<PAGE>
                    U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-K/A

                                 AMENDMENT NO. 1

       FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

     |X|      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                    For the Fiscal Year Ended March 31, 2001
                                       OR
     | |      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES Exchange ACT OF 1934
                  For the Transition Period from _____ to _____

                         Commission file number 0-26756

                                GEOGRAPHICS, INC.
             (Exact Name of Registrant as Specified in Its Charter)
                                ----------------

                   DELAWARE                             87-0305614
     (State or Other Jurisdiction of                    (I.R.S. Employer
      Incorporation or Organization)                    Identification No.)

            1555 ODELL ROAD, P. O. BOX 1750, BLAINE, WASHINGTON 98231
              (Address and Zip Code of Principal Executive Offices)

        Registrant's Telephone Number, Including Area Code (360) 332-6711
                                ----------------

        Securities registered pursuant to Section 12(b) of the Act: NONE

              Securities registered under Section 12(g) of the Act:
                         COMMON STOCK, $0.001 PAR VALUE

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

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

Indicate by checkmark if disclosure of delinquent                      |  |
filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this
Form 10-K.

         The aggregate market value of the common stock held by nonaffiliates of
         the registrant as of June 8, 2001 was $6,337,458 based on a closing
         sales price of $0.28 per share on the NASDAQ OTC Bulletin Board on such
         date.

         The number of shares outstanding of the registrant's common stock,
         $0.001 par value, as of June 8, 2001 was 38,191,676.

                      DOCUMENTS INCORPORATED BY REFERENCE.
                                      None.


<PAGE>

                                EXPLANATORY NOTE

Geographics, Inc. ("the Company") has determined to restate its annual
consolidated financial statements and its condensed consolidated quarterly
financial statements for the fiscal year ending March 31, 2001 to adjust the
useful life of the Domtar license and other intangibles from fifteen years to
six years, increasing the net loss for the year by $250,000. This amendment
includes in Item 1 such restated condensed consolidated financial statements for
the twelve months ended March 31, 2001, and other information relating to such
restated consolidated financial statements. Item 2 includes the Company's
amended and restated discussion and analysis of financial condition and results
of operations.

Except for Items 1 and 2 and Exhibits 11 and 27, no other information included
in the original report on Form 10-K is amended by this amendment. The following
sections of the original report on Form 10-K are amended: Item 1, "Sales by
Product Category" and "Risk Factors"; Item 6 "Selected Consolidated Financial
Data"; Item 7 "Management's Discussion and Analysis of Financial Condition and
Results of Operations"; Item 8 "Financial Statements" and "Supplementary Data:
Selected Quarterly Financial Data -- Unaudited"; Item 14 "Financial Statements."


<PAGE>


                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                               PAGE
<S>                                                                                                          <C>
PART I   ........................................................................................................1

         ITEM 1.  BUSINESS.......................................................................................1

         ITEM 2.  PROPERTIES....................................................................................15

         ITEM 3.  LEGAL PROCEEDINGS.............................................................................16

         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...........................................16

PART II  .......................................................................................................16

         ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS......................16

         ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA..........................................................17

         ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.........18

         ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK ...................................22

         ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...................................................25

         ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE..........26

PART III ...................................................................................................... 26

         ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT...........................................26

         ITEM 11.  EXECUTIVE COMPENSATION.......................................................................28

         ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...............................29

         ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...............................................31

PART IV  .......................................................................................................31

         ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.............................31

SIGNATURES......................................................................................................36

</TABLE>

                                       i

<PAGE>

                                     PART I



         ITEM 1.  BUSINESS

         GENERAL

         Geographics, Inc. (the "Company" or "Geographics") is primarily engaged
         in the development, manufacture, marketing and distribution of
         specialty paper products, generally made using pre-printed designs,
         including stationery, business cards, brochures, memo pads, and poster
         boards. Geographics is also engaged in the development, marketing and
         distribution of plastic ready-to-assemble filing and storage cabinets,
         and has entered into a direct supply agreement with a Taiwanese
         manufacturer as of May 15, 2001, whereby the company will earn a
         royalty based on sales of proprietary designs.

         From its inception in 1974 until fiscal year 1991, the Company was
         engaged exclusively in the manufacture and wholesale marketing of
         various rub-on and stick-on lettering, stencils, graphics arts products
         and other signage products. In 1991, the Company began the development
         of "pre-print" or "specialty" paper products consisting of paper on
         which photographs or other art images are printed and which is then cut
         to size. In 1992, the Company introduced its first specialty paper
         product under the Geopaper brand name. The Company makes several
         specialty paper products using Geopaper designs, including stationery,
         business cards, brochures, memo pads, and poster boards which, in North
         America, are sold primarily to office supply superstores, including
         Office Depot, and mass market retailers, such as Wal-Mart, and which
         are also distributed internationally through the Company's subsidiary
         in Australia, and its European subsidiary through a license agreement
         dated October 31, 2000, with Atlanta Group BV, the European subsidiary
         of Smead Manufacturing Corporation. The specialty papers group now
         constitutes the Company's principal business, with approximately 87% of
         the Company's total sales in fiscal 2001 attributable to sales of
         Geopaper products.

         During the fiscal year 2000, the Company announced the introduction of
         GeoFile Modular Storage and File System(TM) ("GeoFile"). GeoFile is a
         flexible line of plastic ready-to-assemble filing and storage cabinets.
         GeoFile(TM) were sold primarily through the Company's existing office
         supply superstore customers, including Office Depot and Wal-Mart.
         Subsequent to fiscal year 2001, the Company has decided to cease
         reselling the GeoFile line and to focus its sales and marketing efforts
         on its core specialty paper products. In connection with these
         decisions, on May 15, 2001, the Company entered into an exclusive
         direct supply agreement with a Taiwanese manufacturer to license the
         manufacture and direct sale of GeoFile products.

                 Between March 2001 and June 2001, the Company has been in
         default of two financial covenants under its revolving credit facility
         with U.S. Bank National Association, the Company's primary source of
         working capital, and borrowings under the facility have exceeded
         permitted borrowing base limitations. U.S. Bank has waived these
         defaults effective as of June 30, 2001. The report of the Company's
         independent auditors dated June 28, 2001 relating to the Company's
         Consolidated Financial Statements for the fiscal year ended March 31,
         2001 states that the Company's fiscal year 2001 net loss, working
         capital deficiency and accumulated deficit at March 31, 2001 raise
         substantial doubt about the Company's ability to continue as a going
         concern. See "Liquidity and Capital Resources."




                                       1
<PAGE>



         REINCORPORATION IN DELAWARE

         Prior to October 16, 2000, the Company was incorporated in Wyoming. On
         October 16, 2000, the Company consummated a merger into a wholly-owned
         Delaware subsidiary, pursuant to which each outstanding share of common
         stock of the existing Wyoming corporation was converted into an equal
         number of shares of common stock of the Delaware corporation. In
         connection with the reincorporation, the par value of the Company's
         common stock was changed from no par value to $.001 per share and the
         Wyoming corporation ceased to have a separate existence. The surviving
         entity, also named Geographics, Inc. is a Delaware corporation with a
         Board of Directors and shareholders identical to that of the former
         Wyoming corporation.

         EXPANSION OF BOARD OF DIRECTORS

         At a special meeting of the Board of Directors held on February 26,
         2001, the Board determined that it is in the best interests of the
         Company and the shareholders to increase the number of directors on the
         board from the then current number of three directors up to five
         directors, pursuant to Section 3.2 of the Company's Bylaws. The Board
         also nominated and elected Mr. Roger R. Mayer and Mr. Jack Stein to
         fill the newly created directorships pursuant to Section 3.3 of the
         Company's Bylaws.

