UNITED STATES
                       SECURITIES AND EXCHANGE COMMMISSION
                             WASHINGTON, D.C. 20549
                             ----------------------
                                  FORM 10-QSB/A


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

          For the quarterly period ended MARCH 31, 2001

/ /       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
                              ---------------------
              (Registrant's telephone number, including area code)

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

As of April 30, 2001, there were 7,596,400 shares of Common Stock outstanding.


<PAGE>


                                EXPLANATORY NOTE

The accompanying financial statements for the three months ended March 31, 2001,
have been  restated to reflect the business  combination  with Image (see Note 2
below)  under the  purchase  method of  accounting  as opposed to the pooling of
interests method, as previously reported.


                               COLOR IMAGING, INC.
                        QUARTERLY REPORT ON FORM 10-QSB/A
                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001

                                      INDEX


PART I:       FINANCIAL INFORMATION

Item 1.       Financial Statements

                  Consolidated Balance Sheets
                   March 31, 2001 (Unaudited) and December 31, 2000...........3

                  Consolidated Statements of Operations (Unaudited)
                   for the Three Months ended March 31, 2001
                    and 2000..................................................4

                  Consolidated Statements of Cash Flows (Unaudited)
                   for the Three Months ended March 31, 2001
                    and 2000..................................................5

                  Notes to Consolidated Financial Statements..................6

Item 2.       Management's Discussion and Analysis of Financial Condition
               and Results of Operations......................................9


Signatures...................................................................14

<PAGE>


PART I: FINANCIAL INFORMATION
ITEM 1 -FINANCIAL STATEMENTS

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

                      COLOR IMAGING, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                                    31-Mar-01              31-Dec-00
                                                                  (Unaudited)              (Audited)
                                                                   As restated             As restated
CURRENT ASSETS                                                --------------          ---------------


    Cash                                                      $      168,509          $      339,348
    Accounts receivable                                            3,345,063               3,562,120
    Refundable income taxes                                           19,995                  19,995
    Inventory                                                      5,612,928               5,181,248
    Deferred taxes                                                   136,210                 155,526
    Related party portion of bonds - current                          76,716                  76,032
    Other current  assets                                            310,834                 381,148
                                                              --------------          ---------------
       TOTAL CURRENT ASSETS                                        9,670,255               9,715,417
                                                              --------------          ---------------
FIXED ASSETS
    Furniture & fixtures                                             129,955                 129,955
    R&D equipment                                                    418,776                 412,325
    Machinery & equipment                                          7,068,882               6,865,206
    Leasehold improvements                                         1,262,410               1,252,021
    Accumulated depreciation                                        (555,277)               (403,077)
                                                              ---------------         ---------------
       TOTAL FIXED ASSETS, NET                                      8,324746               8,256,430
                                                              ---------------         ---------------
OTHER ASSETS                                                           5,000                   5,000
    Patent/intellectual property                                     490,211                 467,984
    Deferred income tax                                              897,412                 898,096
    Related party portion of bonds                                   373,649                 269,626
    Other assets                                                   1,766,272               1,640,706
                                                              --------------          --------------
       OTHER ASSETS                                           $   19,761,273          $   19,612,553
                                                              ==============          ==============
CURRENT LIABILITIES
    Revolving credit lines                                    $    1,217,000          $    1,399,000
    Accounts payable                                               6,884,514               6,665,322
    Current portion notes payable                                    349,830                 343,408
    Current portion bonds payable                                    320,000                 320,000
    Other current liabilities                                        400,735                 370,765
    Current income taxes payable                                          --                      --
                                                              --------------          --------------
       TOTAL CURRENT LIABILITIES                                   9,172,079               9,098,495
                                                              --------------          --------------
LONG TERM LIABILITIES
    Notes payable                                                  1,611,993               1,698,058
    Bonds payable                                                  3,780,000               3,780,000
    Other long term liabilities                                           --                      --
                                                              --------------          --------------
       LONG TERM LIABILITIES                                       5,391,993               5,478,058
                                                              --------------          --------------
       TOTAL LIABILITIES                                          14,564,072              14,576,553
                                                              --------------          --------------
STOCKHOLDERS' EQUITY

