1639953.rtf
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 10-Q

[ 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         0-18450
                                                       -------------------------

                       SECURITIES AND EXCHANGE COMMISSION

                               COLOR IMAGING, INC.
             (Exact name of registrant as specified in its charter)

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

                        Delaware                                                        13-3453420
--------------------------------------------------------------                  --------------------------------
(State or other jurisdiction of incorporation or organization)                  (IRS Employer Identification No.)

        4350 Peachtree Industrial Blvd, Suite 100
                Norcross, GA                                                                 30071
        -----------------------------------------                                        -------------
        (Address of principal executive offices)                                          (Zip Code)

</TABLE>

                                 (770) 840-1090
          -------------------------------------------------------------
               Registrant's telephone number, including area code

                                 Not Applicable
        -----------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report


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

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

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practical date.

As of July 28, 2003, there were 12,925,005 shares outstanding of Common Stock.




<PAGE>




                               COLOR IMAGING, INC.
                          QUARTERLY REPORT ON FORM 10-Q
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003
                                      INDEX



PART I:   FINANCIAL INFORMATION

Item 1.   Financial Statements

          Condensed Balance Sheets at June 30, 2003
          (Unaudited) and December 31, 2002(Audited)...........................3
          Condensed Statements of Operations (Unaudited)
          for the Three and Six Months ended June 30, 2003 and 2002............4
          Condensed Statements of Cash Flows (Unaudited)
          for the Six Months ended June 30, 2003 and 2002......................5
          Notes to Interim Unaudited Condensed Financial
          Statements ..........................................................6

Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations.................................10
Item 3.   Quantitative and Qualitative Disclosures about Market Risks.........24
Item 4.   Controls and Procedures.............................................24



PART II:  OTHER INFORMATION

Item 1.   Legal Proceedings ..................................................25
Item 2.   Changes in Securities and Use of Proceeds...........................25
Item 3.   Defaults Upon Senior Securities.....................................26
Item 4.   Submission of Matters to a Vote of Security Holders.................26
Item 5.   Other information ..................................................27
Item 6.   Exhibits and Reports on Form 8-K....................................27
Signatures....................................................................30

                                        2

<PAGE>


PART I: FINANCIAL INFORMATION
ITEM 1 -FINANCIAL STATEMENTS

                               COLOR IMAGING, INC.
                            CONDENSED BALANCE SHEETS

                         ASSETS
<TABLE>
<CAPTION>
<S>                                                               <C>    <C>       <C>    <C>
                                                                  30 Jun-03        31-Dec-02
                                                                 (Unaudited)       (Audited)
                                                                ------------     ------------
CURRENT ASSETS
    Cash                                                        $  2,551,178     $    128,501
    Accounts receivable, net                                       1,968,875        2,390,019
    Inventories                                                    6,325,787        5,080,237
    Related party portion of IDR bond                                 83,160           83,160
    Other current assets                                             359,104          304,672
                                                                ------------     ------------
          TOTAL CURRENT ASSETS                                    11,288,104        7,986,589
                                                                ------------     ------------

PROPERTY, PLANT AND EQUIPMENT - NET                                6,895,429        7,038,111
                                                                ------------     ------------
OTHER ASSETS
    Related party portion of IDR bond                                735,340          735,340
    Deferred offering costs                                               --          121,924
    Other assets                                                     224,481          231,571
                                                                ------------     ------------
          TOTAL OTHER ASSETS                                         959,821        1,088,835
                                                                ------------     ------------
                                                                $ 19,143,354     $ 16,113,535
                                                                ============     ============
          LIABILITIES & STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Revolving credit lines                                      $         --     $  1,022,470
    Accounts payable                                               2,812,690        3,543,680
    Current portion of notes payable                                   5,396          363,789
    Current portion of bonds payable                                 350,000          350,000
    Notes payable - related parties                                  336,191          401,937
    Other current liabilities                                        613,827          507,782
                                                                ------------     ------------
           TOTAL CURRENT LIABILITIES                               4,118,104        6,189,658
                                                                ------------     ------------
LONG TERM LIABILITIES
    Notes payable                                                     14,836          989,667
    Bonds payable                                                  3,095,000        3,095,000
    Notes payable - related parties                                  318,820          598,063
    Deferred tax liability                                           248,534               --
                                                                ------------     ------------
          LONG TERM LIABILITIES                                    3,677,190        4,682,730
                                                                ------------     ------------
           TOTAL LIABILITIES                                       7,795,294       10,872,388
                                                                ------------     ------------
COMMITMENTS & CONTINGENCIES

STOCKHOLDERS' EQUITY
   Common stock, $.01 par value, authorized 20,000,000
     shares; 12,925,005 and  8,437,965 shares issued and
     outstanding on June 30, 2003 and
     December 31, 2002, respectively                                 129,250           84,380
   Additional paid-in capital                                     13,035,258        7,205,909
   Accumulated deficit                                            (1,683,108)      (2,049,142)
   Treasury stock, at cost, 66,670 shares                         (  133,340)              --
                                                                ------------     ------------
          TOTAL STOCKHOLDERS' EQUITY                              11,348,060        5,241,147
                                                                ------------     ------------
                                                                $ 19,143,354     $ 16,113,535
                                                                ============     ============
                             See accompanying notes

</TABLE>

                                       3
<PAGE>


                               COLOR IMAGING, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
<S>                                 <C>           <C>           <C>             <C>
                                  THREE MONTH PERIODS ENDED     SIX MONTH PERIODS ENDED
                                  -------------------------   --------------------------
                                    30-JUN-03    30-JUN-02      30-JUN-03     30-JUN-02
                                  ------------  -----------   ------------  ------------

SALES                             $ 5,058,589   $ 7,970,300   $10,687,994   $15,631,623

C0ST OF SALES                       3,519,174     6,878,347     7,829,329    13,316,635
                                  ------------  ------------  ------------  ------------
GROSS PROFIT                        1,539,415     1,091,953     2,858,665     2,314,988
                                  ------------  ------------  ------------  ------------

OPERATING EXPENSES

    Administrative                    426,144       329,140       892,791       694,615

    Research & development            325,514       239,623       597,481       451,107

    Sales & marketing                 388,346       335,825       755,620       612,077
                                  ------------  ------------   ------------  -----------
                                    1,140,004       904,588     2,245,892     1,757,799
                                  ------------  ------------   ------------  -----------

INCOME FROM OPERATIONS                399,411       187,365       612,773       557,189
                                  ------------  ------------   ------------  -----------

OTHER INCOME  (EXPENSE)

    Other income                       60,379        22,328       108,525        29,205

    Financing expenses                (34,298)      (90,866)     (110,264)     (165,820)
                                  ------------  ------------   ------------  -----------
                                       26,081       (68,538)     (  1,739)     (136,615)
                                  ------------  ------------   ------------  -----------

INCOME BEFORE TAXES                   425,492       118,827       611,034       420,574

PROVISION FOR INCOME TAXES            171,000        46,000       245,000       161,250
                                  ------------  ------------   ------------  -----------
INCOME FROM
CONTINUING OPERATIONS                 254,492        72,827       366,034       259,324

DISCONTINUED OPERATIONS (Note 2)
    (Loss) from operations of
       subsidiary disposed of -
       net of income taxes                 --       (92,824)           --      (163,082)
                                  ------------  ------------   ------------  -----------

NET INCOME (LOSS)                 $   254,492   $   (19,997)   $  366,034    $   96,242
                                  ============  ============   ============  ===========

     INCOME (LOSS)
     PER COMMON SHARE - BASIC
        Continuing operations     $       .02   $      .01    $       .03    $      .03
        Discontinued operations            --         (.01)            --          (.02)
                                  -----------    ----------    -----------    ----------
                                  $       .02   $        --   $       .03    $      .01
                                  ============  ============   ============  ===========
      INCOME (LOSS)
      PER COMMON SHARE - DILUTED
        Continuing operations     $       .02   $      .01    $       .03    $      .03
        Discontinued operations            --         (.01)            --          (.02)
                                  -----------    ----------    -----------    ----------
                                  $       .02   $       --    $       .03    $      .01
                                  ============  ============   ============  ===========
      WEIGHTED AVERAGE
      SHARES OUTSTANDING
        Basic                      12,887,408    10,099,880     11,134,003    10,099,724
        Assumed conversion                 --            --             --            --
                                  ------------  ------------   ------------  -----------
                                   12,887,408    10,099,880     11,134,003    10,099,724
                                  ============  ============   ============  ===========

                             See accompanying notes

</TABLE>

                                       4
<PAGE>


                               COLOR IMAGING, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                     FOR THE SIX MONTH PERIODS ENDED JUNE 30
                                   (UNAUDITED)

<TABLE>
<CAPTION>
<S>                                                          <C>            <C>
                                                             2003           2002
                                                        -----------    -----------

Cash flows from operating activities:
  Net income from continuing operations                $    366,034   $    259,324
  Adjustments to reconcile net income to net cash
    provided (used) by operating activities:
      Depreciation and amortization                         289,500        263,123
      Deferred income taxes                                 248,534         79,001
  (Increase) decrease in:
        Accounts receivable and other receivables           421,144     (1,122,760)
        Inventories                                      (1,245,550)     1,141,646
        Prepaid expenses and other assets                    74,583          2,520
  (Decrease) in:
        Accounts payable and accrued liabilities           (624,945)      (595,161)
                                                       -------------  -------------
        Net cash (used in) provided by
               continuing operations                       (470,700)        27,693

   Net cash flows of discontinued operations                     --       (174,671)
                                                       -------------  -------------
        Net cash (used by)
               operating activities                        (470,700)      (146,978)
                                                       -------------  -------------

Cash flows (used in) investing activities:
     Capital expenditures                                  (146,819)      (331,311)
                                                       -------------  -------------
        Net cash (used in)
             investing activities                          (146,819)      (331,311)
                                                       -------------  -------------
Cash flows from financing activities:
  Net (payments) under line of credit                    (1,022,470)     (190,334)
  Net proceeds from sale of common stock                  5,917,086        143,351
  Repurchase of common shares and warrants                 (176,207)            --
  Net proceeds from related party borrowings                     --        500,000
  Principal payments on related party borrowings           (344,989)            --
  Principal payments of long-term debt                   (1,333,224)      (166,636)
                                                       -------------  -------------
         Net cash provided by
             financing activities                         3,040,196        286,381
                                                       -------------  -------------
         Net increase (decrease) in cash                  2,422,677       (191,908)

Cash at beginning of year                                   128,501        393,981
                                                       -------------  -------------
Cash at end of period                                   $ 2,551,178    $   202,073
                                                       =============  =============


                             See accompanying notes


</TABLE>

                                       5
<PAGE>


                               COLOR IMAGING, INC.
                 NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
                                  June 30, 2003
                                   (Unaudited)

NOTE 1. BASIS OF PRESENTATION

The accompanying  unaudited  interim  condensed  financial  statements have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United  States  of  America  for  interim  financial  information  and  with the
instructions  to  Form  10-Q.  Accordingly,  they  do  not  include  all  of the
information and footnotes required by accounting  principles  generally accepted
in the United  States of  America  for  complete  financial  statements.  In the
opinion of management,  all adjustments (consisting of normal recurring accruals
and  adjustments)  considered  necessary  for  a  fair  presentation  have  been
included. Operating results for the three and six months ended June 30, 2003 are
not  necessarily  indicative  of the results  that may be expected  for the year
ended December 31, 2003.

NOTE 2. DISCONTINUED OPERATIONS

On September 30, 2002,  the Company  completed a share  exchange  agreement with
Digital Color Print, Inc. and four of its former directors,  whereby the Company
received  1.7  million  shares of its common  stock in  exchange  for all of the
shares of the common stock of its subsidiary,  Logical Imaging  Solutions,  Inc.
Based  upon  guidance  provided  by APB 29 in  connection  with  accounting  for
nonmonetary  transactions,  the fair value of the 1.7  million  shares of common
stock received was approximately  $2,678,993;  the fair value (approximating the
net book value) of Logical Imaging  Solutions,  Inc. plus the transaction  costs
incurred.

Following  is  summary  financial  information  for the  Company's  discontinued
Logical Imaging Solutions, Inc. subsidiary:

<TABLE>
<CAPTION>
<S>                                             <C>             <C>             <C>             <C>
                                                For the Three Months Ended      For the Six Months Ended
                                                          June 30,                     June 30,
                                                --------------------------      --------------------------
                                                    2003          2002             2003            2002
                                                -----------    -----------      ------------   -----------
(Loss) from discontinued operations:
    Before income taxes                         $      --      $(154,824)       $      --      $(260,326)
    Income tax provision (benefit)                     --        (62,000)              --       ( 97,244)
                                                -----------    -----------      ------------   -----------
Net (loss) from discontinued operations         $      --      $ (92,824)       $      --      $(163,082)
                                                ===========    ===========      ============   ===========

</TABLE>

Pursuant to the share exchange agreement, the Company also received a warrant to
purchase approximately 15% of the then outstanding common stock of Digital Color
Print, Inc. or Logical Imaging Solutions, Inc. The warrant has not been assigned
any value,  since it is not cashless,  increases from $1.50 to $2.25 and then to
$3.25 per share each year over three years,  expires  after three years,  is not
registered for resale and has no current market.