         INDUSTRY

         The market for preprinted papers ("preprints") includes preprinted cut
         sheet papers used for letterheads, brochures, flyers, posters and
         bulletins. Suppliers within the preprint industry also offer
         combination sets made up of multiple products such as matching
         letterhead, envelopes and business cards, or software packages that
         improve ease of use of preprints by the consumer. New designs and a
         large variety of preprints and related specialty products have been
         important elements of success and growth for businesses in the preprint
         market.

         The preprint market is segmented between two major methods of
         distribution: retail and direct mail. Within the retail segment of the
         preprint market there are numerous sub-segments, including office
         supply superstores, mass market retailers, arts and crafts stores,
         party stores, specialty paper retailers, and office supply
         business-to-business retailers. The Company sells its specialty paper
         products exclusively in the retail segment of the preprint market,
         primarily to office supply superstores such as Office Depot and
         mass-market retailers such as Wal-Mart.

         Large retailers somewhat dominate the retail segment of the preprint
         industry, and as such, exert considerable influence over the operations
         of the relatively smaller suppliers, such as the Company, that service
         them in the preprint market. Of particular importance are factors such
         as pricing, monetary requirements for the retailers selling programs
         (including such expenses as volume rebates and advertising allowances),
         prompt order turnaround which in turn requires the maintenance of large
         inventories, and payment terms, including prompt pay discounts and
         extended and seasonal terms.

         INTRODUCTION OF NEW PRODUCTS; VENDOR CONSOLIDATIONS

                  The Company is developing and expects to introduce additional
         new lines of products to its customers through its existing
         distribution system. Management believes these products will compliment
         the Company's current lines and will have the effect of improving the
         profitability and to some extent reducing the seasonal fluctuations of
         the Company's operating results.

                                       2
<PAGE>

         Introduction of New Products; Vendor Consolidations (continued)

                  Additionally, customers in the office products industry have
         pointedly attempted to consolidate the number of vendors from whom they
         make purchases. Consequently, the Company expects to be in a position
         to benefit from this industry phenomenon due to the existence of a
         number of single line vendors whose products could readily be
         manufactured and distributed by the Company.

                  Management believes the existence of additional complimentary
         lines and the Company's ability to absorb additional lines strengthens
         the Company's position with key customers. However, there can be no
         assurance that additional complimentary lines will be successfully
         launched with customers, or that vendor consolidations will result in
         additional product offerings by the Company.

         SALES BY PRODUCT CATEGORY

         The percentage of the Company's approximate total Net Sales
         attributable to each class of product offered by the Company for the
         last three years is set forth below.

                          AS A PERCENTAGE OF NET SALES

         CLASS OF PRODUCT
<TABLE>
<CAPTION>
                                                                                          FISCAL YEAR
                                                                                          -----------
                                                                         2001                2000                1999
                                                                         ----                ----                ----
<S>                                                                    <C>                 <C>                 <C>
         Designer stationery and specialty papers                         87%                 97%                 96%
         Plastic filing and storage cabinets                              13%                  3%                  0%
         Lettering, signage, stencil and graphic art                       0%                  0%                  4%
         products (1)
</TABLE>

                        NET SALES STATED IN U.S. DOLLARS

         CLASS OF PRODUCT
<TABLE>
<CAPTION>
                                                                                          FISCAL YEAR
                                                                                          -----------
                                                                         2001                2000             1999
                                                                         ----                ----             ----
<S>                                                                  <C>                 <C>               <C>
         Designer stationery and specialty papers                    $31,640,877         $26,463,998       $20,055,014
         Plastic filing and storage cabinets                          $4,961,188            $790,784                $0
         Lettering, signage, stencil and graphic art                          $0                  $0          $752,000
         products (1)
</TABLE>

(1)      Related to discontinued operations



                                       3
<PAGE>



         Sales by Product Category (continued)


                     NET SALES/ASSETS BY GEOGRAPHIC LOCATION

         Financial information relating to foreign and domestic operations and
export sales is as follows:

<TABLE>
<CAPTION>
         REGION                                                                    FISCAL YEAR
         ------                                                                    -----------
                                                                     2001             2000             1999 (1)
                                                              ---------------     --------------   ----------------
        Net sales to domestic and foreign customers               (Restated)
<S>                                                           <C>                 <C>              <C>
          North America                                       $    33,673,253     $   23,602,805   $     16,488,463
          United Kingdom                                            1,528,235          2,152,093          1,021,474
          Other European Countries                                          -                  -          1,054,000
          Australia                                                 1,400,576          1,499,884          1,491,077
                                                              ---------------     --------------   ----------------
              Total                                           $    36,602,065     $   27,254,782   $     20,055,014
                                                              ===============     ==============   ================
        Operating profit (loss)
          North America                                       $    (3,610,736)    $      937,632   $     (2,581,464)
          United Kingdom                                             (476,487)          (344,869)          (550,609)
          Australia                                                     6,742             87,378            (34,090)
                                                              ---------------     --------------   ----------------
              Total                                           $    (4,080,481)    $      680,141   $     (3,166,163)
                                                              ===============     ==============   ================

        Property, Plant and Equipment
          United States                                       $     8,855,324     $    9,125,809   $      9,778,864
          United Kingdom                                               39,938            126,159            108,793
          Australia                                                    81,973             52,896             57,977
                                                              ---------------     --------------   ----------------
              Total                                           $     9,007,234     $    9,304,864   $      9,945,634
                                                              ===============     ==============   ================
</TABLE>

 (1)     Effective May 4, 1998, the Company sold substantially all of its
         signage and lettering operating assets, licenses, inventory, and other
         rights to Identity Group, Inc.

         International sales accounted for approximately 21%, 25% and 36% of the
         Company's total net sales in fiscal years 2001, 2000 and 1999,
         respectively. International sales by the Company's subsidiaries were
         concentrated in Canada, Europe and Australia. As a result of such
         international sales, a significant portion of the Company's revenues
         were subject to certain risks, including unexpected changes in
         regulatory requirements, exchange rates, tariffs and other barriers,
         political and economic instability and other risks. To address this and
         to broaden its European distribution channels, as of October 31, 2000,
         the Company's European subsidiary entered into a licensing and
         distribution agreement with Atlanta Group BV, the European subsidiary
         of Smead Manufacturing Corporation, to sell certain assets of
         Geographics Europe, Ltd. Beginning in November 2000, the Company also
         made arrangements to sub-contract printing and packaging of its
         products in Australia to supply that subsidiary.

         BUSINESS CONCENTRATIONS

         The Company had two customers in fiscal year 2001, and three customers
         in fiscal years 2000 and 1999 that individually exceeded 10% of net
         sales and in the aggregate accounted for approximately 54%, 32%, and
         57% of net sales in 2001, 2000 and 1999, respectively. The Company
         expects that sales to relatively few customers will continue to account
         for a high percentage of its net sales in the foreseeable future and
         believes that its financial results depend in significant part upon the
         success of these few customers.



                                       4
<PAGE>
         PURCHASING

         The Company's principal purchases are materials for use in the
         manufacture of specialty paper. In particular, the Company routinely
         purchases sheets and rolls of commodity paper, as well as other direct
         materials involved in the printing and packaging of its Geopaper
         product lines, such as inks, packaging film, labels, shipping boxes and
         other materials. Certain of the products used in the manufacture of the
         Company's products are considered commodities, and as such can vary
         significantly in cost from time to time. Though prices may vary, the
         Company has not experienced and does not currently anticipate any
         market shortages of the specific raw materials that it purchases and
         uses in the manufacture of its products.

