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

                             ----------------------

                                   FORM 10-QSB


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

     For the quarterly period ended September 30, 2002

[ ]  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

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

           DELAWARE                                       13-3453420
 ------------------------------              ----------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

4350 PEACHTREE INDUSTRIAL BOULEVARD, SUITE 100
             NORCROSS, GEORGIA                                         30071
----------------------------------------------                       --------
(Address of principal executive offices)                            (Zip code)


                        (770) 840-1090 FAX (770) 242-3494
                        ---------------------------------
              (Registrant's telephone number, including area code)


                  As of October 30, 2002, there were 8,437,965
                      shares of Common Stock outstanding.



<PAGE>

                               COLOR IMAGING, INC.
                         QUARTERLY REPORT ON FORM 10-QSB
                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002
                                      INDEX



PART I:   FINANCIAL INFORMATION

Item 1.   Financial Statements

          Condensed Balance Sheets at September 30, 2002
          (Unaudited) and December 31, 2001(Audited)..........................1
          Condensed Statements of Operations (Unaudited)
          for the Three and Nine Months ended September 30, 2002 and 2001.....2
          Condensed Statements of Cash Flows (Unaudited)
          for the Nine Months ended September 30, 2002 and 2001...............3
          Notes to Interim Unaudited Condensed Financial
          Statements .........................................................4

Item 2.   Management's Discussion and Analysis or Plan of Operation ..........7
Item 3.   Controls and Procedures ...........................................20

PART II:  OTHER INFORMATION

Item 1.   Legal Proceedings .................................................20
Item 2.   Changes in Securities..............................................20
Item 3.   Defaults Upon Senior Securities....................................21
Item 4.   Submission of Matters to a Vote of Security Holders................21
Item 5.   Other information .................................................21
Item 6.   Exhibits and Reports on Form 8-K...................................26
Signatures...................................................................29
Certifications...............................................................30



                                       i
<PAGE>

PART I: FINANCIAL INFORMATION
ITEM 1 -FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                               COLOR IMAGING, INC.
                            CONDENSED BALANCE SHEETS
<S>                                                             <C>              <C>
                                                                 30-Sept-02       31-Dec-01
                                                                (Unaudited)       (Audited)
                                                                ------------     ------------
                          ASSETS
CURRENT ASSETS
    Cash                                                        $    113,539     $    393,981
    Accounts receivable, net                                       2,863,728        2,894,003
    Inventory                                                      5,296,787        5,604,975
    Deferred income taxes                                             23,508          190,509
    Related party portion of IDR bond                                 83,160           79,596
    Other current assets                                             276,188          335,621
    Net assets of discontinued subsidiary                                 --        2,264,117
                                                                ------------     ------------
          TOTAL CURRENT ASSETS                                     8,656,910       11,762,802
                                                                ------------     ------------

PROPERTY, PLANT AND EQUIPMENT - NET                                7,143,967        7,013,070
                                                                ------------     ------------
OTHER ASSETS
    Related party portion of IDR bond                                735,340          818,500
    Other assets                                                     306,361          222,131
                                                                ------------     ------------
          TOTAL OTHER ASSETS                                       1,041,701        1,040,631
                                                                ------------     ------------
                                                                $ 16,842,578     $ 19,816,503
                                                                ============     ============
          LIABILITIES & STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Revolving credit lines                                      $  1,092,281     $  1,462,416
    Accounts payable                                               4,205,351        4,841,414
    Current portion of notes payable                                 358,653          340,232
    Current portion of bonds payable                                 350,000          335,000
    Notes payable - related parties                                  279,203               --
    Other current liabilities                                        472,186          432,043
                                                                ------------     ------------
           TOTAL CURRENT LIABILITIES                               6,757,674        7,411,105
                                                                ------------     ------------
LONG TERM LIABILITIES
    Notes payable                                                  1,082,521        1,352,893
    Bonds payable                                                  3,095,000        3,445,000
    Notes payable - related parties                                  720,797               --
                                                                ------------     ------------
          LONG TERM LIABILITIES                                    4,898,318        4,797,893
                                                                ------------     ------------
           TOTAL LIABILITIES                                      11,655,992       12,208,998
                                                                ------------     ------------
COMMITMENTS & CONTINGENCIES

STOCKHOLDERS' EQUITY
   Common stock, $.01 par value, authorized 20,000,000
     shares; 8,437,965 and 10,099,175 shares issued and
     outstanding on September 30, 2002 and
     December 31, 2001, respectively                                  84,380          100,992
   Additional paid-in capital                                      7,205,908        9,873,939
   Stock subscription receivable                                          --         (149,000)
   Retained earnings (accumulated deficit)                        (2,103,702)      (2,218,426)
                                                                ------------     ------------
          TOTAL STOCKHOLDERS' EQUITY                               5,186,586        7,607,505
                                                                ------------     ------------
                                                                $ 16,842,578     $ 19,816,503
                                                                ============     ============
</TABLE>
                             See accompanying notes



                                       1
<PAGE>
<TABLE>
<CAPTION>

                               COLOR IMAGING, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<S>                               <C>           <C>           <C>           <C>
                                  THREE MONTH PERIODS ENDED    NINE MONTH PERIODS ENDED
                                   30-Sept-02   30-Sept-01     30-Sept-02    30-Sept-01
                                  ------------  -----------   ------------  ------------

SALES                             $ 6,654,366   $ 9,711,931   $22,285,989   $23,056,235

C0ST OF SALES                       5,460,287     8,417,173    18,776,922    19,778,728
                                  ------------  ------------  ------------  ------------
GROSS PROFIT                        1,194,079     1,294,758     3,509,067     3,277,507
                                  ------------  ------------  ------------  ------------

OPERATING EXPENSES

    Administrative                    304,491       372,061       999,106     1,114,161

    Research & development            237,553       195,695       688,660       552,408

    Sales & marketing                 351,568       375,485       963,645       882,878
                                  ------------  ------------  ------------  ------------
                                      893,612       943,241     2,651,411     2,549,447
                                  ------------  ------------  ------------  ------------

INCOME FROM OPERATIONS                300,467       351,517       857,656       728,060
                                  ------------  ------------  ------------  ------------

OTHER INCOME  (EXPENSE)

    Other income                       (9,434)       15,230        19,771        26,216

    Financing expenses                (84,820)      (90,152)     (250,640)     (311,065)

    Non-recurring moving expense           --            --            --        (9,570)
                                  ------------  ------------  ------------  ------------
                                      (94,254)      (74,922)     (230,869)     (294,419)
                                  ------------  ------------  ------------  ------------

INCOME BEFORE TAXES                   206,213       276,595       626,787       433,641

PROVISION FOR INCOME TAXES             89,488        94,436       250,738       142,246
                                  ------------  ------------  ------------  ------------
NET INCOME FROM
CONTINUING OPERATIONS                 116,725       182,159       376,049       291,395

DISCONTINUED OPERATIONS (Note 2)
    (Loss) from operations of
       subsidiary disposed of -
       net of income taxes            (98,244)      (36,320)     (261,326)     (106,056)
                                  ------------  ------------  ------------  ------------

NET INCOME                        $    18,481   $   145,839   $   114,723    $  185,339
                                  ============  ============  ============  ============

     INCOME (LOSS)
     PER COMMON SHARE - BASIC
        Continuing operations     $       .01   $       .02   $       .04   $      .04
        Discontinued operations   $      (.01)  $       .00   $      (.03)  $     (.02)
                                  ------------  ------------  ------------  ------------
                                  $        --   $       .02   $       .01   $      .02
                                  ============  ============  ============  ============
      INCOME (LOSS)
      PER COMMON SHARE - DILUTED
        Continuing operations     $       .01   $       .02   $       .04   $      .04
        Discontinued operations   $      (.01)  $       .00   $      (.03)  $     (.02)
                                  ------------  ------------  ------------  ------------
                                  $        --   $       .02   $       .01   $      .02
                                  ============  ============  ============  ============
      WEIGHTED AVERAGE
      SHARES OUTSTANDING
        Basic                      10,122,283     8,070,136    10,107,156     7,774,391
        Assumed conversion                 --       203,281            --       166,205
                                  ------------  ------------  ------------  ------------
                                   10,122,283     8,273,417    10,107,156     7,940,596
                                  ============  ============  ============  ============
</TABLE>

                             See accompanying notes


                                       2
<PAGE>
<TABLE>
<CAPTION>

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

<S>                                                     <C>            <C>
                                                              2002           2001
                                                       -------------  -------------

Cash flows from operating activities:
  Net income from continuing operations                $    376,049   $    291,395
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation and amortization                         396,252        434,783
      Deferred income taxes                                 167,001        136,144
      Allowance for doubtful accounts                         3,603             --
  Decrease (increase) in:
        Accounts receivable and other receivables            26,672       (161,292)
        Inventories                                         308,188     (1,472,673)
        Prepaid expenses and other assets                   (24,797)       (33,732)
        Due from related party - IDR bond                    79,596         76,032
  Increase (decrease) in:
        Accounts payable and accrued liabilities           (595,922)     1,090,175
                                                       -------------  -------------
        Net cash provided by
               continuing operations                        736,642        360,832

   Net cash flows of discontinued operations               (676,202)      (216,815)
                                                       -------------  -------------
        Net cash provided by
               operating activities                          60,440        144,017
                                                       -------------  -------------

Cash flows (used in) investing activities:
     Capital expenditures                                  (527,149)      (188,610)
     Other assets                                                --       (125,449)
                                                       -------------  -------------
        Net cash (used in)
             investing activities                          (527,149)      (314,059)
                                                       -------------  -------------
Cash flows from financing activities:
  Net (payments) under line of credit                      (370,135)      (166,806)
  Net proceeds from sale of common stock                    143,351      1,156,877
  Net proceeds from related party borrowings              1,000,000             --
  Principal payments of long-term debt                     (586,949)      (539,353)
                                                       -------------  -------------
         Net cash provided by
             financing activities                           186,267        450,718
                                                       -------------  -------------
         Net (decrease) increase in cash                   (280,442)       280,676

Cash at beginning of year                                   393,981        338,463
                                                       -------------  -------------
Cash at end of period                                   $   113,539    $   619,139
                                                       =============  =============
</TABLE>

                             See accompanying notes


                                       3
<PAGE>

                               COLOR IMAGING, INC.
                 NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
                               September 30, 2002
                                   (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-QSB.  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 months and nine months ended September
30, 2002 are not necessarily  indicative of the results that may be expected for
the year ended December 31, 2002.

