U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                 ---------------

                                  FORM 10-QSB/A

(MarkOne)
|X|  Quarterly  report under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934

For the quarterly period ended May 31, 1998

[ ]  Transition  report under Section 13 or 15(d) of the  Securities  Exchange
     Act

For the transition period from __________ to __________
                         Commission file number 0-27664

                                 UNIDIGITAL INC.
         --------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)

           Delaware                                        13-3856672          
-------------------------------            ------------------------------------
State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)


                 229 West 28th Street, New York, New York 10001
                 ----------------------------------------------
                    (Address of Principal Executive Offices)

                                 (212) 244-7820
                           ---------------------------
                           (Issuer's Telephone Number,
                              Including Area Code)

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

                     Yes:   X                     No:      
                           ----                       ----

     State the number of shares  outstanding of each of the Issuer's  classes of
common stock, as of June 30, 1998:

Class                                             Number of Shares
-----                                             ----------------
Common Stock,  $.01 par value                        3,902,634

     Transitional Small Business Disclosure Format (check one):

                     Yes:                         No:   X
                          ----                        -----

<PAGE>

                        UNIDIGITAL INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS
                                -----------------
                                                                            Page
                                                                            ----

PART I FINANCIAL INFORMATION


   Item 1.  Financial Statements.............................................1

        CONSOLIDATED BALANCE SHEETS
        as at May 31, 1998 (unaudited)
        and August 31, 1997 (audited)........................................2

        CONSOLIDATED  INCOME  STATEMENTS
        For the Three  Months and Nine
        Months Ended May 31, 1998 and May 31, 1997
        (unaudited)..........................................................3

        CONSOLIDATED  STATEMENTS OF CASH FLOWS
        For the Nine Months Ended
        May 31, 1998 and May 31, 1997
        (unaudited)..........................................................4

        NOTES TO CONSOLIDATED FINANCIAL
        STATEMENTS (unaudited)...............................................5

   Item 2.  Management's Discussion and Analysis or
            Plan of Operation................................................11

            General..........................................................11

            Results of Operations............................................11

            Liquidity, Capital Resources and Other Matters...................15

PART II OTHER INFORMATION

   Item 6.  Exhibits and Reports on Form 8-K.................................17

SIGNATURES...................................................................21



                                       -i-
<PAGE>






                          PART I FINANCIAL INFORMATION

                          Item 1. Financial Statements



                                      -1-
<PAGE>
<TABLE>
<CAPTION>

                        UNIDIGITAL INC. AND SUBSIDIARIES
                        --------------------------------
                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------

                                                                                May 31,               August 31,
                                                                                  1998                   1997
                                                                                --------               ------
                                                                              (unaudited)
                                        ASSETS

<S>                                                                           <C>                     <C>          
Current assets:
 Cash and cash equivalents......................................            $     162,098             $   3,202,766
   Accounts receivable (less allowance for doubtful
     accounts of $553,499 and $266,000 at
     May 31, 1998 and August 31, 1997, respectively)..............               14,546,337               9,752,807
   Deferred financing costs, net..................................                1,107,204                 463,931
   Prepaid expenses...............................................                3,201,952               1,529,664
   Other current assets...........................................                3,645,179                 765,760
                                                                              -------------           -------------
       Total current assets.......................................               22,662,770              15,714,928
Property and equipment, net.......................................               13,807,594              11,899,475
Intangible assets, net............................................               27,252,774               5,330,923
Other assets......................................................                  342,123                  87,964
                                                                              -------------           -------------
       Total assets...............................................            $  64,065,261           $  33,033,290
                                                                              =============           =============
                                        LIABILITIES
Current liabilities:
   Accounts payable and accrued expenses..........................            $   7,258,029           $   5,181,684
   Current portion of capital lease obligations...................                2,230,281               1,998,443
   Current portion of long-term debt..............................                2,942,775              10,018,332
   Income taxes payable...........................................                  890,412                 551,235
   Loans and notes payable to stockholders........................                  168,906                 154,591
                                                                              -------------           -------------
       Total current liabilities..................................               13,490,403              17,904,285
Capital lease obligations, net of current portion.................                3,275,900               2,875,577
Long-term debt, net of current portion............................               32,393,333               2,127,796
Deferred income taxes.............................................                  543,970                 445,000
Loans and notes payable to stockholders, net of current portion...                  207,495                 207,496
                                                                              -------------           -------------
       Total liabilities..........................................               49,911,101              23,560,154
                                                                              -------------           -------------

                               STOCKHOLDERS' EQUITY
Preferred stock -- authorized 5,000,000 shares,
   $.01 par value each; none issued or outstanding................                       --                      --
Common stock -- authorized 10,000,000 shares,
   $.01 par value each; 3,902,634 and 3,243,243 shares
   issued and outstanding at May 31, 1998 and
   August 31, 1997, respectively..................................                   39,206                  32,432
Additional paid-in capital........................................                9,814,625               6,291,613
Retained earnings.................................................                4,237,005               3,237,984
Cumulative foreign translation adjustment.........................                   63,324                 (88,893)
                                                                              -------------           -------------
       Total stockholders' equity.................................               14,154,160               9,473,136
                                                                              -------------           -------------
       Total liabilities and stockholders' equity.................            $  64,065,261           $  33,033,290
                                                                              =============           =============
</TABLE>

     The Notes to Consolidated Financial Statements are made a part hereof.

                                      -2-
<PAGE>
<TABLE>
<CAPTION>


                        UNIDIGITAL INC. AND SUBSIDIARIES
                        --------------------------------
                         CONSOLIDATED INCOME STATEMENTS
                         ------------------------------
                                   (unaudited)

                                                           Three Months Ended,                    Nine Months Ended,
                                                           -------------------                    ------------------
                                                         May 31,           May 31,              May 31,           May 31,
                                                          1998              1997                 1998              1997
                                                          ----              ----                 ----              ----

<S>                                                   <C>                <C>                <C>              <C>        
Revenues
   Net sales...................................        $13,994,679        $7,664,033         $32,845,094      $18,157,668
                                                       -----------        ----------         -----------      -----------
Expenses
   Cost of sales...............................          7,692,922         4,239,289          17,597,651        9,624,915
   Selling, general and
     administrative  expenses .................          4,203,955         2,273,727          10,943,509        6,018,091
   Expenses incurred due to restructuring......            246,930                --             246,930               --
                                                       -----------       -----------         ------------     -----------
   Total operating expenses....................         12,143,807         6,513,016          28,788,090       15,643,006
                                                       -----------       -----------         -----------      -----------

   Income from operations......................          1,850,872         1,151,017           4,057,004        2,514,662
   Interest expense............................            840,208           396,921           1,388,359          695,660
   Interest expense - deferred financing costs.            219,583                --             695,721               --
   Interest and other expenses (income)........             40,670           (67,175)            126,604          (60,792)
                                                       -----------       -----------         -----------     ------------
   Income before income taxes..................            750,411           821,271           1,846,320        1,879,794
   Provision for income taxes..................            306,815           281,162             704,299          634,378
                                                       -----------       -----------         -----------      -----------
Net income before extraordinary item...........            443,596           540,109           1,142,021        1,245,416