NOTE 3. COMMON STOCK

On February 27, 2003,  the Company  entered into an agreement with a stockholder
to repurchase  150,000  shares of common stock and warrants to purchase  300,000
shares of the Company's  common stock for an aggregate  cost of $300,000.  Under
the agreement,  the  stockholder  has a one-time right to cancel the sale of the
common stock and warrants not yet paid for by the Company upon written notice to
the  Company.  Upon  receipt of such  notice,  the Company is not  obligated  to
purchase the remaining  common stock and warrants.  The agreement  provides that
the  Company is to pay $2.00 for each common  share and warrant to purchase  two
common shares of the Company's  common stock.  The shares and warrants are to be
repurchased in approximately  equal installments over nine months,  beginning in
March and ending in November  2003.  From March 24, 2003  through June 30, 2003,
the Company  repurchased  66,670 of the Company's  common shares and warrants to
purchased  133,340  common  shares,  paying  $133,340.  The shares and  warrants
repurchased  by the Company are held in escrow,  pending the  completion  of the
repurchase  in November  2003, or its earlier  cancellation,  at which time they
will be cancelled.



                                       6
<PAGE>


NOTE 3. COMMON STOCK (CONTINUED)

On March 4, 2003,  the Company  completed the  repurchase  from a stockholder of
12,939 shares of the Company's  common stock  together with warrants to purchase
25,878 shares of the Company's common stock at an aggregate cost of $25,878. The
shares and warrants were originally sold in the Company's private placement that
was completed in December 2001,  and the shares and warrants  repurchased by the
Company were cancelled.

On March 13, 2003, the Company  completed the public sale of 4,500,000 shares of
the Company's  common stock at a price of $1.35 per share (see note 10), whereby
the Company received $5,917,086 in net proceeds.

On April 18,  2003,  the Company  granted  options to two  directors to purchase
25,000  shares of the  Company's  common stock at an exercise  price of $.45 per
share.  The options  vest at the rate of 5,000 per year  beginning  on the first
anniversary  date of the grant and  continuing  annually  thereafter  and expire
three years from their respective date of vesting.  On June 2, 2003, the Company
granted options to an officer 100,000 shares of the Company's common stock at an
exercise  price of $.77 per share.  The  options  vest at the rate of 25,000 per
year beginning on the date of the grant and continuing  annually  thereafter and
expire five years from their  respective  date of vesting.  The  following  is a
summary of total outstanding options and stock warrants at June 30, 2003:

<TABLE>
<CAPTION>
<S>                     <C>             <C>                     <C>                         <C>                   <C>
                                        Options and Warrants Outstanding                   Options and Warrants Exercisable
                                       Weighted-           Weighted-Average
   Range of                             Average               Remaining                                     Weighted-Average
Exercise Prices         Number       Exercise Price        Contractual Life                  Number          Exercise Price
---------------      ------------    ---------------       ----------------               -------------     ----------------
Options
 $0.45-$2.75          1,070,000          $2.11                 4.10 years                    793,750              $2.24

Warrants
 $2.00                  801,997          $2.00                 0.62 years                    801,997              $2.00
                     ------------                                                         -------------
Options and
warrants              1,871,997          $2.06                 2.61 years                  1,595,747              $2.12
                     ============                                                         =============

</TABLE>

The  warrants  reflected  in the above table  exclude  the  warrants to purchase
133,340  shares of the Company's  common stock that are held in escrow,  pending
cancellation, as of June 30, 2003.


NOTE 4. INVENTORIES

Inventories  consisted  of the  following  components  as of June  30,  2003 and
December 31, 2002:

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

                                     June 30, 2003            December 31, 2002
                                 ------------------           -----------------
        Raw materials              $       917,567             $       427,752
        Work-in-process                  1,797,276                   1,021,496
        Finished goods                   3,662,229                   3,665,953
        Obsolescence allowance            ( 51,285)                    (34,964)
                                  -----------------           -----------------
            Total                  $     6,325,787             $     5,080,237
                                  =================           =================
</TABLE>


NOTE 5. CHANGES TO BORROWING ARRANGEMENTS

The Company has a $1.5 million  revolving  line of credit,  as amended,  with an
outstanding balance of $0 as of June 30, 2003, bearing interest at the one-month
Libor  interest  rate in effect two  business  days  before the first day of the
month plus 2.50%. As of June 30, 2003, the interest rate was the one-month Libor
rate of 1.12% plus 2.50%  (3.62%).  This revolving line of credit has a June 30,
2004 expiration date.

Under  the line of  credit,  the  Company  is  permitted  to borrow up to 75% of
eligible accounts receivable and 50% of eligible inventories (up to a maximum of
$750,000  and not to  exceed  50% of the total  outstanding).  The  Company  has
granted the Bank a security  interest in all of the Company's assets as security
for the repayment of the line of credit.  The Bank  agreement  contains  various
covenants  which the Company is required to  maintain,  and as of June 30, 2003,
the Company was in compliance with these covenant requirements.


                                       7
<PAGE>


NOTE 6. EMPLOYMENT AGREEMENTS:

On June 27, 2003,  the Vice  President of Marketing and Sales  retired,  and the
Employment Agreement between he and the Company was cancelled. On July 14, 2003,
subsequent  to the balance  sheet date,  the  Employment  Agreement  between the
Company  and its  Executive  Vice  President  and Chief  Financial  Officer  was
amended,  making the officer responsible for marketing and sales while remaining
chief  financial  officer for an indefinite  period,  reducing the annual salary
from $151,200 to $78,000,  eliminating the five percent (5%) annual increase and
supplemental life insurance  retirement plan and providing for a one-half of one
percent (0.5%) commission on certain of the net sales of the Company.

NOTE 7. SIGNIFICANT CUSTOMERS

In the three and six month periods ended June 30, 2003, two customers  accounted
for 28% and 17% and 31% and 18%,  respectively,  of net sales.  The Company does
not have a written or oral  contract  with these  customers.  All sales are made
through  purchase orders.  Accounts  receivable from these customers at June 30,
2003, were $562,605 and $295,194, respectively.

NOTE 8. SIGNIFICANT SUPPLIERS

In the three and six month  periods ended June 30, 2003,  the Company  purchased
28% and 39% of its raw  materials,  components and supplies from one supplier in
connection with sales to its largest  customers.  At June 30, 2003, the accounts
payable to this supplier was $787,919.

NOTE 9. FINANCIAL REPORTING FOR BUSINESS SEGMENTS:

The  Company  believes  that its  operations  are in a single  industry  segment
involving  the  development  and  manufacture  of  products  used in  electronic
printing.  All of the Company's  assets are domestic.  The sales to unaffiliated
customers by  geographic  region from  continuing  operations  for the six-month
periods ended June 30 are as follows:

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

                                            2003            2002
                                        -----------     -----------
Sales to Unaffiliated Customers:
United States                           $ 6,347,513     $10,005,967
Europe/Eastern Europe                     2,348,586       3,222,774
Mexico                                    1,252,150       1,349,501
Asia/Southeast Asia                         360,481         547,502
South America                               250,310         254,930
Others                                      128,954         250,949
                                        -----------     -----------
Total                                   $10,687,994     $15,631,623
                                        ===========     ===========
</TABLE>


NOTE 10. RELATED PARTY TRANSACTIONS:

The Company  purchased  from an  affiliate  for the three and six month  periods
ended  June 30,  2003,  $671,666  and  1,124,190,  respectively,  of  all-in-one
imaging,   toner  and  drum  cartridges  and  injection  molded  cartridges  and
accessories for copiers and laser printers. Accounts payable to the affiliate at
June 30, 2003, was $407,802.

On January 23, 2003 the Company's  registration  statement on Form SB-2 offering
of up to 7 million  shares of its common  stock was  declared  effective  by the
Securities  and  Exchange  Commission.  On March 6, 2003,  the Company  received
subscription  gross proceeds from an affiliate of $6,075,000 for the public sale
of  4,500,000  shares of its common  stock from an  affiliate,  and on March 13,
2003,  the Company  accepted  the  investment  in  accordance  with the offering
procedures.

On March 14,  2002,  the Company  borrowed  $500,000  from its  President  on an
unsecured  basis.  The interest  rate on the loan was 12% per annum,  matured on
March 14, 2003 and was evidenced in writing.  On September 2, 2002,  the Company
entered into a modification  agreement with its President to change the terms of
the  note,  extending  the term to  March  1,  2005,  providing  for a  $100,000
principal payment,  decreasing the interest rate to 6% per annum,  providing for
interest only payments  through  February 28, 2003, and providing for 24 monthly
payments of principal and interest  beginning on April 1, 2003, in the amount of
$17,735.67.  The  Company  borrowed  the  $500,000  amount  to  meet a  supplier
commitment for product.  From January 1 through June 30, 2003,  interest accrued
and paid on the note  was  $10,543  and as of June  30,  2003,  the  outstanding
principal balance was $150,000.


                                       8
<PAGE>

NOTE 10. RELATED PARTY TRANSACTIONS (CONTINUED):

On August  21,  2002,  the  Company  borrowed  $100,000  from a  director  on an
unsecured basis. The loan bears interest at the rate of 6% per annum, matures on
March 1, 2005 and is evidenced in writing.  The Company  borrowed this amount in
order to repay $100,000  borrowed from director  Sueling Wang on March 14, 2002.
The  note is  interest  only  through  February  28,  2003,  and  then is  fully
amortizing over 24 months with principal and interest  payments  payable monthly
beginning April 1, 2003 in the amount of $4,434. From January 1 through June 30,
2003, the interest  accrued and paid on the note was $2,874,  and as of June 30,
2003, the outstanding principal balance was $84,169.

On August 21 and September 2, 2002, the Company borrowed  $200,000 and $300,000,
respectively,  from  another  director  on an  unsecured  basis.  The loan bears
interest at the rate of 6% per annum,  matures on March 1, 2005 and is evidenced
in  writing.  The  Company  borrowed  this  amount in order to make a  principal
payment due on our  industrial  development  bond in the  approximate  amount of
$255,000,  for the acquisition of capital equipment in the approximate amount of
$125,000 and for general corporate  purposes.  The note is interest only through
February 28, 2003,  and then is fully  amortizing  over 24 months with principal
and interest  payments payable monthly  beginning April 1, 2003 in the amount of
$22,169.60.  From January 1 through June 30, 2003,  interest accrued and paid on
the note was $14,370, and as of June 30, 2003, the outstanding principal balance
was $420,843.



                                       9
<PAGE>


ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The  following  discussions  should be read in  conjunction  with our  condensed
financial statements and the related notes thereto.

BACKGROUND

On June 28, 2000,  Color  Imaging,  formerly known as Advatex  Associates,  Inc.
merged with Logical Imaging  Solutions,  Inc. and Color Image,  Inc. and Logical
Imaging  Solutions and Color Image became  wholly-owned  subsidiaries of Advatex
Assocates.  The financial  information contained in this report is in conformity
with the purchase  method of accounting.  On December 31, 2000,  Color Image was
merged with and into Color Imaging.  On September 30, 2002, we divested  Logical
Imaging  Solutions  in exchange  for 1.7 million  shares of our common stock and
warrants  to purchase  up to 15% of the common  stock of Digital  Color Print or
Logical  Imaging  Solutions.  As a result of our  disposing  of Logical  Imaging
Solutions,  Inc. we no longer offer printing systems to commercial  printers nor
the support  services and consumables  related  thereto.  As a further result of
Color Imaging's divestiture of Logical Imaging Solutions, our investments in the
furthering  of  Logical  Imaging   Solutions'   technologies  and  carrying  its
operations have ceased. Significantly,  since the merger on June 28, 2000, Color
Imaging had invested  approximately  $2.35 million in the  operations of Logical
Imaging  Solutions  and the  development  of its  technologies.  The disposal of
Logical  Imaging  Solutions  eliminates  the  capital  needed to  support  those
operations.

COLOR IMAGING, INC.

Color Imaging,  Inc. has developed and manufactured  products used in electronic
printing and copying.  We formulate and produce black text and specialty toners,
including  color and magnetic  character  recognition  toners for numerous laser
printers. Our toners permit the printing of a wide range of user-selected colors
and also the full process  color  printing of cyan,  yellow,  magenta and black.
Magnetic character recognition toners enable the printing of magnetic characters
that are required for the  high-speed  processing of checks and other  financial
documents. We also supply other consumable products used in electronic printing,
and   photocopying,    including   toner   cartridges,   cartridge   components,
photoreceptors, imaging drums and parts.