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 Nine Months Ended
                                                                  September 30,                         September 30,
                                                             2002                2001               2002                2001
                                                      -----------------    ----------------   -----------------    ----------------
(Loss) from discontinued operations:
   Before income taxes                                    $(146,244)         $ (51,030)          $(406,570)            $(150,266)
   Income tax provision (benefit)                           (48,000)           (14,710)           (145,244)              (44,210)
                                                      -----------------    ----------------   -----------------    ----------------
Net (loss) from discontinued operations                   $( 98,244)         $ (36,320)          $(261,326)            $(106,056)
                                                      =================    ================   =================    ================
</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 September 30, 2002,  the Company  completed a share  exchange  agreement with
Digital Color Print,  Inc. (see note 2 above),  whereby the Company received 1.7
million  shares of the Company's  common stock in exchange for all of the shares
of the common stock of Logical Imaging Solutions, Inc. As of September 30, 2002,
the 1.7 million shares of the Company's common stock were cancelled and retired.

From January 1, 2002 to September 30, 2002, one holder of the Company's warrants
exercised  1,750  warrants on a cashless  basis and was issued 705 shares of the
Company's common stock. During March 2002, the Company rescinded one transaction
entered  into  during  2001 for the sale of 25,000  shares  of common  stock and
warrants to purchase  25,000  shares of the common  stock of the  Company.  This
transaction  was  retroactively  reflected  in the  financial  statements  as of
December 31, 2001. As of March 2002, all notes  receivable from sales of Company
securities have been fully paid by the investors.

During  August  2002 the Company  issued  38,085  shares of its common  stock to
warrant holders who exercised,  on a cashless basis,  157,116 warrants that were
issued to them in exchange  for their  warrants to purchase  the common stock of
Logical  Imaging  Solutions,  Inc.  at the time of the merger in June  2000.  On
September 15, 2002,  warrants to purchase 12,939 shares of the Company's  common
stock  issued in exchange  for  warrants to purchase the common stock of Logical
Imaging Solutions, Inc. at the time of the merger in June 2000, expired.


                                       4
<PAGE>


NOTE 3. COMMON STOCK (CONTINUED)

On July 8, 2002, the Company granted  options to purchase  100,000 shares of the
Company's common stock to James Telsey, vice president,  sales and marketing, at
an  exercise  price of $2.00  with  options  to  purchase  25,000  shares of the
Company's  common  stock  vesting  on the grant date and the  remainder  vesting
equally upon the next three  anniversaries  of the grant date.  The grant of the
options  was  approved  by the board of  directors  of the Company at its annual
meeting on June 10, 2002.

On October 30, 2001, the Company issued and sold 1,000,000  shares of its common
stock to one investor in exchange for $2 million.  The purchase  price was $2.00
per share,  of which $10,000 was payable in cash and  $1,990,000  was payable in
the form of a recourse  promissory  note. The Company also agreed to issue up to
500,000 warrants exercisable at $2.00 per share to purchase the Company's common
stock.  In March 2002,  the Company and the  investor  mutually  rescinded  this
transaction  and the Company has  retroactively  reflected this rescission as of
December 31, 2001.


NOTE 4. INVENTORIES

Inventories of continuing operations consisted of the following components as of
September 30, 2002 and December 31, 2001:

                                 September 30, 2002           December 31, 2001
                                 ------------------           -----------------
        Raw materials              $     1,269,306             $       723,480
        Work-in-process                  1,430,084                     967,982
        Finished goods                   2,775,608                   3,987,343
        Obsolescence allowance            (178,211)                    (73,830)
                                  -----------------           -----------------
            Total                  $     5,296,787             $     5,604,975
                                  =================           =================


NOTE 5. CHANGES TO BORROWING ARRANGEMENTS

The Company has a $2.5 million  revolving  line of credit,  as amended,  with an
outstanding  balance as of September 30, 2002 of $1,092,281.  At the end of each
month for the  following  month,  the  Company has the  interest  rate option of
either the one month Libor  interest rate in effect two business days before the
first day of the month plus 2.50% or the Bank's prime interest rate minus 0.25%.
As of September  30, 2002,  the interest  rate was the  one-month  Libor rate of
1.82% plus 2.50%  (4.32%).  This  revolving  line of credit has a June 30,  2003
expiration date.

Under  the line of  credit,  the  Company  is  permitted  to borrow up to 85% of
eligible  accounts  receivable and 50 percent of eligible  inventories  (up to a
maximum of $1.1 million and not to exceed 60 percent 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
September  30,  2002,  the  Company  was  in  compliance   with  these  covenant
requirements.


NOTE 6. SIGNIFICANT CUSTOMERS

In the nine month period ended  September 30, 2002, two customers  accounted for
51% and 19%, 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 September 30, 2002, were $933,129
and $292,176, respectively.


NOTE 7. SIGNIFICANT SUPPLIERS

In the nine months ended  September 30, 2002,  the Company  purchased 47% of its
raw  materials,  components  and supplies from one supplier in  connection  with
sales to its largest  customers.  At September 30, 2002, the accounts payable to
this supplier was $1,585,258.


                                       5
<PAGE>

NOTE 8. 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 nine-month
periods ended September 30 are as follows:

                                         2002         2001
                                     -----------  -----------
Sales to Unaffiliated Customers:
United States                        $13,294,061  $17,832,052
Europe                                 4,500,420    3,750,509
Asia                                     986,666      523,174
All Other                              3,504,842      950,500
                                     -----------  -----------
Total                                $22,285,989  $23,056,235
                                     ===========  ===========




                                       6
<PAGE>

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

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

BACKGROUND

On June 28, 2000,  Color Imaging,  Inc.,  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. We previously  accounted for the merger as a  pooling-of-interests  and
have since  revised  the  accounting  treatment  for the merger to the  purchase
method. The financial information contained in this report is in conformity with
the purchase method of accounting,  and the historical  financial statements are
those of Logical  Imaging  Solutions.  The  assets,  liabilities  and  operating
results  of  Color  Image  are  only  included  in  the  consolidated  financial
statements of Color Imaging from the date of acquisition,  June 28, 2000, or for
only the last six months of the year ended  December  31,  2000 and for the full
year ended December 31, 2001. On December 31, 2000,  Color Image was merged with
and into Color Imaging.

On September  30, 2002,  we completed a share  exchange  agreement  with Digital
Color Print, Inc., whereby we received 1.7 million shares of our common stock in
exchange  for all of the common stock of our wholly  owned  subsidiary,  Logical
Imaging Solutions,  Inc. In addition, we received warrants to purchase up to 15%
of the  common  stock of  Digital  Color  Print or  Logical  Imaging  Solutions,
expiring  in three  years.  As the 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.

Pro  forma  condensed  financial  statements,  balance  sheet and  statement  of
operations,   eliminating  the   discontinued   operations  of  Logical  Imaging
Solutions,  Inc., derived from the audited consolidated financial statements for
the fiscal  years ended  December 31, 2001 and December 31, 2000 are included in
Item 5, Other Information, later herein.

COLOR IMAGING, INC.

Since 1989, Color Imaging,  Inc. has developed and manufactured products used in
electronic printing.  Color Imaging, Inc. formulates and produces black text and
specialty toners,  including color and magnetic character recognition toners for
numerous laser printers.  Color Imaging,  Inc.'s 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.  Color also supplies other
consumable  products used in electronic  printing,  and photocopying,  including
toner cartridges, cartridge components, photoreceptors and imaging drums.

Color Imaging,  Inc. has continually expanded its product line and manufacturing
capabilities.  This expansion has led to the creation of more than 130 different
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
manufacturers  and or  markets  toners for use in Ricoh,  Sharp(TM),  Xerox(TM),
Canon(TM),  Lanier(TM) and Toshiba(TM) copiers.  Color Imaging, Inc. also offers
product  enhancements,  including  imaging  supplies that enable  standard laser
printers to print magnetic  character  recognition  data.  Color  Imaging,  Inc.
markets branded products directly to OEMs and its aftermarket products worldwide
to distributors  and  remanufacturers  of laser printer toner  cartridges and to
dealers and distributors of copier products.

OVERVIEW

Net sales are  primarily  generated  from the sale of our black text,  color and
magnetic character recognition toners. We do not have a written or oral contract
with our customers,  and all sales are made through purchase orders.  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


                                       7
<PAGE>

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.

Net sales,  for the three and nine months that ended on September 30, 2002, were
primarily  generated  from the sale of our black text,  color and  magnetic  ink
character recognition printer and copier toners.  Revenue is recognized from the
sale of products when the goods are shipped to the customer.  In the nine months
ended  September 30, 2002, two  distributors of imaging  supplies  accounted for
approximately 51% and 19%, respectively,  of net sales, with the latter being an
OEM for which we private label.  Sales to these customers  consist  primarily of
analog copier products, and as a result are expected to decline over time unless
these  declining  sales to these  customers  are  offset by the sale of  digital
copier  products.  As of September  30, 2002, we no longer sell certain very low
margin  copier  products  purchased  for resale to our  largest  customer.  As a
result,  our sales will be less  concentrated  with our largest customer and our
gross  profit  margins are expected to improve.  Our sales of this  discontinued
very low margin product are expected to be approximately $4 million of our total
sales this year. During the fourth quarter of 2002, as the result of our largest
customer  having lost  business  from one of its major  customers  that has been
using our product,  we expect sales to our largest  customer to further decline.
Sales to our largest  customer  during 2003 are expected to be about one-half of
the amount sold to them during 2002,  or down some $8 million.  We do not have a
written or oral contract with this customer.  Our inventory for the discontinued
product has been sold,  and inventory in connection  with the other  products no
longer sold by our largest  customer to one its customers is still being sold to
our largest  customer for sale to others.  All sales are made  through  purchase
orders,  and for sales related to copier products we endeavor to have only small
quantities  on hand or on order that  exceed  that  required  to fill  confirmed
purchase orders.  Consistent with the purchase orders and forecasts  provided to
us by our two major  customers that account for 70% of our business,  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 these  customers and suppliers to assess  developments
in the industry  and  expected  changes in the business to maintain an efficient
supply  chain.  Net  sales  made  outside  of the  United  States  increased  to
$8,992,000,  or 40% of total sales for the nine months ended September 30, 2002,
compared to  $5,224,000,  or 23% for the nine months ended  September  30, 2001.
This 72% increase in international sales resulted primarily from the increase in
sales  to our two  largest  customers.  However,  as a result  of our no  longer
selling the  abovementioned  copier products to our largest  customer,  both our
domestic  and our  international  sales are  expected  to decrease in the fourth
quarter of 2002 and for all of 2003,  while our gross  margin is  expected to be
higher throughout 2003 when compared to 2002.