Extraordinary item-loss on early retirement of
debt (net of income tax benefit of $137,000)              (143,000)         (143,000)                 --               --
                                                       -----------       -----------         -----------       ----------

Net income.....................................        $   300,596      $    540,109         $   999,021      $ 1,245,416
                                                       ===========      ============         ===========      ===========

Basic earnings (loss) per common share:
   Earnings before extraordinary item..........        $      0.12      $       0.17         $      0.34      $      0.39
   Extraordinary item..........................              (0.04)               --               (0.04)              --
                                                       -----------      ------------         -----------      -----------
   Net income..................................        $      0.08      $       0.17         $      0.30      $      0.39
                                                       ===========      ============         ===========      ===========

Diluted earnings (loss) per common share:
   Earnings before extraordinary item..........        $      0.11      $       0.17         $      0.31      $      0.39
   Extraordinary item..........................              (0.04)               --               (0.04)              --
                                                       -----------      ------------         -----------      -----------
   Net income..................................        $      0.07      $       0.17         $      0.27      $      0.39
                                                       ===========      ============         ===========      ===========

Shares used to compute net income per share:
   Basic.......................................          3,724,459         3,228,083           3,403,721        3,203,121
                                                       ===========       ===========         ===========      ===========
   Diluted.....................................          4,036,427         3,253,163           3,640,752        3,217,789
                                                       ===========       ===========         ===========      ===========
</TABLE>

     The Notes to Consolidated Financial Statements are made a part hereof.

                                      -3-
<PAGE>

<TABLE>
<CAPTION>
                        UNIDIGITAL INC. AND SUBSIDIARIES
                        --------------------------------
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
                                   (unaudited)

                                                                   Nine Months Ended,
                                                               ---------------------------
                                                                 May 31,          May 31,
                                                                  1998             1997
                                                                  ----             ----

<S>                                                            <C>               <C>        
OPERATING ACTIVITIES
Net income..................................................   $   999,021       $ 1,245,416
Adjustments to reconcile  net income to
 net cash provided by (used in) operating activities:
   Depreciation and amortization............................     2,684,088         1,346,217
   Provision for deferred income taxes......................        91,069           (73,530)
   Provision for bad debts..................................        31,600            77,182
Net changes in assets and liabilities net of effects of 
businesses acquired:
   Accounts receivable......................................    (3,272,035)       (1,376,573)
   Prepaid expenses and other current assets................    (3,493,771)       (1,841,527)
   Other assets.............................................       (91,550)           (6,184)
   Accounts payable and accrued expenses....................       776,256         2,004,481
   Income taxes payable.....................................       316,976           181,743
                                                               -----------       -----------
Net cash (used in) provided by operating activities.........    (1,958,346)        1,557,225
                                                               -----------       -----------
INVESTING ACTIVITIES
Additions to property and equipment.........................      (836,694)         (959,996)
Business acquisitions.......................................   (21,245,349)       (5,320,902)
                                                               -----------       -----------
Net cash used in investing activities.......................   (22,082,043)       (6,280,898)
                                                               -----------       -----------
FINANCING ACTIVITIES
Net proceeds from bank borrowings...........................    22,386,042         5,721,404
Payments of capital lease obligations.......................    (1,421,939)       (1,493,261)
Payments of notes for cancellation of options
 and acquisition of business................................            --          (177,893)
IPO issuance costs..........................................            --            (4,214)
Stockholder loans...........................................            --               687
Common stock issued.........................................        20,134               460
                                                               -----------       -----------
Net cash provided by financing activities...................    20,984,237         4,047,183
                                                               -----------       -----------
Effect of foreign exchange rates on cash....................        15,484             6,152
                                                               -----------       -----------
Net decrease in cash and cash equivalents...................    (3,040,668)         (670,338)
Cash and cash equivalents at beginning of period............     3,202,766         4,145,514
                                                               -----------       -----------
Cash and cash equivalents at end of period..................   $   162,098       $ 3,475,176
                                                               ===========       ===========
SUPPLEMENTAL DISCLOSURES
Interest paid...............................................   $   406,943       $   685,467
                                                               ===========       ===========
Income taxes paid...........................................   $   159,443       $   706,879
                                                               ===========       ===========
Noncash transactions:
Equipment acquired under capital lease obligations..........   $ 1,310,243       $ 2,025,673
                                                               ===========       ===========
</TABLE>

     The Notes to Consolidated Financial Statements are made a part hereof.

                                      -4-
<PAGE>

                        UNIDIGITAL INC. AND SUBSIDIARIES
                        --------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                   (unaudited)


NOTE A - BASIS OF PRESENTATION:

     The information presented for May 31, 1998, and for the three-month and the
nine-month  periods ended May 31, 1998 and May 31, 1997,  is unaudited,  but, in
the opinion of the management of Unidigital Inc., its wholly-owned  subsidiaries
and  its  and  their   subsidiaries,   affiliated   companies  and  predecessors
(collectively, the "Company"), the accompanying unaudited consolidated financial
statements  contain  all  adjustments   (consisting  only  of  normal  recurring
accruals) which the Company considers necessary for the fair presentation of the
Company's financial position as of May 31, 1998, the results of their operations
for the  three-month  and the nine-month  periods ended May 31, 1998 and May 31,
1997 and their cash flows for the nine-month  periods ended May 31, 1998 and May
31, 1997.

     The consolidated financial statements included herein have been prepared by
the Company in accordance  with  generally  accepted  accounting  principles for
interim  financial  information and the instructions to Form 10-QSB and Item 310
of Regulation S-B.  Accordingly,  certain  information and footnote  disclosures
normally included in financial  statements prepared in accordance with generally
accepted   accounting   principles   have  been  condensed  or  omitted.   These
consolidated  financial  statements  should  be read  in  conjunction  with  the
Company's audited financial statements for the year ended August 31, 1997, which
were included as part of the Company's Annual Report on Form 10-KSB.

     The consolidated  financial  statements  include the accounts of Unidigital
Inc.  and its direct and indirect  subsidiaries.  All  significant  intercompany
balances have been eliminated.

     This Form 10-QSB has been amended to reflect the  correction  of the impact
of an extraordinary  loss related to the refinancing of certain of the Company's
debt in March 1998.  The impact of such  correction was to reduce net income for
the three and nine months ended May 31, 1998 by approximately $167,000. See Note
E.

     Interim  results  are not  necessarily  indicative  of results  that may be
expected for the full fiscal year.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

     ORGANIZATION AND BUSINESS:

     Unidigital Inc., a Delaware  corporation,  is the parent holding company of
five  wholly-owned  operating  subsidiaries,  Unidigital  Elements  (NY),  Inc.,
formerly known as  LinoGraphics  Corporation  ("Elements  (NY)"),  Elements (UK)
Limited ("Elements  (UK)"),  Unidigital  Elements (SF), Inc.,  formerly known as
LinoGraphics  (Delaware)  Corporation  ("Elements  (SF)"),  Unison  (NY),  Inc.,
formerly known as  Unidigital/Cardinal  Corporation  ("Unison  (NY)") and Unison
(MA),  Inc.,  formerly known as  Unidigital/Boris  Corporation  ("Unison (MA)").
Elements (NY) engages in the on-demand  print and digital  prepress  business in
New York City. Elements (UK)


                                      -5-
<PAGE>

                        UNIDIGITAL INC. AND SUBSIDIARIES
                        --------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                   (unaudited)

engages in the  on-demand  print and digital  prepress  business  in London.  In
addition,  Elements  (UK)  through its  wholly-owned  subsidiary,  Regent  Group
Limited,  operates a financial  digital print business in London.  Elements (SF)
owns and operates the San Francisco  on-demand  prepress business and retouching
studio.  Unison  (NY)  engages in the  digital  prepress  and  digital  printing
business,  and provides  general  printing,  color  separation  and large format
printing services to advertising agencies and corporations  primarily in the New
York City area.  Unison  (MA)  engages in the  business  of digital  imaging and
photographic processing in the Boston area.