Color Imaging,  Inc. has continually expanded its product line and manufacturing
capabilities.  This  expansion  has led to the  creation of black  text,  color,
magnetic  character  recognition  and specialty  toner  formulations,  including
aftermarket  toners and imaging  products for printers  and  facsimile  machines
manufactured  by  Brother(TM),   Canon(TM),  Delphax(TM),  Hewlett  Packard(TM),
IBM(TM), Lexmark(TM),  Sharp(TM), Xerox(TM), Minolta(TM), Mita(TM), Panafax(TM),
Pentax(TM),   Pitney   Bowes(TM),   Epson(TM),   Fuji-Xerox(TM),    Toshiba(TM),
Kyocera(TM),  Okidata(TM),  Panasonic(TM),  and  printing  systems  developed by
Logical Imaging  Solutions,  Inc. Color Imaging,  Inc. also  manufactures and or
markets toners for use in Ricoh, Sharp(TM),  Xerox(TM),  Canon(TM),  Lanier(TM),
Toshiba(TM),   Savin(TM)  and  Gestetner(TM)  copiers.  We  also  offer  product
enhancements,  including imaging supplies that enable standard laser printers to
print magnetic  character  recognition data. We market branded products directly
to  OEMs  and  our   aftermarket   products   worldwide  to   distributors   and
remanufacturers   of  laser  printer  toner   cartridges   and  to  dealers  and
distributors of copier products.  During the second quarter of 2003 we commenced
the sale of all-in-one  imaging,  toner and drum cartridges for use in Xerox(TM)
and Canon(TM)  personal  copiers and a Hewlett  Packard(TM)  laser  printer.  In
addition to selling these all-in-one  products to the abovementioned  customers,
we are selling them to a multi-state retail chain store and are offering them to
catalog companies.

Our strategy for growing  revenue and operating  profit is to expand,  including
through strategic acquisition(s),  our printer and copier products business. The
key  elements  of our  strategy  are  (1)  increasing  vertical  integration  by
supplying complete toner and cartridge devices, (2) capitalizing on our research
and development  expertise of producing specialty,  color and digital copier and
or  multifunctional  device toners,  (3) exploiting the efficiencies  associated
with the investment made in manufacturing facilities,  (4) expanding our sources
for products from  strategic  suppliers  that we can add value to or resell that
complement our product lines and (5) expanding into new geographic markets,  and
broadening our sales channels,  including  selling certain products  directly to
retailers.


                                       10
<PAGE>


RECENT DEVELOPMENTS

During the second  quarter of 2003 we commenced the sale of all-in-one  imaging,
toner and drum  cartridges  for use two  personal  copiers and a laser  printer.
During the third quarter 2003 we will further  expand our product  offerings for
copiers,   including  adding  toners  and  parts  for  several  Minolta(TM)  and
Konica(TM)  copiers and  introducing  additional  digital  toners for Ricoh(TM),
Canon(TM) and Toshiba copiers(TM).

During  the  third  quarter  2003,  we will  open a  sales  office  in  southern
California  to  increase  our  customer  base  on  the  west  coast,  and we are
considering  the  addition  of a  warehouse  for  finished  products  to improve
delivery to existing and prospective west coast customers.  Additionally, during
July  2003  we  announced  the  closeout  of  most  of our  laser  parts  stock,
discontinuing  the  sale of  approximately  80% of all  laser  parts  previously
offered by the Company, and we are in the process of discontinuing laser printer
products for older  machines  that  currently  comprise more than 50% of all our
laser printer toner products.

OVERVIEW

Net sales are  primarily  generated  from the sale of our black text,  color and
magnetic  character  recognition  toners, and we believe net sales of all-in-one
imaging,  toner and drum  cartridges  will become a  significant  portion of our
total sale in the next few years.  Net sales  decreased to $10.7 million for the
six months  ended June 30,  2003,  compared to $15.6  million for the six months
ended June 30, 2002. This 32% decrease in net sales resulted  primarily from the
decrease in sales to our two largest customers. In the six months ended June 30,
2003, our two largest  customers,  distributors of imaging  supplies for whom we
private label,  accounted for  approximately 31% and 18%,  respectively,  of net
sales,  with the latter being an OEM. Sales to these customers consist primarily
of analog  copier  products,  and as a result are expected to decline over time.
Further, both of these customers either have, or will,  manufacture  themselves,
or with another,  certain  products that we formerly  supplied to them.  For the
year ended December 31, 2003, we expect the sales to our largest  customer to be
less than one-half of their 2002 sales of approximately $13.2 million, and sales
to our second largest customer are expected to be approximately  60% of the 2002
sales of $5.5 million. As a result, our sales will be less concentrated with our
largest  customers,  sales overall  during 2003 will be less than those of 2002,
and we expect our gross profit  margins to improve.  Our  inventory  for product
discontinued  by our largest  customers has either been sold or is being sold to
other  customers.  Net sales made outside of the United States decreased to $4.3
million,  or 41% of total sales for the six months ended June 30, 2003, compared
to $5.6  million,  or 36% for the six  months  ended  June  30,  2002.  This 23%
decrease in international sales resulted primarily from the decrease in sales to
our two largest  customers.  The revenue  decrease for the six months ended June
30,  2003  compared to the same period in 2002 for  finished  products  and bulk
toners and parts for use in copiers and laser printers from 2002 to 2003 was 28%
and  40%,  respectively,  reflecting  our  decreased  sales  to our two  largest
customers and our  continuing  transition to the sale of more finished  products
and less bulk toner.

All sales are made through purchase orders.  Revenue is recognized from the sale
of products  when the goods are  shipped to the  customer.  Consistent  with the
purchase orders and forecasts provided to us by our major customers,  we provide
our  major  suppliers  with  purchase  orders  three  months in  advance  and an
additional rolling forecast for two months. We communicate regularly and meet at
least  twice  annually  with  our  major   customers  and  suppliers  to  assess
developments  in the  industry  and changes in the  business  expected  from our
customers to maintain an efficient  supply chain.  In April 2001, we changed our
purchasing  arrangement  with our largest  supplier to FOB origination  from FOB
destination, and we adjusted our pricing to reflect the change to costs.


                                       11
<PAGE>


The following table reflects the consolidated new orders,  net of cancellations,
revenues  and  backlog as of the  beginning  and end of the three and six months
ended June 30, 2003, as well as for Color Imaging's two general product lines.

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

                              Backlog                            Backlog
                             at start                             at end
                                of         New         Net          of
                              Period      Orders     Revenue      Period
                             --------    --------    --------    --------
                                         (IN THOUSANDS OF DOLLARS)
Three Months June 30, 2003:
  Copier Products            $  2,109    $  2,633    $  3,040    $  1,702
  Printer Products                457       2,368       2,018         807
                             --------    --------    --------    --------
     Total                      2,566       5,001       5,058       2,509
                             ========    ========    ========    ========

                                         (IN THOUSANDS OF DOLLARS)
Six Months June 30, 2003:
  Copier Products            $  2,718    $  5,586    $  6,602    $  1,702
  Printer Products                473       4,419       4,085         807
                             --------    --------    --------    --------
     Total                      3,191      10,005      10,687       2,509
                             ========    ========    ========    ========
</TABLE>


CRITICAL ACCOUNTING ESTIMATES

"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  discusses  our  financial  statements  that have been  prepared  in
accordance with accounting principles generally accepted in the United States of
America.  The  preparation  of these  financial  statements  requires us to make
estimates  and  assumptions  that  affect  the  reported  amount of  assets  and
liabilities  at  the  date  of  the  financial  statements,  the  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenues and expenses during the reporting period.

On an on-going basis,  we evaluate our estimates and judgments,  including those
related to revenue recognition,  valuation allowances for inventory and accounts
receivable,  warranty and impairment of long-lived assets. We base our estimates
and  judgments on  historical  experience  and on various  other factors that we
believe to be reasonable under the circumstances.  The result of these estimates
and judgments form the basis for making  conclusions about the carrying value of
assets and liabilities that are not readily apparent from other sources.  Actual
results  may  differ  from  these  estimates  under  different   assumptions  or
conditions.  Our  significant  estimates  and  assumptions  are reviewed and any
required adjustments are recorded on a quarterly basis.

A critical  accounting  policy is one that is both important to the portrayal of
Color Imaging's financial  condition and results and requires  management's most
difficult,  subjective  or complex  judgments,  often as a result of the need to
make  estimates  about the  effect of  matters  that are  inherently  uncertain.
Management  believes the following critical  accounting policies affect its more
significant  judgments  and  estimates  in  the  preparation  of  its  financial
statements.

VALUATION ALLOWANCE FOR ACCOUNTS RECEIVABLE. We maintain allowances for doubtful
accounts for estimated  losses  resulting from the inability of our customers to
make required  payments.  These  allowances are based on historical  experience,
credit  evaluations and specific customer  collection issues we have identified.
Since our accounts  receivable are often concentrated in a relatively few number
of customers, a significant change in the liquidity or financial position of any
one  of  these   customers   could  have  a  material   adverse  impact  on  the
collectibility of our accounts receivable and our future operating results.

INVENTORY VALUATION.  Our inventories are recorded at the lower of standard cost
or the current  estimated  market value. As with any manufacturer or wholesaler,
economic conditions,  cyclical customer demand, product introductions or pricing
changes of our competitors and changes in purchasing or distribution  can affect
the  carrying  value  of  inventory.  Demand  for our  products  has  fluctuated
significantly and may do so in the future,  which could result in an increase in
the cost of inventory or an increase in excess inventory  quantities on hand. As
circumstances  warrant, we record lower of cost or market inventory adjustments.
In some instances these  adjustments can have a material effect on the financial
results of an annual or interim period.  In order to determine such adjustments,
we evaluate the age,  inventory turns,  estimated fair value and, in the case of
toner products,  whether or not they can be reformulated and  manufactured  into
other products, and record any adjustment if estimated fair value is below cost.


                                       12
<PAGE>

Through  periodic  review of each of our  inventory  categories  and by offering
markdown or closeout pricing,  we regularly take steps to sell off slower moving
inventory  to  eliminate  or  lessen  the  effect of any lower of cost or market
adjustment.  If assumptions  about future demand or actual market conditions are
less  favorable  than those  projected by  management,  write-downs of inventory
could be required,  and there can be no assurance that future  developments will
not necessitate further write-downs.


VALUATION OF LONG-LIVED  ASSETS.  We  periodically  evaluate  whether events and
circumstances  have occurred  which may affect the estimated  useful life or the
recoverability  of the remaining balance of our long-lived  assets,  such as our
investment in our toner  manufacturing  equipment.  We have  approximately  $7.8
million invested in such equipment and plant improvements, with a carrying value
of $6.5  million,  that  have  estimated  lives of up to  twenty  years.  Should
competing   technologies  or  offshore   competitors   cause  our  manufacturing
technology  to be  non-competitive,  or should  other  events  or  circumstances
indicate that the carrying amount of these assets would not be recoverable,  the
estimated life of these assets may need to be shortened and their carrying value
could be materially affected. If the sum of the undiscounted expected cash flows
from an asset to be held and used in operations is less than the carrying  value
of the asset, an impairment loss is recognized.

WARRANTY.  We provide a limited  warranty,  generally  ninety (90) days,  to all
purchasers  of our  products.  Accordingly,  we do not make a provision  for the
estimated  cost of providing  warranty  coverage,  and instead we expense  these
costs as they are  incurred.  On  occasion,  we have  been  required  and may be
required in the future to provide  additional  warranty  coverage to ensure that
our products are ultimately accepted or to maintain customer goodwill. While our
warranty costs have historically not been significant,  we cannot guarantee that
we will continue to experience a similar level of predictability  with regard to
warranty  costs as we have in the past. In addition,  the  introduction  of more
expensive finished products, technological changes or previously unknown defects
in raw  materials  or  components  may  result in more  extensive  and  frequent
warranty claims than anticipated,  which could have a material adverse impact on
our  operating   results  for  the  periods  in  which  such  additional   costs
materialize.

RESULTS OF OPERATIONS

Color  Imaging's net sales were $5.1 million and $10.7 million for the three and
six months ended June 30, 2003, a decrease of approximately 37% and 32% from the
three and six months ended June 30, 2002. The net sales by product category were
as follows:

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

                                                               % Increase
        (Dollars in thousands)                 2003       %    (Decrease)      2002       %
                                           ----------    ----  ----------   ---------    ----
        Three Months
        ------------
        Product Category:
         Cartridges and bottles
          Copier finished products            $ 2,842     56%      (37%)      $ 4,478     56%
          Printer finished products               857     17%      ( 5%)          898     11%
                                           ----------          ----------   ---------
                                                3,699     73%      (31%)        5,376     67%

        Bulk toner and parts                    1,360     27%      (48%)        2,594     33%
                                           ----------          ----------   ---------
              Total net revenue               $ 5,059    100%      (37%)      $ 7,970    100%
                                           ==========          ==========   =========

        Six Months
        ----------
        Product Category:
         Cartridges and bottles
          Copier finished products            $ 5,893     55%      (33%)      $ 8,818     56%
          Printer finished products             1,823     17%      ( 3%)        1,876     12%
                                           ----------          ----------   ---------
                                                7,716     72%      (28%)       10,694     68%

        Bulk toner and parts                    2,972     28%      (40%)        4,938     32%
                                           ----------          ----------   ---------
              Total net revenue               $10,688    100%      (32%)      $15,632    100%
                                           ==========          ==========   =========

</TABLE>


                                       13
<PAGE>


The following  table sets forth certain  information  derived from the Company's
unaudited interim statements of operations:

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

                                                          THREE MONTHS ENDED                         SIX MONTHS ENDED
                                                                JUNE 30,                                 JUNE 30,
                                                       2003                 2002                 2003                  2002
                                                      -----                 -----                -----                -----
                                                                     (PERCENTAGE OF NET SALES)

        Net sales                                       100                  100                  100                  100
        Cost of sales                                    70                   86                   73                   85
        Gross profit                                     30                   14                   27                   15
        Administrative expenses                           8                    4                    8                    4
        Research and development                          6                    3                    6                    3
        Sales and marketing                               8                    4                    7                    4
        Operating income                                  8                    2                    6                    4
        Interest expense                                  1                    1                    0                    1
        Depreciation and amortization                     6                    2                    4                    2
        Income before taxes                               8                    1                    6                    3
        Provision for income taxes                        3                    1                    2                    1

        Income from continuing operations                 5                    1                    3                    2

        Loss from discontinued operations,
        net of income taxes                               0                   -1                    0                   -1

        Net income                                        5                    0                    3                    1

</TABLE>

THREE MONTHS ENDED JUNE 30, 2003 COMPARED TO THREE MONTHS ENDED JUNE 30, 2002

NET SALES. Our net sales decreased by $2.9 million,  or 37%, to $5.1 million for
the three  months  ended June 30,  2003,  from $8.0 million for the three months
ended June 30, 2002.  Net sales made in the United States were $3.0  million,  a
decrease of $2.0  million,  or 39%,  from $5.0  million  made in the  comparable
period in 2002.  Net sales made outside of the United  States  decreased by $0.9
million,  or 31%,  for the  quarter  compared to the same  quarter of 2002.  The
decrease in net sales for the  quarter  compared to that of a year ago made both
inside and outside of the United  States was  primarily  the result of decreased
sales to our two  largest  customers.  Of the $5.1  million in net  sales,  $3.7
million,  or 73%, were attributable to our copier and printer finished products,
compared to 67% for the comparable  period in 2002,  while the net sales of bulk
toner and parts  declined  from 33% of net sales for the three months ended June
30, 2002 compared to 27% for the comparable period in 2003. Net sales to our two
largest  customers  decreased as a percentage  of our total sales to 45% for the
three months ended June 30, 2003, from 52% for the comparable period in 2002.