ACCOUNTING PRINCIPLES

Our financial  statements are prepared in accordance with accounting  principles
generally  accepted  in the United  States,  which  require  management  to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  at  the  date  of  the  financial  statements,  the  disclosure  of
contingent  assets and  liabilities,  and the  reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates. We believe the following critical accounting policies affect our more
significant  estimates and assumptions  used in the preparation of our financial
statements.  Our  significant  estimates  and  assumptions  are reviewed and any
required adjustments are recorded on a quarterly basis.

Allowances for doubtful accounts are maintained based on estimated bad debts. If
the financial  condition of our customers were to  deteriorate,  resulting in an
impairment of their ability to make  payments,  additional  allowances  might be
required.

Lower of Cost or Market for Inventory. Our inventories are recorded at the lower
of standard cost or market.  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.  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.  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.

Carrying Value of Toner Manufacturing  Equipment.  We are nearing the completion
of  the  latest  expansion  of  our  toner  manufacturing   facility.   We  have
approximately  $7.7 million  invested in the  equipment and  leaseholds,  with a
carrying value of $6.6 million, in connection with toner manufacturing that have
estimated lives of up to twenty years. Should competing technologies or offshore
competitors  cause  our  manufacturing  technology  to be  non-competitive,  the


                                       8
<PAGE>

estimated life of these assets may need to be shortened and their carrying value
could be materially affected.

Revenue  from  product  sales  is  recognized  when  persuasive  evidence  of an
arrangement exists,  delivery has occurred, the fee is fixed or determinable and
collectibility  is probable.  At this time the earnings  process is complete and
the risks and rewards of ownership have  transferred  to the customer,  which is
generally when the goods are shipped and all of our significant obligations have
been satisfied.

Cost of goods  sold  includes  direct  material  and labor,  warranty  expenses,
license fees and manufacturing  and service overhead.  Inventories are stated at
the lower of cost  (first-in,  first-out)  or market.  Equipment is  depreciated
using the straight-line method over the estimated useful lives of the equipment.
Improvements to leased property are amortized over the lesser of the life of the
lease or the life of the improvements.

Selling,  general and  administrative  expenses  include  marketing and customer
support staff, other marketing expenses, management and administrative personnel
costs,  professional  services,  legal and  accounting  fees and  administrative
operating costs. Selling, general and administrative costs are expensed when the
costs are incurred.

Research and development  expenses include costs associated with the development
of new products and significant  enhancements of existing products,  and consist
primarily of employee salaries,  benefits,  consulting expenses and depreciation
of laboratory equipment. All research and development costs are expensed as they
are incurred.

RECENT DEVELOPMENTS

On June 10, 2002, the board of directors,  to better focus executive  management
energies on each of our operating units,  reaffirmed Director Michael W. Brennan
as  Chairman  and Chief  Executive  Officer of our  subsidiary  Logical  Imaging
Solutions,  Inc., and elected Jui-Hung Wang Chairman of Color Imaging,  Inc. Dr.
Sueling Wang continues to serve as Vice-Chairman and President of Color Imaging,
Inc. Mr.  Brennan  also  resigned  from the board of directors of Color  Imaging
effective  September  10, 2002,  to dedicate  himself to the  furthering  of the
business interests of Logical Imaging Solutions, including its reorganization as
a  standalone  company  separate  and apart  from  Color  Imaging.  The board of
directors and management realized that the difficulties  surrounding the raising
of  significant  equity  capital from  non-affiliates  for Color Imaging in this
market  environment is such that a restructure of Logical Imaging  Solutions had
to be  considered.  We did not, at that time,  specifically  allocate any of the
proceeds  of our  pending  offering  filed  with  the  Securities  and  Exchange
Commission  on  Form  SB-2  to the  furthering  of  Logical  Imaging  Solutions'
technology,  since we were  considering  the  restructuring of  Logical  Imaging
Solutions.

Four of our  directors,  Messrs.  Brennan,  St.  Amour,  Langsam  and  Hollander
expressed  concern over the potential  restructure or  reorganization of Logical
Imaging  Solutions  and the lack of the  planned  use of any  proceeds  from our
offering  pending the  Securities  and Exchange  Commission on Form SB-2 for the
further  development of its technology,  as they are of the opinion that Logical
Imaging  Solutions'  business  prospects  demanded a greater  investment.  After
informal  discussion  with Dr.  Sueling Wang and Mr. Van Asperen this past July,
they submitted an informal proposal whereby a new company,  Digital Color Print,
Inc.,  would acquire the capital stock of Logical Imaging  Solutions in exchange
for 1.6  million of our shares and  warrants  to  purchase  shares of the common
stock of Logical Imaging  Solutions and or Digital Color Print  approximating up
to 15% of its then  outstanding  shares.

On August 23,  2002,  the Board of  Directors,  by  unanimous  written  consent,
authorized  our  entering  into a  definitive  share  exchange  arrangement  and
appointed  a  committee  of  disinterested  directors,  Mr. Van  Asperen and Mr.
Allison, to conduct due diligence as appropriate and to engage, at their option,
an independent  consultant to evaluate the fairness,  from a financial  point of
view, of the transaction.  There were also several important conditions, such as
the consent of our bank and the release of the bank's  security  interest in the
assets of Logical  Imaging  Solutions,  a  recommendation  by the  committee  of
disinterested  directors with an opinion of an independent  financial consultant
of the fairness from a financial point of view of the transaction,  if obtained,
and the approval to close the transaction of not only a majority of the board of
directors  but  also of a  majority  of the  disinterested  members  of board of
directors.  On September 11, 2002, we signed the share  exchange  agreement.  On
September 20, 2002, the share  exchange  agreement was amended and the number of
shares of our common  stock to be  exchanged  for the  capital  stock of Logical
Imaging  Solutions  was  increased  from  1.6  million  to  1.7  million  and  a
requirement  was  added  that  Logical  Imaging  Solutions  was to have at least
$100,000 on hand at closing.  In addition,  the amendment to the share  exchange
agreement  also  provided  that Mr.  Brennan's  employment  agreement  was to be
terminated  upon the  closing  of the  transaction  and his  severance  formerly
payable  through June 10, 2003 will be  terminated  as of March 10, 2003.  After


                                       9
<PAGE>

having met all of the conditions,  the divestiture of Logical Imaging  Solutions
and the share  exchange was completed on September 30, 2002.  Effective upon the
closing, Messrs. St. Amour, Langsam and Hollander resigned as directors of Color
Imaging.  Mr.  Brennan had  previously  resigned as a director of Color  Imaging
effective  September  10, 2002.

Now that the share  exchange  transaction  has  closed,  Digital  Color  Print
intends to offer to exchange  shares of its common  stock for  shares  of common
stock held  by our  stockholders  who are, per a press  release of Digital Color
Print,  holders  of  record  as of  October  1,  2003.  We are  not  sponsoring,
encouraging,  or responsible  for the proposed  offering by Digital Color Print.
Conditions  of the share  exchange  agreement  include that Digital  Color Print
shall be solely  responsible  for such offering,  including  compliance with all
applicable laws, and it shall not accept the tender of more than an aggregate of
2,600,000  shares,  inclusive  of the  1,700,000  of our common  shares  that it
exchanged  with us for all of the  common  stock of Logical  Imaging  Solutions.
Further,  neither Logical  Imaging  Solutions nor Digital Color Print shall take
any  action in  connection  with  their  offering  that could have the effect of
reducing the number of our  stockholders below  325. As of September 9, 2002, we
had 344 holders of record of our common stock.

Based  upon  guidance  provided  by APB 29 in  connection  with  accounting  for
nonmonetary  transactions,  the  1,700,000  million  shares of our common  stock
exchanged for all of the shares of common stock of Logical Imaging Solutions was
valued at approximately  $2.68 million:  the fair value  (approximating  the net
book value) of Logical Imaging  Solutions plus the  transaction  costs incurred.
The  warrants  that  we  received  for  approximately  15%  of  Logical  Imaging
Solutions,  or Digital Color Print, have not been assigned any value, since they
are not cashless,  increase from $1.50 to $2.25 and then to $3.25 per share each
year over three years,  expire after three years,  are not registered for resale
and have no current market.

As the  result of the  foregoing,  Logical  Imaging  Solutions'  operations  and
research and development activities will remain in Santa Ana, California and are
not being consolidated with ours at our headquarters in Norcross, Georgia.

Color   Imaging  has  completed   the  testing  of  recently   installed   toner
manufacturing  equipment to complete our most recent factory  expansion to again
double our capacity. This installation represents  approximately a $1.44 million
investment  to not only  increase our  business,  but to also  improve  quality,
product  consistency and to lower costs.  Recently we placed orders for $100,000
of additional  equipment to be installed before the end of this year to complete
our first dedicated color toner manufacturing system, a system for which we have
already  invested some  $300,000.  In our offering filed with the Securities and
Exchange  Commission  on Form SB-2,  we made  provision  for $1.5 million of new
capital equipment, most of which is planned for additional dedicated color toner
manufacturing  systems for "business  color"  printing and copying systems being
introduced  by OEMs.  The  remainder  of the planned  capital  investment  is to
further improve our toner research, development and quality control programs.

On July 8, 2002,  Charles Allison was appointed Vice President,  Technology,  to
increase  executive  management  involvement in laser printer and copier product
development, quality assurance and technical support. Mr. James Telsey was hired
as Vice President, Sales & Marketing, to replace Mr. Allison in that position.

During March 2002,  we  rescinded  two  transactions  for the sale of our common
stock and warrants to purchase  additional  shares of our common stock  totaling
1,025,000 and 525,000,  respectively.  The purchasers paid the par value in cash
for the shares issued to them, and the balance of the purchase  price  consisted
of recourse  promissory  notes. The sale of 1,000,000 shares of our common stock
and warrants to purchase an additional  500,000  shares of common stock was, per
agreement,  subject to our registering the securities for resale.  However,  the
SEC staff took the position that these  securities  could not be registered  for
resale in this  registration  statement and the transaction  was rescinded,  the
shares,  warrant and promissory  note were cancelled and we retained the $10,000
and accrued interest earned thereon in consideration of our expenses incurred in
connection with the transaction. The second transaction for 25,000 shares of our
common stock and warrants to purchase an additional  25,000 shares of our common
stock was rescinded when the parties  believed the promissory  note would not be
paid by the time this  registration  statement  became  effective.  The  shares,
warrant  and  promissory  note were  cancelled  and the cash  consideration  was
refunded to the purchaser.