     FOREIGN CURRENCY TRANSLATION:

     The portion of the Company's financial statements relating to the Company's
United  Kingdom  operations  are  translated  into United  States  Dollars using
period-end  exchange rates ((pound) 1.00 = $1.62 at August 31, 1997 and $1.67 at
May 31, 1998,  respectively,  for balance sheet  accounts) and average  exchange
rates  ((pound)  1.00 = $1.64 for the year ended August 31, 1997;  and $1.68 and
$1.64  for the  three  month  periods  ended  May  31,  1998  and May 31,  1997,
respectively;  and $1.68 and $1.64 for the nine month periods ended May 31, 1998
and May 31, 1997, respectively,  for income statement accounts). The translation
difference is reflected as a separate component of stockholders' equity.

     EARNINGS PER SHARE:

     In February 1997, the Financial Accounting Standards Board issued Statement
of  Financial  Accounting  Standards  No. 128,  "Earnings  per Share,"  which is
required to be adopted for years  ending after  December 15, 1997.  Accordingly,
the Company has adopted the provisions of the new statement.

     The  following  table  sets  forth the  computation  of basic and  dilutive
earnings per share:

<TABLE>
<CAPTION>

                                                            Three Months Ended,                   Nine Months Ended,
                                                     ----------------------------------    --------------------------------
                                                                 May 31,                                May 31,
                                                          1998             1997                 1998              1997
                                                          ----             ----                 ----              ----

<S>                                                   <C>             <C>                 <C>                <C>
Numerator  for  basic  and  diluted   earnings  per   
     share-net    income   available   for   common
     stockholders...............................      $    300,596    $     540,109        $     999,021    $   1,245,416
                                                       ===========     ============         ============     ============
Denominator:
   Denominator for basic earnings per share-
     weighted average shares....................         3,724,459        3,228,083            3,403,721        3,203,121
   Effect of dilutive securities:
     Stock options..............................           109,555           17,128               64,896           11,978
     Warrants...................................           202,413            7,953              172,135            2,690
                                                       -----------      -----------          -----------      -----------
   Denominator    for    diluted    earnings    per
     share-adjusted   weighted-average  shares  and
     assumed conversions........................         4,036,427        3,253,163            3,640,752        3,217,789
                                                       ===========      ===========          ===========      ===========
</TABLE>

                                      -6-
<PAGE>

                        UNIDIGITAL INC. AND SUBSIDIARIES
                        --------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                   (unaudited)

     The  following  securities  have been  excluded from the dilutive per share
computation as they are antidilutive:

                                Three Months Ended,          Nine Months Ended,
                          ------------------------------------------------------
                                     May 31,                     May 31,
                                 1998       1997            1998         1997
                          ------------------------------------------------------
Stock options............       11,000     153,500         11,000       153,500
Warrants.................       25,000      92,000        117,000        92,000

NOTE C - STOCKHOLDERS' EQUITY:

     COMMON STOCK:

     As at June 30, 1998, 3,902,634 shares of common stock, $0.01 par value (the
"Common Stock"), were issued and outstanding.

     PREFERRED STOCK:

     As at June 30,  1998,  there were no shares of preferred  stock,  $0.01 par
value, issued or approved for issuance.

NOTE D - STOCK OPTION PLANS:

     Pursuant to the 1997 Equity  Incentive  Plan, as amended (the "Plan"),  the
Company granted options to purchase an aggregate of 222,599 shares of its Common
Stock  during the nine months  ended May 31,  1998.  All options were granted at
their fair market value.

     Subsequent to the end of the quarter, on July 13, 1998, the Company granted
options to  purchase  40,000  shares of its Common  Stock to Nicholas P. Gill in
connection with his employment as the Company's Vice President,  Chief Financial
Officer and  Secretary.  Such  options  were  granted at their fair market value
under the Plan.


                                      -7-
<PAGE>

                        UNIDIGITAL INC. AND SUBSIDIARIES
                        --------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                   (unaudited)

NOTE E - LONG TERM DEBT AND NOTES PAYABLE:

     At May 31, 1998, the Company's debt consisted of the following:
<TABLE>
<CAPTION>

                                                                        Facility
                                                                         Amount
                                                                                             Amount Outstanding
                                                                                   -----------------------------------
                                                                        August 31,         May 31,         August 31,
                                                                           1997             1998              1997
                                                                     --------------------------------------------------

<S>                                                                   <C>             <C>              <C>
Credit facilities in the United Kingdom;  interest at the bank's  
   overdraft rate plus 3%; facility amount is approximately
   (pound)1,145,000 ($1,969,400)                                       $1,969,400      $       --       $1,784,150
Credit  facilities  in the United  Kingdom;  interest at the bank's
   overdraft  rate  plus  2%;  facility  amount  is   approximately
   (pound)2,300,000 ($3,841,000)                                               --       2,557,358               --
Revolving  line of credit;  matures  April 30,  2000,  interest  at
   Alternate  Base Rate or Adjusted  LIBO Rate,  as  defined,  plus
   1/4% in the United States and 2.25% in the United Kingdom            4,500,000              --        1,725,000
Lines of credit;  interest at Alternate  Base Rate or Adjusted LIBO
   Rate,  as defined,  plus 1/4% in the United  States and 2.25% in
   the United Kingdom                                                   5,250,000              --        4,110,110
Term  loan;  matures  March  31,  2003,  payable  in  sixteen  (16)
   quarterly  installments ranging from $750,000 to $1,500,000, 
   commencing June 30, 1999,  together  with a balloon  payment of
   $7,000,000 at March 31, 2003, plus interest at the Base Rate or 
   at the Eurodollar Rate, as defined, plus an Applicable Margin,
   as  defined,  ranging  from  0.75% to 3.0%;  facility  amount is            
   $25,000,000                                                                 --      25,000,000               --
Revolving line of credit;  matures March 24, 2003,  interest at the
    Base Rate or at the Eurodollar Rate, as defined,  plus an 
    Applicable  Margin,  as defined,ranging from 0.75% to 3.0%;
   facility amount is $10,000,000                                              --       6,935,000               --
Acquisition  line of credit;  matures  March 31,  2003,  payable in
   eleven (11)  quarterly  installments  of 5.0% of the  outstanding
   balance at March 24, 2000  commencing  June 30, 2000 and one (1) 
   installment of 45.0% of the outstanding  balance at March 24, 2000,
   plus interest at the Base Rate or at the Eurodollar Rate, as defined,
   plus an Applicable  Margin,  as defined, ranging from
   0.75% to 3.0%; facility amount is $5,000,000                                --              --               --
SBA loan;  matures  December 1, 2014,  monthly  payments of $3,665,
   interest at prime rate plus 2.74%                                      350,000              --          334,368
Installment note due seller of Elements (SF);  payable in eight (8)
   quarterly installments of $11,600 including interest at 6%              85,000          21,250           42,500
Loans from private investors,  beginning May 1997, maturing between
   May 2002 and August 2002;  interest at 10% for first six months,
   11% for second six months and 12% thereafter                         4,000,000              --        4,000,000
Installment  note due seller of Unison  (MA);  matures  January 15,
   1999,  payable  in  two  (2)  annual   installments  of  $75,000
   including interest at 8.0%                                             150,000         114,167          150,000
Installment  note due Kwik  International;  matures April 15, 2001,
   payable in thirty-five  (35) monthly  installments of $20,833.33
   and one (1) installment of $20,833.45 including interest at 5.7%            --         708,333               --
                                                                                   ---------------- ------------------
                                                                                       35,336,108       12,146,128
Less current portion                                                                    2,942,775       10,018,332
                                                                                   ---------------- ------------------
                                                                                     $ 32,393,333     $  2,127,796
                                                                                   ================ ==================
</TABLE>
                                      -8-
<PAGE>