    Common stock, $.01 par value, authorized 20,000,000
      shares; 7,574,219 and 7,490,948 shares issued on
      March 31, 2001 and December 31, 2000, respectively.             75,742                  74,909
    Additional paid-in capital                                     7,395,003               7,229,293
    Accumulated deficit                                           (2,273,544)             (2,268,202)
                                                              ---------------         ---------------
                                                                   5,197,201               5,036,000
                                                              ---------------         ---------------
                                                              $   19,761,273          $   19,612,553
                                                              ===============         ===============
</TABLE>

                 See Notes to Consolidated Financial Statements

                                     Page 3
<PAGE>



                      COLOR IMAGING, INC. AND SUBSIDIARIES
                       UNAUDITED STATEMENTS OF OPERATIONS


                                                    31-Mar-01      31-Mar-00
                                                   As restated    As restated
                                                  ------------   ------------

                SALES                             $  5,528,316   $    275,029

                C0ST OF SALES                        4,514,325        172,658
                                                  ------------   ------------

                   GROSS PROFIT                      1,013,991        102,371
                                                  ------------   ------------

                OPERATING EXPENSES
                   Administrative                      456,181         74,926
                   Research & development              216,909         48,231
                   Sales & marketing                   225,681             --
                                                  ------------   ------------
                                                       898,771        123,157
                                                  ------------   ------------

                   OPERATING PROFIT (LOSS)             115,220        (20,786)
                                                  ------------   ------------


                OTHER INCOME AND (EXPENSE)

                   Other income and (expense)            7,682            445
                   Financing expenses                 (120,574)        (4,529)
                   Non-recurring moving expense         (9,570)           --
                                                  -------------  ------------
                                                      (122,462)        (4,084)

                (LOSS) BEFORE TAXES                     (7,242)       (24,870)

                (BENEFIT) FOR INCOME TAXES              (1,900)       (10,000)
                                                  -------------  -------------
                 NET (LOSS)                       $     (5,342)  $    (14,870)
                                                  =============  =============


                 INCOME (LOSS)
                 PER COMMON SHARE

                   Basic/Diluted*                 $       (.00)  $       (.00)


                 WEIGHTED AVERAGE
                 SHARES OUTSTANDING

                   Basic/Diluted *                   7,007,534      4,000,000
                                                  =============  =============

* Antidilutive



                 See Notes to Consolidated Financial Statements

                                     Page 5
<PAGE>


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


                      COLOR IMAGING, INC. AND SUBSIDIARIES
                       UNAUDITED STATEMENTS OF CASH FLOWS


                                                                  THREE MONTHS      THREE MONTHS
                                                                      ENDED             ENDED
                                                                   31-Mar-01         31-Mar-00
                                                                  As restated       As restated
                                                                  -----------       -----------

 Cash flows from operating activities:

   Net income (loss)                                              $   (5,342)       $  (14,870)
   Adjustments to reconcile net income (loss)
     to net cash provided (used) by operating activities:
         Depreciation and amortization                               152,200             1,600
         Deferred income taxes                                        (2,911)          (10,000)
     Decrease (increase) in:
         Accounts and other receivables                              411,718           147,941
         Inventories                                                (431,680)          (74,056)
         Prepaid and other assets                                   (120,802)          (34,754)
         Cash surrender value of life insurance                           --                --
         Deposits                                                         --                --
     Increase (decrease) in:
         Accounts payable and accrued liabilities                    249,162           (88,878)
         Income taxes payable                                             --                --
                                                                  -----------       -----------
            Net cash provided by (used in)
              operating activities                                   252,345           (73,017)
                                                                  -----------       -----------
 Cash flows from investing activities:
     Capital expenditures                                           (220,516)         (100,752)
     Patents and intellectual properties                                  --            (5,000)
     Investments in acquisitions                                    (107,568)               --
                                                                  -----------       -----------
              Net cash (used in)
                investing activities                                (328,084)         (105,752)
                                                                  -----------       -----------
 Cash flows from financing activities:
     Net borrowings (payments) under line of credit                 (182,000)               --
     Proceeds from issuance of bonds or long-term debt                    --             7,930
     Proceeds from sale of stock                                     166,543                --
     Principal payments of long-term debt                            (79,643)               --
                                                                  -----------       -----------
              Net cash provided by (used in)
                financing activities                                 (95,100)            7,930
                                                                  -----------       -----------
              Net (decrease)  increase in cash                      (170,839)         (170,839)
 Cash at beginning of year                                           339,348         1,183,874
                                                                  -----------       -----------
 Cash at end of period                                            $  168,509        $1,013,035
                                                                  ===========       ===========
</TABLE>






                 See Notes to Consolidated Financial Statements

                                     Page 5
<PAGE>

                               COLOR IMAGING, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



NOTE 1. BASIS OF PRESENTATION

The accompanying  unaudited condensed financial statements have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information and with the  instructions to Form 10-Q and Article 10 of Regulation
S-X.  Accordingly,  they do not include  all of the  information  and  footnotes
required by generally  accepted  accounting  principles  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 ended March 31, 2001
(see Note 7 - Restatement)  are not  necessarily  indicative of the results that
may be expected for the year ended December 31, 2001.

NOTE 2. DESCRIPTION OF COMPANY

On May 16, 2000, Color Imaging, Inc., formerly known as Advatex Associates, Inc.
(Advatex),  Logical  Acquisition  Corp.  (LAC),  Color  Acquisition Corp. (CAC),
Logical Imaging Solutions,  Inc. (Logical) and Color Image, Inc. (Image) entered
into  a  Merger  Agreement  and  Plan  of  Reorganization,  as  amended  (Merger
Agreement),  pursuant to which LAC merged  with and into  Logical and CAC merged
with and into Image (the  Merger)  and  Logical  and Image  became  wholly-owned
subsidiaries  of Advatex.  Pursuant  to the Merger  Agreement,  stockholders  of
Logical and Image  exchanged  their  common  stock for shares of common stock of
Advatex. A reverse stock split of one share of common stock for 6.0779 shares of
common stock was  simultaneously  approved for the then existing  Advatex common
stock. Subsequently, the equity interests in Logical were converted by virtue of
the Logical Merger into  approximately  3,000,000 newly issued shares of Advatex
common stock,  on the basis of 1.84843  Advatex Common Shares for each one share
of common  stock of Logical.  The equity  interests  in Image were  converted by
virtue of the Image Merger into  approximately  3,000,000 newly issued shares of
Advatex common stock on the basis of 15 Advatex common shares for each one share
of common stock of Image.  The above  transactions  were consummated on June 28,
2000.

Prior to the  completion  of the above  referenced  transaction,  Advatex  was a
non-operating,  fully  reporting,  public shell, and both Logical and Image were
privately owned operating enterprises.  By the terms of the Merger Agreement and
Plan of Reorganization, the combination was contingent upon the agreement of all
of  the  enterprises,  and  it  was,  therefore  considered  a  single  business
combination.

Image and Logical each  received the same number of shares and both the board of
directors and executive officers of the Company were equally divided between the
managements  of Logical  and Image.  However,  since the  majority of the voting
stock was held by  directors  coming from Logical or  including  former  Logical
directors,  Logical was determined to be the accounting  acquirer in the reverse
merger with  Advatex,  based upon guidance  provided by Securities  and Exchange
Commission (SEC) Staff Accounting  Bulletin (SAB) Topic 2A and APB 16, regarding
Business Combinations.

