UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             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  JUNE 30, 2000


/ /      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
 incorporation or organization)                              Identification No.)

4350 PEACHTREE 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 June 30, 2000, there were 7,000,000 shares of Common Stock outstanding.



<PAGE>
                                EXPLANATORY NOTE

     The  accompanying  financial  statements  for the six months ended June 30,
2000,  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 JUNE 30, 2000

                                      INDEX


PART I:   FINANCIAL INFORMATION

Item 1.   Financial Statements

              Consolidated Balance Sheets
                June 30, 2000 (Unaudited) and December 31, 1999...............3

              Consolidated Statements of Operations
               for the Three Months and Six Months ended June 30, 2000
                and 1999......................................................4

              Consolidated Statements of Cash Flows (Unaudited)
               for the Six Months ended June 30, 2000
                and 1999......................................................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

                      COLOR IMAGING, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

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


                                                          30-Jun-00                       31-Dec-99
                                                         (Unaudited)                      (Audited)
CURRENT ASSETS                                           As restated                     As restated
                                                      ------------------              -----------------
    Cash                                              $          864,284              $       1,183,874
    Accounts receivable                                        3,419,176                        157,622
    Refundable income taxes                                      163,135                             --
    Inventory                                                  5,948,311                        329,227
    Deferred taxes                                               277,416                         23,200
    Other current  assets                                        365,119                        256,648
                                                      ------------------              -----------------
          TOTAL CURRENT ASSETS                                11,037,441                      1,950,571
                                                      ------------------              -----------------
FIXED ASSETS
    Furniture & fixtures                                         125,685                         49,686
    Test equipment                                               376,690                             --
    Machinery & equipment                                      5,357,144                             --
    Leasehold improvements                                       677,132                             --
    Accumulated depreciation                                     (27,350)                       (23,960)
                                                      ------------------              -----------------
          TOTAL FIXED ASSETS, NET                              6,509,301                         25,726
                                                      ------------------              -----------------

OTHER ASSETS
    Patent/intellectual property                                   5,000                             --
    Deferred income tax                                          232,800                        232,800
    Related party portion of bonds                               974,128                             --
    Other assets                                                 688,139                          3,124
                                                      ------------------              -----------------
          OTHER ASSETS                                         1,900,067                        235,924
                                                      ------------------              -----------------
                                                      $       19,446,809              $       2,212,221
                                                      ==================                ===============
CURRENT LIABILITIES
    Revolving lines of credit                         $        1,940,000              $              --
    Accounts payable                                           6,051,076                        238,336
    Notes payable                                                106,596                             --
    Other current liabilities                                    674,296                        105,739
    Current income taxes payable                                 144,126                             --
                                                      ------------------              -----------------
          TOTAL CURRENT LIABILITIES                            8,916,094                        344,075
                                                      ------------------              -----------------
LONG TERM LIABILITIES
    Notes payable                                              1,565,000                         94,534
    Bonds payable                                              4,100,000                             --
    Other long term liabilities                                  123,054                             --
                                                      ------------------              -----------------
          LONG TERM LIABILITIES                                5,788,054                         94,534
                                                      ------------------              -----------------
          TOTAL LIABILITIES                                   14,704,148                        438,609
                                                      ------------------              -----------------

STOCKHOLDERS' EQUITY

    Common stock, $.01 par value, authorized
        20,000,000 shares; 7,000,000 and
        4,000,000 shares issued on June 30, 2000                  70,000                         40,000
        and December 31, 1999, respectively.
    Additional paid-in capital                                 6,344,601                      3,343,430
    Accumulated deficit                                       (1,671,940)                    (1,609,818)
                                                      ------------------              -----------------
                                                               4,742,661                      1,773,612
                                                      ------------------              -----------------
                                                      $       19,446,809              $       2,212,221
                                                      ==================               ================
</TABLE>

                 See Notes to Consolidated Financial Statements

                                       3
<PAGE>







                               COLOR IMAGING, INC. AND SUBSIDIARIES
                                UNAUDITED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

<S>                            <C>                <C>               <C>              <C>


                                  THREE MONTH PERIODS ENDED             SIX MONTH PERIODS ENDED
                                 30-Jun-00         30-Jun-99          30-Jun-00        30-Jun-99
                                As restated       As restated        As restated      As restated
                               --------------     -------------     ---------------  ---------------

