ORDERS FOR OUR SOFTWARE PRODUCTS WILL BE DELAYED OR CANCELED, WHICH WOULD HARM
OUR BUSINESS.

Many of our customers require that our software products be designed to
integrate with their existing systems. We may be required to modify our software
product designs to achieve a sale, which may result in a longer sales cycle,
reduced operating margins, and increased research and development expense. In
some cases, we may be unable to adapt or enhance our software products to meet
these challenges in a timely and cost-effective manner, or at all. If our
software products do not integrate with our customers' existing systems,
implementations could be delayed or orders for our software products could be
canceled, which would harm our business, financial condition, and results of
operations.

IF WE FAIL TO DEVELOP AND SELL NEW PRODUCTS THAT MEET THE EVOLVING NEEDS OF OUR
CUSTOMERS, OR IF OUR NEW PRODUCTS FAIL TO ACHIEVE MARKET ACCEPTANCE, OUR
BUSINESS AND RESULTS OF OPERATIONS WOULD BE HARMED.

Our success depends on our ability to anticipate our customers' evolving needs
and to develop and market products that address those needs. The timely
development of these products, as well as any additional new or enhanced
products, is a complex and uncertain process. We may experience design,
marketing, and other difficulties that could delay or prevent our development,
introduction, or marketing of these and other new products and enhancements. We
may not have sufficient resources to anticipate technological and market trends,
or to manage long development cycles. The introduction of new or enhanced
products also requires that we manage the transition from existing products to
these new or enhanced products in order to minimize disruption in customer
ordering patterns. We are currently in the process of developing software for
print industry raw material suppliers. If we are unable to attract raw material
suppliers as customers, then our Web-based products may not be as attractive to
printers and print buyers and our business may be harmed. If we are not able to
develop new products or enhancements to existing products on a timely and
cost-effective basis, or if our new products or enhancements fail to achieve
market acceptance, our ability to continue to sell our products and grow our
business would be harmed.

IF WE ARE UNABLE TO OBTAIN LICENSES OF THIRD-PARTY TECHNOLOGY ON ACCEPTABLE
TERMS, OUR BUSINESS WOULD BE HARMED

We integrate third-party licensed technology with our products. For example, our
Web-based products are deployed on an Oracle database. From time to time we may
be required to license additional technology from third parties to develop new
products or product enhancements. Third-party licenses may not be available or
continue to be available to us on acceptable terms. Our inability to maintain or
acquire any third-party licenses required in our current products, including
licenses from Oracle, or required to develop new products and product
enhancements could require us to obtain substitute technology of lower quality
or performance standards or at additional cost, which could seriously harm our
business, financial condition, and results of operations.

INCREASING GOVERNMENTAL REGULATION OF THE WEB AND LEGAL UNCERTAINTIES COULD
DECREASE DEMAND FOR OUR WEB-BASED PRODUCTS OR INCREASE OUR COST OF DOING
BUSINESS.

In addition to regulations applicable to businesses generally, we are subject to
laws and regulations directly applicable to the Web. Although there are
currently few laws and regulations governing the Web, federal, state, local, and
foreign governments are considering a number of legislative and regulatory
proposals. As a result, a number of laws or regulations may be adopted
regarding:

     -    the pricing and taxation of goods and services offered over the Web;


     -    intellectual property ownership; and

     -    the characteristics and quality of goods and services offered over the
          Web.

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<PAGE>


Existing laws regarding property ownership, copyright, trademark, and trade
secrets may be applied to the Web. The adoption of new laws or the adaptation of
existing laws to the Web may decrease the growth in the use of the Web, which
could in turn decrease the demand for our Web-based products, increase our cost
of doing business, or otherwise adversely impact our ability to become
profitable.

The growth of Web-based commerce has been attributed by some to the lack of
sales and value-added taxes on interstate sales of goods and services over the
Web. Numerous state and local authorities have expressed a desire to impose such
taxes on sales to consumers and businesses in their jurisdictions. The Internet
Tax Non-Discrimination Act prevents imposition of such taxes through November
2003. If the federal moratorium on state and local taxes on Web sales is not
renewed, or if it is terminated before its expiration, then sales of goods and
services over the Web could be subject to multiple overlapping tax schemes,
which could substantially hinder the growth of Web-based commerce, including
sales of subscriptions to our Web-based products.

WE HAVE LIMITED EXPERIENCE OPERATING INTERNATIONALLY, WHICH MAY MAKE IT
DIFFICULT AND COSTLY TO EXPAND IN OTHER COUNTRIES

To date, we have derived the substantial majority of our revenue from sales to
customers in North America. As part of our business strategy, we plan to expand
our international operations, focusing initially on the European market. We face
many barriers to competing successfully internationally, including:

     -    varying technology standards and capabilities;

     -    insufficient or unreliable telecommunications infrastructure and Web
          access;

     -    difficulties staffing and managing foreign operations;

     -    fluctuations in currency exchange rates;

     -    reduced protection for intellectual property rights in some countries;
          and

     -    import and export restrictions and tariffs.