The fair market  value of the shares  being  issued in the  reverse  acquisition
transaction could not be determined and accordingly,  the transaction was valued
at the fair market value of the issuer's net assets,  which  approximated  their
carrying value. As a result, and consistent with treatment of a merger between a
non-operating   public  shell  and  privately  held  entity,   no  goodwill  was
recognized.




                                     Page 6
<PAGE>


NOTE 2. DESCRIPTION OF COMPANY  (CONTINUED)

Concurrently with the above  transaction,  Advatex,  the legal acquirer,  issued
3,000,000  shares of common stock (with a per share value of $1.00 as determined
in the aforementioned reverse acquisition by Logical of Advatex) in exchange for
the outstanding  shares of Image.  This  transaction was accounted for under the
purchase method of accounting (see Note 7 -- Restatement). The fair value of the
Image's  assets was  reviewed to  determine  the  allocation  of the cost of the
purchase to tangible  and  intangible  assets,  including  goodwill.  Management
determined  that  no  adjustment  to  the  financial  statements  of  Image  was
necessary,  and that the fair value of the  tangible  and  intangible  assets of
Image was  equivalent  to their  respective  book  values  and no  goodwill  was
recognized in this transaction. The historical financial statements are those of
Logical,  and the assets,  liabilities  and operating  results of Image are only
included in the consolidated  financial  statements of the Company from the date
of acquisition, June 28, 2000.

The following  unaudited pro forma results of operations were developed assuming
the acquisition had occurred at the beginning of the earliest period presented.

                            THREE MONTH PERIODS ENDED
                            -------------------------
                           MARCH 31, 2001  MAR 31, 2000
                           -------------- ------------
                            (Unaudited Proforma Data)
       Net sales           $ 5,528,316     $ 3,728,372
       Net income          $    (5,342)    $    48,441
       Income per share    $      (.00)    $       .01

On July 7, 2000, by a vote of the majority of stockholders,  Advatex Associates,
Inc. (Advatex),  changed its name to Color Imaging,  Inc. (the Company or Color)
and approved the reverse stock split.

Color develops,  manufactures and markets  products used in electronic  printing
and  photocopying.  Color designs,  manufactures and delivers black text toners,
specialty  toners,  including  color and MICR (magnetic ink  characters  used on
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.

Logical's  development  efforts  have  focused on  creating  a digital  variable
printing process that provides high-speed, color printing systems for commercial
applications.  Logical  designs,  manufactures  and delivers  complete  printing
systems, including software, control units and print engines to its customers.

NOTE 3. STOCK OPTIONS

Prior to the Merger,  the Company  granted  options to acquire 500,000 shares of
the common stock of the Company to senior  members of the Company's  management.
The option  price is $2.00 per share.  The options  will vest over a two to four
year period.

NOTE 4. WARRANTS TO PURCHASE COMMON STOCK

As part of the Merger,  the Company  granted  warrants  (the "New  Warrant")  to
purchase up to 100,000 shares of the common stock of the Company to professional
advisors to the Merger. The New Warrant entitles the warrant holder to purchase,
at any  time  and  for a  five-year  period,  a share  of  common  stock  of the
Registrant for $2.00 per share. In addition,  current  shareholders  own 272,000
similar  warrants  (the "Old  Warrant").  The Old Warrant  entitles  the warrant
holder to  purchase,  at any time until  September  15,  2001, a share of common
stock of the Registrant for $2.70 per share.

NOTE 5. EARNINGS PER SHARE

Basic and diluted  earnings per share have been computed in accordance  with the
adoption of SFAS No. 128.