SALES                          $     165,024      $    113,440      $      440,053   $      198,520
C0ST OF SALES                         96,906            74,506             269,564          130,385
                               --------------     -------------     ---------------  ---------------
      GROSS PROFIT                    68,118            38,934             170,489           68,135
                               --------------     -------------     ---------------  ---------------

OPERATING EXPENSES
    Administrative                    75,484            41,399             150,410           72,448
    Research and development          66,410            82,935             114,641          145,136
    Sales and marketing                   --            41,399                  --           72,448
                               --------------     -------------     ---------------  ---------------
                                     141,894           165,733             265,051          290,032
                               --------------     -------------     ---------------  ---------------

     OPERATING (LOSS)                (73,776)         (126,799)            (94,562)        (221,897)
                               --------------     -------------     ---------------  ---------------

OTHER INCOME AND (EXPENSE)
    Other Income and (expense)           361             2,099                 806            3,673
    Financing expenses                (4,837)           (3,342)             (9,366)          (5,849)
                               --------------     -------------     ---------------  ---------------
                                      (4,476)           (1,243)             (8,560)          (2,176)
                               --------------     -------------     ---------------  ---------------

(LOSS) BEFORE TAXES                  (78,252)         (128,042)           (103,122)        (224,073)

PROVISION (BENEFIT)                  (31,000)          (51,200)            (41,000)         (89,600)
  FOR TAXES INCOME TAXES       --------------     -------------     ---------------   --------------

NET (LOSS)                     $     (47,252)      $   (76,842)      $     (62,122)   $    (134,473)
                               ==============      ============     ===============   ==============
(LOSS)
PER COMMON SHARE

            Basic              $        (.01)      $      (.02)      $        (.01)   $        (.03)
            Diluted  *         $        (.01)      $      (.02)      $        (.01)            (.03)

WEIGHTED AVERAGE
SHARES OUTSTANDING

            Basic                  7,000,000         4,000,000           7,000,000        4,000,000
            Assumed conversion *          --                --                  --               --
                               --------------     -------------     ---------------  ---------------
                                   7,000,000         4,000,000         7,000,000          4,000,000
                               --------------     -------------     ---------------  ---------------

* Antidilutive

</TABLE>



                 See Notes to Consolidated Financial Statements

                                       4
<PAGE>

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

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

                                                            SIX MONTHS ENDED        SIX MONTHS ENDED
                                                               30-Jun-00                30-Jun-99
                                                              As restated              As restated
                                                              -------------            -------------

Cash flows from operating activities:

  Net (loss)                                                $       (62,122)        $       (134,473)
  Adjustments to reconcile net income (loss)
    to net cash provided (used) by operating activities:
        Depreciation and amortization                                 3,391                    3,336
        Deferred income taxes                                       (41,000)                 (89,600)
    Decrease (increase) in:
        Accounts and other receivables                              381,453                   10,996
        Inventories                                                 (83,880)                  11,999
        Prepaid and other assets                                   (134,965)                     242
    Increase (decrease) in:
        Accounts payable and accrued liabilities                    (94,804)                 (68,547)
        Income taxes payable                                          8,970                      --
                                                                ------------              -----------
              Net cash (used in)
                  operating activities                              (22,957)                (266,047)
                                                                ------------              -----------
Cash flows from investing activities:
     Capital expenditures                                          (197,099)                      --
     Patents and intellectual properties                             (5,000)                      --
                                                                ------------              -----------
              Net cash (used in)
                  investing activities                             (202,099)                      --
                                                                ------------              -----------
Cash flows from financing activities:
  Advances from related parties, net                                     --                  370,077
  Principal payments of long-term debt                              (94,534)                  (9,690)
                                                                ------------              -----------
              Net cash provided by (used in)
                  financing activities                              (94,534)                 360,387
                                                                ------------              -----------

              Net (decrease) increase in cash                      (319,590)                  94,340
Cash at beginning of year                                         1,183,874                   12,862
                                                                ------------              -----------
Cash at end of period                                       $       864,284        $         107,202
                                                                ============              ===========

</TABLE>


                 See Notes to Consolidated Financial Statements

                                       5
<PAGE>



                               COLOR IMAGING, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2000
                                   (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 and six months ended June
30,  2000 (see  Note 7 -  Restatement)  are not  necessarily  indicative  of the
results that may be expected for the year ended December 31, 2000.