With  the  rescission  of the two  above-mentioned  sales  of our  common  stock
totaling  $2,050,000,  we anticipate that we will need to raise additional funds
from other sources to fund other planned investing and financing activities.  We
intend to meet our operating  requirements  from funds  generated by operations,
funds  available  under our line of credit  agreement and funds we have borrowed
from  affiliates.  The other planned  activities  are dependent upon our raising
funds through the sale of our securities. We will allow our directors,  officers
and affiliates to purchase up to $7 million of our shares of common stock in our
offering pending with the Securities and Exchange Commission on Form SB-2.


                                       10
<PAGE>

RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
<S>                                                          <C>            <C>            <C>              <C>
                                                               THREE MONTHS ENDED               NINE MONTHS ENDED
                                                                   SEPT 30,                        SEPT 30,
                                                              2002            2001           2002            2001
                                                             -----           -----          -----            -----
                                                                           (PERCENTAGE OF NET SALES)

        Net sales                                             100             100            100              100
        Cost of sales                                          82              87             84               86
        Gross profit                                           18              13             16               14
        Administrative expenses                                 5               4              4                5
        Research and development                                4               2              3                2
        Sales and marketing                                     5               4              4                4
        Operating income                                        4               4              4                3
        Interest expense                                        1               1              1                1
        Depreciation and amortization                           1               1              2                2
        Income before taxes                                     3               3              2                2
        Provision for income taxes                              1               1              1                1

        Income from continuing operations                       2               2              2                1

        Loss  from  discontinued   operations,   net  of
        income taxes                                           (2)              0             (1)               0

        Net income                                              0               2              1                1
</TABLE>

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  audited  and  unaudited  consolidated   statements  of
operations.

<TABLE>
<CAPTION>
<S>                          <C>                  <C>                  <C>
                                      Twelve Months Ended               Nine Months Ended
                                          December 31,                     September 30,
                             ---------------------------------------   -------------------
                                   2000                 2001                  2002
                             -----------------    ------------------   -------------------

     Net revenue               $  723,063            $  551,399            $  464,628
     Operating (loss)            (350,999)             (267,220)             (406,570)
                             -----------------    ------------------   -------------------
     Net (loss)                $ (271,799)           $ (204,154)           $ (261,326)
                             =================    ==================   ===================
</TABLE>

Pro  forma  condensed  financial  statements,  balance  sheet and  statement  of
operations,   eliminating  the   discontinued   operations  of  Logical  Imaging
Solutions,  Inc., derived from the audited consolidated financial statements for
the fiscal  years ended  December 31, 2001 and December 31, 2000 are included in
Item 5, Other Information, later herein.

RESULTS OF CONTINUING OPERATIONS

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

NET SALES.  Our net sales  decreased by $3 million,  or 31%, to $6.7 million for
the three  months  ended  September  30,  2002,  from $9.7 million for the three
months ended  September 30, 2001.  Net sales made in the United States were $3.5
million,  a  decreased  of $4 million,  or 54%,  from $7.5  million  made in the
comparable period in 2001. Net sales made outside of the United States increased
by $1 million, or 45%, for the quarter compared to the same quarter of 2001. The
decrease  in net sales for the quarter  compared to that of a year ago  resulted
from  reduced  domestic  demand for all of our  products,  while the increase in
sales made outside of the United  States was  primarily  the result of increased


                                       11
<PAGE>

sales to our two  largest  customers.  Of the $6.7  million in net  sales,  $4.9
million,  or 73%, were attributable to our copier products,  the same percentage
as that of the  comparable  period in 2001.  The  revenue  decrease  from copier
products from 2001 to 2002 was 32%, while the decrease for the comparable period
experienced by laser products was 30%. Sales of our laser products for the three
months ended  September 30, 2002 were $1.8 million  compared to $2.6 million for
the same period of 2001.  We believe that sales of both our copier and our laser
printing  products will decrease in the quarter ending December 31, 2002, as the
result of less  domestic  demand and the reduced sales being made to our largest
customers.

COST OF GOODS SOLD.  Cost of goods sold  decreased by $2.9  million,  or 35%, to
$5.5 million from $8.4 million for the three months ended September 30, 2002 and
for the  comparable  period in 2001,  primarily as the result of the decrease in
net  sales.  Cost of goods  sold as a  percentage  of net sales  decreased  by 5
percentage  points from 87% for the three months ended September 30, 2001 to 82%
for the three  months  ended  September  30,  2002,  primarily  as the result of
reduced sales derived from certain very loan margin products  previously sold to
our largest customer that have been  discontinued,  a larger percentage of sales
being  derived from sales of products  with higher gross margins and the effects
of previous price  increases on a few analog copier  products.  Having  recently
placed more efficient  manufacturing equipment in service, we expect our cost of
goods sold to further decrease as a percentage of net sales.

GROSS PROFIT.  As a result of the above factors,  gross profit decreased to $1.2
million in the three  months ended  September  30, 2002 from $1.3 million in the
three months ended September 30, 2001, or only $100,000, while net sales for the
same period  decreased by $3 million.  Gross profit as a percentage of net sales
increased  by 5  percentage  points from 13% to 18% for the three  months  ended
September 30, 2002, 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 loan margin  products  previously  sold to our
largest customer that have been discontinued, a larger percentage of sales being
derived  from sales of  products  with higher  gross  margins and the effects of
previous price increases on a few analog copier products. Having recently placed
more efficient manufacturing equipment in service, we expect our gross profit to
further increase as a percentage of net sales.

OPERATING EXPENSES.  Operating expenses decreased $49,000, or 5%, to $894,000 in
the three  months  ended  September  30, 2002 from  $943,000 in the three months
ended September 30, 2001. General and  administrative,  selling and R&D expenses
increased,  as a  percentage  of net  sales,  to 14% in the three  months  ended
September 30, 2002 from 10% in the three months ended  September 30, 2001 as the
result of the decrease in net sales for the quarter.  General and administrative
expenses  decreased  approximately  18%,  or $68,000 to  $304,000  for the three
months ended  September  30, 2002 from the  comparable  period in 2001,  largely
resulting from reduced payroll,  other taxes,  travel and professional  investor
relations  expenses.  Selling expenses decreased by $24,000, or 6%, in the three
months ended September 30, 2002 compared to the three months ended September 30,
2001. Selling expenses decreased  primarily as a result of decreased  conference
and promotional expenses and fewer bad debts.  Research and development expenses
increased by $42,000,  or 21%, to $238,000 in the three  months ended  September
30, 2002,  primarily as the result of increased  expenditures overall to develop
new black text and color toner digital copier and laser  products.  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 31% decrease
in net sales,  operating  income  decreased  by $51,000,  or 15%, to a profit of
$300,000 in the three months ended September 30, 2002 from $351,000 in the three
months ended September 30, 2001.

INTEREST AND FINANCE EXPENSE.  Interest expense decreased by $5,000 in the three
months ended  September 30, 2002 from the three months ended September 30, 2001.
The decrease was primarily the result of reduced interest bearing debt levels.

OTHER INCOME. Other income increased by $24,000 from income of $15,000 to a cost
of $9,000 in the three  months  ended  September  30, 2002 from the three months
ended September 30, 2001, primarily as the result of Euro exchange losses.

INCOME  TAXES.  As the result of our profit from  continuing  operations  in the
three months ended  September  30, 2002,  we recorded an income tax provision of
$89,000 for the period,  while the income tax  provisions  were  $94,000 for the
three months ended September 30, 2001.

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

NET SALES. Our net sales decreased by $0.8 million,  or 3%, to $22.3 million for
the nine months ended September 30, 2002, from $23.1 million for the nine months
ended  September  30,  2001.  Net sales  made in the  United  States  were $13.3
million,  a decreased of $4.5  million,  or 25%,  from $17.8 million made in the
comparable period in 2001. Net sales made outside of the United States increased
by $3.7 million, or 70%, to $9.0 million for the nine months ended September 30,


                                       12
<PAGE>

2002  compared  to same nine months of 2001.  The  decrease in net sales for the
nine months ended  September  30, 2002,  compared to that of a year ago resulted
from  reduced  domestic  demand for all of our  products,  while the increase in
sales made outside of the United  States was  primarily  the result of increased
sales to our two largest  customers.  Of the $22.3  million in net sales,  $15.8
million, or 71%, were attributable to our copier products.  Of the $23.1 million
in net sales for the nine months ended September 30, 2001, 69% were derived from
copier  products.  The revenue decrease from copier and laser products from 2001
to 2002 was 1% and 10%,  respectively.  The greater  decrease in laser  products
result  primarily from reduced demand in the United States,  where most of these
products  are sold.  We  believe  that  sales of both our  copier  and our laser
printing  products will decrease in the quarter ending December 31, 2002, as the
result of less  domestic  demand and the reduced sales being made to our largest
customers.

COST OF GOODS SOLD. Cost of goods sold decreased by $1 million,  or 5%, to $18.8
million from $19.8 million for the nine months ended  September 30, 2002 and for
the comparable  period in 2001.  Cost of goods sold as a percentage of net sales
decreased  by 2 percentage  points from 86% for the nine months ended  September
30, 2001 to 84% for the nine months ended  September 30, 2002,  primarily as the
result of reduced sales derived from certain very low margin products previously
sold to our largest customer that have been discontinued, a larger percentage of
sales being  derived from sales of products  with higher  gross  margins and the
effects of previous  price  increases on a few analog  copier  products.  Having
recently placed more efficient manufacturing equipment in service, we expect our
cost of goods sold to further decrease as a percentage of net sales.

GROSS PROFIT.  As a result of the above factors,  gross profit increased to $3.5
million in the nine months  ended  September  30, 2002 from $3.3  million in the
nine months ended  September  30, 2001,  or $200,000 and 7%, while net sales for
the same period  decreased by $800,000,  or 3%. Gross profit as a percentage  of
net sales  increased by 2 percentage  points from 14% to 16% for the nine months
ended September 30, 2002, 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 loan margin products  previously sold to
our largest customer that have been  discontinued,  a larger percentage of sales
being  derived from sales of products  with higher gross margins and the effects
of previous price  increases on a few analog copier  products.  Having  recently
placed more efficient  manufacturing  equipment in service,  we expect our gross
profit to further increase as a percentage of net sales.