                        UNIDIGITAL INC. AND SUBSIDIARIES
                        --------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                   (unaudited)

     The Company has borrowing  arrangements  with commercial  banks in both New
York and  London.  On March 24,  1998,  the  Company  terminated  its  financing
facilities with its former New York bank and entered into borrowing arrangements
with its  current  New  York  bank  (the  "Bank")  in the  aggregate  amount  of
$40,000,000,  which consist of a: (i) $25,000,000  term loan;  (ii)  $10,000,000
revolving  line of  credit  facility  which is  available  for  working  capital
purposes;  and (iii) $5,000,000 credit facility which is available for corporate
acquisition  purposes.  Such  borrowings are guaranteed by the Company's  United
States  subsidiaries.  In  addition,  the  Company  pledged  all of  its  equity
interests  in its  United  States  subsidiaries  and  two-thirds  of its  equity
interests in its wholly-owned  United Kingdom  subsidiary as collateral for such
credit  facilities.  Interest under such credit  facilities is, at the Company's
option,  at the  Base  Rate  or at the  Eurodollar  Rate,  as  defined,  plus an
Applicable  Margin,  as defined,  ranging  from 0.75% to 3.0%  depending  on the
Company's  consolidated  debt to earnings  ratio and the type of loan. As of May
31, 1998, the Company had an outstanding  balance of $25,000,000  under the term
loan and  $6,935,000  under the  revolving  credit  facility.  A portion  of the
proceeds  of such loans was used to repay in full  promissory  notes  previously
issued by the  Company in 1997 to certain  private  investors  in the  aggregate
principal amount of $4,000,000. In connection therewith, the Company recorded an
extraordinary loss of $143,000, net of income tax benefit of $137,000 related to
the write-off of deferred financing costs.

     The credit  facilities  contain  covenants  which  require  the  Company to
maintain certain earnings and debt to earnings ratio  requirements  based on the
combined  operations of the Company and its subsidiaries.  The credit facilities
are secured by a first priority lien on all of the assets of the Company and its
subsidiaries,  a mortgage on the Company's  facilities  located at 545 West 45th
Street, New York, New York and a leasehold mortgage on the Company's  facilities
acquired as part of the Kwik  Acquisition (as defined below) located at 229 West
28th Street,  New York,  New York.  The Company,  the Bank and Richard J. Sirota
("Sirota"),  the sole  shareholder of Kwik (as defined  below),  entered into an
intercreditor  subordination  agreement  with respect to the Bank's and Sirota's
relative interests in the Company.

     The Company's  agreement with the Bank  restricts the Company's  ability to
pay certain dividends without the Bank's prior written consent.

     The  Company's  credit  facility with its London bank provides for combined
lines of credit  of  (pound)2,300,000  (approximately  $3,841,000)  for  working
capital for its United Kingdom  operations.  Such credit  facility was increased
from (pound)1,400,000 (approximately $2,338,000) on May 13, 1998. These lines of
credit renew  annually and bear  interest at 2.0% over the Bank's Base Rate,  as
defined.  In addition,  the Company is required to pay a service charge equal to
0.2% of invoice value. These lines of credit contain covenants which require the
Company's  United  Kingdom  subsidiaries  to  maintain  a  minimum  net worth of
(pound)500,000,  limit borrowings up to specified amounts of accounts receivable
aged 120 days or less and are guaranteed by the Company for the principal amount
of up to (pound)500,000. Amounts outstanding are collateralized by

                                      -9-
<PAGE>

                        UNIDIGITAL INC. AND SUBSIDIARIES
                        --------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                   (unaudited)

substantially  all of the Company's  United Kingdom assets.  As of May 31, 1998,
the Company had an  outstanding  balance of $2,557,358  under its United Kingdom
credit facility.

NOTE F - ACQUISITION:

     On March 25, 1998, the Company, through its wholly-owned subsidiary, Unison
(NY),  consummated  the acquisition of  substantially  all of the assets of Kwik
International  Color,  Ltd.  ("Kwik")  located  in  New  York  City  (the  "Kwik
Acquisition"). Kwik provided general printing, color separation and large format
printing  services.  The Company intends to continue such line of business.  The
assets  purchased  included Kwik's entire customer list,  inventory,  equipment,
cash,  accounts  receivable  and trade name.  The purchase  price  included cash
payments of $20,590,349,  issuance of a 5.7% subordinated promissory note in the
principal  amount of  $750,000  (payable in 36 monthly  installments  commencing
April 15, 1998),  issuance of 649,841  shares of restricted  Common Stock of the
Company and the assumption of certain trade obligations of Kwik. Of the purchase
price,  $1,000,000  in cash and  $1,000,000  of  restricted  Common Stock of the
Company  (190,589  shares)  is being held in escrow for a period of two years to
satisfy any indemnification claims.

     The Company  funded the cash portion of the purchase price from proceeds of
a $25,000,000  term loan and a $10,000,000  revolving credit loan from the Bank.
See "Note E - Bank Credit Facilities."

     The following  supplemental  pro forma  information  is presented as if the
Company had  completed  the Kwik  Acquisition  as of September 1, 1997 and 1996,
respectively:

                            Nine Months Ended May 31,
                                      --------------------------------------
                                             1998               1997
                                      --------------------------------------
Net sales........................         41,675,406        36,257,283
Income from operations...........          4,636,498         3,216,370
Net income.......................            594,383         1,778,271
Net income per share - basic.....               0.16              0.46
Net income per share - diluted...               0.14              0.46


                                      -10-
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

GENERAL

     The Company provides a full range of digital  prepress,  four color digital
offset printing, wide format and financial printing products and services to the
New York City, San Francisco, London and Boston markets. Using advanced computer
technology,  the Company provides the imaging and reproduction services required
by graphic artists and marketing  professionals  in connection with the creation
of printed and photographic  materials for their clients.  The Company's clients
include advertising  agencies,  publishers,  corporations,  government agencies,
retailers,  marketing  communications  firms  and  financial  institutions.  The
Company's  services  are  designed  to  afford  graphic  artists  and  marketing
professionals  the  ability to make  numerous  changes and  enhancements  in the
design and  content  of printed  materials  throughout  the design and  approval
process,  with  shorter  turnaround  times and at reduced  costs as  compared to
traditional industry methods.