COST OF GOODS SOLD.  Cost of goods sold  decreased by $3.3  million,  or 49%, to
$3.5  million from $6.9 million for the three months ended June 30, 2003 for the
comparable period in 2002,  primarily as the result of the decrease in net sales
and  secondarily  from reduced costs of  manufacturing.  Cost of goods sold as a
percentage of net sales decreased by 16 percentage points from 86% for the three
months  ended June 30,  2002 to 70% for the three  months  ended June 30,  2003,
primarily  as the result of reduced  sales  derived from certain very low margin
products previously sold to our largest customer that have been discontinued and
a larger  percentage  of sales being  derived from sales of products with higher
gross margins.

GROSS PROFIT.  As a result of the above factors,  gross profit increased to $1.5
million in the three  months  ended June 30, 2003 from $1.1 million in the three
months ended June 30, 2002, or by $447,000,  while net sales for the same period
decreased by $2.9 million.  Gross profit as a percentage of net sales  increased
by 16  percentage  points  from 14% to 30% for the three  months  ended June 30,
2003, as compared to the corresponding period of the prior year. The increase in
the  percentage of gross profit  resulted  primarily  from reduced sales derived
from certain very low margin products  previously  sold to our largest  customer
that have been  discontinued and a larger percentage of sales being derived from
sales of products with higher gross margins.

OPERATING EXPENSES. Operating expenses decreased $235,000, or 26%, to $1,140,000
in the three months ended June 30, 2003 from  $905,000 in the three months ended
June 30, 2002. General and  administrative,  selling and R&D expenses increased,
as a  percentage  of net sales,  to 22% in the three  months ended June 30, 2003
from 11% in the three  months  ended June 30, 2002 as the result of the decrease
in net sales for the quarter and higher expenditures in all categories.  General


                                       14
<PAGE>

and administrative  expenses increased approximately 29%, or $97,000 to $426,000
for the three  months  ended June 30, 2003 from the  comparable  period in 2002,
largely resulting from increased  professional fees in connection with complying
with the change in SEC  reporting  requirements  from  Regulation  SB to S-K and
increased state franchise taxes.  Selling expenses increased by $52,000, or 15%,
in the three months ended June 30, 2003  compared to the three months ended June
30,  2002.  Selling  expenses  increased  primarily  as a  result  of  increased
advertising and manufacturer's representative expenses. Research and development
expenses  increased  by $86,000,  or 36%, to $325,000 in the three  months ended
June 30, 2003, primarily as the result of increased expenditures for testing and
qualifying  toner  products  and the  recruitment  and  relocation  of our  vice
president  of  technology.  We expect  to  continue  to  increase  research  and
development  expenditures  in an effort to develop  and bring to market more new
products  before our  competition,  while  also  reformulating  certain  product
formulas  to  manufacture  a  greater  percentage  of our  products  on our more
efficient production equipment.

OPERATING INCOME.  As a result of the above factors,  primarily the 41% increase
in gross profit, operating income increased by $212,000, or 113%, to a profit of
$399,000  in the three  months  ended June 30,  2003 from  $187,000 in the three
months ended June 30, 2002.

INTEREST AND FINANCE EXPENSE. Interest expense decreased by $57,000 in the three
months  ended  June 30,  2003 from the three  months  ended June 30,  2002.  The
decrease was primarily the result of reduced interest bearing debt levels.

OTHER INCOME. Other income increased by $38,000 from income of $22,000 to income
of $60,000 in the three  months  ended June 30, 2003 from the three months ended
June 30, 2002, primarily as the result of Euro exchange gains.

INCOME  TAXES.  As the result of our profit from  continuing  operations  in the
three  months  ended June 30,  2003,  we  recorded  an income tax  provision  of
$171,000 for the period,  while the income tax  provisions  were $46,000 for the
three months ended June 30, 2002.


SIX MONTHS ENDED JUNE 30, 2003 COMPARED TO SIX MONTHS ENDED JUNE 30, 2002

NET SALES. Our net sales decreased by $4.9 million, or 32%, to $10.7 million for
the six months ended June 30, 2003,  from $15.6 million for the six months ended
June 30, 2002. Net sales made in the United States were $6.3 million, a decrease
of $3.7 million,  or 37%, from $10.0  million made in the  comparable  period in
2002. Net sales made outside of the United States decreased by $1.4 million,  or
25%, to $4.3 million for the six months ended June 30, 2003 compared to the same
six months of 2002.  The decrease in net sales for the six months ended June 30,
2003,  compared to that of a year ago resulted  primarily  from reduced sales to
our two largest customers.  Of the $10.7 million in net sales, $7.7 million,  or
72%, were attributable to our finished products for use in copiers and printers,
while $3.0 million, or 28%, were derived from the sale of bulk toners and parts.
Of the $15.6  million in net sales for the six months ended June 30,  2002,  68%
were derived from finished products for use in copiers and printers,  while $4.9
million,  or 32%,  were  derived  from the sale of bulk  toners and  parts.  The
revenue  decrease  for the six months  ended June 30, 2003  compared to the same
period  in 2002 for  finished  products  and bulk  toners  and  parts for use in
copiers  and laser  printers  from  2002 to 2003 was 28% and 40%,  respectively,
reflecting the decreased sales from our two largest customers and our continuing
transition to the sale of more finished products.

COST OF GOODS SOLD.  Cost of goods sold  decreased by $5.5  million,  or 41%, to
$7.8 million from $13.3  million for the six months ended June 30, 2003 from the
comparable  period  in 2002.  Cost of goods  sold as a  percentage  of net sales
decreased  by 12  percentage  points from 85% for the six months  ended June 30,
2002 to 73% for the six months ended June 30,  2003,  primarily as the result of
reduced sales derived from certain very low margin  products  previously sold to
our largest customer that have been  discontinued and larger percentage of sales
being derived from sales of products with higher gross margins.

GROSS PROFIT.  As a result of the above factors,  gross profit increased to $2.9
million  in the six  months  ended  June 30,  2003 from $2.3  million in the six
months  ended June 30, 2002,  or $544,000 and 23%,  while net sales for the same
period  decreased by $4.9 million,  or 32%.  Gross profit as a percentage of net
sales increased by 12 percentage points from 15% to 27% for the six months ended
June 30, 2003, as compared to the  corresponding  period of the prior year.  The
increase in the percentage of gross profit resulted primarily from reduced sales
derived  from certain very low margin  products  previously  sold to our largest
customer  that have been  discontinued  and a larger  percentage  of sales being
derived from sales of products with higher gross margins.

OPERATING EXPENSES. Operating expenses increased $488,000 or 28% to $2.2 million
in the six months  ended June 30, 2003 from $1.8 million in the six months ended
June 30, 2002. As a percentage of net sales general and administrative,  selling
and R&D expenses, was 21% and 11%,  respectively,  for the six months ended June


                                       15
<PAGE>

30, 2003 and 2002.  The  increase in operating  expenses as a percentage  of net
sales was  largely  the result of the  decrease  in net sales for the six months
ended June 30, 2003, and increased  expenses in each operating  expense category
in support of the changes being made in the  operations of the Company.  General
and administrative expenses increased approximately 28%, or $198,000 to $893,000
for the six  months  ended  June 30,  2003 from the  comparable  period in 2002,
largely  resulting from  increased  professional  expenses for  compliance  with
changing  from  SEC  regulation  SB to  S-K  reporting  and  the  repurchase  of
securities issued in our private  placement  completed in 2001, the provision of
$78,000 for a bonus program and payroll for a staff addition.  Selling  expenses
increased by $144,000, or 24%, in the six months ended June 30, 2003 compared to
the six months ended June 30, 2002. Selling expenses increased  primarily as the
result of increased advertising,  product samples given to customers and payroll
for sales  and  customer  support  staff  increases.  Research  and  development
expenses increased by $146,000, or 32%, to $597,000 in the six months ended June
30, 2003, primarily as the result of increased  expenditures for product testing
and  qualification  and expenses in connection with the hiring and relocation of
our vice president of technology. We expect to continue to increase research and
development  expenditures  in an effort to develop and bring to market more new,
rigorously  tested,  products before our competition,  while also  reformulating
certain product formulas to manufacture a greater  percentage of our products on
our more efficient production equipment.

OPERATING INCOME.  As a result of the above factors,  operating income increased
by $156,000,  to a profit of $613,000 in the six months ended June 30, 2003 from
$557,000 in the six months ended June 30, 2002.

INTEREST AND FINANCE EXPENSE.  Interest expense  decreased by $56,000 in the six
months ended June 30, 2003 from the six months ended June 30, 2002. The decrease
was primarily the result of reduced interest bearing debt levels.

OTHER INCOME. Other income increased by $80,000 from income of $29,000 to income
of $109,000 in the six months ended June 30, 2003 from the six months ended June
30, 2002.

INCOME TAXES. As the result of our increased  profit from continuing  operations
for the six months ended June 30, 2003,  our provision for taxes  increased from
$161,000 in the six months  ended June 30, 2002 to $245,000 for the period ended
June 30, 2003.

RESULTS OF DISCONTINUED OPERATIONS

The following table sets forth, for the periods indicated,  selected information
relating to the  discontinued  operations of Logical Imaging  Solutions that has
been derived from our unaudited consolidated statements of operations.

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

                                                For the Three Months Ended      For the Six Months Ended
                                                         June 30,                       June 30,
                                                --------------------------      --------------------------
                                                  2003             2002            2003            2002
                                                -----------    -----------      -----------    -----------
(Loss) from discontinued operations:
    Before income taxes                         $      --      $(154,824)       $      --      $(260,326)
    Income tax provision (benefit)                     --        (62,000)              --       ( 97,244)
                                                -----------    -----------      -----------    -----------
Net (loss) from discontinued operations         $      --      $ (92,824)       $      --      $(163,082)
                                                ===========    ===========      ===========    ===========

</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2003, and December 31, 2002,  our working  capital and current ratio
was  approximately  $7.2  million and $1.8  million and 2.74 to 1 and 1.29 to 1,
respectively.  The substantial increase in our working capital and current ratio
at June 30, 2003,  compared to December 31, 2002,  was  primarily due to the net
proceeds we received for the public sale on Form SB-2 of our common stock.

Cash flows used by  continuing  operating  activities  were  $470,700 in the six
months ended June 30, 2003 compared to $27,693 provided by continuing operations
in the six  months  ended  June 30,  2002.  The cash  flows  used by  continuing
operating  activities in the six months ended June 30, 2003 increased  primarily
due to the reduction made to accounts  payable and increased  inventory net of a
reduction in accounts receivable.

Cash flows used in investing  activities  were  $146,819 in the six months ended
June 30, 2003,  compared to $331,311 in the six months ended June 30, 2002.  The
decrease in cash used in investing  activities  in the six months ended June 30,
2003, was entirely  attributable to decreased capital expenditures in connection
with our most recent factory expansion.



                                       16
<PAGE>

We have a $1.5 million revolving line of credit, as amended,  with our bank with
an  outstanding  balance  as of June 30,  2003 of $0,  bearing  interest  at the
one-month  Libor  interest rate in effect two business days before the first day
of the  month  plus  2.50%.  As of June  30,  2003,  the  interest  rate was the
one-month Libor rate of 1.12% plus 2.50% (3.62%).  This revolving line of credit
has a June 30, 2004 expiration date. Under the line of credit,  we are permitted
to borrow up to 75% of eligible  accounts  receivable and 50 percent of eligible
inventories  (up to a maximum  of  $750,000  and not to exceed 50 percent of the
total  outstanding).  We have granted the bank a security interest in all of our
assets as security for the repayment of the line of credit.  The bank  agreement
contains various covenants which we are required to maintain, and as of June 30,
2003, we were in compliance with these covenant requirements.