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.




                                       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
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.


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

                                         THREE MONTH PERIODS ENDED                SIX MONTH PERIODS ENDED
                                         -------------------------                -----------------------
                                     JUNE 30, 2000      JUNE 30, 1999         JUNE 30, 2000     JUNE 30, 1999
                                     -------------      -------------         -------------     -------------
                                                            (Unaudited Proforma Data)

          Net sales                   $ 5,807,984        $ 2,591,291            $ 9,536,356     $   5,286,980

          Net income                  $    29,887        $   (60,609)           $    78,328     $     (18,600)

          Income per share            $        --        $      (.01)           $       .01     $          --
</TABLE>

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.


                                       7
<PAGE>


NOTE 6. INVENTORIES


Inventories  consisted  of the  following  components  as of June  30,  2000 and
December 31, 1999:
<TABLE>
<CAPTION>
<S>                                                  <C>                        <C>


                                                       June 30, 2000            December 31, 1999
                                                       -------------            -----------------

        Raw materials ....................           $      673,459             $           --
        Work-in-process...................                  889,786                         --
        Finished goods....................                4,593,414                    329,227
        Obsolescence allowance............                 (208,348)                        --
                                                     ----------------           ----------------

    Total.................................           $    5,948,311             $      329,227
                                                     ================           ================
</TABLE>



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




The  accompanying  financial  statements for the six months ended June 30, 2000,
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.

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

                                                         As Previously
                                                           Reported                As Restated
As of June 30, 2000:
    Balance Sheet:
        Related party portion of bonds - current       $          21,600        $              --
       Property, plant and equipment, net                      6,100,193                6,509,301
       Patent/intellectual property                              414,108                    5,000
       Related party portion of bonds, non-current               952,528                  974,128
       Bond payable - current portion                             90,000                       --
       Bond payable - long-term                                4,010,000                4,100,000
       Additional paid-in capital                             12,076,943                6,344,601
       Accumulated deficit                                    (7,404,282)              (1,671,940)


                                                        As Previously
                                                          Reported                 As Restated
Six Months Ended June 30, 2000:
    Statement of Operations:
        Sales                                           $       9,536,356        $          440,053
        Cost of sales                                           7,886,751                   269,564
        Administrative expenses                                   738,743                   150,410
        Research and development                                  353,920                   114,641
        Sales and marketing                                       410,551                        --
        Interest and other income                                 499,856                       806
        Interest and financing costs                             (257,277)                   (9,366)
        Non-recurring moving expenses                            (232,642)                       --
        Provision (benefit) for income taxes                       78,000                   (41,000)
        Net income (loss )                                         78,328                   (62,122)
        Basic income (loss) per share                                 .01                      (.01)
        Diluted income (loss) per share                 $             .01        $             (.01)

See also Note 2 -- Unaudited Proforma Data

</TABLE>

                                       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.
Logical  shareholders  converted  their  shares into  shares of common  stock of
Advatex at the ratio of 1.84843  shares of common  stock of Advatex for each one
share of  Logical.  Image  shareholders  converted  their  shares into shares of
common stock of Advatex at the ratio of 15 shares of common stock of Advatex 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 and shareholders of Advatex before
the Merger owned approximately 15%.

     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.
                                       9
<PAGE>

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 Image, Inc.  ("Image") and Logical
Imaging Solutions, Inc. ("Logical").  Image 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.

Image

     Since 1989, Image 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.
Image'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.  Image also  supplies  other  consumable  products used in electronic
printing and  photocopying,  including toner cartridges,  cartridge  components,
photoreceptors and imaging drums.

     Image  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.  Image also manufacturers and or markets toners for use in
Ricoh(TM),  Sharp(TM), Xerox(TM), Canon(TM), Lanier(TM) and Toshiba(TM) copiers.
Image also offers product enhancements,  including imaging supplies, that enable
standard laser  printers to print magnetic  character  recognition  data.  Image
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.

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.

                                       10
<PAGE>

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 six month periods that ended on June 30, 2000,
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 and six month periods ended June 30, 2000, net sales
increased  $52,000  and  $242,000,  respectively.  The  larger  increase  in net
revenues  for the six month  period  ended June 30,  2000  compared  to the same
period of 1999 was primarily  the result of a printing  system sale in the first
quarter 2000.

     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.