         The Company's success depends in large part on reliable and
         uninterrupted supply of raw materials from its major vendors. The
         Company purchases goods from over 100 vendors, and historically has
         made a practice of extensive use of a "primary" source for major
         categories of purchased goods and services. Coincident with the April
         1, 2000 acquisition of certain inventory, licenses and trademark rights
         of the Consumer Products Business of the Communication Papers Division
         of Domtar, Inc. of Canada, the Company also entered into a preferred
         supply agreement with Domtar, Inc., pursuant to which Domtar, Inc. has
         agreed to provide an immediately available and uninterrupted supply of
         paper. The Company continues to develop relationships with other
         significant vendors both as "primary" or "secondary" sources for other
         goods and services.

         In addition, key vendors have granted the Company significant amounts
         of trade credit. While management recognizes the loyalty shown the
         Company from key vendors, it is management's practice to review all
         significant purchases, to solicit competitive bids from alternate
         sources, and to evaluate these alternate suppliers for their ability to
         provide products and service to the Company of the same or similar
         quality and on the same or more favorable terms than those currently
         provided to the Company. Although the Company may be able to find other
         sources of supply for commodity paper and other major raw material
         categories, there can be no assurance that potential new vendors, once
         sourced, would provide an uninterrupted supply of raw materials or
         adequate levels of trade credit, competitive prices or acceptable
         payment terms.

         DISTRIBUTION

         The Company sells its products on a wholesale basis primarily to
         retailers, including office supply superstores, mass market retailers,
         arts and crafts stores, party stores, specialty paper retailers, and
         office supply business-to-business catalog retailers. The Company also
         markets its products to office supply distributors in the U.S. and to
         distributors in those countries where the Company does not service
         retailers directly. Historically, the Company has sold a substantial
         portion of its products to a limited number of retail customers, and
         the Company believes that this trend can be expected to continue in the
         future.

         The Company has historically conducted its export operations through
         two subsidiaries:

         - Geographics (Europe) Limited ("Geographics-Europe") was incorporated
         in England on December 12, 1995. To broaden its European distribution
         channels, as of October 31, 2000, Geographics-Europe entered into an
         agreement with Atlanta Group BV, the European subsidiary of Smead
         Manufacturing Corporation to sell certain assets of Geographics Europe,
         Ltd. The assets sold consist of inventory, customer files, customer
         records, sales history, sales orders, supply contracts, goodwill and
         know-how, which represent all of the assets necessary to operate the
         business. The Company has retained ownership of its designs, copyrights
         and trademarks, and has provided an exclusive license to Smead/Atlanta
         Group for the use of the Geographics brand for paper products and a




                                       5
<PAGE>



         non-exclusive license to the GeoFile brand for file and storage
         products in exchange for royalty payments on sales of the licensed
         products. Atlanta Group BV is headquartered in Hoogezand, The
         Netherlands, and also has distribution facilities in Austria, Belgium,
         England, France, Germany, Spain, Portugal and Switzerland. Under the
         terms of the agreement, Geographics Europe has received approximately
         $500,000 in initial proceeds, and will receive royalties of 5% of the
         net sales of all of the Company's products sold by the Smead/Atlanta
         Group.

         -        Geographics Australia Pty. Ltd. ("Geographics-Australia") was
                  incorporated in Brisbane, Australia on June 28, 1996. The
                  offices of Geographics-Australia are located at Unit 1, 31 -
                  41 Bridge Road, Stanmore, NSW 2048, Australia.
                  Geographics-Australia was organized to import, warehouse,
                  market and distribute the Company's products throughout
                  Australia. Beginning in November 2000, the Company made
                  arrangements to sub-contract printing and packaging of its
                  products in Australia to supply Geographics-Australia.

         The Company has also entered into an exclusive supply and distribution
         agreement, effective as of November 28, 2000, for the production and
         distribution of its products in Mexico. Under the agreement, the
         Company's paper products will be printed and packaged in Mexico, and
         will be sold directly to the Company's Mexican distributor in US
         dollars. The Company believes that this arrangement will greatly
         enhance its ability to service its customers in Mexico, such as Office
         Depot and Wal-Mart, as well as enhancing the ability to reach
         traditional Mexican retailers.

         The Company dissolved Geographics Marketing Canada, Inc. during fiscal
         year 2000. Geographics, Inc now conducts all business and distribution
         previously conducted by Geographics Marketing Canada, Inc.

         COMMERCIAL TERMS - MAJOR CUSTOMERS

         On an annual basis, and in line with industry practice, the Company
         negotiates terms of sale with certain of its major customers, including
         office supply superstores, mass-market retailers, and office supply
         distributors. Items negotiated may include payment terms, co-op
         advertising, slotting, new store opening, cross dock and freight
         allowances, volume sales rebates, and merchandise return policies. In
         limited cases, extended payment terms may be offered. In other cases,
         sales may be made on a guaranteed basis, allowing the customer to
         return unsold merchandise during an agreed period. These terms can have
         a material impact on the net sales and profitability of sales programs
         with major customers.

         MANAGEMENT INFORMATION SYSTEMS - INTEGRATED OPERATIONS SOFTWARE

         The Company is currently finalizing the installation of a comprehensive
         Operations Management software system. The financial, customer service,
         and purchasing portions of the system went on-line and are operational
         as of May 2001. Manufacturing and shop floor control systems are
         anticipated to go on-line in fiscal year 2002. This software includes
         MRP and master scheduling capabilities and will be integrated with the
         Company's financial systems. The Company will be required to make an
         additional investment of resources to implement the balance of the
         system in fiscal year 2002 and possibly in future periods.




                                       6
<PAGE>

         MANAGEMENT INFORMATION SYSTEMS - ELECTRONIC DATA INTERCHANGE (EDI)

         The Company currently utilizes EDI to transact business with its
         largest customers. Presently, approximately 70% to 80% of customer
         orders and invoices are transacted by EDI. Accordingly, the Company has
         developed in-house EDI expertise to support critical EDI requirements.
         In fiscal year 2000, the Company achieved compliance with EDI ASN 4010,
         which relates to electronic transmission of advanced shipping notice
         information. In fiscal year 2001, the Company achieved compliance with
         EDI ASN 4030, which relates to electronic transmission of invoices to
         customers. Compliance with these standards is critical to the Company's
         ability to transact business with its largest customers.

         MANUFACTURING OPERATIONS - SUPPLY AND DISTRIBUTION

         As of March 1, 2001, the Company has entered into a long-term lease of
         a warehouse and offices in Waukesha, Wisconsin. The Company has
         consolidated and moved its sales and warehouse operations from Toronto,
         Canada, Dallas, Texas, Milwaukee, Madison and Windsor, Wisconsin. The
         Company believes that this consolidation will provide annual savings of
         approximately $200,000 in rent, and allow the Company to more
         efficiently service its business east of the Rocky Mountains in North
         America, which amounts to over 70% of its sales.

         The Company has also made arrangements for local sub-contract supply of
         certain of its paper products, which will provide considerable freight
         savings versus servicing from its facility in Blaine, Washington.