Cash flows provided by financing  activities,  after the repayment of $1,678,213
of debt and $1,022,470  reduction to the line of credit for the six months ended
June 30, 2003 were  $3,040,196,  resulting  primarily from the $5,917,000 in net
proceeds received for the public sale of our common stock to an affiliate.  Cash
flows provided by financing  activities for the same six month period ended June
30, 2003,  were  $286,381,  derived  primarily  from  $500,000 in proceeds  from
related party borrowings.

On April 18, 2003, Color Imaging  established a stock  repurchase  program under
which Color  Imaging's  common stock,  with an aggregate  market value up to the
lesser of $1 million or 1 million shares,  may be acquired in the open market or
through  private  or  other  transactions.  In  July  2003,  Color  Imaging  has
repurchased some 9,500 shares our common stock which have yet to be certificated
and cancelled.

We believe that existing cash balances,  cash generated by operating activities,
and funds  available under our credit facility will be sufficient to finance our
operating and investing  activities for at least the next 12 months,  which will
include  expenditures of approximately  $500,000 for  manufacturing and research
and development  equipment,  approximately $100,000 for a significant upgrade to
our accounting and manufacturing computer system and the repurchase of our stock
under  the  stock  repurchase  program  of up to the  lesser  of  $1,000,000  or
1,000,000 shares of our common stock.

FACTORS   THAT  MAY   AFFECT   FUTURE   RESULTS   AND   INFORMATION   CONCERNING
FORWARD-LOOKING STATEMENTS

RISK FACTORS

RISKS RELATED TO OUR BUSINESS:

OUR BUSINESS DEPENDS ON A LIMITED NUMBER OF CUSTOMERS.

For  the  six  months  ended  June  30,  2003,   two  customers   accounted  for
approximately  48%  of our  net  sales.  We do not  have  contracts  with  these
customers and all of the sales to them are made through purchase  orders.  While
our products typically go through the customer's required qualification process,
which we  believe  gives us an  advantage  over other  suppliers,  this does not
guarantee  that the  customer  will  continue to  purchase  from us. The loss of
either of these  customers,  including  through an  acquisition,  other business
combination  or the loss by them of business from their  customers  could have a
substantial and adverse effect on our business.  We have in the past, and may in
the future,  lose one or more major  customers  or  substantial  portions of our
business with one or more of our major customers.  If we do not sell products or
services to  customers in the  quantities  anticipated,  or if a major  customer
reduces  or  terminates  its  relationship  with us,  market  perception  of our
products and technology,  growth prospects,  and financial condition and results
of operation could be harmed.

OUR  RELIANCE ON SALES TO A FEW MAJOR  CUSTOMERS  AND  GRANTING  CREDIT TO THOSE
CUSTOMERS PLACES US AT FINANCIAL RISK.

As of June 30, 2003,  receivables  from two customers  comprised 44% of accounts
receivable.  A concentration of our receivables from a small number of customers
places us at risk should these receivables become  uncollectable.  If any one or
more of our major  customers is unable to pay us it could  adversely  affect our
results of operations and financial condition.  Color Imaging attempts to manage
this credit risk by performing  credit  checks,  requiring  significant  partial
payments  prior  to  shipment  where   appropriate,   and  actively   monitoring
collections.

APPROXIMATELY  39% OF OUR BUSINESS DEPENDS ON A SUPPLIER  APPROVED BY ONE OF OUR
CUSTOMERS.

Some  of  our  products  incorporate  technologies  that  are  available  from a
particular   supplier  that  has  been   approved  by  one  of  our   customers.
Approximately  31% of our sales for the six  months  ended June 30,  2003,  were
derived from products limited to a specific  supplier.  For the six months ended
June 30, 2003, we purchased 39% of our supplies from that same  supplier.  We do


                                       17
<PAGE>

not  have a  written  agreement  with  this or any  other  supplier.  We rely on
purchase orders. Should we be unable to obtain the necessary materials from this
supplier, product shipments could be prevented or delayed, which could result in
a loss of sales.  If we are  unable to  fulfill  existing  orders or accept  new
orders because of a shortage of materials,  we may lose revenues and risk losing
customers.

IF OUR CRITICAL SUPPLIERS FAIL TO DELIVER SUFFICIENT  QUANTITIES OF MATERIALS OR
PRODUCTS IN A TIMELY AND  COST-EFFECTIVE  MANNER IT COULD NEGATIVELY  AFFECT OUR
BUSINESS.

We use a wide range of materials in the  production of our products,  and we use
numerous  suppliers  to supply  materials  and  certain  finished  products.  We
generally do not have guaranteed supply arrangements with our suppliers. Because
of the  variability and uniqueness of customers'  orders,  we do not maintain an
extensive  inventory of materials  for  manufacturing  or resale.  Key suppliers
include  providers of special resins,  toners and our injection molder affiliate
that provides plastic  bottles,  cartridges and related  components  designed to
avoid the intellectual property rights of others.

Although we make  reasonable  efforts to ensure that raw  materials,  toners and
certain  finished  products are available from multiple  suppliers,  this is not
always possible;  accordingly, some of these materials are being procured from a
single  supplier or a limited  group of suppliers.  Many of these  suppliers are
outside the United  States,  resulting in longer  lead-times  for many important
materials,  which could cause delays in meeting  shipments to our customers.  We
have  sought,  and will  continue to seek,  to minimize  the risk of  production
interruptions and shortages of key materials and products by:

     o    selecting and qualifying  alternative  suppliers for key materials and
          products;
     o    monitoring the financial stability of key suppliers; and
     o    maintaining appropriate inventories of key materials and products.

There can be no assurance that results of operations  will not be materially and
adversely  affected  if,  in the  future,  we do not  receive  in a  timely  and
cost-effective manner a sufficient quantity of raw materials, toners or finished
products to meet our production or customer delivery requirements.

OUR  SUCCESS IS  DEPENDENT  ON OUR  ABILITY TO UTILIZE  AVAILABLE  MANUFACTURING
CAPACITY.

From 1999 through 2000, we expanded our manufacturing  capacity by acquiring new
manufacturing  equipment and moving to a larger location.  We intend to continue
to expand  capacity  by placing in service  additional  manufacturing  equipment
during  2003.  To  fully  utilize  these  new  additions  to  the  factory,  new
formulations for toner have to be developed specifically for manufacture on this
new  equipment  or orders for  larger  quantities  of  existing  toners  must be
obtained. While we have been successful in developing formulas for new equipment
in the past and  increasing  sales of many of our existing toner  products,  our
continued  success  will be  dependent  on our  ability  to  develop  additional
formulations  or increase our sales from existing  formulations  and manufacture
the toners with the new equipment to achieve a reduction in production costs. We
cannot  assure  you  that  we  will  be  successful  in  developing  all  of the
formulations  needed in the future or that we will be able to manufacture  toner
at a lower production cost on a regular basis or that such products will achieve
market  acceptance.  If we are not  successful  in  increasing  the sales of our
manufactured  products,  or if our  existing  sales from  manufactured  products
decline, our business will be materially and adversely affected.

OUR SUCCESS IS DEPENDENT ON OUR ABILITY TO SUCCESSFULLY DEVELOP, OR ACQUIRE FROM
THIRD PARTIES,  INTELLECTUAL  PROPERTY OR PRODUCTS THAT WE CAN COMMERCIALIZE AND
THAT ACHIEVE MARKET ACCEPTANCE.

Our success depends in part on our ability to develop proprietary toner formulas
and manufacturing  processes,  obtain copyrights and trademarks,  maintain trade
secret  protection  and operate  without  infringing the  proprietary  rights of
others.  Future claims of intellectual  property  infringement  could prevent us
from obtaining  technology of others and could  otherwise  adversely  affect our
operating results, cash flows, financial position or business, as could expenses
incurred  enforcing  intellectual  property  rights  against others or defending
against claims that our products  infringe the  intellectual  property rights of
others.

Success in the  aftermarket  imaging  industry  depends,  in part, on developing
consumable  products that are  compatible  with the printers,  photocopiers  and
facsimile  machines  made by the OEMs,  and that have a selling  price less than
that of like consumable  supplies  offered by the OEM. For example,  if the OEMs
introduce chemical toners with better imaging characteristics and higher yields,
microprocessor  chips  that  communicate  between  the toner  cartridge  and the
device, or introduce products using patented or other proprietary  technologies,
then the aftermarket  industry has to respond with ongoing development  programs
to offer compatible  products that emulate the OEMs' without infringing upon the
OEM's intellectual property.



                                       18
<PAGE>

Technical innovations are inherently complex and require long development cycles
and appropriate  professional  staffing.  Our future business success depends on
our  ability,  and that of  critical  suppliers,  to develop and  introduce  new
products that successfully  address the changing  technologies of the OEMs, meet
the customer's  needs and win market  acceptance in a timely and  cost-effective
manner.  If we do not develop and introduce  products  compatible with the OEM's
technologies  in a timely  manner in response to changing  market  conditions or
customer requirements, our business could be seriously harmed.

The challenges we face in implementing  our business model include  establishing
market acceptance of existing products and successfully  developing or acquiring
new  product  lines  that  achieve  market  acceptance.   We  must  successfully
commercialize the products that are currently being developed, such as our color
and magnetic  character  recognition toner for printers and black text and color
toners for new digital copiers and continue to acquire from third parties parts,
materials and finished product that can be integrated into finished  products or
sold as our products.  While we have  successfully  developed toners in the past
and are in the late stages of developing and testing several new toners, we have
not commercialized many of the toners that are under development.  While we have
in the past acquired from third parties materials and products that we have been
successful  in  selling,  there can be no  assurance  that parts,  materials  or
products for new products will be available or will achieve  market  acceptance.
If we fail to  successfully  commercialize  products we develop or acquire  from
third  parties,  or if these  products fail to achieve  market  acceptance,  our
financial condition and results of operation would be seriously harmed.

OUR BUSINESS MIGHT BE ADVERSELY AFFECTED BY OUR DEPENDENCE ON FOREIGN BUSINESS.

We sell a  significant  amount of  product  to  customers  outside of the United
States. International sales accounted for 41%, 37%, 24% and 10% of net sales for
the six months  ended June 30, 2003,  and in the years ended  December 31, 2002,
2001 and 2000, respectively. We expect that shipments to international customers
will  continue  to account for a material  portion of net sales.  During the six
months ended June 30, 2003, our sales were made to customers  outside the United
States as follows:

     o    Europe/Eastern Europe - 22%
     o    Mexico - 12%
     o    Asia/Southeast Asia - 3%
     o    Other - 4%

Most of our products sold  internationally,  including  those sold to our larger
international  customers, are on open account, giving rise to the added costs of
collection  in the  event of  non-payment.  Further,  should a  product  shipped
overseas be defective, Color Imaging would experience higher costs in connection
with a product recall or return and replacement.

Most of our products are priced in U.S.  dollars,  but because we began  selling
products in Europe  denominated in Euros during 2001,  fluctuations  in the Euro
could  also  cause  our  products  there  to  become  less  affordable  or  less
competitive  or we may  sell  some  products  at a loss  to  otherwise  maintain
profitable  business from a customer.  We recorded a gain of $75,865 for the six
months ended June 30, 2003.  We recorded a gain of $2,858 and a charge of $1,877
during the years ended December 31, 2002 and 2001, respectively,  as a result of
foreign currency transactions.

While our  business  has not been  materially  affected  in the past by  foreign
business or currency  fluctuations,  because of our  significant  dependence  on
international  revenues, our operating results could be negatively affected by a
continued or  additional  decline in the  economies  of any of the  countries or
regions  in which we do  business.  Periodic  local  or  international  economic
downturns,  trade balance issues,  changes to duties,  tariffs or  environmental
regulations,  political  instability  and  fluctuations in interest and currency
exchange rates could negatively affect our business and results of operations.

We cannot assure you that these factors will not have a material  adverse effect
on our international sales and would, as a result,  adversely impact our results
of operation and financial condition.

OUR RESULTS OF OPERATIONS  MAY BE  MATERIALLY  HARMED IF WE ARE UNABLE TO RECOUP
OUR INVESTMENT IN RESEARCH AND DEVELOPMENT.

The rapid change in technology in our industry requires that we continue to make
investments   in  research  and   development  in  order  to  not  only  develop
technologies  that  function  like the  OEMs' and do not  infringe  on the OEMs'
intellectual  property  rights,  but we must also  enhance the  performance  and
functionality  of our  products and to keep pace with  competitive  products and
satisfy customer demands for improved performance,  features,  functionality and


                                       19
<PAGE>

costs.  There can be no assurance that revenues from future  products or product
enhancements will be sufficient to recover the development costs associated with
such  products or  enhancements  or that we will be able to secure the financial
resources necessary to fund future  development.  Research and development costs
typically  are  incurred  before  we  confirm  the  technical   feasibility  and
commercial viability of a product, and not all development  activities result in
commercially viable products.  In addition, we cannot ensure that these products
or enhancements  will receive market  acceptance or that we will be able to sell
these  products  at prices  that are  favorable  to us.  Our  business  could be
seriously harmed if we are unable to sell our products at favorable prices or if
our products are not accepted by the market in which we operate.