OPERATING EXPENSES.  Operating expenses increased $100,000 or 4% to $2.7 million
in the nine months ended September 30, 2002 from $2.6 million in the nine months
ended   September   30,  2001.   As  a  percentage  of  net  sales  general  and
administrative,  selling and R&D  expenses,  was 11% for the nine  months  ended
September 30, 2002 and 2001. The increase in operating  expenses as a percentage
of net sales was  largely  the result of the  decrease in net sales for the nine
months ended September 30, 2002. General and  administrative  expenses decreased
approximately  9%, or $100,000 to $1,000,000 for the nine months ended September
30, 2002 from the comparable  period in 2001,  largely  resulting from decreased
payroll and consulting expenses.  Selling expenses increased by $81,000, or 10%,
in the nine months ended  September  30, 2002  compared to the nine months ended
September  30,  2001.  Selling  expenses  increased  primarily  as the result of
increased  commissions  and  advertising  expenses.   Research  and  development
expenses  increased  by  $137,000,  or 25%, to $689,000 in the nine months ended
September 30, 2002, primarily as the result of increased expenditures overall to
develop new black text and color toner  digital  copier and laser  products.  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,  operating income increased
by $130,000, to a profit of $858,000 in the nine months ended September 30, 2002
from $728,000 in the nine months ended September 30, 2001.

INTEREST AND FINANCE EXPENSE.  Interest expense decreased by $60,000 in the nine
months ended  September 30, 2002 from the nine months ended  September 30, 2001.
The decrease was primarily the result of reduced interest bearing debt levels.

OTHER INCOME.  Other income decreased by $6,000 from income of $26,000 to income
of $20,000 in the nine  months  ended  September  30,  2002 from the nine months
ended September 30, 2001.

INCOME TAXES. As the result of our increased  profit from continuing  operations
for the nine months ended  September 30, 2002, our provision for taxes increased
from  $124,000 in the nine months ended  September  30, 2001 to $251,000 for the
period ended September 30, 2002.


                                       13
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2002,  and December 31, 2001,  our working  capital and current
ratio was approximately  $1.9 million and $2.1 million and 1.28 to 1 and 1.28 to
1, respectively.

Cash flows provided by continuing operating activities were $737,000 in the nine
months ended  September  30, 2002  compared to $361,000  provided by  continuing
operations in the nine months ended  September 30, 2001.  The cash flows used by
continuing  operating  activities  in the nine months ended  September  30, 2002
increased  primarily  due to  higher  net  income  and  the  reduction  made  to
inventories.  We continue to reduces SKUs,  and we expect to further reduce SKUs
and inventories further during 2003.

Cash flows used in investing  activities  were $527,000 in the nine months ended
September 30, 2002,  compared to $314,000 in the nine months ended September 30,
2001. The increase in cash used in investing activities in the nine months ended
September 30, 2002, was entirely  attributable to increase capital  expenditures
in connection with our most recent factory expansion.

We have a $2.5  million  revolving  line of  credit  with our  bank  that had an
outstanding  balance as of September 30, 2002 of $1,092,000.  At the end of each
month,  for the following  month,  we have an interest rate option of either the
one-month  Libor  interest rate in effect two business days before the first day
of the month plus 2.50% or our bank's prime  interest  rate minus  0.25%.  As of
September 30, 2002, the interest rate was the one-month Libor rate of 1.84% plus
2.50%  (4.34%).  This  revolving  line of credit has a June 30, 2003  expiration
date. Under the line of credit, we are permitted to borrow up to 85% of eligible
accounts  receivable and 50 percent of eligible  inventories (up to a maximum of
$1.1  million  and not to exceed 60 percent of the total  outstanding).  We have
granted our bank a security  interest  in all of our assets as security  for the
repayment of the lines of credit.

The Bank agreement  contains various  covenants which the Company is required to
maintain, and as of September 30, 2002, the Company was in compliance with these
covenant requirements.

Cash flows provided by financing  activities for the six months ended  September
30, 2002 was  $186,000,  resulting  primarily  from the  $1,000,000  in loans we
received  from three  directors,  compared  to $451,000  provided  by  financing
activities  for the  comparable  period  of 2001.  The cash  flows  provided  by
financing  activities for the nine months ended  September 30, 2001 were derived
primarily from proceeds from the sale of our common stock.

Funds  generated  from  operating   activities  and  availability  under  credit
facilities  is expected  to be  insufficient  to finance  certain of our planned
investing and financing plans for 2003. We anticipate that we will need to raise
an  additional  $2  million  from  other  sources  to  payoff  $1.4  million  of
institutional  debt and to acquire  $600,000  of  production  and  research  and
development equipment. To meet the $2 million in planned financing and investing
requirements  we intend to engage in sales of our  securities  and or  obtaining
institutional  financing.  Should we not obtain these  additional  funds,  these
financing  and  investing  activities  would  have to be  reduced  or  curtailed
entirely  to meet our  existing  commitments.  There  can be no  assurance  that
proceeds from the sale of our  securities or  institutional  borrowings  will be
available to meet these planned financing and investing  activities.  We believe
that  these  planned  investing  and  financing   activities,   if  successfully
completed,  will  increase  revenues and operating  margins and reduce  interest
expense.

FACTORS   THAT  MAY   AFFECT   FUTURE   RESULTS   AND   INFORMATION   CONCERNING
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
our  securities  or cash  flow,  the  ability to expand  capacity  by placing in
service  additional  manufacturing  equipment during 2002 and 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,  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


                                       14
<PAGE>

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,
including  without  limitation,  those  discussed in the sections  titled "Color
Imaging" and  "Management's  Discussion  and Analysis" and the factors set forth
below:

RISKS RELATED TO OUR BUSINESS:

Our business depends on a limited number of customers.

In the nine months  ended  September  30,  2002,  two  customers  accounted  for
approximately  70%  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.

Approximately  51% 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 51% of our sales for the nine months ended September 30, 2002 were
derived from products limited to a specific supplier.  For the nine months ended
September  30,  2002,  we purchased  47% of our raw  materials,  components  and
supplies from that same supplier.  We do 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.

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 2002 and 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
declines, our business will be materially and adversely affected.

Our success is dependent on our ability to successfully develop, or acquire from
third  parties,  products  that we can  commercialize  and that  achieve  market
acceptance.

The challenges we face in implementing  our business model include  establishing
market acceptance of existing products and services 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


                                       15
<PAGE>

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.

We anticipate that we will need to raise additional capital or obtain funding to
finance certain of our planned financing and investing  activities over the next
twelve months.

Our failure to raise additional  capital in the approximate amount of $2,000,000
may  significantly  limit our  ability  to prepay  some of our debt and  finance
certain planned investing activities over the next twelve months that we believe
will improve quality,  generate additional revenues and reduce manufacturing and
operating  costs.  Specifically,  we plan to raise  additional  funds to  prepay
approximately  $1,400,000  of debt and are  considering  the  acquisition  of an
additional  planned  $600,000  of  capital  equipment  for use in  research  and
development,  quality assurance and the manufacturing of our toner products.  We
may not be able to  raise  the  additional  funds,  and our  failure  to  obtain
additional funds would  significantly  limit or eliminate our ability to conduct
the foregoing  activities.  We anticipate that we will seek  additional  funding
through the public or private sales of our securities and/or through  commercial
or private financing arrangements, including borrowing from affiliates. Adequate
funds may not be available when needed or on terms  acceptable to us, or at all.
In the  event  that we are not able to  obtain  additional  funding  on a timely
basis,  we may be  required  to limit  any  proposed  debt  prepayment,  quality
improvements, operational efficiencies, research and development or expansion.

Our success depends on our ability to develop or acquire  intellectual  property
rights.

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.  Current or 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.

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.

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.

Acts of domestic terrorism and war have impacted general economic conditions and
may impact the industry and our ability to operate profitably.

                                       16
<PAGE>

On  September  11,  2001,  acts of  terrorism  occurred  in New  York  City  and
Washington, D.C. On October 7, 2001, the United States launched military attacks
on  Afghanistan.  As a result of those terrorist acts and acts of war, there has
been a disruption in general economic activity. The demand for printing products
and services may decline as layoffs in the  transportation  and other industries
affect the economy as a whole.  There may be other  consequences  resulting from
those acts of terrorism, and any others which may occur in the future, including
civil  disturbance,  war,  riot,  epidemics,  public  demonstration,  explosion,
freight  embargoes,   governmental  action,  governmental  delay,  restraint  or
inaction,   quarantine  restrictions,   unavailability  of  capital,  equipment,
personnel, which we may not be able to anticipate. These terrorist acts and acts
of war may continue to cause a slowing of the economy,  and in turn,  reduce the
demand of printing products and services, which would harm our ability to make a
profit.  We are  unable  to  predict  the  long-term  impact,  if any,  of these
incidents or of any acts of war or  terrorism in the United  States or worldwide
on the U.S. economy, on us or on the price of our common stock.

We depend on the efforts and  abilities  of certain  officers  and  directors 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.

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,
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.

We sell a significant portion of our products internationally,  which exposes us
to currency fluctuations and collection and product recall risks.

We sell a  significant  amount of  product  to  customers  outside of the United
States.  International  sales  accounted for 40% of net sales in the nine months
ended September 30, 2002 and 23% in the nine months ended September 30, 2001. We
expect that shipments to international  customers will continue to account for a
material  portion of net sales.  Most products are priced in U.S.  dollars,  but
because we do sell products in Europe denominated in Euros,  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.  Most of our products sold internationally,
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.  We
cannot assure you that these factors will not have a material  adverse effect on
our international  sales and would, as the result,  adversely impact our results
of operation and financial condition.

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.


                                       17
<PAGE>

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.

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.

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 own approximately  45.3% of the outstanding shares of
common stock and they and other  affiliates will be allowed to purchase up to $7
million of our common stock in our  offering  pending with the SEC on Form SB-2,
allowing  these  stockholders  to  control  matters  requiring  approval  of the
stockholders.

As a result of such ownership,  and potential increased ownership, our officers,
directors and principal stockholders,  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 October 1, 2002, we had issued and outstanding  8,437,965 shares of common
stock and  outstanding  warrants  and options to purchase  2,231,257  additional
shares of common stock. 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.

Our ability to raise  additional  capital through the sale of our securities may
be harmed by competing resales of our common stock by our stockholders.

The price of our  common  stock  could  fall if  stockholders  sell  substantial
amounts of our common stock.  Such sales could make it more  difficult for us to
sell  securities  at the  time  and  price we deem  appropriate.  To the  extent
stockholders, including the selling stockholders, offer and sell their shares of


                                       18
<PAGE>

common stock to investors  for less than the price offered by us, our attempt to
sell our  securities  may be  adversely  affected as a result of the  concurrent
offering by selling stockholders.  Investors may negotiate prices lower than the
price we are  offering  our shares of common  stock with  selling  stockholders.
Furthermore,  potential  investors may not be interested in purchasing shares of
our common stock on any terms if stockholders  sell  substantial  amounts of our
common stock.