     The statements  contained in this Quarterly  Report on Form 10-QSB that are
not historical facts are forward-looking  statements (as such term is defined in
the Private  Securities  Litigation  Reform Act of 1995) that involve  risks and
uncertainties. Such forward-looking statements may be identified by, among other
things,  the use of forward-looking  terminology such as "believes,"  "expects,"
"may,"  "will,"  "should"  or  "anticipates"  or the  negative  thereof or other
variations thereon or comparable terminology, or by discussions of strategy that
involve  risks  and  uncertainties.  From  time  to  time,  the  Company  or its
representatives have made or may make forward-looking  statements,  orally or in
writing. Such forward-looking statements may be included in various filings made
by the Company with the Securities and Exchange Commission, or press releases or
oral statements made by or with the approval of an authorized  executive officer
of the Company. These forward-looking  statements,  such as statements regarding
anticipated  future  revenues,   capital  expenditures,   and  other  statements
regarding  matters  that are not  historical  facts,  involve  predictions.  The
Company's actual results,  performance or achievements  could differ  materially
from the results expressed in, or implied by, these forward-looking  statements.
Potential  risks and  uncertainties  that  could  affect  the  Company's  future
operating  results  include,  but are not limited to: (i)  economic  conditions,
including economic  conditions  related to the digital print industry;  (ii) the
availability  of  equipment  from the  Company's  vendors at current  prices and
levels;  (iii) the intense competition in the markets for the Company's products
and services;  (iv) the Company's  ability to integrate  acquired  companies and
businesses in a cost-effective  manner; (v) the Company's ability to effectively
implement  its branding  strategy;  and (vi) the  Company's  ability to develop,
market,  provide,  and achieve market acceptance of new service offerings to new
and existing clients.

RESULTS OF OPERATIONS

     The consolidated  financial  information includes both the Company's United
States  operations  and its United  Kingdom  operations.  On April 4, 1997,  the
Company  consummated  the  acquisition  of Boris Image Group,  Inc.  (the "Boris
Acquisition")  and, on May 22, 1997, the Company  consummated the acquisition of
Libra City Corporate Printing Limited (the "Libra

                                      -11-
<PAGE>

Acquisition").  In addition, on March 25, 1998, the Company consummated the Kwik
Acquisition.

     THREE MONTHS ENDED MAY 31, 1998 AND MAY 31, 1997
     ------------------------------------------------

     NET  SALES.  Net sales  for the three  months  ended May 31,  1998  ("Third
Quarter of Fiscal 1998")  increased by 83%, or $6,330,646,  to $13,994,679  from
$7,664,033  for the three months  ended May 31, 1997  ("Third  Quarter of Fiscal
1997").  Net sales for the Company's United States operations  increased by 98%,
or $4,767,168, from $4,844,565 in the Third Quarter of Fiscal 1997 to $9,611,733
in the Third Quarter of Fiscal 1998. This increase was attributable primarily to
an  increase  in net sales  resulting  from the Kwik  Acquisition,  a full three
months  of net  sales  resulting  from the Boris  Acquisition  and,  to a lesser
extent,  an  increase  in net sales in each of the  Company's  two other  United
States  subsidiaries.  Net sales for the  Company's  United  Kingdom  operations
increased by 55%, or $1,563,478,  from $2,819,468 in the Third Quarter of Fiscal
1997 to  $4,382,946  in the Third  Quarter of Fiscal  1998.  This  increase  was
attributable  primarily to a full three months of net sales  resulting  from the
Libra Acquisition and, to a lesser extent,  increases in the Company's  prepress
operations.

     COST OF SALES. Cost of sales for the Third Quarter of Fiscal 1998 increased
by 81%, or $3,453,633,  to $7,692,922  from  $4,239,289 for the Third Quarter of
Fiscal 1997. As a percentage of net sales,  cost of sales  remained  constant at
55% for the Third  Quarter of Fiscal 1997 and the Third  Quarter of Fiscal 1998.
Cost  of  sales  for the  Company's  United  States  operations  decreased  as a
percentage of net sales from 55% for the Third Quarter of Fiscal 1997 to 51% for
the Third Quarter of Fiscal 1998.  Such decrease was  attributable  primarily to
the change in product mix in the Company's  United States  operations to include
more  digital  prepress  services as a result of the Kwik  Acquisition.  Cost of
sales for the Company's United Kingdom  operations  increased as a percentage of
net sales  from 56% for the Third  Quarter  of Fiscal  1997 to 63% for the Third
Quarter of Fiscal 1998. Such increase was  attributable  primarily to the change
in product  mix in the  Company's  United  Kingdom  operations  to include  more
digital print and financial  print  services.  Digital print and financial print
services have higher costs compared to digital prepress services.

     SELLING,  GENERAL  AND  ADMINISTRATIVE   EXPENSES.   Selling,  general  and
administrative   expenses  ("SG&A")  increased  by  85%,  or  $1,930,228,   from
$2,273,727  for the Third  Quarter of Fiscal  1997 to  $4,203,955  for the Third
Quarter  of  Fiscal  1998.  Such  increase  was  attributable  primarily  to the
increased  level of operations  which resulted from the Kwik  Acquisition  and a
full  three  months  of  operations  which  resulted  from  each  of  the  Boris
Acquisition  and the Libra  Acquisition.  As a  percentage  of net  sales,  SG&A
remained  constant  at 30% for the Third  Quarter  of Fiscal  1997 and the Third
Quarter of Fiscal 1998.

     RESTRUCTURING  EXPENSES.  In  connection  with  the Kwik  Acquisition,  the
Company  has  consolidated  its  New  York  operations.  As  a  result  of  such
consolidation, the Company incurred restructuring expenses of $246,930.

     INCOME FROM  OPERATIONS.  Income from  operations  for the Third Quarter of
Fiscal 1998 increased by 61%, or $699,855, to $1,850,872 from $1,151,017 for the
Third Quarter of Fiscal

                                      -12-
<PAGE>

1997. Of this amount,  $1,474,418 was contributed by the Company's United States
operations  and  $376,454  by the  Company's  United  Kingdom  operations.  This
increase  resulted from higher net sales in both the Company's United States and
United Kingdom operations.

     NET INTEREST EXPENSE.  Net interest expense for the Third Quarter of Fiscal
1998 increased by 234%, or $770,715,  to $1,100,461  from $329,746 for the Third
Quarter of Fiscal 1997. This increase  resulted from increased  borrowings under
the Company's  credit  facilities  and capital  leases assumed by the Company as
part of the Kwik Acquisition,  the Boris Acquisition and the Libra  Acquisition.
In addition,  the Company incurred deferred financing costs of $219,583,  and of
such deferred financing costs, $138,000 are non-cash, non-recurring expenses.