                                     Page 7
<PAGE>



NOTE 6. INVENTORIES

Inventories  consisted of the following components as March 31, 2001and December
31, 2000:

                                 March 31, 2001         December 31, 2000
                                 --------------         -----------------
                                                            (As restated)

   Raw materials ..........     $    1,254,528          $        794,128
   Work-in-process.........          1,072,095                 1,275,545
   Finished goods..........          3,408,960                 3,234,230
   Obsolescence allowance..           (122,655)                 (122,655)
                                ---------------         -----------------
Total......................     $    5,612,928          $      5,181,248
                                ===============         =================

NOTE 7. RESTATEMENT OF THREE MONTHS YEAR 2000 FINANCIAL STATEMENTS:

The accompanying financial statements for the three months ended March 31, 2001,
have been  restated to reflect the business  combination  with Image (see Note 2
under the purchase  method of  accounting as opposed to the pooling of interests
method, as previously  reported.  Accordingly,  Image's financial statements are
only  consolidated  beginning  with the date of  acquisition,  June 28, 2000. In
addition, the Company reclassified certain tangible assets that were erroneously
classified as  Patent/Intellectual  Property.  The following  tables present the
impact of the restatement.

                                         As Previously
                                          Reported                  As Restated
                                         --------------             -----------
As of March 31, 2001:
   Balance Sheet:
      Property, plant and equipment, net     7,203,701               8,324,746
      Patent/intellectual property           1,014,404                   5,000
      Additional paid-in capital             7,151,714               7,395,003
      Accumulated deficit                   (7,459,540)             (2,273,544)


See also Note 2 -- Unaudited Proforma Data

                                    Page 8
<PAGE>




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

     The following  discussion and analysis  should be read in conjunction  with
our Consolidated  Condensed  Financial  Statements and related Notes included in
this report.

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 and/or engage in sales of
our securities,  our intention to repay certain  borrowings from future sales of
our securities,  the ability to expand capacity by placing in service additional
manufacturing  equipment, the ability to commercialize our electron beam imaging
technologies and products, 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,  competition,  capital expenditures,  credit arrangements,  and
other  statements  regarding  matters  that are not  historical  facts,  involve
predictions  which are based upon a number of future  conditions that ultimately
may prove to be inaccurate.  Our actual  results,  performance  or  achievements
could  differ  materially  from the results  expressed  in, or implied by, these
forward-looking  statements.  Forward-looking  statements  are made  based  upon
management's current expectations and beliefs concerning future developments and
their  potential  effects upon our business.  We cannot  predict  whether future
developments affecting us will be those anticipated by management, and there are
a number of factors that could adversely affect our future operating  results or
cause our actual results to differ materially from the estimates or expectations
reflected in such  forward-looking  statements,  including  without  limitation,
those  discussed  in  the  sections  titled  "The  Company"  and   "Management's
Discussion and Analysis."

     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.

BACKGROUND

     Color  Imaging,  Inc.,  formerly  known as Advatex  Associates,  Inc.,  was
incorporated in Delaware in 1987. On May 16, 2000, Advatex,  Logical Acquisition
Corp., Color Acquisition Corp., Logical Imaging Solutions,  Inc. ("Logical") and
Color  Image,  Inc.  ("Image")  entered  into a  Merger  Agreement  and  Plan of
Reorganization,  as  amended  ("Merger  Agreement")  pursuant  to which  Logical
Acquisition  Corp.  merged  with and into  Logical and Color  Acquisition  Corp.
merged with and into Image (the "Merger"),  whereby Logical and Image became our
wholly-owned  subsidiaries.  Pursuant to the Merger  Agreement,  shareholders of
Logical and Image  exchanged  their shares for shares of common stock of Advatex
Associates,  Inc..  Logical  shareholders  converted their shares into shares of
common  stock of Advatex  Associates,  Inc.  at the ratio of  1.84843  shares of
common stock of Advatex  Associates,  Inc. for each one share of Logical.  Image
shareholders  converted  their  shares  into  shares of common  stock of Advatex
Associates,  Inc.  at  the  ratio  of 15  shares  of  common  stock  of  Advatex
Associates, Inc. for each one share of Image. Following the conversion of shares
by Logical  and Image  shareholders,  shareholders  of Logical  and Image  owned
approximately  85%  of  the  outstanding  shares  of  common  stock  of  Advatex
Associates,  Inc. and shareholders of Advatex Associates,  Inc. after the Merger
owned approximately 15%.