         COMPETITION

         The Company operates in a highly competitive environment. The Company's
         designer stationery products compete in most of the Company's markets
         with Great Papers, Action Communications, Inc., Avery Dennison Office
         Products, First Base, Paper Direct, Inc., and American Pad and Paper,
         Inc. The Company's designer stationery products compete for limited
         shelf space in the office products superstores, office product stores,
         mass-market stores, contract stationers, wholesalers, office product
         catalogs and mail order catalogs.

         The Company believes that its product designs, product quality,
         merchandising programs, distribution channels, customer service and
         competitive pricing distinguish the Company from its competitors. While
         none of these competitors are believed to be dominant in the Company's
         primary product lines, many are larger, better capitalized and have
         substantially greater financial, marketing and human resources. In
         order to remain competitive, the Company may be required to continue to
         make significant expenditures for capital equipment, sales, service,
         training and support capabilities, investments in systems, procedures
         and controls, expansions of operations and research and development,
         among many other items. Additional financing might be required to fund
         the Company's investments in those areas. There can be no assurance
         that additional financing will be available on terms acceptable to the
         Company.




                                       7
<PAGE>



         ACQUISITIONS

         To strengthen its market position, the Company made two significant
         acquisitions in fiscal year 2001.

         Effective as of April 1, 2000, the Company acquired certain inventory,
         licenses and trademark rights of the Consumer Products Business of the
         Communication Papers Division of Domtar, Inc. of Canada, for a total
         consideration of $4,781,140 plus expenses of $49,138. Under the
         provisions of the agreement with Domtar, the Company was granted an
         exclusive worldwide license to convert, distribute and sell products
         under certain exclusive Domtar trademarks, and a non-exclusive license
         to use the Domtar Trademark. The initial term of the licenses is for a
         three-year period extending to March 31, 2003, extendable at the
         Company's option for an additional three-year period, and annually
         thereafter, unless terminated by either party. The licenses remain
         exclusive providing annual sales achieve certain minimum sales levels
         or minimum royalty payments are made. The agreement also provides for
         the payment of royalties on sales of the Domtar products, an option by
         Domtar to repurchase the assets at a premium, and the purchase of paper
         from Domtar.

         To expand its product offerings and customer base, as of December 18,
         2000, the Company has entered into an agreement to acquire certain
         assets of the Z-GRAFIX(R) brand image paper from Kansas City, Missouri
         based Z-International, Inc. The Company and Z-International have
         entered into a license agreement for the Company to use the Z-GRAFIX
         name. Under the terms of the agreement, the Company has made an initial
         payment of $100,000, will pay for inventory as sold, and will negotiate
         for the payment of remaining inventory, if any, at a future date. The
         agreement also provides for the payment of commissions on net sales,
         for a period not to exceed three years.

         LICENSES, TRADEMARKS AND COPYRIGHTS

         In connection with the acquisition of certain inventory, licenses and
         trademark rights of the Consumer Products Business of the Communication
         Papers Division of Domtar, Inc. of Canada, the Company was granted an
         exclusive worldwide license to convert, distribute and sell products
         under certain exclusive Domtar trademarks, and a non-exclusive license
         to use the Domtar Trademark. The initial term of the licenses is for a
         three-year period extending to March 31, 2003, extendable at the
         Company's option for an additional three-year period, and annually
         thereafter, unless terminated by either party. The licenses remain
         exclusive providing annual sales achieve certain minimum sales levels
         or minimum royalty payments are made. The agreement also provides for
         the payment of royalties on sales of the Domtar products, an option by
         Domtar to repurchase the assets at a premium, and the purchase of paper
         from Domtar. In connection with the agreement to acquire certain assets
         of the Z-GRAFIX(R) brand image paper from Kansas City, Missouri based
         Z-International, Inc., the Company and Z-International have entered
         into a license agreement for the Company to use the Z-GRAFIX(R) name.

         The Company maintains twelve registered trademarks in the United
         States, Canada and Australia. The Company's trademarks have various
         expiration dates from 2002 to 2006 in the U.S., expiration dates in
         2005 in Canada, and expiration dates in 2011 in Australia. The Company
         considers consumer awareness of its products and brand names an
         important factor in creating demand for its products among office
         supply stores and other existing or prospective customers. Part of the
         Company's strategy for increasing consumer awareness is to establish
         consistent brand identity across all of its major product lines. The
         Company believes that its trademarks and copyrights play an important
         role in this effort.



                                       8
<PAGE>

         Licenses, Trademarks and Copyrights (continued)

         While the Company has made reasonable efforts to protect its
         intellectual property, including registering them as trademarks and
         copyrights in the countries where the product lines are marketed, to
         the extent that such protections are inadequate, the Company could lose
         all or a part of these rights which, in turn, could result in the
         diminution of the Company's overall brand identity or individual
         product line identities. Either the loss of intellectual property
         rights or the diminution of the Company's brand identities could have a
         material adverse effect on the Company. See "Risk Factors--Uncertain
         Protection of Intellectual Property."

         SEASONAL

         A significant portion of the Company's customer orders are placed
         between June and October of each year for shipment during the Company's
         third fiscal quarter, which includes the Christmas and Holiday season,
         with the largest levels of sales historically occurring in the second
         half of the calendar year. As a result, the Company has experienced,
         and is expected to continue to experience, seasonal fluctuations in its
         operating results based upon past purchasing patterns.

         BACKLOG

            The Company's backlog of orders as of March 31, 2001 and March 31,
         2000 was approximately $902,000 and $1,448,000 respectively. The
         Company includes in backlog the value of all purchase orders received
         from customers for product not yet shipped and invoiced. The Company's
         backlog is subject to fluctuations as a result of the seasonal nature
         in the Company's business and other factors and is, therefore, not
         necessarily indicative of future sales. There can be no assurance that
         current backlog will necessarily lead to sales in any future period.
         The Company's inability to ship product with respect to a purchase
         order could result in cancellation of such purchase order and reduction
         of backlog and could have a material adverse effect on the Company's
         business, financial condition and results of operations.

         EMPLOYEES

         At March 31, 2001, the Company employed approximately 147 people; 121
         at its headquarters in Blaine, Washington, 19 at its Wisconsin sales
         and distribution facilities, and 7 at the Company's facilities in
         Australia. None of the Company's employees are subject to a collective
         bargaining agreement.

         SUBSEQUENT EVENT

         On April 27, 2001, the Company issued $1,200,000 in 10% Convertible
         Secured Subordinated Notes, due and payable on or before April 27, 2003
         (the "Notes"), to certain of the Company's existing shareholders. The
         Notes bear interest at a rate of 10%, and are convertible at the
         holder's option into shares of the Company's common stock, at a
         conversion price of $.20 per share. The Notes will be subordinated to
         the Company's existing indebtedness owing to U.S. Bank National
         Association ("U.S. Bank"). Proceeds from the Notes were used to reduce
         the Company's existing indebtedness to U.S. Bank and for working
         capital and other general corporate purposes.




                                       9
<PAGE>



         SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

         Statements herein concerning expectations for the future constitute
         forward-looking statements, which are subject to a number of known and
         unknown risks, uncertainties and other factors which might cause actual
         results to differ materially from those expressed or implied by such
         forward-looking statements. Forward-looking statements include, but are
         not limited to, anticipated growth in the preprint paper market;
         anticipated growth in the Company's sales; anticipated growth in sales
         of specialty paper products as a percentage of revenue; the Company's
         ability to increase its market share within the preprint industry; the
         ability of the Company to successfully implement price changes for the
         Company's products when and as needed; trends relating to the Company's
         profitability and gross profits margins; and the ability of the Company
         to increase its availability under its existing revolving credit
         facility and to raise additional debt or equity financing sufficient to
         meet its working capital requirements.