     INCOME TAXES.  Income taxes for the Third Quarter of Fiscal 1998  increased
by 9%, or $25,653,  to $306,815  from  $281,162 for the Third  Quarter of Fiscal
1997.

     EXTRAORDINARY  ITEM.  In  connection  with the  prepayment of $4,000,000 of
loans from private  investors,  the Company  recorded an  extraordinary  loss of
$143,000,  net of income tax benefit of  $137,000  related to the  write-off  of
deferred financing costs.

     NET INCOME.  As a result of the factors described above, net income for the
Third  Quarter of Fiscal  1998  decreased  by 44%, or  $239,513,  to $300,596 as
compared to a net income of $540,109 for the Third Quarter of Fiscal 1997.

     NINE MONTHS ENDED MAY 31, 1998 AND MAY 31, 1997
     -----------------------------------------------

     NET SALES.  Net sales for the nine months  ended May 31, 1998  increased by
81%, or $14,687,426,  to $32,845,094  from $18,157,668 for the nine months ended
May 31, 1997. Net sales for the Company's United States operations  increased by
78%, or  $8,621,664,  from  $11,089,871 in the nine months ended May 31, 1997 to
$19,711,535  in  the  nine  months  ended  May  31,  1998.   This  increase  was
attributable  primarily  to an  increase in net sales  resulting  from the Boris
Acquisition,  the Kwik Acquisition  and, to a lesser extent,  an increase in net
sales in each of the Company's two other United States  subsidiaries.  Net sales
for the Company's  United  Kingdom  operations  increased by 86%, or $6,065,762,
from $7,067,797 in the nine months ended May 31, 1997 to $13,133,559 in the nine
months  ended May 31, 1998.  This  increase  was  attributable  primarily to the
inclusion  of net sales  from the Libra  Acquisition  and,  to a lesser  extent,
increases in the Company's prepress operations.

     COST OF  SALES.  Cost of  sales  for the nine  months  ended  May 31,  1998
increased by 83%, or  $7,972,736,  to 17,597,651  from  $9,624,915  for the nine
months ended May 31, 1997. As a percentage of net sales, cost of sales increased
slightly  from 53% for the nine  months  ended May 31,  1997 to 54% for the nine
months  ended  May 31,  1998.  Cost of sales  for the  Company's  United  States
operations  decreased as a percentage  of net sales from 51% for the nine months
ended May 31, 1997 to 49% for the nine months ended May 31, 1998.  Such decrease
was attributable  primarily to the change in product mix in the Company's United
States  operations to include more digital prepress  services as a result of the
Kwik Acquisition and, to a lesser extent, to the Company's  renegotiation of its
vendor contracts resulting in reduced supply costs to the Company. Cost of sales
for the Company's  United  Kingdom  operations  increased as a 


                                      -13-
<PAGE>

percentage  of net sales from 57% for the nine months  ended May 31, 1997 to 61%
for the nine months ended May 31, 1998. Such increase was attributable primarily
to the change in product  mix in the  Company's  United  Kingdom  operations  to
include more digital  print and  financial  print  services.  Digital  print and
financial  print  services  have  higher  costs  compared  to  digital  prepress
services.

     SELLING,  GENERAL AND  ADMINISTRATIVE  EXPENSES.  SG&A increased by 82%, or
$4,925,418,  from  $6,018,091  for  the  nine  months  ended  May  31,  1997  to
$10,943,509  for  the  nine  months  ended  May  31,  1998.  Such  increase  was
attributable  primarily to the increased level of operations which resulted from
the Kwik Acquisition, the Boris Acquisition and the Libra Acquisition, and, to a
lesser extent, the hiring of additional management and administrative  personnel
and costs  associated  with the Company's  acquisitions.  As a percentage of net
sales,  SG&A remained constant at 33% for the nine months ended May 31, 1997 and
for the nine months ended May 31, 1998.

     RESTRUCTURING  EXPENSES.  In  connection  with  the Kwik  Acquisition,  the
Company  has  consolidated  its  New  York  operations.  As  a  result  of  such
consolidation, the Company incurred restructuring expenses of $246,930.

     INCOME FROM  OPERATIONS.  Income from  operations for the nine months ended
May 31, 1998 increased by 61%, or $1,542,342,  to $4,057,004 from $2,514,662 for
the nine months ended May 31, 1997. Of this amount,  $2,479,649 was  contributed
by the Company's United States operations and $1,577,355 by the Company's United
Kingdom  operations.  This  increase  resulted from higher net sales and reduced
supply  costs  offset in part by higher  production  costs  associated  with the
changing  product mix of the Company's  operations to include more digital print
and financial print services.

     NET INTEREST  EXPENSE.  Net interest  expense for the nine months ended May
31, 1998 increased by 248%, or $1,575,816,  to $2,210,684  from $634,868 for the
nine months ended May 31, 1997. This increase resulted from increased borrowings
under the Company's credit  facilities and capital leases assumed by the Company
as  part  of  the  Kwik  Acquisition,   the  Boris  Acquisition  and  the  Libra
Acquisition.  In addition,  the Company  incurred  deferred  financing  costs of
$695,721,   and  of  such  deferred  financing  costs,  $414,000  are  non-cash,
non-recurring expenses.

     INCOME TAXES. Income taxes for the nine months ended May 31, 1998 increased
by 11%, or $69,921,  to $704,299 from $634,378 for the nine months ended May 31,
1997.

     EXTRAORDINARY  ITEM.  In  connection  with the  prepayment of $4,000,000 of
loans from private  investors,  the Company  recorded an  extraordinary  loss of
$143,000,  net of income tax benefit of  $137,000  related to the  write-off  of
deferred financing costs.

     NET INCOME.  As a result of the factors described above, net income for the
nine months ended May 31, 1998  decreased  by 20%, or  $246,395,  to $999,021 as
compared to a net income of $1,245,416 for the nine months ended May 31, 1997.

                                      -14-
<PAGE>

LIQUIDITY, CAPITAL RESOURCES AND OTHER MATTERS

     CASH FLOW.  Net cash used in operations  was  $1,958,346 for the first nine
months of fiscal 1998.  Net cash provided by operations  was  $1,557,225 for the
first nine months of fiscal 1997. Net cash used in investing  activities for the
acquisition  of property and equipment was $836,694 for the first nine months of
fiscal 1998 and $959,996 for the first nine months of fiscal 1997. For the first
nine months of fiscal 1998 and fiscal 1997, the Company acquired equipment under
capital leases of $1,310,243  and  $2,025,673,  respectively,  and made payments
under  capital  leases of  $1,421,939  and  $1,493,261,  respectively.  Net bank
borrowings  provided  funds of  $22,386,042  and  $5,721,404  for the first nine
months of fiscal 1998 and fiscal 1997, respectively.