OUR INTELLECTUAL PROPERTY PROTECTION IS LIMITED.

We do not rely on patents to protect  our  proprietary  rights.  We do rely on a
combination of laws such as trade secrets and contractual  restrictions  such as
confidentiality   agreements  to  protect   proprietary   rights.   Despite  any
precautions we have taken:

     o    laws and contractual  restrictions  might not be sufficient to prevent
          misappropriation  of our  technology  or deter others from  developing
          similar technologies; and
     o    policing unauthorized use of our products is difficult,  expensive and
          time-consuming  and we might not be able to  determine  the  extent of
          this unauthorized use.

Therefore, there can be no assurance that we can meaningfully protect our rights
in such unpatented  proprietary technology or that others will not independently
develop substantially  equivalent proprietary products or processes or otherwise
gain access to the proprietary  technology.  Reverse  engineering,  unauthorized
copying or other  misappropriation  of our proprietary  technology  could enable
third  parties to benefit  from our  technology  without  paying us which  could
significantly harm our business.

WE DEPEND ON THE EFFORTS AND ABILITIES OF CERTAIN  SENIOR  MANAGEMENT  AND OTHER
KEY PERSONNEL TO CONTINUE OUR OPERATIONS AND GENERATE REVENUES.

Our success depends to a significant  extent on the continued services of senior
management and other key personnel. While we do have employment, non-compete and
confidentiality  agreements  with  executive  officers  and  certain  other  key
individuals, employment agreements may be terminated by either party upon giving
the required notice.  The loss of the services of any of our executive  officers
or other key employees could harm our business.  Our success also depends on our
ability to attract,  retain and motivate highly skilled  employees.  Competition
for qualified  employees in the industries in which we operate is intense. If we
fail to hire and retain a sufficient number of qualified employees, our business
will be adversely affected.

WE HAVE A SINGLE MANUFACTURING FACILITY AND WE MAY LOSE REVENUE AND BE UNABLE TO
MAINTAIN OUR CLIENT RELATIONSHIPS IF WE LOSE OUR PRODUCTION CAPACITY.

We manufacture all of the products we sell in our existing facility in Norcross,
Georgia.  If our existing production facility becomes incapable of manufacturing
products for any reason,  we may be unable to meet production  requirements,  we
may lose revenue and we may not be able to maintain our  relationships  with our
customers.  Without our  existing  production  facility,  we would have no other
means of manufacturing  products until we were able to restore the manufacturing
capability  at our facility or develop an  alternative  manufacturing  facility.
Although we carry  business  interruption  insurance  to cover lost  revenue and
profits in an amount we consider  adequate,  this  insurance  does not cover all
possible situations.  In addition, our business interruption insurance would not
compensate  us for the loss of  opportunity  and  potential  adverse  impact  on
relations  with our existing  customers  resulting from our inability to produce
products for them.

OUR ACQUISITION STRATEGY MAY PROVE UNSUCCESSFUL.

We intend to pursue  acquisitions of businesses or technologies  that management
believes  complement or expand the existing business.  Acquisitions of this type
involve a number of risks,  including the possibility that the operations of any
businesses that are acquired will be  unprofitable or that management  attention
will be diverted  from the  day-to-day  operation of the existing  business.  An
unsuccessful  acquisition  could reduce  profit  margins or  otherwise  harm our
financial   condition,   by,  for  example,   impairing  liquidity  and  causing
non-compliance with lending institution's  financial covenants. In addition, any
acquisition  could  result in a  dilutive  issuance  of equity  securities,  the
incurrence  of  debt or the  loss  of key  employees.  Certain  benefits  of any
acquisition may depend on the taking of one-time or recurring accounting charges
that may be material. We cannot predict whether any acquisition undertaken by us
will be successfully  completed or, if one or more  acquisitions  are completed,
whether the  acquired  assets  will  generate  sufficient  revenue to offset the
associated costs or other adverse effects.

COMPLIANCE  WITH  GOVERNMENT  REGULATIONS  MAY  CAUSE  US  TO  INCUR  UNFORESEEN
EXPENSES.

Our black text,  color and magnetic  character toner supplies and  manufacturing
operations  are  subject to domestic  and  international  laws and  regulations,


                                       20
<PAGE>

particularly  relating to environmental  matters that impose  limitations on the
discharge of pollutants into the air, water and soil and establish standards for
treatment,  storage and disposal of solid and hazardous wastes. In addition,  we
are subject to regulations  for storm water  discharge,  and as a requirement of
the State of Georgia have  developed  and  implemented  a Storm Water  Pollution
Prevention  Plan.  We are also  required to have a permit issued by the State of
Georgia in order to conduct  various  aspects of our business.  Compliance  with
these laws and regulations has not in the past had a material  adverse affect on
our capital  expenditures,  earnings or  competitive  position.  There can be no
assurance, however, that future changes in environmental laws or regulations, or
in the criteria required to obtain or maintain necessary permits,  will not have
a material adverse affect on our operations.

OUR QUARTERLY OPERATING RESULTS FLUCTUATE AS A RESULT OF MANY FACTORS.

Our quarterly operating results fluctuate due to various factors.  Some of these
factors  include the mix of products sold during the quarter,  the  availability
and costs of raw materials or components,  the costs and benefits of new product
introductions, and customer order and shipment timing. Because of these factors,
our quarterly  operating results are difficult to predict and are likely to vary
in the future.

RISKS RELATING TO OUR INDUSTRY:

WE OPERATE IN A COMPETITIVE AND RAPIDLY CHANGING MARKETPLACE.

There is significant  competition in the toner and consumable  imaging  products
industry in which we operate. In addition, the market for digital color printers
and copiers and related  consumable  products is subject to rapid change and the
OEM technologies are becoming  increasingly  difficult barriers to market entry.
Many competitors,  both OEMs and other after market firms, have longer operating
histories,  larger customer bases,  greater brand  recognition and significantly
greater  financial,  marketing and other resources than we do. These competitors
may be able to devote  substantially more resources to developing their business
than we can. Our ability to compete depends upon a number of factors,  including
the  success and timing of product  introductions,  marketing  and  distribution
capabilities and the quality of our customer support.  Some of these factors are
beyond our control.  In addition,  competitive  pressure to develop new products
and technologies could cause our operating expenses to increase substantially.

THE IMAGING SUPPLIES INDUSTRY IS COMPETITIVE AND WE ARE RELATIVELY SMALL IN SIZE
AND HAVE FEWER RESOURCES IN COMPARISON WITH MANY OF OUR COMPETITORS.

Our industry  includes large original  equipment  manufacturers  of printing and
photocopying  equipment  and the  related  imaging  supplies,  as well as  other
manufacturers and resellers of aftermarket  imaging  supplies,  with substantial
resources to support customers  worldwide.  Our future performance  depends,  in
part, upon our ability to continue to compete successfully worldwide. All of the
original  equipment   manufacturers  and  many  of  our  other  competitors  are
diversified  companies  with  greater  financial  resources  and more  extensive
research, engineering, manufacturing, marketing and customer service and support
capabilities  than we can provide.  We face  competition  from  companies  whose
strategy is to provide a broad array of products, some of which compete with the
products that we offer.  These competitors may bundle their products in a manner
that may discourage customers from purchasing our products. In addition, we face
competition  from smaller emerging imaging supply companies whose strategy is to
provide  a  portion  of the  products  and  services  that  we  offer.  Loss  of
competitive position could impair our prices, customer orders,  revenues,  gross
margins,  and market share, any of which would  negatively  affect our operating
results and financial condition.  Our failure to compete successfully with these
other companies  would  seriously harm our business.  There is risk that larger,
better-financed  competitors will develop and market more advanced products than
those that we currently offer or may be able to offer, or that  competitors with
greater  financial  resources  may  decrease  prices  thereby  putting  us under
financial pressure.  The occurrence of any of these events could have a negative
impact on our revenues.

OUR  PRODUCTS  HAVE  SHORT  LIFE  CYCLES  AND  ARE  SUBJECT  TO  FREQUENT  PRICE
REDUCTIONS.

The  markets in which we operate  are  characterized  by  rapidly  evolving  and
increasingly  difficult  technologies,  frequent new product  introductions  and
significant  price  competition.  Consequently,  our  products  have  short life
cycles, and we must frequently reduce prices in response to product competition.
Our financial condition and results of operations could be adversely affected if
we are unable to manufacture  new and  competitive  products in a timely manner.
Our success  depends on our ability to develop and  manufacture  technologically
advanced  products,  price them  competitively,  and achieve cost reductions for
existing  products.   Technological  advances  require  sustained  research  and
development efforts,  which may be costly and could cause our operating expenses
to increase substantially.



                                       21
<PAGE>

OUR  FINANCIAL  PERFORMANCE  DEPENDS  ON  OUR  ABILITY  TO  SUCCESSFULLY  MANAGE
INVENTORY LEVELS, WHICH IS AFFECTED BY FACTORS BEYOND OUR CONTROL.

Our  financial  performance  depends in part on our ability to manage  inventory
levels to  support  the needs of new and  existing  customers.  Our  ability  to
maintain  appropriate  inventory  levels  depends on factors beyond our control,
including  unforeseen  increases  or  decreases  in demand for our  products and
production and supply  difficulties.  Demand for our products can be affected by
product  introductions  or price changes by competitors or by us, the life cycle
of our products,  or delays in the development or manufacturing of our products.
Our  operating  results and ability to increase the market share of our products
may be  adversely  affected  if we are unable to address  inventory  issues on a
timely basis.

RISKS RELATING TO OWNING OUR COMMON STOCK:

OUR OFFICERS AND DIRECTORS BENEFICIALLY OWN APPROXIMATELY 42% OF THE OUTSTANDING
SHARES OF COMMON STOCK, ALLOWING THESE STOCKHOLDERS TO CONTROL MATTERS REQUIRING
APPROVAL OF THE STOCKHOLDERS.

As a result of such  ownership by our officers and  directors,  other  investors
will have limited control over matters  requiring  approval by the stockholders,
including the election of directors.  Such concentrated control may also make it
difficult  for the  stockholders  to receive a premium  for their  shares of our
common stock in the event we enter into  transactions  that require  stockholder
approval. In addition,  certain provisions of Delaware law could have the effect
of making it more difficult or more  expensive for a third party to acquire,  or
of discouraging a third party from attempting to acquire control of us.

EXERCISE OF WARRANTS AND OPTIONS  WILL DILUTE  EXISTING  STOCKHOLDERS  AND COULD
DECREASE THE MARKET PRICE OF OUR COMMON STOCK.

As of July 28, 2003, we had issued and outstanding  12,925,005  shares of common
stock and  935,337  outstanding  warrants  and  970,000  outstanding  options to
purchase  additional  shares of common stock,  inclusive of 66,670 shares of our
common  stock and warrants to purchase  133,340  shares of our common stock that
have been repurchased  pursuant to a repurchase  agreement and will be cancelled
upon  their  receipt  from  escrow.   Further,   subject  to  cancellation  upon
certification,  are 9,500 shares that we repurchased  in the market  pursuant to
our stock  repurchase  program.  The  existence  of the  remaining  warrants and
options may adversely  affect the market price of our common stock and the terms
under which we obtain additional equity capital.

WE MAY FACE POTENTIAL REGULATORY ACTION OR LIABILITY IN CONNECTION WITH OUR 2001
PRIVATE PLACEMENT.

Our  issuance  of common  stock and  warrants in a private  placement  which was
completed in 2001 could subject us to potential adverse consequences,  including
securities law liability and the voiding of contracts entered into in connection
with the private placement. If our activities or the activities of other parties
in the 2001 private placement are deemed to be inconsistent with securities laws
under Section 29 of the Securities Exchange Act of 1934 or our activities or the
activities or the activities of other parties are deemed to be inconsistent with
the broker dealer registration provisions of Section 15(a) of the Exchange Act:

     o    we may be able to void our obligation to pay transaction-related  fees
          in  connection   with  the  private   placement  and  we  may  receive
          reimbursement for fees already paid;

     o    persons with whom we have entered into  securities  transactions  that
          are  subject to these  transaction-related  fees may have the right to
          void these transactions; and

     o    we may be subject to regulatory action.

Due to the inherent uncertainties involved with the interpretation of securities
laws,  we are unable to predict the  following:  the  validity of any  potential
liability  in  connection  with  our  private  placement,  the  outcome  of  any
regulatory action or potential liability or the outcome of voiding  transactions
in connection with the private  placement.  The defense of any regulatory action
or litigation and any adverse  outcome could be costly and could have a material
adverse  effect on our financial  position and results of  operations  and could
divert management attention.

OUR COMMON STOCK IS LISTED ON THE  OVER-THE-COUNTER  (OTC) BULLETIN BOARD, WHICH
MAY MAKE IT MORE DIFFICULT FOR  STOCKHOLDERS  TO SELL THEIR SHARES AND MAY CAUSE
THE MARKET PRICE OF OUR COMMON STOCK TO DECREASE.