         Relevant risks and uncertainties include, but are not limited to, the
         Company's lack of profitability and questions about its ability to
         continue as a going concern, material weaknesses in the Company's
         internal controls, slower than anticipated growth of the preprint
         papers market; loss of certain key customers; insufficient consumer
         acceptance of the Company's specialty paper products; unanticipated
         actions, including price reductions, by the Company's competitors;
         unanticipated increases in the costs of raw materials used to produce
         the Company's products; supply terms, reliable and immediately
         available raw material supply and other favorable terms with certain
         key vendors; failure to realize expected economic efficiencies of the
         Company's automated production system; the inability to hire and retain
         key personnel; unfavorable determinations of pending lawsuits or
         disputes; the inability to secure additional working capital when and
         as needed and other risks described herein and in the Company's filings
         with the Securities and Exchange Commission. Additional risks and
         uncertainties include those described from time to time in the
         Company's other filings with the Securities and Exchange Commission,
         press releases and other communications.



                                  RISK FACTORS



         PROSPECTIVE INVESTORS ARE STRONGLY CAUTIONED THAT AN INVESTMENT IN THE
         COMPANY INVOLVES A VERY HIGH DEGREE OF RISK. PROSPECTIVE INVESTORS
         SHOULD NOT DISMISS, AS "BOILERPLATE" OR "CUSTOMARY," DISCLOSURE OF THE
         RISK FACTORS SET FORTH BELOW. THE CONTINGENCIES AND OTHER RISKS
         DISCUSSED BELOW COULD AFFECT THE COMPANY IN WAYS NOT PRESENTLY
         ANTICIPATED BY ITS MANAGEMENT AND THEREBY HAVE A MATERIAL ADVERSE
         EFFECT ON THE VALUE OF ITS COMMON STOCK. A CAREFUL REVIEW AND
         UNDERSTANDING OF EACH OF THE RISK FACTORS SET FORTH BELOW, AS WELL AS
         THE OTHER INFORMATION CONTAINED IN THIS OFFERING MEMORANDUM IS
         ESSENTIAL FOR AN INVESTOR SEEKING TO MAKE AN INFORMED DECISION WITH
         RESPECT TO THE COMPANY.




                                       10
<PAGE>



  LACK OF PROFITABILITY; FINANCIAL WEAKNESSES; ABILITY TO CONTINUE AS A
  GOING CONCERN

  The Company incurred a net loss of $5,256,834 in fiscal year 2001 and
  has a working capital deficiency of $4,992,359 and an accumulated
  deficit of $20,349,268 at March 31, 2001. For fiscal year 2001, the
  Company's independent auditor has included an explanatory paragraph is
  its audit report, regarding the Company's ability to continue as a
  going concern. Among the factors cited by the auditor that raised
  substantial doubt as to the Company's ability to continue as a going
  concern, are the Company's net loss for fiscal year 2001, working
  capital deficiency and accumulated deficit at March 31, 2001. In order
  for the Company to continue as a going concern it must achieve
  profitability or obtain adequate financing to fund its obligations as
  they become due.

  The Company believes that the consolidation of multiple distribution
  facilities into the Waukesha Wisconsin facility, licensing agreements
  with Atlanta Group, BV, and Mexican distribution partner, the
  establishment of the direct supply agreement for GeoFile products, and
  local manufacture of products for the Australian subsidiary will
  greatly improve liquidity. The Company has also prepared preliminary
  plans for further operational consolidations, should the actions
  already taken prove insufficient to restore proper liquidity. The
  Company also believes that the provider of the current credit facility
  is willing to increase the current borrowing limit, and, if necessary,
  the Company would optimistically pursue other public and private
  capital sources.

  Although the Company believes it will achieve profitability, improve
  its financial condition, and obtain any required financing, it may not
  be successful. The Company's consolidated financial statements do not
  include any adjustments that might be necessary should the Company be
  unable to continue as a going concern. See "Liquidity and Capital
  Resources."

  MATERIAL WEAKNESSES IN INTERNAL CONTROL

  The Company had significant weaknesses in internal accounting controls
  during fiscal year 2001, which could cause material errors in
  accounting and financial reporting to occur and go undetected. The
  Company's independent auditor has reported to the Company's board of
  directors the existence of reportable conditions. Reportable conditions
  are matters coming to the independent auditors attention that, in their
  judgement, relate to significant deficiencies in the design or
  operation of internal control and could adversely affect the Company's
  ability to record, process, summarize and report financial data
  consistent with the assertions of management in the financial
  statements. The Company believes that it has mitigated these weaknesses
  in its accounting and financial reporting by the thorough review
  performed by its management. The Company cannot be certain that its
  efforts to implement adequate internal controls will in the future be
  successful.

  CUSTOMER CONCENTRATIONS

  The Company had two customers in fiscal year 2001, and three customers
  in fiscal years 2000 and 1999 that individually exceeded 10% of net
  sales and in the aggregate accounted for approximately 54%, 32%, and
  57% of net sales in 2001, 2000 and 1999, respectively. The Company
  expects that sales to relatively few customers will continue to account
  for a high percentage of its net sales in the foreseeable future and
  believes that its financial results depend in significant part upon the
  success of these few customers. Although the composition of the
  Company's largest customers may vary from period to period, the loss of
  a significant customer or any reduction in orders by any significant
  customer, including reductions due to market, economic or competitive
  conditions in the designer stationery or specialty papers industry,
  would


                                       11
<PAGE>

         have a material adverse effect on the Company's business, financial
         condition and results of operations.

         Customer Concentrations (continued)

         As a result of the concentration occurring in the office supply
         industry in which the major office mega-stores are accounting for a
         greater percentage of industry-wide sales, it is anticipated that an
         increasing number of the smaller outlets and retail stores will
         discontinue operations in the years ahead. The Company anticipates that
         certain of such sales will be transferred to the larger mega-stores or
         wholesale distributors to which the Company currently supplies its
         products.

         International sales accounted for approximately 21%, 25% and 36% of the
         Company's total net sales in fiscal years 2001, 2000 and 1999,
         respectively. International sales by the Company's subsidiaries were
         concentrated in Canada, Europe and Australia. As a result of such
         international sales, a significant portion of the Company's revenues
         were subject to certain risks, including unexpected changes in
         regulatory requirements, exchange rates, tariffs and other barriers,
         political and economic instability and other risks.

         COMPETITION

         The Company believes that its product designs, product quality,
         merchandising programs, distribution channels, customer service and
         competitive pricing distinguish the Company from its competitors. While
         none of these competitors are believed to be dominant in the Company's
         primary product lines, many are larger, better capitalized, and have
         substantially greater financial, marketing and human resources. In
         order to remain competitive, the Company may be required to continue to
         make significant expenditures for sales, service, training and support
         capabilities, investments in systems, procedures and controls,
         expansions of operations and research and development, among many other
         items. Additional financing might be required to fund the Company's
         investments in those areas. There can be no assurance that additional
         financing will be available on terms acceptable to the Company, or at
         all.

         MAINTENANCE OF LARGE INVENTORY OF PRODUCTS

         As of March 31, 2001, the Company maintained inventories of specialty
         papers and other products of $6,634,321. The Company believes that it
         is sound business practice to maintain inventories in sufficient
         quantities to afford the Company flexibility in responding to incoming
         orders, to maintain its reputation as a major supplier in the industry
         and to offer certain economies of scale in its purchasing program. The
         maintenance of the inventories requires a substantial outlay of funds,
         which may not be recovered for extended periods of time. In addition,
         the Company has generally observed that raw material prices change more
         rapidly than pricing for the Company's products. Consequently, the
         Company may be required to absorb price increases on raw materials
         before it is able to pass through such increases to its customer base.
         Also, to the extent that purchasing preferences of the Company's
         customers change over time, such inventory may become less marketable,
         which may require the Company to dispose of such inventories at a
         reduced price.