     BANK  CREDIT  FACILITIES.  The  Company  has  borrowing  arrangements  with
commercial  banks in both New York and London.  On March 24,  1998,  the Company
terminated  its financing  facilities  with its former New York bank and entered
into  borrowing   arrangements   with  the  Bank  in  the  aggregate  amount  of
$40,000,000,  which consist of a: (i) $25,000,000  term loan;  (ii)  $10,000,000
revolving  line of  credit  facility  which is  available  for  working  capital
purposes;  and (iii) $5,000,000 credit facility which is available for corporate
acquisition  purposes.  Such  borrowings are guaranteed by the Company's  United
States  subsidiaries.  In  addition,  the  Company  pledged  all of  its  equity
interests  in its  United  States  subsidiaries  and  two-thirds  of its  equity
interests in its wholly-owned  United Kingdom  subsidiary as collateral for such
credit  facilities.  Interest under such credit  facilities is, at the Company's
option,  at the  Base  Rate  or at the  Eurodollar  Rate,  as  defined,  plus an
Applicable  Margin,  as defined,  ranging  from 0.75% to 3.0%  depending  on the
Company's  consolidated  debt to earnings  ratio and the type of loan. As of May
31, 1998, the Company had an outstanding  balance of $25,000,000  under the term
loan and  $6,935,000  under the  revolving  credit  facility.  A portion  of the
proceeds  of such loans was used to repay in full  promissory  notes  previously
issued by the  Company in 1997 to certain  private  investors  in the  aggregate
principal amount of $4,000,000. In connection therewith, the Company recorded an
extraordinary loss of $143,000, net of income tax benefit of $137,000 related to
the write-off of deferred financing costs.

     The credit  facilities  contain  covenants  which  require  the  Company to
maintain certain earnings and debt to earnings ratio  requirements  based on the
combined  operations of the Company and its subsidiaries.  The credit facilities
are secured by a first priority lien on all of the assets of the Company and its
subsidiaries,  a mortgage on the Company's  facilities  located at 545 West 45th
Street, New York, New York and a leasehold mortgage on the Company's  facilities
acquired as part of the Kwik  Acquisition  located at 229 West 28th Street,  New
York, New York. The Company,  the Bank and Sirota entered into an  intercreditor
subordination  agreement  with  respect  to the  Bank's  and  Sirota's  relative
interests in the Company.

     The Company's  agreement with the Bank  restricts the Company's  ability to
pay certain dividends without the Bank's prior written consent.

     The  Company's  credit  facility with its London bank provides for combined
lines of credit  of  (pound)2,300,000  (approximately  $3,841,000)  for  working
capital for its United Kingdom


                                      -15-
<PAGE>

operations.   Such  credit   facility  was   increased   from   (pound)1,400,000
(approximately $2,338,000) on May 13, 1998. These lines of credit renew annually
and bear  interest at 2.0% over the Bank's Base Rate,  as defined.  In addition,
the Company is required to pay a service  charge equal to 0.2% of invoice value.
These lines of credit  contain  covenants  which  require the  Company's  United
Kingdom  subsidiaries to maintain a minimum net worth of  (pound)500,000,  limit
borrowings up to specified amounts of accounts  receivable aged 120 days or less
and  are   guaranteed  by  Unidigital   for  the  principal   amount  of  up  to
(pound)500,000.  Amounts  outstanding are collateralized by substantially all of
the Company's  United  Kingdom  assets.  As of May 31, 1998,  the Company had an
outstanding balance of $2,557,358 under its United Kingdom credit facility.

     The  Company  expects  that  anticipated  cash  flow  from  operations  and
available  borrowings will be sufficient to fund its capital lease  obligations,
debt service payments,  potential earn-outs, capital expenditures and operations
for at  least 12  months.  The  Company  may  require  additional  financing  to
consummate future acquisitions.  There can be no assurance that the Company will
be able to secure such additional financing on terms favorable to the Company.

     WORKING  CAPITAL.  The  Company's  working  capital  at May  31,  1998  was
$9,172,367  compared to a working  capital  deficit of  2,189,357  at August 31,
1997.

     ACQUISITION.  On March 25,  1998,  the  Company,  through its  wholly-owned
subsidiary,  Unison (NY),  consummated the Kwik Acquisition.  The purchase price
included  cash  payments  of  $20,590,349,   issuance  of  a  5.7%  subordinated
promissory  note in the  principal  amount of  $750,000  (payable  in 36 monthly
installments   commencing  April  15,  1998),  issuance  of  649,841  shares  of
restricted  Common  Stock of the Company  and the  assumption  of certain  trade
obligations of Kwik. Of the purchase price, $1,000,000 in cash and $1,000,000 of
restricted  Common Stock of the Company (190,589 shares) is being held in escrow
for a period of two years to satisfy any indemnification claims.

     The Company  funded the cash portion of the purchase price from proceeds of
a $25,000,000 term loan and a $10,000,000 revolving credit loan from the Bank.

     INFLATION,   FOREIGN  CURRENCY  FLUCTUATIONS  AND  INTEREST  RATE  CHANGES.
Although the Company cannot  accurately  determine the precise effect thereof on
its operations, it does not believe inflation, currency fluctuations or interest
rate  changes have  historically  had a material  effect on  revenues,  sales or
results of operations.  Inflation, currency fluctuations and changes in interest
rates have,  however, at various times, had significant effects on the economies
of the United  States  and the United  Kingdom  and could  adversely  impact the
Company's revenues, sales and results of operations in the future. If there is a
material adverse change in the  relationship  between the Pound Sterling and the
United  States  Dollar,  such change would  adversely  affect the results of the
Company's  United  Kingdom  operations as reflected in the  Company's  financial
statements.  The  Company  has not  hedged  its  exposure  with  respect to this
currency  risk,  and does not expect to do so in the  future,  since it does not
believe that it is practicable for it to do so at a reasonable cost.


                                      -16-
<PAGE>


                                     PART II

                                OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K.

         (a)  Exhibits.

              4.1   Stockholders'  Agreement  dated as of March 25,  1998 by and
                    among Unidigital Inc.,  William E. Dye and Richard J. Sirota
                    (included as an exhibit to the Current Report on Form 8-K of
                    the  Company  dated  April  8,  1998  and   incorporated  by
                    reference herein).

              10.1  Asset Purchase  Agreement  dated as of March 25, 1998 by and
                    among Unidigital Inc., Unison (NY), Inc., Kwik International
                    Color, Ltd. and Richard J. Sirota (included as an exhibit to
                    the Current Report on Form 8-K of the Company dated April 8,
                    1998 and incorporated by reference herein).

              10.2  Subordinated   Promissory  Note  dated  March  25,  1998  of
                    Unidigital Inc. payable to Kwik International Color, Ltd. in
                    the principal amount of $750,000  (included as an exhibit to
                    the Current Report on Form 8-K of the Company dated April 8,
                    1998 and incorporated by reference herein).

              10.3  Employment  Agreement  dated  as of  March  25,  1998 by and
                    between  Unidigital Inc. and Richard J. Sirota  (included as
                    an exhibit to the Current  Report on Form 8-K of the Company
                    dated April 8, 1998 and incorporated by reference herein).

              10.4  Loft Lease dated March 1, 1997 between S.N.Y., Inc. and Kwik
                    International Color, Ltd. for the property located at 229 W.
                    28th Street,  New York, New York, on the fourth floor, known
                    as Room  401-405  (included  as an  exhibit  to the  Current
                    Report on Form 8-K of the  Company  dated  April 8, 1998 and
                    incorporated by reference herein).