Effectiveness  of our  registration  statement  on Form  SB-2 may  result in the
dilution of existing  stockholders  and could  decrease  the market price of our
common stock.

Once our registration statement is declared effective, selling stockholders will
be able to sell up to  approximately 4 million shares of our common stock and we
will be able to sell the  equivalent  of up to 7 million  shares  of our  common
stock. The sale of common stock covered by the  registration  statement by us or
selling stockholders will dilute existing  stockholders and may adversely affect
the market price of our common stock.

Digital Color Print,  Inc.'s intended tender offer to exchange its shares for up
to 2.6 million of our common  shares  could  result in as much as 900,000 of our
shares being sold in the market and may adversely affect the market price of our
common stock.

The intended tender offer to exchange Digital Color Print,  Inc.'s shares for up
to 2.6 million of our common shares will result in Digital Color Print having up
to 900,000 shares of our common stock that it could sell to fund its and Logical
Imaging Solutions' operations and technology development activities. The sale of
our common stock by Digital Color Print may adversely affect the market price of
our common stock.

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.

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:

     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;

                                       19
<PAGE>

     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.

ITEM 3. Controls and Procedures

     a) On October 16, 2002, 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.

     b) Our  President  and  principal  executive  officer  and Chief  Financial
Officer are involved in ongoing  evaluations  of internal  controls.  On October
17th and 30th, 2002, in anticipation of the filing of this Form 10-QSB, they (1)
reviewed the  evaluation  of our internal  controls  prepared by the Company and
reviewed  by our  independent  auditors  in  connection  with their audit of our
fiscal year ended  December 31, 2001, and (2) and reviewed the evaluation of our
internal  controls  prepared by the Company in  preparation  for the audit to be
conducted  by our  independent  auditors of our fiscal year ended  December  31,
2002. Our President and principal  executive officer and Chief Financial Officer
have  determined,  based on such reviews,  that, since the date of the auditor's
evaluation,  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 September 30, 2002, we completed a share  exchange  arrangement  with Digital
Color Print, Inc., whereby we received 1.7 million shares of our common stock in
exchange for all of the shares of the common stock of Logical Imaging Solutions,
Inc. The 1.7 million  shares of our common stock so received were  cancelled and
retired as of September 30, 2002.

During  August 2002,  warrant  holders who were issued  warrants to purchase our
common stock in exchange for their  warrants to purchase the common stock of our
subsidiary  Logical  Imaging  Solutions,  Inc. at the time of our merger in June
2000 exercised,  on a cashless basis, warrants to purchase 157,116 shares of our
common stock and were issued 38,085 shares of our common stock.  The issuance of
the shares  upon  exercise of the  previously  issued  warrants  was exempt from
registration provisions of the Act pursuant to Section 4(2) thereof.

On July 8, 2002,  we granted  options to purchase  100,000  shares of our common
stock to James Telsey, vice president, sales and marketing, at an exercise price
of $2.00 with options to purchase  25,000  shares of our common stock vesting on


                                       20
<PAGE>

the  grant  date  and  the  remainder   vesting  equally  upon  the  next  three
anniversaries  of the grant date.  The grant of the options were approved by the
board of directors at its annual meeting on June 10, 2002.

ITEM 3. Defaults upon Senior Securities

None

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

None

ITEM 5. Other Information

Pro Forma Financial Information.

On September  30, 2002,  we completed a share  exchange  agreement  with Digital
Color Print, Inc., whereby we received 1.7 million shares of our common stock in
exchange  for all of the shares of the common stock of our  subsidiary,  Logical
Imaging  Solutions,  Inc.  The  financial  statements  for  the  quarter  ending
September  30,  2002,  herein,   reflect  the  divestiture  of  Logical  Imaging
Solutions,  Inc. Pro forma financial statements,  balance sheet and statement of
operations,   eliminating  the   discontinued   operations  of  Logical  Imaging
Solutions,  Inc.,  derived from the audited financial  statements for the fiscal
years ended December 31, 2001 and December 31, 2000 are included hereafter:

                                       21
<PAGE>

<TABLE>
<CAPTION>

                                                          COLOR IMAGING, INC.
                                                  PRO FORMA CONDENSED BALANCE SHEETS
                                                           DECEMBER 31, 2001
                                                              (Unaudited)

 <S>                                                            <C>              <C>              <C>
                                                                CONSOLIDATED,                      PRO FORMA
                                                                AS PREVIOUSLY    DISCONTINUED      CONTINUING
                                                                   REPORTED       OPERATIONS       OPERATIONS
                                                                -------------    ------------     ------------
                         ASSETS
CURRENT ASSETS
    Cash                                                        $    395,327     $      1,346     $    393,981
    Accounts receivable, net                                       3,030,995          136,992        2,894,003
    Inventory                                                      6,056,042          451,067        5,604,975
    Deferred income taxes                                            277,239           86,730          190,509
    Related party portion of IDR bond                                 79,596               --           79,596
    Other current assets                                             339,141            3,520          335,621
                                                                ------------     ------------     ------------
          TOTAL CURRENT ASSETS                                    10,178,340          679,655        9,498,685
                                                                ------------     ------------     ------------

PROPERTY, PLANT AND EQUIPMENT - NET                                8,438,826        1,425,756        7,013,070
                                                                ------------     ------------     ------------
OTHER ASSETS
    Patent/intellectual property                                       5,000            5,000               --
    Deferred income taxes                                            312,000          312,000               --
    Related party portion of IDR bond                                818,500               --          818,500
    Other assets                                                     225,204            3,073          222,131
                                                                ------------     ------------     ------------
          TOTAL OTHER ASSETS                                       1,360,704          320,073        1,040,631
                                                                ------------     ------------     ------------
           TOTAL ASSETS                                         $ 19,977,870     $  2,425,484     $ 17,552,386
                                                                ============     ============     ============
          LIABILITIES & STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Revolving credit lines                                      $  1,462,416     $         --     $  1,462,416
    Accounts payable                                               4,898,665           57,251        4,841,414
    Current portion of notes payable                                 369,198           63,966          340,232
    Current portion of bonds payable                                 335,000               --          335,000
    Other current liabilities                                        501,086           34,043          432,043
                                                                ------------     ------------     ------------
           TOTAL CURRENT LIABILITIES                               7,566,365          155,260        7,411,105
                                                                ------------     ------------     ------------
LONG TERM LIABILITIES
    Notes payable                                                  1,359,000            6,107        1,352,893
    Bonds payable                                                  3,445,000               --        3,445,000
                                                                ------------     ------------     ------------
          LONG TERM LIABILITIES                                    4,804,000            6,107        4,797,893
                                                                ------------     ------------     ------------
           TOTAL LIABILITIES                                      12,370,365          161,367       12,208,998
                                                                ------------     ------------     ------------
COMMITMENTS & CONTINGENCIES

STOCKHOLDERS' EQUITY
   Common stock, $.01 par value, authorized 20,000,000
     shares; 10,099,175 and 8,399,175 shares issued and
     outstanding on December 31, 2001 and pro forma on
     December 31, 2001, respectively                                 100,992           17,000           83,992
   Additional paid-in capital                                      9,873,939        4,332,888        7,626,822
   Stock subscription receivable                                    (149,000)              --         (149,000)
   Accumulated deficit                                            (2,218,426)      (2,085,771)      (2,218,426)
                                                                ------------     ------------     ------------
          TOTAL STOCKHOLDERS' EQUITY                               7,607,505        2,264,117        5,343,388
                                                                ------------     ------------     ------------
                                                                $ 19,977,870     $  2,425,484     $ 17,552,386
                                                                ============     ============     ============
</TABLE>

                                       22
<PAGE>
<TABLE>
<CAPTION>


                                                          COLOR IMAGING, INC.
                                              PRO FORMA CONDENSED STATEMENT OF OPERATIONS
                                             FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2001
                                                              (Unaudited)


<S>                                    <C>              <C>              <C>
                                        CONSOLIDATED,                      PRO FORMA
                                       AS PREVIOUSLY     DISCONTINUED     CONTINUING
                                         REPORTED         OPERATIONS      OPERATIONS
                                       -------------    ------------     ------------

SALES                                  $30,521,167      $   551,399      $29,969,768

C0ST OF SALES                           26,053,501          455,406       25,598,095
                                       -------------    ------------     ------------
GROSS PROFIT                             4,467,666           95,993        4,371,673
                                       -------------    ------------     ------------
OPERATING EXPENSES

    Administrative                       1,698,836          243,723        1,455,113

    Deferred charge write-off              215,371               --          215,371

    Research & development                 883,115           91,617          791,498

    Sales & marketing                    1,196,458           27,873        1,168,585
                                       -------------    ------------     ------------
                                         3,993,780          363,213        3,630,567
                                       -------------    ------------     ------------

INCOME (LOSS) FROM OPERATIONS              473,886         (267,220)         741,106
                                       -------------    ------------     ------------

OTHER INCOME  (EXPENSE)

    Interest and other (expense)            39,183             (599)          39,782

    Financing expenses                    (417,107)         (21,509)        (395,598)

    Non-recurring moving expense            (9,570)              --           (9,570)
                                       -------------    ------------     ------------
                                          (387,494)         (22,108)        (365,386)
                                       -------------    ------------     ------------

INCOME (LOSS) BEFORE TAXES                  86,392         (289,328)         375,720

PROVISION (CREDIT) FOR INCOME TAXES         36,616          (85,174)         121,790
                                       -------------    ------------     ------------

NET INCOME (LOSS)                      $    49,776      $  (204,154)      $  253,930
                                       =============    ============     ============


INCOME PER COMMON SHARE
        Basic                          $       .01                       $       .04
        Diluted                        $       .01                       $       .04


WEIGHTED AVERAGE SHARES OUTSTANDING
        Basic                            7,985,071                         6,285,071
        Assumed conversion                 575,298                           575,298
                                       ------------                      ------------
                                         8,560,369                         6,860,369
                                       ------------                      ------------

</TABLE>


                                       23
<PAGE>
<TABLE>
<CAPTION>

                                                          COLOR IMAGING, INC.
                                                  PRO FORMA CONDENSED BALANCE SHEETS
                                                           DECEMBER 31, 2000
                                                              (Unaudited)