As a result of these factors, we may not be able to successfully market, sell,
or deliver our products in international markets.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

For the six months ended June 30, 2003, revenue from foreign customers
approximated 15% of our total revenue. We have not had any material exposure to
factors such as changes in foreign currency exchange rates or weak economic
conditions in foreign markets. However, in future periods, we expect to increase
sales in foreign markets, including Canada and Europe. As our sales are made in
U.S. dollars, a strengthening of the U.S. dollar could cause our products to be
less attractive in foreign markets. Most of our cash equivalents, short-term
investments, and capital lease obligations are at fixed interest rates.
Therefore, the fair value of these investments is affected by changes in the
market interest rates. However, because our investment portfolio is primarily
composed of investments in money market funds and high-grade commercial paper
with short maturities, we do not believe an immediate 10% change in market
interest rates would have a material effect on the fair market value of our
portfolio. Therefore, we would not expect our operating results or cash flows to
be affected to any significant degree by the effect of a sudden change in market
interest rates on our investment portfolio.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Printcafe's management, with the participation of Printcafe's Chief Executive
Officer and Chief Financial Officer, evaluated the effectiveness Printcafe's
disclosure controls and procedures as of the end of the period covered by this
report. Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that Printcafe's disclosure controls and procedures
as of the end of the period covered by this report have been designed and are
functioning effectively to provide reasonable assurance that the information
required to be disclosed by Printcafe in reports filed under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the SEC's rules and forms. Printcafe believes that a
controls system, no matter how well designed and operated, cannot provide
absolute assurance that the objectives of the controls system are met, and no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within a company have been detected.

(b) Change in Internal Control over Financial Reporting

No change in Printcafe's internal control over financial reporting occurred
during Printcafe's most recent fiscal quarter that has materially affected, or
is reasonably likely to materially affect, Printcafe's internal control over
financial reporting.


                                       23
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

On June 25, 2003 a securities class action complaint was filed against the
Company, Marc Olin, President and Chief Executive Officer, and Joseph Whang,
Chief Financial Officer and Chief Operating Officer, in the United States
District Court for the Western District of Pennsylvania. The complaint alleges
that the defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act
of 1933 due to allegedly false and misleading statements in connection with the
Company's initial public offering and subsequent press releases. The Company
believes that the lawsuit is completely without merit and intends to vigorously
defend itself. To date, the Company has not been required to file a response to
the complaint and has not done so. In light of the early stage of this
proceeding, the Company cannot predict with certainty the likely outcome of the
action or the likely value of any of the related claims.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

On June 17, 2002, the Securities and Exchange Commission declared effective the
Company's Registration Statement on Form S-1 (File No. 333-82646). The
Registration Statement covered the sale of 4,212,000 shares of the Company's
Common Stock (including an option to purchase 462,000 shares solely to cover
over-allotment, if any) at an offering price of $10.00 per share. The managing
underwriters in the offering were UBS Warburg LLC, Robertson Stephens, Inc.,
U.S. Bancorp Piper Jaffray Inc., and McDonald Investments Inc. (the
"Underwriters"). On June 21, 2002, the Company sold to the Underwriters
3,750,000 shares of Common Stock for aggregate consideration of $37,500, less
underwriting discounts and commissions of $2,625 and other expenses of $1,925
for net proceeds to the Company of $32,950, The other expenses of $1,925 were
paid to third parties not affiliated with the Company. From the amount of net
proceeds $23,200 in cash was used to pay outstanding debt, deferred interest,
and prepayment fees. Of this amount, $16,900 was paid to Creo, Inc., which owns,
through its subsidiary Creo SRL, approximately 30.2% of our outstanding common
stock. Since the completion of our initial public offering, we have used
additional amounts of the proceeds for general operating and corporate
purposes.

On February 13, 2003, the Company entered into a stock option agreement with EFI
granting them an option to purchase up to 2,126,574 shares of Common Stock at a
purchase price equal to $2.60 per share. On June 11, 2003, EFI exercised this
option and the Company received approximately $5,529 exchange for 2,126,574
shares of its common stock. The issuances of the above securities were intended
to be exempt from registration under the Securities Act in reliance on Section
4(2) thereof.

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

The following matters were submitted to a vote of the stockholders during the
Company's annual stockholders meeting held on May 2, 2003.



<TABLE>

<S>                                            <C>                           <C>
1.       Election of Class I Directors
                                             Votes Cast For             Authority Withheld
                                             --------------             ------------------
         Charles J. Billerbeck                 8,090,993                     35
         Amos Michelson                        8,089,287                    1,741

2.       Election of Class II Director

         Thomas J. Gill                        8,090,993                     35

3.       Ratification of Ernst & Young LLP   Votes Cast For             Authority Withheld        Abstentions
         as independent accountants          --------------             ------------------        -----------
                                               8,091,028                     ---                      ---

</TABLE>


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS.

 31.1    Section 302 Certification by the Chief Executive Officer

 31.2    Section 302 Certification by the Chief Financial Officer

 32.1    Section 906 Certification by the Chief Executive Officer and Chief
         Financial Officer relating to a periodic report containing financial
         statements



                                       24
<PAGE>

(b) Reports on Form 8-K. The following current reports on Form 8-K were filed by
the Company during the second fiscal quarter:

         (1) Current report on Form 8-K dated April 15, 2003 setting forth the
Company's preliminary earnings release for the quarter ended March 31, 2003.

         (2) Current report on Form 8-K dated April 29, 2003 setting forth the
Company's earnings release for the quarter ended March 31, 2003.

         (3) Current report on Form 8-K dated June 26, 2003 setting forth a
press release issued by the Company in response to a stockholder class action
lawsuit.

     * * * *



                                       25
<PAGE>



                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

                            PRINTCAFE SOFTWARE, INC.

                                   /s/ Marc D. Olin
                                   ------------------
                                   Marc D. Olin
                                   President and Chief Executive Officer

                                   /s/ Joseph J. Whang
                                   -------------------
                                   Joseph J. Whang
                                   Chief Financial Officer and Chief
                                   Operating Officer
                                   (Chief Accounting Officer)

      Date: August 14, 2003




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