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

                                                     Three Months Ended        Six Months Ended
                                                           June 30,                 June 30,
                                                       2000          1999       2000          1999
                                                       ----          ----       ----          ----
                                                                  (Percentage of Net
Sales)
       Net sales ......................................100           100           100          100
       Cost of goods sold ..............................59            66            61           66
       Gross Profit ....................................41            34            39           34
       Administrative expenses..........................46            36            34           36
       Research and Development.........................40            73            26           73
       Sales and Marketing...............................0            36             0           36
       Operating income................................-45          -112           -21         -112
       Interest expense..................................3             3             2            3
       Depreciation and Amortization.....................1             1             1            2
       Income before income taxes......................-47          -113           -23         -113
       Provision for income taxes (credit) ............-19           -45            -9          -45

       Net income (Loss) ..............................-28           -68           -14          -68
</TABLE>

                                       11
<PAGE>


THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THREE MONTHS ENDED JUNE 30, 1999

NET SALES.  Net sales were $165,000 for the three months ended June 30, 2000, or
an increase of 46%  compared to $113,000  for the three month  period ended June
30, 1999.  The increase in net sales was primarily  due to increased  consumable
sales and service revenues.

COST OF GOODS SOLD. Cost of goods sold increased by $22,000 or 29% to $97,000 in
the three months ended June 30, 2000 from $75,000 in the three months ended June
30, 1999. This increase was primarily due to increased net sales.  Cost of goods
sold as a percentage of net sales decreased to 59% in the second quarter of 2000
from 66% in the second  quarter  of 1999.  This  decrease  was due to the higher
level of sales at better profit margins.

GROSS  PROFIT.  As a result of the above  factors,  gross  profit  increased  to
$68,000 in the three months ended June 30, 2000 from $39,000 in the three months
ended June 30, 1999.  Gross profit as a percentage of net sales increased to 41%
in the  second  quarter of 2000 from 34% in the  second  quarter  of 1999.  This
increase was also due to the higher level of sales at better margins.

GENERAL   AND   ADMINISTRATIVE,   R&D  AND   SELLING   EXPENSES.   General   and
administrative, selling and R&D expenses decreased $24,000 or 14% to $142,000 in
the three  months  ended June 30, 2000 from  $166,000 in the three  months ended
June 30, 1999. General and  administrative,  R&D and selling expenses decreased,
as a percentage of net sales,  to 86% in the second quarter of 2000 from 146% in
the second quarter of 1999.  General and  administrative  expenses  increased by
$34,000 or 83% to $75,000 in the three  months  ended June 30, 2000 from $41,000
in the three months ended June 30,  1999.  R&D expenses  decreased by $17,000 or
20% to $66,000 in the three months ended June 30, 2000 from $83,000 in the three
months ended June 30, 1999.  There were no selling  expenses in the three months
ended June 30, 2000 compared to selling expenses of $41,000 for the three months
ended June 30, 1999.

OPERATING  INCOME. As a result of the above factors the operating loss decreased
by $53,000,  to a loss of $74,000 in the three months ended June 30, 2000 from a
loss of $127,000 in the three months ended June 30, 1999.

INTEREST EXPENSE. Interest expense was $5,000 in the three months ended June 30,
2000 compared to $3,000 for the three months ended June 30, 1999.

OTHER INCOME. A decrease in interest income resulted in other income  decreasing
to $400 from $2,000 for the three  months  ended June 30,  2000  compared to the
same period of 1999.

INCOME TAXES. Income tax benefits decreased to $31,000 in the three months ended
June 30, 2000 from a tax benefit of $51,000 for the  comparable  period in 1999.
This decrease in tax benefit resulted from the Company's decreased losses.

SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO SIX MONTHS ENDED JUNE 30, 1999.

NET SALES. Net sales were $440,000 for the six months ended June 30, 2000, or an
increase of 121%  compared to $199,000  for the six month  period ended June 30,
1999,  with the increase  primarily  attributable  to a system sale in the first
quarter of 2000.

COST OF GOODS SOLD. Cost of goods sold increased by $140,000 or 108% to $270,000
in the six months ended June 30, 2000 from $130,000 in the six months ended June
30, 1999. This increase was primarily due to increased net sales.  Cost of goods
sold as a percentage of net sales  decreased to 61% in the six months ended June
30, 2000 from 66% in the first six month period of 1999.  This  decrease in cost
of sales is attributable to the system sales at a better profit margin.