 <S>                                                            <C>              <C>              <C>
                                                                CONSOLIDATED,                      PRO FORMA
                                                                AS PREVIOUSLY    DISCONTINUED      CONTINUING
                                                                   REPORTED       OPERATIONS       OPERATIONS
                                                                -------------    ------------     ------------
                         ASSETS
CURRENT ASSETS
    Cash                                                        $    339,348     $        885     $    338,463
    Accounts receivable, net                                       3,562,120          118,219        3,443,901
    Inventory                                                      5,181,248          438,360        4,742,888
    Deferred income taxes                                            155,526               --          155,526
    Related party portion of IDR bond                                 76,032               --           76,032
    Other current assets                                             401,143              418          400,725
                                                                ------------     ------------     ------------
          TOTAL CURRENT ASSETS                                     9,715,417          557,882        9,157,535
                                                                ------------     ------------     ------------

PROPERTY, PLANT AND EQUIPMENT - NET                                8,256,430          928,259        7,328,171
                                                                ------------     ------------     ------------
OTHER ASSETS
    Patent/intellectual property                                       5,000            5,000               --
    Deferred income taxes                                            467,984          312,000          155,984
    Related party portion of IDR bond                                898,096               --          898,096
    Other assets                                                     269,626            7,566          262,060
                                                                ------------     ------------     ------------
          TOTAL OTHER ASSETS                                       1,640,706          324,566        1,316,140
                                                                ------------     ------------     ------------
           TOTAL ASSETS                                         $ 19,612,553     $  1,810,707     $ 17,801,846
                                                                ============     ============     ============
          LIABILITIES & STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Revolving credit lines                                      $  1,399,000     $         --     $  1,399,000
    Accounts payable                                               6,665,322          199,636        6,465,686
    Current portion of notes payable                                 349,408           44,285          305,123
    Current portion of bonds payable                                 320,000               --          320,000
    Other current liabilities                                        364,765           41,097          323,668
                                                                ------------     ------------     ------------
           TOTAL CURRENT LIABILITIES                               9,098,495          285,018        8,813,477
                                                                ------------     ------------     ------------
LONG TERM LIABILITIES
    Notes payable                                                  1,698,058           32,266        1,665,792
    Bonds payable                                                  3,780,000               --        3,780,000
                                                                ------------     ------------     ------------
          LONG TERM LIABILITIES                                    5,478,058           32,266        5,445,792
                                                                ------------     ------------     ------------
           TOTAL LIABILITIES                                      14,576,553          317,284       14,259,269
                                                                ------------     ------------     ------------
COMMITMENTS & CONTINGENCIES

STOCKHOLDERS' EQUITY
   Common stock, $.01 par value, authorized 20,000,000
     shares; 7,490,848 and 5,790,848 shares issued and
     outstanding on December 31, 2000 and pro forma on
     December 31, 2000, respectively                                  74,909           17,000           57,909
   Additional paid-in capital                                      7,229,293        3,358,040        5,752,870
   Accumulated deficit                                            (2,268,202)      (1,881,617)      (2,268,202)
                                                                ------------     ------------     ------------
          TOTAL STOCKHOLDERS' EQUITY                               5,036,000        1,493,423        3,542,577
                                                                ------------     ------------     ------------
                                                                $ 19,612,553     $  1,810,707     $ 17,801,846
                                                                ============     ============     ============
</TABLE>

                                       24
<PAGE>

<TABLE>
<CAPTION>

                                                          COLOR IMAGING, INC.
                                              PRO FORMA CONDENSED STATEMENT OF OPERATIONS
                                             FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2000
                                                              (Unaudited)


<S>                                      <C>               <C>              <C>
                                          CONSOLIDATED,                       PRO FORMA
                                         AS PREVIOUSLY     DISCONTINUED      CONTINUING
                                            REPORTED         OPERATIONS       OPERATIONS
                                         -------------     ------------     ------------

SALES                                     $12,108,132      $   723,063      $11,385,069

C0ST OF SALES                              10,329,418          447,329        9,882,089
                                          ------------     ------------     ------------
GROSS PROFIT                                1,778,714          275,734        1,502,980
                                          ------------     ------------     ------------
OPERATING EXPENSES

    Administrative                            889,742          372,210          517,532

    Research & development                    764,286          213,259          551,027

    Sales & marketing                         470,625               --          470,625
                                          ------------     ------------     ------------
                                            2,124,653          585,469        1,539,184
                                          ------------     ------------     ------------

LOSS FROM OPERATIONS                         (345,939)        (309,735)         (36,204)
                                          ------------     ------------     ------------

OTHER INCOME  (EXPENSE)

    Interest and other income (expense)        (7,147)         (21,531)          14,384

    Financing expenses                       (241,037)         (19,733)        (221,304)

    Loss on disposal of fixed assets         (140,841)              --         (140,841)

    Non-recurring moving expense             (256,212)              --         (256,212)
                                          ------------     ------------     ------------
                                             (645,237)         (41,264)        (603,973)
                                          ------------     ------------     ------------

(LOSS) BEFORE TAXES                          (991,176)        (350,999)        (640,177)

PROVISION (CREDIT) FOR INCOME TAXES          (332,792)         (79,200)        (253,592)
                                          ------------     ------------     ------------

NET (LOSS)                                $  (658,384)     $  (271,799)     $  (386,585)
                                          ============     ============     ============


(LOSS) PER COMMON SHARE
        Basic and diluted                 $      (.09)                      $      (.07)


WEIGHTED AVERAGE SHARES OUTSTANDING
        Basic and diluted                   7,064,042                         5,364,042

</TABLE>


                                       25
<PAGE>

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       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  the
          Registrant's Amendment No. 5 to Form SB-2 filed on 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
          the Registrant's Amendment No. 4 to Form SB-2 filed on May 31, 2002.
4.2       Promissory  Note of Wall Street  Consulting  Corp.  dated  October 30,
          2001, incorporated by reference to the Registrant's Amendment No. 4 to
          Form SB-2 filed on May 31, 2002.
4.3       Form of  Warrant  issued  to  Selling  Stockholders,  incorporated  by
          reference to the Registrant's Form SB-2 filed on December 28, 2001.
4.4       Loan and Security  Agreement between Color Imaging and Southtrust Bank
          dated May 5,  2000,  incorporated  by  reference  to the  Registrant's
          Amendment No. 4 to Form SB-2 filed on May 31, 2002.
4.5       Amendment of Loan Documents  between Color Imaging and SouthTrust Bank
          dated August 30, 2000,  incorporated by reference to the  Registrant's
          Amendment No. 4 to Form SB-2 filed on May 31, 2002.
4.6       Second   Amendment  of  Loan  Documents   between  Color  Imaging  and
          SouthTrust Bank dated November 30, 2000,  incorporated by reference to
          the Registrant's Amendment No. 4 to Form SB-2 filed on May 31, 2002.
4.7       Third Amendment of Loan Documents between Color Imaging and SouthTrust
          Bank  dated  June  30,   2001,   incorporated   by  reference  to  the
          Registrant's Amendment No. 4 to Form SB-2 filed on May 31, 2002.
4.8       Fourth   Amendment  of  Loan  Documents   between  Color  Imaging  and
          SouthTrust  Bank dated November 1, 2001,  incorporated by reference to
          the Registrant's Amendment No. 4 to Form SB-2 filed on May 31, 2002.
4.9       Fifth Amendment of Loan Documents between Color Imaging and SouthTrust
          Bank  dated  December  31,  2001,  incorporated  by  reference  to the
          Registrant's Amendment No. 4 to Form SB-2 filed on May 31, 2002.
4.10      Sixth Amendment of Loan Documents between Color Imaging and Southtrust
          Bank  dated  February  7,  2002,  incorporated  by  reference  to  the
          Registrant's Amendment No. 3 to Form SB-2 filed on April 11, 2002.
4.11      $500,000  Line of Credit  Promissory  Note issued to  Southtrust  Bank
          dated May 5,  2000,  incorporated  by  reference  to the  Registrant's
          Amendment No. 4 to Form SB-2 filed on May 31, 2002.
4.12      $500,000 Amended and Restated Line of Credit Promissory Note issued to
          Southtrust  Bank dated August 30, 2000,  incorporated  by reference to
          the Registrant's Amendment No. 4 to Form SB-2 filed on May 31, 2002.
4.13      $500,000  Revolving  Note  Modification  Agreement  dated November 30,
          2000, incorporated by reference to the Registrant's Form SB-2 filed on
          December 28, 2001.
4.14      $500,000 Second  Revolving Note  Modification  Agreement dated July 5,
          2001, incorporated by reference to the Registrant's Amendment No. 4 to
          Form SB-2 filed on May 31, 2002.
4.15      $1,500,000  Revolving Note between Color Imaging and  SouthTrust  Bank
          dated June 24, 1999,  incorporated  by  reference to the  Registrant's
          Amendment No. 4 to Form SB-2 filed on May 31, 2002.
4.16      $1,500,000 Revolving Note Modification Agreement between Color Imaging
          and SouthTrust  Bank dated May 5, 2000,  incorporated  by reference to
          the Registrant's Form SB-2 filed on December 28, 2001.
4.17      $1,500,000 Second Revolving Note Modification  Agreement between Color
          Imaging and  SouthTrust  Bank dated August 30, 2000,  incorporated  by
          reference to the  Registrant's  Amendment  No. 4 to Form SB-2 filed on
          May 31, 2002.