         DEPENDENCE ON KEY VENDORS

         The Company's success depends in large part on reliable and
         uninterrupted supply of raw materials from its major vendors. The
         Company purchases goods from over 100 vendors, and historically has
         made a practice of extensive use of a "primary" source for major
         categories of purchased goods and services. In connection with the
         April 1, 2000 acquisition of certain



                                       12
<PAGE>

         inventory, licenses and trademark rights of the Consumer Products
         Business of the Communication Papers Division of Domtar, Inc. of
         Canada, the Company also entered into a preferred supply agreement with
         Domtar, Inc., pursuant to which Domtar, Inc. has agreed to provide an
         immediately available and uninterrupted supply of paper.

         Dependence on Key Vendors (continued)

         The Company continues to develop relationships with other significant
         vendors both as "primary" or "secondary" sources for other goods and
         services. The interruption of supplies by Domtar, Inc. or any other key
         vendor could result in the Company not being able to fulfill customer
         orders, resulting in the loss of sales and future business.

         TECHNOLOGY CHANGES AFFECTING PRODUCTS

         Technology advances in the design and manufacture of personal computer
         ("PC") hardware and software have had a positive effect on the demand
         for designer stationery and other specialty paper products marketed by
         the Company. Significant advances in PC printer hardware combined with
         lower retail prices have increased penetration rates for these
         printers. The average consumer now has access to printers offering
         professional quality color print output at retail prices starting well
         below the $200 price range. Increased penetration rates have increased
         the end user demographic for designer stationery. This new technology
         enables consumers to create products with design quality comparable to
         the Company's own manufactured products. However, the Company believes
         that current costs for color printer ink cartridges make mass
         production of self-created designer papers prohibitively expensive at
         the present time. The costs for printer ink cartridges as a consumable
         item related to the use of PC hardware have remained stable in recent
         years. The Company believes that the cost relationship between the PC
         printer and associated consumables like replacement cartridges will
         remain at current ratios for the foreseeable future. If technology
         continues to advance there can be no assurances that future
         developments will not render existing or proposed products of the
         Company uneconomical or obsolete, or that the Company will not be
         adversely affected by the future development of commercially viable
         products by others. The development of superior products by others
         could have a material adverse effect on the Company's business,
         financial condition or results of operations.

         UNCERTAIN PROTECTION OF INTELLECTUAL PROPERTY

         The Company owns a number of trademarks and copyrights, and certain of
         the Company's proprietary manufacturing processes are protected by
         trade secrets. While the Company has made reasonable efforts to protect
         all of its trade secrets, trademarks, copyrights and other proprietary
         rights, to the extent such protections are inadequate, the Company
         could lose a part or all of these rights which, in turn, could have a
         material adverse effect on the Company's business, financial condition
         or results of operations.

         DEPENDENCE UPON KEY PERSONNEL

         At the present time, the Company is highly dependent on the continued
         services of its principal executive officers as well as Directors of
         the Company. There can be no assurances that the Company will be able
         to replace any of these key executives in the event their services
         become unavailable. The loss of other key members of the Company's
         management team could also have a material adverse effect on the
         Company's business, financial condition or results of operations.



                                       13
<PAGE>

         LACK OF LISTING ON AN EXCHANGE

         The Company's common stock, $0.001 par value per share ("Common
         Stock"), trades on the NASDAQ OTC Electronic Bulletin Board. However,
         the lack of listing on a national or regional exchange may restrict
         marketability of the Common Stock, which could reduce the liquidity of
         the Common Stock and have a material adverse effect on the trading
         market and the market price for the Common Stock.

         APPLICABILITY OF RULES RELATING TO LOW-PRICED STOCK

         The Securities and Exchange Commission has adopted regulations which
         generally define a "penny stock" to be any equity security that has a
         market price (as defined) of less than $5 per share, subject to certain
         exceptions. Unless the Common Stock is listed on the Nasdaq National
         Market or the Nasdaq SmallCap Market, it will be deemed to be "penny
         stock" and will continue to be subject to rules that impose additional
         sales practice requirements on broker/dealers who sell such securities
         to persons other than established customers and accredited investors.
         These rules adversely effect the ability and willingness of
         broker-dealers to sell the Common Stock, which could reduce the
         liquidity of the Common Stock and have a material adverse effect on the
         trading market and the market price for the Common Stock.

         EXISTENCE OF WARRANTS, OPTIONS, CONVERTIBLE NOTES AND POSSIBLE DILUTION

         As of March 31, 2001, there were outstanding warrants to purchase up to
         235,000 shares of Common Stock at an exercise price of $.383 per share
         and options to purchase up to 3,215,000 shares of Common Stock at
         exercise prices ranging from $0.30 to $0.50 per share. As of April 27,
         2001, the Company issued a total of $1,200,000 in 10% Convertible
         Secured Subordinated Notes. At the option of the holder, the notes may
         be converted into shares of the Company's common stock at the rate of
         $.20 per share of stock. In the event that the outstanding warrants and
         options are exercised and the notes are converted, the holders will be
         given the opportunity to profit from a rise in the market price of the
         underlying shares. This may have certain dilutive effects on, and a
         materially depressive effect on, the market price for the Common Stock.
         The terms on which the Company could obtain additional capital during
         the life of such warrants, options and convertible notes, may be
         adversely affected because the holders may be expected to exercise or
         convert them at a time when the Company might otherwise be able to
         obtain comparable additional capital in a new offering of securities at
         a price per share greater than the exercise price of such options and
         warrants or conversion rate of such notes.

         VOLATILITY OF STOCK PRICE

         The market price of the Common Stock has been, and is likely to
         continue to be, volatile. The market price of the Common Stock could
         fluctuate, perhaps substantially, in response to a number of factors,
         such as actual or anticipated variations in the Company's quarterly
         operating results, announcements of technological innovations or new
         products or enhancements by the Company or its competitors,
         developments in the Company's relationships with its customers or
         suppliers, changes in the general condition of, or trends in, the
         designer stationery, specialty paper and office products industries,
         paper prices, changes in governmental regulations, or changes in
         securities analysts' estimates of the Company's or its competitors' or
         industry's future performance. In addition, in recent years the stock



                                       14
<PAGE>

         Volatility of Stock Price (continued)

         market in general, and the market for shares of small capitalization
         stocks in particular, including the Company's Common Stock, have
         experienced extreme price and volume volatility, which has had a
         substantial effect on the market prices of securities of many smaller
         public companies for reasons frequently unrelated to the operating
         performance of such companies.

         LACK OF DIVIDENDS

         The Company's ability to pay a dividend to holders of the Company's
         Common Stock is limited by its existing credit facility with U.S. Bank.
         In addition, the Company currently anticipates that all of its earnings
         will be needed for the on-going operation of the business and does not
         anticipate paying any cash dividends on shares of the Company's Common
         Stock in the foreseeable future.