Because our common stock is listed on the OTC Bulletin  Board,  the liquidity of
our common stock is  impaired,  not only in the number of shares that are bought
and sold,  but also through  delays in the timing of  transactions,  and limited
coverage by security  analysts  and the news media,  if any, of us. As a result,
prices for shares of our common stock may be lower than might otherwise  prevail
if our common stock was traded on NASDAQ or a national securities exchange, like
the American Stock Exchange.



                                       22
<PAGE>

OUR STOCK  PRICE MAY BE VOLATILE  AND AN  INVESTMENT  IN OUR COMMON  STOCK COULD
SUFFER A DECLINE IN VALUE.

The market price of our common stock may fluctuate  significantly in response to
a number of  factors,  some of which  are  beyond  our  control.  These  factors
include, but are not limited to:

     o    progress of our products through development and marketing;

     o    announcements  of  technological  innovations or new products by us or
          our competitors;

     o    government  regulatory  action  affecting our products or competitors'
          products in both the United States and foreign countries;

     o    developments or disputes concerning patent or proprietary rights;

     o    actual or anticipated fluctuations in our operating results;

     o    the loss of key management or technical personnel;

     o    the loss of major customers or suppliers;

     o    the outcome of any future litigation;

     o    changes in our financial estimates by securities analysts;

     o    fluctuations in currency exchange rates;

     o    general  market   conditions   for  emerging   growth  and  technology
          companies;

     o    broad market fluctuations;

     o    recovery from natural disasters; and

     o    economic conditions in the United States or abroad.

OUR CHARTER  DOCUMENTS  AND  DELAWARE  LAW MAY HAVE THE EFFECT OF MAKING IT MORE
EXPENSIVE OR MORE DIFFICULT FOR A THIRD PARTY TO ACQUIRE, OR TO ACQUIRE CONTROL,
OF US.

Our certificate of incorporation makes it possible for our board of directors to
issue  preferred stock with voting or other rights that could impede the success
of any attempt to change  control of us. Our  certificate of  incorporation  and
bylaws  eliminate  cumulative  voting  which  may make it more  difficult  for a
minority  stockholder  to gain a seat on our board of directors and to influence
board of  directors'  decision  regarding a takeover.  Delaware Law  prohibits a
publicly  held   Delaware   corporation   from  engaging  in  certain   business
combinations with certain persons, who acquire our securities with the intent of
engaging in a business combination,  unless the proposed transaction is approved
in  a  prescribed  manner.   This  provision  has  the  effect  of  discouraging
transactions  not  approved by our board of directors as required by the statute
which may discourage  third parties from  attempting to acquire us or to acquire
control of us even if the attempt  would  result in a premium  over market price
for the shares of common stock held by our stockholders.

The  information  referred  to above  should be  considered  by  investors  when
reviewing any forward-looking statements contained in this report, in any of our
public filings or press releases or in any oral  statements made by us or any of
our officers or other persons acting on our behalf.  The important  factors that
could affect  forward-looking  statements are subject to change, and we disclaim
any obligation or duty to update or modify these forward-looking statements.

FORWARD-LOOKING STATEMENTS

Statements  contained in this report which are not statements of historical fact
are  forward-looking  statements  within  the  meaning  of  Section  27A  of the
Securities Act of 1933 and Section 21E of the  Securities  Exchange Act of 1934.
These forward-looking statements may be identified by the use of forward-looking
terms such as "believes," "expects," "may", "will," "should" or "anticipates" or
by  discussions of strategy that involve risks and  uncertainties.  From time to
time, we have made or may make forward-looking statements, orally or in writing.
These  forward-looking  statements include  statements  regarding our ability to
borrow funds from financial  institutions  or affiliates,  to engage in sales of
our securities,  our intention to repay certain  borrowings from future sales of


                                       23
<PAGE>

our  securities  or cash  flow,  the  ability to expand  capacity  by placing in
service additional manufacturing equipment during 2003, our expected acquisition
of business or  technologies,  our expectation  that shipments to  international
customers  will  continue  to  account  for a  material  portion  of net  sales,
anticipated future revenues, our introduction of new products and our increasing
our sales from digital copier,  color and magnetic  character  recognition toner
products during 2003, the prospective effects of having discontinued the Logical
Imaging Solutions operations, sales, operations,  demand, technology,  products,
business ventures, major customers, major suppliers,  retention of key officers,
management or employees,  competition, capital expenditures, credit arrangements
and other statements  regarding matters that are not historical  facts,  involve
predictions  which are based upon a number of future  conditions that ultimately
may prove to be inaccurate.  Our actual  results,  performance  or  achievements
could  differ  materially  from the results  expressed  in, or implied by, these
forward-looking  statements.  Forward-looking  statements  are made  based  upon
management's current expectations and beliefs concerning future developments and
their  potential  effects upon our business.  We cannot  predict  whether future
developments affecting us will be those anticipated by management, and there are
a number of factors that could adversely affect our future operating  results or
cause our actual results to differ materially from the estimates or expectations
reflected in such forward-looking statements.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risks

Market risk is the risk of loss to future earnings,  to fair values or to future
cash flows that may result from changes in the price of a financial  instrument.
The  value of a  financial  instrument  may  change as a result  of  changes  in
interest rates, exchange rates, commodity prices, equity prices and other market
changes.   Market  risk  is  attributed  to  all  market   sensitive   financial
instruments, including long-term debt.

We do not hold any investments or assets outside of the United States.  However,
we are exposed to financial market risks,  including changes in foreign currency
exchange rates and interest rates.

We estimate that about 7% of our transactions  are denominated in U.S.  dollars,
excepting  those sales in Euros to a few  customer's  in Europe,  including  our
second largest customer European operations.  Accordingly, beginning in 2001, we
are subject to foreign  currency risk with respect to future costs or cash flows
from our sales in Euros.  We have adjusted our prices annually with our customer
to reflect  the change in the  exchange  rate and do not expect to be subject to
material foreign currency risk,  accordingly,  with respect to those sales. As a
result,  to date, we have not entered into any foreign currency forward exchange
contracts  or other  derivative  financial  instruments  to hedge the effects of
adverse  fluctuations in foreign  currency  exchange.  We incurred a net foreign
currency  transaction gain of $75,865 in the six months ended June 30, 2003, and
we  incurred a net  foreign  currency  transaction  gain of $2,858 and a loss of
$1,877 in the years ended December 31, 2002 and 2001, respectively. Our contract
pricing for our  products  sold in Euros is  currently  at the rates of 0.96 and
1.00 Euros  relative to the U.S.  dollar.  A 10% change in the value of the Euro
relative to the United States dollar would cause approximately an $8,000 foreign
currency   translation   adjustment  in  an  average  month,  a  type  of  other
comprehensive income (loss), which would be a direct adjustment to stockholders'
equity.

Our revolving  line of credit bears interest based on interest rates tied to the
LIBOR rate,  which may fluctuate  over time based on economic  conditions.  As a
result, we are subject to market risk for changes in interest rates and could be
subjected to increased or decreased  interest payments if market rates fluctuate
and we are in a  borrowing  mode.  At June  30,  2003,  there  were  no  amounts
outstanding  under the line of credit  agreement and,  accordingly,  a sustained
increase in the reference rate of 1% would not cause our annual interest expense
to change.

Our investment policy requires  investments with high credit quality issuers and
or over night  repurchase  agreements  with our bank.  Investments  we make will
principally  consist of U.S.  government and government  agency  obligations and
investment-grade,   interest-bearing  corporate  debt  securities  with  varying
maturity  dates of five years or less, or the  overnight  purchase of securities
held in our bank's investment  portfolio.  Because of the credit criteria of our
investment  policies,  the primary market risk associated with these investments
is interest rate risk. We do not use derivative financial  instruments to manage
interest rate risk or to speculate on future changes in interest  rates.  We had
approximately  $1,750,000 invested in securities,  which are available for sale,
at June 30,  2003,  and we  experienced  a net asset value loss of $1,037 as the
result of the recent interest rate change.

Management believes that a reasonable change in raw material prices could have a
material impact on future  earnings or cash flows,  because we generally are not
able to offset increases to our costs with higher prices for our products.

ITEM 4. Controls and Procedures

     a) On July 24, 2003,  our  President and  principal  executive  officer and
Chief  Financial  Officer  participated  in a meeting  during which there was an
evaluation of our disclosure controls and procedures.  Based on such evaluation,
they believe such controls and procedures are effective.

                                       24
<PAGE>

     b) Our  President  and  principal  executive  officer  and Chief  Financial
Officer are involved in ongoing  evaluations of internal  controls.  On July 24,
2003,  in  anticipation  of the  filing of this Form  10-Q,  they  reviewed  our
internal  controls and have  determined,  based on such review,  that, since the
date of their  review,  there have been no  significant  changes in our internal
controls  or in other  factors  that would  significantly  affect  our  internal
controls subsequent to such evaluation.

PART II

ITEM 1. Legal Proceedings

None.

ITEM 2. Changes in Securities

On  January  23,  2003,  the  Company's  registration  statement  on Form  SB-2,
registering up to 7 million shares of the Company's  common stock,  was declared
effective (Registration Statement No. 333-76090), and the offering was commenced
by the  Company's  officers  and  directors.  On March  13,  2003,  the  Company
completed the public sale of 4,500,000 shares of the Company's common stock at a
price of $1.35 per share,  whereby  the  Company  received  $6,075,000  in gross
proceeds from an affiliate,  and the Company  terminated the offering before the
sale of all 7 million  of  registered  shares.  From the  effective  date of the
Company's  registration  statement  through March 31, 2003, the Company incurred
total expenses for professional  fees and printing of $30,129 in connection with
the issuance and  distribution of the Company's  common stock.  The net proceeds
received by the Company, after expenses of $30,129, was $6,044,871.  None of the
aforementioned expenses were direct or indirect payments to directors, officers,
their  associates or persons owning ten (10) percent or more of the common stock
of the Company.

Our intended uses of the $6,075,000 of proceeds received from the public sale of
our common  stock,  and our uses  through  June 30,  2003,  are listed  below in
descending order of priority:

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

Purpose:                                                   Amount                Used             Reallocated            Remaining
-------------------                                      ----------           ----------          -----------           ----------
Accounts payable and other corporate
 and offering expenses. . . . . . . . . . . . . . .      $1,000,000           $  403,684          $         0           $  596,316
To retire debt (1). . . . . . . . . . . . . . . . .      $  350,000           $  324,301          $    25,699           $        0
To retire debt (2). . . . . . . . . . . . . . . . .      $1,050,000           $  956,883          $    93,117           $        0
To retire debt (3). . . . . . . . . . . . . . . . .      $        0           $  235,000          $   235,000           $        0
To acquire capital assets . . . . . . . . . . . . .      $1,500,000           $   30,131          $         0           $1,469,869
To repurchase our stock                                  $        0           $        0          $ 1,000,000           $1,000,000
For other general corporate purposes
 including working capital. . . . . . . . . . . . .      $2,175,000           $  260,000          $ 1,116,185           $  798,815
                                                         ----------           ----------                                ----------
                                                 Total:  $6,075,000           $2,210,000                                $3,865,000

Pending application:
-------------------
Short-term investments. . . . . . . . . . . . . . .                                                                     $2,365,000
Pay down of revolving line of credit. . . . . . . .                                                                     $1,500,000

</TABLE>

----------------
     (1)  On November  30,  2000,  we entered  into a loan for  $500,000  with a
          5-year term,  secured by specific  manufacturing  equipment,  maturing
          November 30, 2004, with General Electric  Capital  Corporation for the
          purchase  of  toner  manufacturing  equipment.  The  interest  rate is
          10.214%  and  the  monthly   principal   and  interest   payments  are
          $10,676.39.

     (2)  On June 24, 1999, we entered into a loan for $1,752,000  with a 7-year
          term,  secured by our business  assets,  maturing June 24, 2006,  with
          SouthTrust Bank for the refinancing of obligations  owing the bank for
          the  acquisition  of equipment  and that due under a previous  working
          capital line of credit.  The interest  rate is 7.90% per annum and the
          monthly principal and interest payments are $27,205.00.

     (3)  On July 24, 1999, as amended, we entered into a borrowing  arrangement
          under a  revolving  line  of  credit  in the  maximum  amount  of $2.5
          million.  During  March 2003 we  temporarily  used  $1,735,000  of our
          proceeds from our public offering on Form SB-2 to pay down the line of
          credit to $0, which at that time had an interest  rate of 3.8375%.  On
          June 16, 2003, we renewed and restructured the line of credit with the
          bank,   reducing  the  maximum   availability   to  $1.5  million  and
          permanently retiring $235,000.


                                       25
<PAGE>

During March 2003,  using  proceeds from the offering on Form SB-2,  the Company
retired debt owed to General Electric  Capital  Corporation and SouthTrust Bank,
and to the extent  proceeds were not required in the amounts  outlined for those
purposes, they have been reallocated to be used for general corporate purposes.

During March 2003, pending application of the proceeds from the offering on Form
SB-2,  the  Company  paid  down  its  line of  credit  with the bank by the then
outstanding principal balance of $1,735,000.  On June 16, 2003, with the renewal
of our line of credit with SouthTrust Bank, we permanently reduced our revolving
line of credit to $1,500,000; and, as a result, we retired $235,000 of that debt
with our bank.