                                    Page 9
<PAGE>

     The  purpose  of the Merger was to  combine  Image's  toner and  consumable
expertise  and  manufacturing  plant with  Logical's  advanced  printing  system
capabilities  to offer a wider  product  range and  ensure  product  supply  for
Logical's print system. On July 7, 2000, pursuant to a vote of our stockholders,
we changed our name from Advatex Associates,  Inc. to Color Imaging, Inc, and on
December 31, 2000,  Color  Image,  Inc. was merged with and into Color  Imaging,
Inc. (the "Company" or "Color").

OVERVIEW

     The Company, Color Imaging, Inc. (OTCBB: CIMG), develops,  manufactures and
markets  products used in electronic  printing,  analog and digital  copiers and
high-speed digital printing.  These high-speed digital printing systems print in
real-time  directly on offset  presses.  Offset presses are presses that utilize
plates and ink to print on paper and other  materials.  We conduct our  business
through two separate operating units, Color Imaging,  Inc. ("Color") and Logical
Imaging Solutions, Inc. ("Logical").  Color develops,  purchases from others and
markets electronic printing products,  including black text, color, magnetic ink
character  recognition  and  specialty  toners,  and  provides  other  parts and
accessories for laser printers and analog and digital copiers.  Logical designs,
manufactures  and  integrates  components  made by third parties into a complete
printing  system  and  offers  technical  support  and  supplies  in  connection
therewith.  Logical's  printing system allows  commercial  printers to digitally
process and print data that may change from page to page, also known as variable
data, and images at very high speeds directly on commercial  offset web presses.
This capability saves time and money for both the printer and its customer.

Color

     Since 1989, Color has developed, manufactured and marketed products used in
electronic  printing and photocopying.  Image formulates and produces black text
and specialty toners,  including color and magnetic character recognition toners
for numerous laser printers and a number of facsimile machines and photocopiers.
Color'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  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 ink  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.  Color also manufacturers and or markets toners for use in
Ricoh(TM),  Sharp(TM), Xerox(TM), Canon(TM), Lanier(TM) and Toshiba(TM) copiers.
Color also offers product enhancements,  including imaging supplies, that enable
standard laser  printers to print magnetic  character  recognition  data.  Color
markets branded products directly to OEMs and aftermarket  products worldwide to
distributors.  In addition,  aftermarket products for laser printers and digital
and  analog  copiers  are  also  marketed  to  remanufacturers  and to  dealers,
respectively.

                                    Page 10
<PAGE>



Logical

     Logical  designs,   assembles  and  markets  a  complete  printing  system,
SOLUTION2000,  to  commercial  printers.  When  installed  directly on an offset
printing press,  the SOLUTION2000  expands printing  capabilities to include the
printing  of  variable  data and  images,  including  bar  codes,  magnetic  ink
character  recognition and unlimited  alphanumeric  sequencing.  These functions
allow  commercial  printers  to  digitally  process and print  variable  data at
extremely high speeds where previously they were able to only print fixed images
from printing plates or cylinders  installed on their offset  printing  presses.
Since its  founding  in 1993,  Logical's  development  efforts  have  focused on
creating a high-speed  digital  variable  data  printing  system for  commercial
printing applications that combines software,  hardware and consumable products.
Logical also offers a full line of consumable products,  including toners, print
cartridges  and toner fusing  assemblies.  Logical's  strategy is to continually
build an installed base of printer systems that will generate a recurring demand
for these consumable products.

     Logical is developing the DigitalColorPress,  a Solution series of printing
systems incorporating color printing  capabilities.  The DigitalColorPress  will
print variable data in color at rates exceeding 250 pages-per-minute. This is in
contrast to other  products that do not print directly on the press and print at
speeds  of  approximately  85 pages  per  minute.  Logical  believes  that  this
represents an attractive alternative for high-speed offset printing applications
because  it reduces  steps and labor in the print  process.  Logical  intends to
market the DigitalColorPress color printing system as an enhancement to existing
Solution series installations and as an upgrade for other printing systems..