              10.5  Loft Lease dated March 1, 1997 between S.N.Y., Inc. and Kwik
                    International Color, Ltd. for the property located at 229 W.
                    28th Street, New York, New York, on the seventh floor, known
                    as Room  706-714 and 707-713  (included as an exhibit to the
                    Current  Report on Form 8-K of the  Company  dated  April 8,
                    1998 and incorporated by reference herein).

              10.6  Loft Lease dated March 1, 1997 between S.N.Y., Inc. and Kwik
                    International Color, Ltd. for the property located at 229 W.
                    28th  Street,  New  York,  New  York,  on the  eighth  floor
                    (included as an 


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<PAGE>

                    exhibit  to the  Current  Report on Form 8-K of the  Company
                    dated April 8, 1998 and incorporated by reference herein).

              10.7  Loft Lease dated March 1, 1997 between S.N.Y., Inc. and Kwik
                    International Color, Ltd. for the property located at 229 W.
                    28th  Street,  New  York,  New  York,  on  the  ninth  floor
                    (included as an exhibit to the Current Report on Form 8-K of
                    the  Company  dated  April  8,  1998  and   incorporated  by
                    reference herein).

              10.8  Credit  Agreement  dated as of March  24,  1998 by and among
                    Unidigital  Inc.,  the  lenders  from  time to time  parties
                    thereto and Canadian Imperial Bank of Commerce  (included as
                    an exhibit to the Current  Report on Form 8-K of the Company
                    dated April 8, 1998 and incorporated by reference herein).

              10.9  Term Note dated March 24, 1998 of Unidigital Inc. payable to
                    Canadian  Imperial Bank of Commerce in the principal  amount
                    of $25,000,000 (included as an exhibit to the Current Report
                    on  Form  8-K  of  the  Company  dated  April  8,  1998  and
                    incorporated by reference herein).

              10.10 Acquisition  Note dated  March 24, 1998 of  Unidigital  Inc.
                    payable  to  Canadian  Imperial  Bank  of  Commerce  in  the
                    principal  amount of  $5,000,000  (included as an exhibit to
                    the Current Report on Form 8-K of the Company dated April 8,
                    1998 and incorporated by reference herein).

              10.11 Revolving  Credit Note dated  March 24,  1998 of  Unidigital
                    Inc.  payable to Canadian  Imperial  Bank of Commerce in the
                    principal  amount of $10,000,000  (included as an exhibit to
                    the Current Report on Form 8-K of the Company dated April 8,
                    1998 and incorporated by reference herein).

              10.12 Stock  Pledge  Agreement  (U.S.)  dated as of March 24, 1998
                    made by Unidigital  Inc. in favor of Canadian  Imperial Bank
                    of Commerce (included as an exhibit to the Current Report on
                    Form 8-K of the Company dated April 8, 1998 and incorporated
                    by reference herein).

              10.13 Mortgage dated as of March 24, 1998 made by Unidigital  Inc.
                    in favor of Canadian Imperial Bank of Commerce  (included as
                    an exhibit to the Current  Report on Form 8-K of the Company
                    dated April 8, 1998 and incorporated by reference herein).

              10.14 Security  Agreement  dated  as of  March  24,  1998  made by
                    Unidigital  Inc.  in  favor  of  Canadian  Imperial  Bank of
                    Commerce


                                      -18-
<PAGE>

                    (included as an exhibit to the Current Report on Form 8-K of
                    the  Company  dated  April  8,  1998  and   incorporated  by
                    reference herein).

              10.15 Subsidiaries  Guarantee  dated as of March 24,  1998 made by
                    each of Unidigital Elements (NY), Inc.,  Unidigital Elements
                    (SF),  Inc.,  Unison (NY),  Inc. and Unison (MA),  Inc.,  in
                    favor of Canadian Imperial Bank of Commerce  (included as an
                    exhibit  to the  Current  Report on Form 8-K of the  Company
                    dated April 8, 1998 and incorporated by reference herein).

              10.16 Intercreditor and Subordination  Agreement dated as of March
                    25,  1998  by and  among  Kwik  International  Color,  Ltd.,
                    Unidigital  Inc.  and  Canadian  Imperial  Bank of  Commerce
                    (included as an exhibit to the Current Report on Form 8-K of
                    the  Company  dated  April  8,  1998  and   incorporated  by
                    reference herein).

              10.17 Mortgage,  Assignment  of  Leases  and  Rents  and  Security
                    Agreement dated as of March 24, 1998 between Unidigital Inc.
                    and  Canadian  Imperial  Bank of  Commerce  (included  as an
                    exhibit  to the  Current  Report on Form 8-K of the  Company
                    dated April 8, 1998 and incorporated by reference herein).

              27.1  Restated  Financial  Data  Schedule for the period ended May
                    31, 1998.

              27.2  Restated  Financial  Data  Schedule  for  the  period  ended
                    November 30, 1997  (included as an exhibit to the  Company's
                    Quarterly  Report on Form 10-QSB for the  quarter  ended May
                    31, 1998).

              27.3  Restated  Financial  Data Schedule for the year ended August
                    31, 1997 (included as an exhibit to the Company's  Quarterly
                    Report on Form 10-QSB for the quarter ended May 31, 1998).

              27.4  Restated  Financial  Data  Schedule for the period ended May
                    31, 1997 (included as an exhibit to the Company's  Quarterly
                    Report on Form 10-QSB for the quarter ended May 31, 1998).

              27.5  Restated  Financial  Data  Schedule  for  the  period  ended
                    February 28, 1997  (included as an exhibit to the  Company's
                    Quarterly  Report on Form 10-QSB for the  quarter  ended May
                    31, 1998).

              27.6  Restated  Financial  Data  Schedule  for  the  period  ended
                    November 30, 1996  (included as an exhibit to the  Company's
                    Quarterly  Report on Form 10-QSB for the  quarter  ended May
                    31, 1998).


                                      -19-
<PAGE>

              27.7  Restated  Financial  Data Schedule for the year ended August
                    31, 1996 (included as an exhibit to the Company's  Quarterly
                    Report on Form 10-QSB for the quarter ended May 31, 1998).

              (b)   Reports on Form 8-K.

                    On April 8, 1998, the Company filed a Current Report on Form
               8-K with the Securities and Exchange  Commission  relating to the
               Kwik  Acquisition.  Such  Form 8-K also  disclosed  the  terms of
               certain  loans made to the  Company,  the  proceeds  of which the
               Company used to fund the purchase price of the Kwik Acquisition.

                    Subsequent to the end of the quarter,  on June 8, 1998,  the
               Company filed a Current Report on Form 8-K/A containing  required
               financial  statements and pro forma  information  relating to the
               Kwik  Acquisition  disclosed  in its  Current  Report on Form 8-K
               filed on April 8, 1998.







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<PAGE>


                                   SIGNATURES



     In accordance with the requirements of the Securities Exchange Act of 1934,
the Issuer  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                                         UNIDIGITAL INC.



DATE:  December 4, 1998                  By: /s/William E. Dye                 
                                             -----------------------------------
                                             William E. Dye,
                                             Chief Executive Officer
                                             (Principal Executive, Financial
                                             and Accounting Officer)




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