                                       26
<PAGE>
Exhibit
No.       Description
-------   -----------

4.18      $1,500,000 Third Revolving Note  Modification  Agreement between Color
          Imaging and SouthTrust  Bank dated November 30, 2000,  incorporated by
          reference to the  Registrant's  Amendment  No. 4 to Form SB-2 filed on
          May 31, 2002.
4.19      $1,500,000 Fourth Revolving Note Modification  Agreement between Color
          Imaging  and  SouthTrust  Bank  dated July 5,  2001,  incorporated  by
          reference to the  Registrant's  Amendment  No. 4 to Form SB-2 filed on
          May 31, 2002.
4.20      $2,500,000 Fifth Revolving Note  Modification  Agreement between Color
          Imaging and SouthTrust  Bank dated December 31, 2001,  incorporated by
          reference to the  Registrant's  Amendment  No. 4 to Form SB-2 filed on
          May 31, 2002.
4.21      $1,752,000  Installment Note between Color Imaging and SouthTrust Bank
          dated June 24, 1999,  incorporated  by  reference to the  Registrant's
          Amendment No. 4 to Form SB-2 filed on May 31, 2002.
4.22      $1,752,000 Term Loan Documents  Modification  Agreement  between Color
          Imaging and  SouthTrust  Bank dated August 30, 2000,  incorporated  by
          reference to the  Registrant's  Amendment  No. 4 to Form SB-2 filed on
          May 31, 2002.
4.23      SouthTrust  Bank waiver letter dated March 26, 2001,  incorporated  by
          reference to the  Registrant's  Amendment  No. 1 to Form SB-2 filed on
          February 11, 2002.
4.24      SouthTrust  Bank  waiver  letter  dated May 8, 2001,  incorporated  by
          reference to the  Registrant's  Amendment  No. 1 to Form SB-2 filed on
          February 11, 2002.
4.25      SouthTrust  Bank waiver letter dated August 13, 2001,  incorporated by
          reference to the  Registrant's  Amendment  No. 1 to Form SB-2 filed on
          February 11, 2002.
4.26      SouthTrust Bank waiver letter dated October 31, 2001,  incorporated by
          reference to the  Registrant's  Amendment  No. 1 to Form SB-2 filed on
          February 11, 2002.
4.27      Development   Authority  of  Gwinnett   County,   Georgia   Industrial
          Development  Trust  Indenture   dated  June 1,  1999,  incorporated by
          reference to the  Registrant's  Amendment  No. 4 to Form SB-2 filed on
          May 31, 2002.
4.28      Loan  Agreement  between  the  Company,  Kings  Brothers  LLC  and the
          Development Authority of Gwinnett County,  Georgia dated June 1, 1999,
          incorporated by reference to the Registrant's  Amendment No. 4 to Form
          SB-2 filed on May 31, 2002.
4.29      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 the Registrant's
          Amendment No. 1 to Form SB-2 filed on February 11, 2002.
4.30      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
          the  Registrant's  Amendment  No. 1 to Form SB-2 filed on February 11,
          2002.
4.31      Master Security  Agreement  between Color Imaging and General Electric
          Capital Corporation dated November 30, 2000, incorporated by reference
          to the Registrant's Form SB-2 filed on December 28, 2001.
4.32      Promissory Note issued to General Electric Capital  Corporation  dated
          November 30, 2000,  incorporated by reference to the Registrant's Form
          SB-2 filed on December 28, 2001.
4.33      $200,000  Promissory Note between Color Imaging and Kings Brothers LLC
          dated November 19, 2001, incorporated by reference to the Registrant's
          Amendment No. 1 to Form SB-2 filed on February 11, 2002.
4.34      $500,000  Promissory Note between Color Imaging and Sueling Wang dated
          March  14,  2002,   incorporated  by  reference  to  the  Registrant's
          Amendment No. 3 to Form SB-2 filed on April 11, 2002.
4.35      $240,000  Promissory Note between Color Imaging and Kings Brothers LLC
          dated July 6, 2000,  incorporated  by  reference  to the  Registrant's
          Amendment No. 3 to Form SB-2 filed on April 11, 2002.
4.36      $50,000  Promissory  Note  between  the  Company and Daniel Wang dated
          October  23,  1998,  incorporated  by  reference  to the  Registrant's
          Amendment No. 3 to Form SB-2 filed on April 11, 2002.
4.37      $112,000  Promissory  Note between Color Imaging and Daniel Wang dated
          October  16,  1998,  incorporated  by  reference  to the  Registrant's
          Amendment No. 3 to Form SB-2 filed on April 11, 2002.
4.38      $90,000  Promissory  Note between Color Imaging and Michael Wang dated
          June 4, 1999,  incorporated by reference to the Registrant's Amendment
          No. 3 to Form SB-2 filed on April 11, 2002.
4.39      $150,000  Promissory  Note between Color Imaging and AccuRec LLC dated
          February  3,  2000,  incorporated  by  reference  to the  Registrant's
          Amendment No. 3 to Form SB-2 filed on April 11, 2002.
4.40      $200,000  Promissory  Note between Color Imaging and AccuRec LLC dated
          March 7, 2000, incorporated by reference to the Registrant's Amendment
          No. 3 to Form SB-2 filed on April 11, 2002.


                                       27
<PAGE>
Exhibit
No.       Description
-------   -----------

4.41      $200,000  Promissory  Note between Color Imaging and AccuRec LLC dated
          April  10,  2000,   incorporated  by  reference  to  the  Registrant's
          Amendment No. 3 to Form SB-2 filed on April 11, 2002.
4.42      $200,000  Promissory  Note between Color Imaging and AccuRec LLC dated
          May 2, 2000,  incorporated by reference to the Registrant's  Amendment
          No. 3 to Form SB-2 filed on April 11, 2002.
4.43      $500,000  Promissory  Note between Color Imaging and AccuRec LLC dated
          July 5, 2000,  incorporated by reference to the Registrant's Amendment
          No. 3 to Form SB-2 filed on April 11, 2002.
4.44      $200,000  Promissory  Note between Color Imaging and AccuRec LLC dated
          September  14, 2000,  incorporated  by  reference to the  Registrant's
          Amendment No. 3 to Form SB-2 filed on April 11, 2002.
4.45      $200,000  Promissory  Note between Color Imaging and AccuRec LLC dated
          October  4,  2000,  incorporated  by  reference  to  the  Registrant's
          Amendment No. 3 to Form SB-2 filed on April 11, 2002.
4.46      $200,000  Promissory  Note between Color Imaging and AccuRec LLC dated
          November  3,  2000,  incorporated  by  reference  to the  Registrant's
          Amendment No. 3 to Form SB-2 filed on April 11, 2002.
4.47      Seventh   Amendment  of  Loan  Documents  between  Color  Imaging  and
          SouthTrust Bank dated June 28, 2002,  incorporated by reference to the
          Registrant's Amendment No. 5 to Form SB-2 filed on July 15, 2002.
4.48      $2,500,000 Sixth Revolving Note  Modification  Agreement between Color
          Imaging  and  SouthTrust  Bank,   incorporated  by  reference  to  the
          Registrant's Amendment No. 5 to Form SB-2 filed on July 15, 2002.
4.49      Partial Loan Liability Release  Agreement between Color Imaging,  Inc.
          and  SouthTrust  Bank  dated  September  24,  2002,   incorporated  by
          reference to the  Registrant's  Amendment  No. 6 to Form SB-2 filed on
          October 2, 2002.
4.50      500,000  Promissory Note between Color Imaging and Jui Hung Wang dated
          August  21,  2002,  incorporated  by  reference  to  the  Registrant's
          Amendment No. 6 to Form SB-2 filed on October 2, 2002.
4.51      100,000  Promissory  Note between Color Imaging and Jui Chi Wang dated
          August  21,  2002,  incorporated  by  reference  to  the  Registrant's
          Amendment No. 6 to Form SB-2 filed on October 2, 2002.
4.52      First  Note  Modification  Agreement  between  Sueling  Wang and Color
          Imaging  dated  August 27,  2002,  incorporated  by  reference  to the
          Registrant's Amendment No. 6 to Form SB-2 filed on October 2, 2002.
10.1      Employment  Agreement  between  Color  Imaging and Michael W.  Brennan
          dated June 28, 2000,  incorporated  by  reference to the  Registrant's
          Form SB-2 filed on December 28, 2001.
10.2      Employment  Agreement between Color Imaging and Dr. Sueling Wang dated
          June 28, 2000, incorporated by reference to the Registrant's Form SB-2
          filed on December 28, 2001.
10.3      Employment  Agreement  between  the  Company and Morris E. Van Asperen
          dated June 28, 2000,  incorporated  by  reference to the  Registrant's
          Form SB-2 filed on December 28, 2001.
10.4      Employment  Agreement  between  Color  Imaging and Charles R.  Allison
          dated June 30, 2000,  incorporated  by  reference to the  Registrant's
          Form SB-2 filed on December 28, 2001.
10.5      Lease  Agreement  between Color  Imaging and Kings  Brothers LLC dated
          April 1, 1999, incorporated by reference to the Registrant's Form SB-2
          filed on December 28, 2001.
10.6      Amendment  No. 1 to Lease  Agreement  between  the  Company  and Kings
          Brothers  LLC dated April 1, 1999,  incorporated  by  reference to the
          Registrant's Form SB-2 filed on December 28, 2001.
10.7      Form of Subscription Agreement (Incorporated by reference to Exhibit A
          to the  Registrant's  Registration  Statement  on Form  SB-2  filed on
          October 2, 2002).
10.8      Letter of Agreement to Employment  Agreement between Color Imaging and
          Michael W. Brennan dated June 10, 2002  (incorporated  by reference to
          Exhibit 10.7 to  Registrant's  Form 10-QSB filed for the quarter ended
          June 30, 2002)
10.9      Termination  Agreement  between  Michael W. Brennan and Color  Imaging
          dated   September   30,  2002,   incorporated   by  reference  to  the
          Registrant's Amendment No. 6 to Form SB-2 filed on October 2, 2002.
99.1      Certification of principal executive officer
99.2      Certification of principal financial officer

(b) REPORTS ON FORM 8-K

On October 2, 2002, the Registrant filed a Form 8-K announcing the completion of
the share exchange with Digital Color Print,  Inc. in accordance  with Item 5 of
Form 8-K.

On September 26, 2002,  the  Registrant  filed a Form 8-K outlining the terms of
the Share Exchange  Agreement with Digital Color Print,  Inc. in accordance with
Item 5 of Form 8-K.

                                       28
<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
                                       --------------------------------------
November 1, 2002                       Sueling Wang, PhD
                                       President (principal executive officer)



                                       /S/ MORRIS E. VAN ASPEREN
                                       --------------------------------------
                                       Morris E. Van Asperen
                                       Executive Vice President and
                                       Chief Financial Officer





                                       29
<PAGE>


                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002



     I, Sueling Wang,  president and principal  executive officer of registrant,
certify that:

1.   I have  reviewed  this  quarterly  report on Form 10-QSB of Color  Imaging,
     Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report.

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidating subsidiaries, is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing of this
          quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date.

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

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

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

                                       COLOR IMAGING, INC.


                                       /S/ SUELING WANG
                                       ---------------------------------------
 November 1, 2002                      Sueling Wang, PhD
                                       President (principal executive officer)

                                       30
<PAGE>

                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


     I, Morris E. Van Asperen,  executive  vice  president  and chief  financial
officer of registrant, certify that:

1.   I have  reviewed  this  quarterly  report on Form 10-QSB of Color  Imaging,
     Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report.

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidating subsidiaries, is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing of this
          quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date.

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

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

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

                                       COLOR IMAGING, INC.


                                       /S/ MORRIS E. VAN ASPEREN
                                       ------------------------------------
November 1, 2002                       Morris E. Van Asperen
                                       Executive Vice President and
                                       Chief Financial Officer