OVERVIEW (RESTATEMENT OF FINANCIAL STATEMENTS)

     The Company has revised its accounting  treatment for the merger  completed
in June 2000 from a  pooling-of-interests  to the purchase  method in accordance
with  guidance  provided  by  the  Securities  and  Exchange   Commission  Staff
Accounting  Bulletin Topic 2A and APB 16, regarding business  combinations.  The
financial information contained in this amended report is in conformity with the
purchase  method of accounting  for the merger.  Accordingly,  the  accompanying
financial  statements for the six months ended June 30, 2000, have been restated
to reflect the  business  combination  with Image under the  purchase  method of
accounting  as  opposed  to the  pooling  of  interests  method,  as  previously
reported.  As the result,  Image's  financial  statements are only  consolidated
beginning with the date of acquisition, June 28, 2000.

     Net sales for the three and month period that ended on March 31, 2001, were
primarily  generated  from the sale of  consumable  products,  including  toner.
Revenue is  recognized  from the sale of products  when the goods are shipped to
the  customer.  In the  three  month  period  ended  March 31,  2001,  net sales
increased by $5,253,000.  The large increase in net revenues for the three month
period  compared  to the  same  period  of 2000  was  primarily  the  result  of
consolidation of Image's financial statements.

     Cost of goods sold includes direct material and labor 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 life 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  staffs,   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.


                                    Page 11
<PAGE>


RESULTS OF OPERATIONS

     The  following  table  sets  forth,  for  the  periods  indicated,  certain
information derived from the Company's consolidated statements of operations and
expressed as a percentage of net sales:

                                               Three Months Ended
                                                    March 31,
                                                 2001        2000
                                            ------------ ------------
                                            (Percentage of Net Sales)
     Net sales .............................      100         100
     Cost of goods sold ....................       82          63
     Gross Profit ..........................       18          37
     Administrative expenses................        8          27
     Research and Development...............        4          18
     Sales and Marketing....................        4           0
     Operating income.......................        2          -8
     Interest expense.......................        2           2
     Depreciation and Amortization..........        3           1
     Income before income taxes.............        0          -9
     Provision for income taxes (credit) ...        0          -4

     Net income (Loss) .....................        0          -5

THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 31, 2000

NET SALES.  Net sales were $5,528,000 for the three months ended March 31, 2001,
or an increase of $5,253,000,  or 1910% compared to $275,000 for the three month
period  ended March 31, 2000.  The large  increase in net sales during the three
month  period  ended  March 31,  2001  compared  to the same  period of 2000 was
primarily the result of  consolidation of Image's  financial  statements for the
first quarter 2001.

COST OF GOODS  SOLD.  Cost of goods sold  increased  by  $4,341,000  or 2509% to
$4,514,000  in the three months ended March 31, 2001 from  $173,000 in the three
months ended March  31,2000.  This  increase was  primarily due to increased net
sales.  Cost of goods sold as a percentage of net sales  increased to 82% in the
first quarter of 2001 from 63% in the first  quarter of 2000.  This decrease was
due to the higher level of sales at lower profit margins.

GROSS  PROFIT.  As a result of the above  factors,  gross  profit  increased  to
$1,014,000  in the three months ended March 31, 2001 from  $102,000 in the three
months ended March 31,2000.  Gross profit as a percentage of net sales decreased
to 18% in the first quarter of 2001 from 37% in the first quarter of 2000.  This
increase was also due to the higher level of sales at lower margins.