On April 18, 2003,  the Company  established  a stock  repurchase  program under
which the  Company may  purchase on the open market the lesser of the  aggregate
value of $1,000,00 or 1,000,000  shares in compliance  with Rule 10b-18,  and we
have reallocated  proceeds for this program.  In July 2003, under the repurchase
program the Company has repurchased 9,500 shares of our common stock on the open
market at an average price of $.66. Approximately $994,000 remains available for
future common stock repurchases.

Pending  application,  we have  retained  the  balance of the net  proceeds in a
deposit  account with the bank and an investment  account with a securities firm
related to the bank.

No direct or indirect  payments to  directors,  officers,  their  associates  or
persons owing ten (10) percent or more of the  Company's  common stock were made
with proceeds from the Company's offering on Form SB-2

On March 4, 2003,  the Company  completed the  repurchase  from a stockholder of
12,939 shares of the Company's  common stock  together with warrants to purchase
25,878  shares of the Company's  common stock at an exercise  price of $2.00 per
share for $25,878. The shares and warrants were originally sold in the Company's
private  placement  that was  completed  in  December  2001,  and the shares and
warrants repurchased by the Company were cancelled.

On February 27, 2003,  the Company  entered into an agreement with a stockholder
to repurchase  150,000  shares of common stock and warrants to purchase  300,000
shares of the  Company's  common stock at an exercise  price of $2.00 per share.
Under the agreement,  the stockholder has a one-time right to cancel the sale of
the common  stock and  warrants  not yet paid for by the  Company  upon  written
notice to the Company. Upon receipt of such notice, the Company is not obligated
to purchase the remaining common stock and warrants. The agreement provides that
the  Company is to pay $2.00 for each common  share and warrant to purchase  two
common shares of the Company's  common stock.  The shares and warrants are to be
repurchased in approximately  equal installments over nine months,  beginning in
March and ending in November  2003.  From March 24, 2003  through June 30, 2003,
the Company  repurchased  66,670 of the Company's  common shares and warrants to
purchased  133,340  common  shares,  paying  $133,340.  The shares and  warrants
repurchased  by the Company are held in escrow,  pending the  completion  of the
repurchase  in November  2003, or its earlier  cancellation,  at which time they
will be cancelled.


ITEM 3. Defaults upon Senior Securities

None

ITEM 4. Submission of Matters to a Vote of Security Holders

(a) The Registrant held its Annual Meeting of Stockholders on June 16, 2003. The
following proposals were adopted by the votes indicated.

(b) Seven directors were elected at the Annual Meeting to serve until the Annual
Meeting of  Stockholders in 2003. The names of these Directors and votes cast in
favor of their election and shares withheld are as follows:

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

          NAME                 VOTES FOR          % FOR          VOTES WITHHELD
          ----                 ---------          -----          --------------
    Jui-Hung Wang              10,616,263           82.1            115,541
    Sueling Wang, Phd          10,670,546           82.6             61,258
    Morris E. Van Asperen      10,616,296           82.1            115,508
    Yi Jen Wang                10,616,296           82.1            115,508
    Jui-Chi Wang               10,616,296           82.1            115,508
    Jui-Kung Wang              10,616,296           82.1            115,508
    Richard S. Eiswirth        10,720,546           82.9             11,258

</TABLE>

                                       26
<PAGE>

(c) The  proposal to approve the Color  Imaging  2003 Stock  Incentive  Plan was
approved by 9,785,701 votes for with 946,103 votes withheld.

(d) The prior grant of options to  employees,  officers  and  directors of Color
Imaging was ratified by a vote of 9,786,592 for and 945,212 votes withheld.

(e) The selection of Lazar Levine & Felix,  LLP as our  independent  accountants
for the year ending December 31, 2003 was ratified by 10,676,386  votes for with
55,418 votes withheld.


ITEM 5. Other Information

None

ITEM 6 -EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS

 Exhibit No.      Description
 -----------      -----------

     2.1       Merger Agreement and Plan of  Reorganization  dated May 16, 2000,
               by  and  between  Advatex   Associates,   Inc.,  Logical  Imaging
               Solutions  Acquisition  Corp.,  Color Imaging  Acquisition Corp.,
               Logical  Imaging   Solutions,   Inc.,  and  Color  Image,   Inc.,
               incorporated by reference to the  Registrant's  Form 8-K filed on
               July 17, 2000.
     2.2       Amendment   No.   1  to  the   Merger   Agreement   and  Plan  of
               Reorganization dated June 15, 2000,  incorporated by reference to
               the Registrant's Form 8-K filed on July 17, 2000
     2.3       Amendment   No.   2  to  the   Merger   Agreement   and  Plan  of
               Reorganization dated June 26, 2000,  incorporated by reference to
               the Registrant's Form 8-K filed on July 17, 2000
     2.4(1)    Share Exchange  Agreement  dated as of September 11, 2002 between
               Color Imaging,  Inc.,  Logical Imaging  Solutions,  Inc., Digital
               Color Print,  Inc., and the  shareholders of Digital Color Print,
               Inc.,   incorporated   by   reference   to  Exhibit  2.1  to  the
               Registrant's Form 8-K filed September 26, 2002.
     2.5       Amendment No. 1 to Share Exchange Agreement dated as of September
               20, 2002 between Color Imaging,  Inc., Logical Imaging Solutions,
               Inc.,  Digital Color Print, Inc., and the shareholders of Digital
               Color Print,  Inc.,  incorporated  by reference to Exhibit 2.2 to
               the Registrant's Form 8-K filed September 26, 2002.
     3.1       Certificate  of  Incorporation,   incorporated  by  reference  to
               Exhibit 3.1 to the Registration statement on Form SB-2 filed July
               15, 2002.
     3.2       Bylaws, incorporated by reference to the Registrant's Form 10-QSB
               for the quarter ended March 31, 2002.
     4.1       Stock  Purchase  Agreement  between  the  Company and Wall Street
               Consulting  Corp.   dated  October  30,  2001,   incorporated  by
               reference  to Exhibit 4.1 to the  Registration  statement on Form
               SB-2 filed May 31, 2002.
     4.2       Promissory Note of Wall Street Consulting Corp. dated October 30,
               2001,   incorporated   by   reference   to  Exhibit  4.2  to  the
               Registration statement on Form SB-2 filed May 31, 2002.
     4.3       Form of Warrant issued to Selling  Stockholders,  incorporated by
               reference  to Exhibit 4.3 to the  Registration  statement on Form
               SB-2 filed November 28, 2001.
     4.4       Development  Authority  of Gwinnett  County,  Georgia  Industrial
               Development  Trust Indenture dated June 1, 1999,  incorporated by
               reference to Exhibit 4.27 to the  Registration  statement on Form
               SB-2 filed May 31, 2002.
     4.5       Loan  Agreement  between the Company,  Kings Brothers LLC and the
               Development  Authority of Gwinnett County,  Georgia dated June 1,
               1999,   incorporated   by   reference  to  Exhibit  4.28  to  the
               Registration statement on Form SB-2 filed May 31, 2002.
     4.6       Joint  Debtor  Agreement  dated June 28,  2000 by and among Color
               Image, Inc., Kings Brothers, LLC, Dr. Sueling Wang, Jui-Chi Wang,
               Jui-Kung Wang, and Jui-Hung  Wang,  incorporated  by reference to
               Exhibit  4.28 to the  Registration  statement  on Form SB-2 filed
               February 11, 2002.


                                       27
<PAGE>


 Exhibit No.      Description
 -----------      -----------

     4.7       First  Amendment to Joint Debtor  Agreement dated January 1, 2001
               by and among Color  Imaging,  Kings  Brothers,  LLC, Dr.  Sueling
               Wang,   Jui-Chi  Wang,   Jui-Kung   Wang,   and  Jui-Hung   Wang,
               incorporated  by reference  to Exhibit  4.29 to the  Registration
               statement on Form SB-2 filed February 11, 2002.
     4.8       $500,000  Promissory  Note between Color Imaging and Sueling Wang
               dated March 14, 2002,  incorporated  by reference to Exhibit 4.34
               to the Registration statement on Form SB-2 filed April 11, 2002.
     4.9       $500,000  Promissory Note between Color Imaging and Jui Hung Wang
               dated August 21, 2002,  incorporated by reference to Exhibit 4.50
               to the Registration statement on Form SB-2 filed October 2, 2002.
     4.10      $100,000  Promissory  Note between Color Imaging and Jui Chi Wang
               dated August 21, 2002,  incorporated by reference to Exhibit 4.51
               to the Registration statement on Form SB-2 filed October 2, 2002.
     4.11      First Note Modification  Agreement between Sueling Wang and Color
               Imaging  dated  August 27,  2002,  incorporated  by  reference to
               Exhibit  4.52 to the  Registration  statement  on Form SB-2 filed
               October 2, 2002.
     4.12+     Amended  and  restated  $1,500,000  revolving  note between Color
               Imaging and SouthTrust Bank dated June 16, 2003.
     4.13+     Amended  and  restated loan and security  agreement between Color
               Imaging and SouthTrust Bank dated June 16, 2003.
     10.1      Employment  Agreement  between Color Imaging and Dr. Sueling Wang
               dated June 28, 2000, incorporated by reference to Exhibit 10.2 to
               the Registration statement on Form SB-2 filed November 28, 2001.
     10.2      Employment  Agreement  between  the  Company  and  Morris  E. Van
               Asperen dated June 28, 2000, incorporated by reference to Exhibit
               10.3 to the  Registration  statement on Form SB-2 filed  November
               28, 2001.
     10.3+     Employment  Agreement   amendment  between the Company and Morris
               E. Van Asperen dated July 14, 2003.
     10.4      Deferred  Compensation  Agreement  Amendment  between  Charles R.
               Allison and Color Imaging, Inc., December 27, 2002,  incorporated
               by reference to Exhibit 10.11 to the  Registrant's  Form 10-K for
               the year ended December 31, 2002.
     10.5+     Amendment  to  Deferred  Compensation  Agreement  between   Color
               Imaging and Charles R. Allison dated June 27, 2003.
     10.6      Lease  Agreement  between  Color  Imaging and Kings  Brothers LLC
               dated April 1, 1999, incorporated by reference to Exhibit 10.5 to
               the Registration statement on Form SB-2 filed November 28, 2001.
     10.7      Amendment No. 1 to Lease Agreement  between the Company and Kings
               Brothers  LLC dated April 1, 1999,  incorporated  by reference to
               Exhibit  10.6 to the  Registration  statement  on Form SB-2 filed
               November 28, 2001.
     10.8      Commercial Lease Agreement  Amendment  between Kings Brothers LLC
               and Color Imaging,  Inc. dated February 5, 2003,  incorporated by
               reference to Exhibit 10.13 to the Registrant's  Form 10-K for the
               year ended December 31, 2002
     10.9      Form of Warrant  between  Digital  Color  Print,  Inc.  and Color
               Imaging, Inc.,  incorporated by reference to Exhibit 10.10 to the
               Registration statement on Form SB-2 filed November 13, 2002.
     10.10     Purchase and Sale and Release Agreement between Michael Edson and
               Color  Imaging,  Inc. dated  February 27, 2003,  incorporated  by
               reference to Exhibit 10.14 to the Registrant's  Form 10-K for the
               year ended December 31, 2002
     10.11     Purchase and Sale and Release  Agreement  between Stephen Chromik
               and Color Imaging, Inc. dated February 27, 2003,  incorporated by
               reference to Exhibit 10.15 to the Registrant's  Form 10-K for the
               year ended December 31, 2002
     10.12     Form of Indemnification  Agreement,  incorporated by reference to
               the post  effective  Amendment  No. 1 to Form SB-2 filed April 1,
               2003.
     31+       Certification  Pursuant  to Section 302 of The Sarbanes-Oxley Act
               of 2002
     32+       Certification  Pursuant  to 18 U.S.C. Section 1350, As Adopted
               Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002

------------------------
+ Filed herewith.

(1) Pursuant to Rule  601(b)(2),  the schedules  and exhibits to this  Agreement
shall not be filed.  A list of the  schedules  and  exhibits is contained on the
last page of the Agreement.  The Registrant  agrees to furnish  supplementally a
copy of any of the omitted schedules and exhibits to the Securities and Exchange
Commission upon request.


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<PAGE>


(b) REPORTS ON FORM 8-K

On April 1, 2003, the Company filed a Current Report on Form 8-K disclosing that
the Company had not authorized and was not responsible  for a press release,  or
its content, issued that date by Warrior Capital.

On April 22, 2003,  the Company  filed a Current  Report on Form 8-K  announcing
that the Company's  board of directors had approved a stock  repurchase  program
whereby the Company will buy back, at prices to be determined,  its common stock
in the open market (through a broker or otherwise) from time to time.




                                       29
<PAGE>




                                   SIGNATURES


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


                                       COLOR IMAGING, INC.




                                       /S/ SUELING WANG

                                       --------------------------------------
July 28, 2003                          Sueling Wang, PhD
                                       President (principal executive officer)





                                       /S/ MORRIS E. VAN ASPEREN

                                       --------------------------------------
                                       Morris E. Van Asperen
                                       Executive Vice President and
                                       Chief Financial Officer




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