                                       12
<PAGE>

GROSS  PROFIT.  As a result of the above  factors,  gross  profit  increased  by
$102,000 to $170,000 in the six months  ended June 30, 2000 from  $68,000 in the
six months  ended  June 30,  1999.  Gross  profit as a  percentage  of net sales
increased  to 39% for the first six  months  of 2000,  from 34% for the  similar
period in 1999.  This  increase in gross margin is  primarily  due to the system
sale at better profit margins during the first quarter of 2000.

GENERAL   AND   ADMINISTRATIVE,   SELLING,   AND  R&D   EXPENSES.   General  and
administrative,  R&D and selling expenses decreased $25,000 or 9% to $265,000 in
the six months  ended June 30, 2000 from  $290,000 in the six months  ended June
30, 1999. General and administrative,  R&D and selling expenses decreased,  as a
percentage of net sales, to 60% in the first six months of 2000 from 146% in the
similar six month period of 1999.  This change was the result of lower operating
expenses for the six months  ended June 30,  2000,  while net sales were up 121%
for the same period.  General and administrative  expenses increased by $78,000,
or 108%,  to $150,000  from  $72,000 in the six month period ended June 30, 2000
compared to the six month period ended June 30, 1999. R&D expenses  decreased by
$30,000 or 21% to $115,000 in the six months  ended June 30, 2000 from  $145,000
in the six months ended June 30, 1999. There were no selling expenses in the six
months ended June 30, 2000  compared to $72,000 of selling  expenses for the six
month period ended June 30, 1999.

OPERATING INCOME.  As a result of the above factors,  operating losses decreased
by  $127,000,  to a loss of  $95,000  for the six months  ended  June 30,  2000,
compared with a loss of $222,000 in the six months ended June 30, 1999.

INTEREST  EXPENSE.  Interest  expense  increased  by $3,000 to $9,000 in the six
months ended June 30, 2000 from $6,000 in the six months ended June 30, 1999.

OTHER INCOME.  As the result of less interest income,  other income decreased to
$800 in the six months  ended June 30,  2000 from $4,000 in the  comparable  six
months ended June 30, 1999.

INCOME  TAXES.  As the result of the smaller  loss for the six months ended June
30,  2000  compared to the same period in 1999,  the tax  benefit  decreased  to
$41,000  for the six months  ended June 30,  2000  compared  to $90,000  for the
comparable period in 1999.

LIQUIDITY AND CAPITAL RESOURCES

Cash flows used in  operating  activities  were  $23,000 in the six months ended
June 30, 2000  compared  to $266,000  used by  operating  activities  in the six
months ended June 30, 1999.  The cash flows used in operating  activities in the
six months  ended June 30, 2000 were  significantly  less than in the six months
ended  June 30,  1999  primarily  due to a smaller  loss and  reduced  levels of
accounts and other receivables.

Cash flows used in investing  activities  were  $202,000 in the six months ended
June 30, 2000 compared to no cash flows used in investing  activities in the six
months ended June 30, 1999. Included in cash flows used in investing  activities
in the six months ended June 30, 2000 was $197,000 used in the  construction  of
electron beam imaging test equipment and $5,000 for the acquisition of a patent.

The  Company has a $1.5  million  revolving  line of credit with an  outstanding
balance as of June 30, 2000 of  $1,440,000,  which bears  interest at the Bank's
prime  interest  rate less .25  percent.  The  revolving  line of  credit  has a
November  15, 2000  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 Company also has an additional line of credit of $500,000 from its Bank. The
outstanding  balance as of June 30, 2000 was $500,000.  The  additional  line of
credit has an expiration  date of November 15, 2000,  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  believed  that cash  generated  by  operating  activities,  the net
proceeds of $950,000 from the Merger on June 28, 2000, and funds available under
our credit facilities will be insufficient to finance  operating  activities for
at least the next 12 months after the period ended June 30, 2000.  To the extent
that the funds  generated  from these sources were  insufficient  to finance our
operating activities, we raised additional funds privately and from affiliates.


                                       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.


                                        /s/ MICHAEL W. BRENNAN
                                        ----------------------

May 15, 2002                            Michael W. Brennan
                                        Chairman and Chief Executive Officer


                                        /s/ MORRIS E. VAN ASPEREN
                                        -------------------------

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



                                       14