GENERAL   AND   ADMINISTRATIVE,   R&D  AND   SELLING   EXPENSES.   General   and
administrative,  selling and R&D expenses increased $776,000 or 630% to $899,000
in the three months ended March 31, 2001 from $123,000 in the three months ended
March 31, 2000. General and administrative,  R&D and selling expenses decreased,
as a percentage  of net sales,  to 16% in the first  quarter of 2001 from 45% in
the first  quarter of 2000.  General and  administrative  expenses  increased by
$381,000  or 509% to  $456,000  in the three  months  ended  March 31, 2001 from
$75,000 in the three  months ended March 31,  2000.  R&D  expenses  increased by
$169,000  or 350% to  $217,000  in the three  months  ended  March 31, 2001 from
$48,000 in the three months ended March 31, 2000.  Selling expenses increased by
$226,000 in the three months ended March 31, 2001  compared to selling  expenses
of -0- for the  three  months  ended  March 31,  2000.  The  large  increase  in
operating  expenses for the three month period ended March 31, 2001  compared to
the same period of 2000 was  primarily  the result of  consolidation  of Image's
financial statements for the first quarter 2001.

OPERATING  INCOME. As a result of the above factors the operating loss decreased
by $136,000 to a profit of  $115,000  in the three  months  ended March 31, 2001
from a loss of $21,000 in the three months ended March 31, 2000.

INTEREST EXPENSE.  Interest expense was $121,000 in the three months ended March
31, 2001 compared to $5,000 for the three months ended March 31, 2000.

OTHER  INCOME.  An increase in  miscellaneous  income  resulted in other  income
increasing  to $7,600 from income of $400 for the three  months  ended March 31,

                                    Page 12
<PAGE>
2001 compared to the same period of 2000.

INCOME TAXES.  Income tax benefits decreased to $2,000 in the three months ended
March 31, 2001 from a tax benefit of $10,000 for the comparable period in 2000.

LIQUIDITY AND CAPITAL RESOURCES

     Cash flows  provided by  operating  activities  were  $252,000 in the three
months ended March 31, 2001, compared to $73,000 used by operating activities in
the three  months  ended March 31,  2000.  The cash flows  provided by operating
activities in the three months ended March 31, 2001 were  comparatively  greater
than in the three  months  ended March 31, 2000 due  primarily  to  increases in
accounts  payable and  decreases in accounts  receivable.  The payable  increase
resulted primarily from higher sales and purchasing in 2000.

     Cash flows used in investing  activities  were $328,000 in the three months
ended March 31, 2001  compared to $106,000 in the three  months  ended March 31,
2000.  Included in cash flows used in investing  activities  in the three months
ended March 31, 2001 was $132,000  invested in test equipment for furthering the
Company's patented toner and digital color printing systems technologies.

     The Company has a $1.5 million revolving line of credit with an outstanding
balance as of March 31, 2001 of $717,000, and bears interest at the Bank's prime
interest rate less .25 percent. The revolving line of credit has a June 30, 2001
expiration date. Under the line of credit, the Company is permitted to borrow 85
percent of eligible accounts  receivable and 50 percent of eligible  inventories
(up to a maximum of $1.1 million).

     The Bank has made available an additional  line of credit of $500,000.  The
outstanding  balance as of March 31, 2001 was $500,000.  The additional  line of
credit has an  expiration  date of June 30, 2001,  and bears an interest rate of
the Bank's prime interest rate plus .5 percent. The Company has granted the Bank
a security  interest in all of the Company's  assets as security for the payment
of the lines of credit.

     The Company believes that cash generated by operating  activities,  the net
proceeds of $950,000  from the recent  Merger and funds  available  under credit
facilities   will  be  insufficient  to  finance  its  operating  and  investing
activities  for the next 12 months after March 31, 2001.  To the extent that the
funds  generated from these sources were  insufficient  to finance the operating
activities,  the  Company  raised  additional  funds  through  public or private
financing.  On August 29, 2000, the Board of Directors authorized the raising of
up to $3 million of additional capital on terms and conditions acceptable to the
Company.


                                    Page 13
<PAGE>





                                   SIGNATURES

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

                            COLOR IMAGING, INC.


June 18, 2002               /S/ MORRIS E. VAN ASPEREN
                            ____________________________________________________
                            Morris E. Van Asperen
                            Executive Vice President and Chief Financial Officer




                                    Page 14

1480845