         FLUCTUATIONS OF QUARTERLY RESULTS; SEASONALITY

         Management continues to expect that the Company's financial results may
         vary materially from period to period. Most of the Company's customers
         order products for immediate delivery. As a result, a substantial
         amount of the Company's net sales in each quarter result from orders
         received in that quarter. The Company's net sales and operating results
         may, therefore, vary significantly as a result of, among other things,
         volume and timing of orders received during the quarter, variations and
         sales mix, and delays in production schedules. Accordingly, the
         Company's historical financial performance is not necessarily a
         meaningful indicator of future results. Moreover, significant portions
         of the Company's customer orders are placed between June and October of
         each year in anticipation for shipment during the Company's third
         fiscal quarter (i.e., the Holiday period). As a result, the Company has
         experienced and is expected to continue to experience seasonal
         fluctuations in its operating results based on such purchasing
         patterns. These fluctuations in quarterly operating results could have
         a material adverse effect on, among other things, the market price for
         the Company's Common Stock.

         ITEM 2. PROPERTIES

         The Company considers its properties to be suitable and adequate for
         their intended uses for the foreseeable future. These properties
         consist of the following:

         Executive Offices And Domestic Facilities

         The Company's headquarters and manufacturing facility in Blaine,
         Washington has approximately 96,500 square feet of office, warehouse
         and manufacturing space located on ten and one-half acres of
         Company-owned land. The Company also leases approximately 118,000
         square feet of warehouse and office space in Waukesha, Wisconsin. The
         term of the lease is seven years, beginning on March 1, 2001. The lease
         calls for annual base rent of $354,000, and allows for an increase in
         base rent of 2% per year. Management believes these facilities are
         suitable and adequate for the Company's business.



                                       15
<PAGE>

         Australian Facilities

         In connection with the distribution of the Company's products in
         Australia, Geographics-Australia leases 8,350 square feet of office and
         warehouse space in Stanmore, Australia. The lease requires lease
         payments of AUD$94,800 per year, triple net, and expires on May 31,
         2004.

         ITEM 3. LEGAL PROCEEDINGS

         The Company is subject to claims and actions incident to the operation
         of its business. It is the opinion of management that the ultimate
         resolution of these matters and any future unidentified claims will not
         have a material adverse effect on the Company's business, financial
         condition or results of operations.

         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  No matters were submitted to a vote of security holders during
         the fourth quarter of fiscal year 2001.

                                     PART II

         ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
         STOCKHOLDER MATTERS

         PRICE RANGE OF COMMON STOCK

         Since December 24, 1997, the Company's Common Stock traded on the
         NASDAQ OTC Bulletin Board. The following table sets forth the high and
         low closing bid prices or closing sales prices, as the case may be, of
         the Common Stock, as reported on the OTC Bulletin Board for each fiscal
         quarter beginning with the first fiscal quarter of fiscal year 2000.


<TABLE>
<CAPTION>
                                   Fiscal Year 2001      Fiscal Year 2000
                                   ----------------      ----------------
Quarter                             High       Low        High       Low
-------                             ----       ---        ----       ---
<S>                                 <C>        <C>        <C>        <C>
First (June 30)                     $.94       $.47       $ .69     $.34
Second (September 30)               $.72       $.44       $ .56     $.41
Third (December 31)                 $.36       $.17       $ .56     $.34
Fourth (March 31)                   $.41       $.20       $1.47     $.44
</TABLE>

         The foregoing quotations reflect inter-dealer prices, without retail
         mark-up, markdown or commission and may not represent actual
         transactions. As of June 8, 2001, the Company believes there were
         approximately 3,000 holders of record of the Company's Common Stock.


                                       16
<PAGE>

         ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

         The following selected consolidated financial data are derived from the
         Company's Consolidated Financial Statements for the periods indicated.
         The information set forth below should be read in conjunction with
         "Item 7. Management's Discussion and Analysis of Financial Condition
         and Results of Operations" and the Company's fiscal year 2001
         consolidated Financial Statements and notes thereto, and the
         Independent Auditors' Reports contained elsewhere in this Report. The
         Independent Auditors' Report for fiscal year 2001 contains an
         explanatory paragraph that states that the Company's net loss, working
         capital deficiency, and accumulated deficit raise substantial doubt
         about the Company's ability to continue as a going concern. The
         Company's consolidated financial statements and the following selected
         consolidated financial data do not include any adjustments that might
         result from the outcome of that uncertainty.

                              YEARS ENDED MARCH 31,
                          STATEMENT OF OPERATIONS DATA

<TABLE>
<CAPTION>
                                          2001               2000              1999               1998                1997
                                          ----               ----              ----               ----                ----
                                       (Restated)
<S>                                   <C>                <C>             <C>                 <C>                 <C>
         Net Sales                    $ 36,602,065       $ 27,254,782      $ 20,055,014       $ 22,015,900       $ 14,028,746
         Gross margin                    5,406,272          8,256,070         8,123,917            980,761         (2,493,490)
         Income (loss) from             (4,080,481)           680,141        (3,166,163)        (8,089,245)        (7,598,804)
         operations
         Net income (loss)            $ (5,256,834)      $    236,153      $    979,074       $ (8,727,144)      $ (7,950,301)
         Net income (loss) per        $      (0.15)      $       0.01      $       0.10       $      (0.91)      $      (0.85)
         share Diluted
         Weighted average shares        35,283,729         20,599,160         9,857,252          9,626,335          9,322,278
         outstanding used in
         computing diluted share
         data
         SUPPLEMENTAL OPERATING       $ (2,064,497)      $  2,492,988      $  5,055,625       $ (5,464,219)      $ (6,226,512)
         DATA:  EBITDA (1)
</TABLE>

(1)      As used herein, "EBITDA" is defined as net income plus interest, taxes,
         depreciation and amortization. EBITDA is commonly used to assess the
         non-cash effect on earnings of generally high levels of both
         amortization and depreciation expenses associated with capital
         equipment and acquisitions. EBITDA does not purport to represent cash
         provided by operating activities as reflected in the Company's
         consolidated statements of cash flow, is not a measure of financial
         performance under generally accepted accounting principles and should
         not be considered in isolation or as a substitute for measures of
         performance prepared in accordance with generally accepted accounting
         principles.



                                       17
<PAGE>

                                    MARCH 31,

                               BALANCE SHEET DATA

<TABLE>
<CAPTION>
                                       2001              2000               1999               1998               1997
                                       ----              ----               ----               ----               ----
                                   (Restated)
<S>                              <C>                <C>                <C>                <C>                <C>
          Working capital        $ (4,992,359)      $   (872,053)      $ (6,253,495)      $ (8,872,651)      $    401,550
          Total assets             27,085,496         22,367,444         18,139,989         25,325,764         30,245,701
          Long-term                 1,628,908          3,539,926          3,776,432          4,853,254          4,322,371
          obligations, less
          current portion
          Stockholders'             5,460,856          5,652,073            283,208           (504,744)         7,917,023
          equity
</TABLE>


         ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

         The Companyhas determined to restate its annual consolidated financial
         statements and its condensed consolidated quarterly financial
         statements for the fiscal year ending March 31, 2001 to adjust the
         useful life of the Domtar license and other intangibles from fifteen
         years to six years, resulting in an increase in the previously reported
         cost of sales and net loss for the year by $250,000. The following
         discussion should be read in conjunction with the consolidated
         financial statements of the Company and the Notes thereto appearing
         elsewhere on this Report.

         RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                             Years Ended March 31,
                                                                             ---------------------
          The following table sets forth the percentages  which          2001          2000          1999
          the items in the  Company's  consolidated  statements       ----------     -------       -------
          of  operations  bear to net  sales  for  the  periods       (Restated)
          indicated:                                                  ----------
<S>                                                                  <C>           <C>           <C>

          Net sales                                                     100.0%        100.0%        100.0%

          Cost of sales                                                  85.3          69.7          59.5

          Gross margin                                                   14.6          30.3          40.5

          Selling, general and administrative expenses                   25.9          27.8          56.3

          Income (loss) from operations                                 (11.3)          2.5         (15.8)

</TABLE>


                                       18
<PAGE>

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

          Interest expense                                               (3.1)         (3.4)         (6.1)

          Other income (expense), excluding interest expense             (0.1)          1.8          (0.5)

          Net Income (loss) from continuing operations                  (14.5)          0.9         (22.3)

          Income from and gain on sale of discontinued                     --            --          27.2
          operations

          Net income (loss)                                             (14.5)%         0.9%          4.9%
</TABLE>

         FISCAL 2001 COMPARED TO FISCAL 2000

              NET SALES. Net sales increased 34.3% to $36,602,065 in fiscal 2001
         fr  om $27,254,782 in fiscal 2000. The increase was primarily
         attributable to new products associated with the acquisition of
         Domtar's specialty paper product line and the introduction of the
         GeoFiles product line. Of the $9.3 million increase, products acquired
         from Domtar contributed approximately $3.6 million, and the GeoFile
         line contributed approximately $4.2 million. Store closures at two
         major retailers coupled with customer efforts to reduce inventories
         yielded a slower sales growth pace than experienced in previous years.
         Management expects to experience continued sales growth in the
         Company's specialty papers product lines through general volume
         increases, the introduction of new products and price increases on
         existing products. As a result of the Company's decreased emphasis on
         the GeoFile line, management anticipates that sales of GeoFiles will
         decline in the future. However management expects an improvement in the
         gross margin of this line due to the establishment of the direct supply
         agreement for GeoFile products.

         GROSS MARGIN. Cost of sales includes product manufacturing costs,
         occupancy and distribution costs. Gross margin decreased $2,849,798 to
         $5,406,272 (14.8% of net sales) from $8,256,070 (30.3% of net sales)
         fiscal year 2001 compared to fiscal year 2000. The lower gross margin
         is primarily attributable to higher customer program costs, warehouse
         set-up costs associated with the Waukesha, Wisconsin facility,
         freight-in expenses for GeoFiles, amortization of license fees and
         other intangibles, royalties on new products, higher shipping and
         handling costs, and a one-time air freight charge relating to a special
         promotion on GeoFiles.

         Management continues to explore alternatives of sub-contracting
         portions of manufacturing operations to determine whether improvements
         in gross margin would be available. Management also continues to review
         freight expense and to explore options for reduction of this expense
         via change in the manner in which products are consolidated for
         shipment and in shipping origination points. Management believes that
         consolidation of multiple distribution facilities into its Waukesha,
         Wisconsin facility will have a positive impact on gross margins.
         Management further believes that licensing agreements with Atlanta
         Group, BV, and its Mexican distribution partner, in addition to the
         direct supply agreement for GeoFile products and local manufacturing of
         its products in Australia will create additional positive impact on
         gross margins. However, it is not certain that these improvements in
         gross margin will be realized.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
         administrative expenses ("SG&A") are those central expenses that are
         incurred to support the Company's selling, marketing and manufacturing
         efforts. SG&A expenses increased to $9,486,753 (25.9% of net sales) in
         fiscal 2001 from $7,575,929 (27.8% of net sales) in fiscal 2000. This
         increase is primarily attributable to sales volume related increases in
         commissions, trade shows, other selling and marketing expense, travel
         and depreciation and amortization



                                       19
<PAGE>

         expense. While showing an increase in absolute terms, management
         believes that the relative decrease in SG&A reflects an improvement in
         the efficiency of this area over fiscal year 2000.

         INCOME (LOSS) FROM OPERATIONS. The Company recorded a loss from
         operations in fiscal 2001 of $(4,080,481) compared to income from
         operations of $680,141 during fiscal 2000. The decline was primarily
         the result of the decline in gross margins described above.

         OTHER INCOME (EXPENSE). Other income (expense), other than interest
         expense, for fiscal 2001 amounted to $(32,575) compared to income of
         $483,330 in fiscal 2000, which was primarily derived from favorable
         settlements with trade vendors. Exchange losses associated primarily
         with operations in Australia also contributed to the unfavorable
         change.

         Fiscal 2001 Compared To Fiscal 2000 (continued)

         Management believes that due to the agreement with Atlanta Group BV,
         the European subsidiary of Smead Manufacturing Corporation, and
         establishment of local manufacturing in Australia, that risk of similar
         exchange losses is significantly lower going forward.

         INTEREST EXPENSE. Interest expense increased to $1,143,777 (3.1% of
         net sales) during fiscal 2001, compared to $927,318 (3.4% of net sales)
         during fiscal 2000. The higher interest costs were caused by an
         increase in borrowings by the Company to support operations. The
         increase in borrowings were necessitated by reduced gross margins and
         increased investment in inventories to support sales in new product
         lines.

         NET INCOME (LOSS) FROM CONTINUING OPERATIONS. The net loss from
         continuing operations was $(5,256,834) ((14.4)% of net sales) in fiscal
         2001 compared to net income of $236,153 (0.9% of net sales) in fiscal
         2000. The decline is primarily the result of costs incurred relating to
         the GeoFile product line, freight, consolidation of warehouses, and
         gross margin erosion described above.

         INCOME TAX PROVISION (BENEFIT). An income tax benefit related to the
         Company's net loss for fiscal year 2001 has not been recorded as
         realization of such is not considered more likely than not.

         NET INCOME (LOSS). Net Loss of $(5,256,834) ((14.4)% of net sales) in
         fiscal year 2001 compares unfavorably to net income of $236,153 (0.9%
         of net sales) in fiscal year 2000, for the reasons discussed above.

         FISCAL YEAR 2000 COMPARED TO FISCAL YEAR 1999

         NET SALES. Net sales increased 35.9% to $27,254,782 in fiscal 2000 from
         $20,055,014 in fiscal 1999. The increase was primarily attributable to
         increased business with a major customer, the addition of a new
         significant customer, and sales of GeoFiles, a new product line
         acquired in early fiscal 2000.

         GROSS MARGIN. Cost of sales includes product manufacturing costs,
         occupancy and distribution costs. Gross margin as a percentage of net
         sales decreased to 30.3% in fiscal 2000, from 40.5% in fiscal 1999. The
         lower gross margin is primarily attributable to increases in volume
         discounts due to increased sales, increased freight and distribution
         costs, new product introduction and startup costs.



                                       20
<PAGE>

         Management continues to explore alternatives of sub-contracting
         portions of manufacturing and fulfillment operations to determine
         whether improvements in gross margin would be available. Management
         also continues to review freight expense and to explore options for
         reduction of this expense via change in the manner in which products
         are consolidated for shipment and in shipping origination points.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
         administrative expenses ("SG&A") are those central expenses that are
         incurred to support the Company's selling, marketing and manufacturing
         efforts. SG&A expenses decreased to $7,575,929 (27.8% of net sales) in
         fiscal 2000 from $11,290,080 (56.3% of net sales) in fiscal 1999. This
         decrease is primarily attributable to a decrease in the Company's legal
         fees, decreases in other professional fees, salaries and benefits,
         offset by increases in promotional expenses, commissions, travel
         expenses and European selling expenses.

         Fiscal Year 2000 Compared To Fiscal Year 1999 (continued)

         INCOME (LOSS) FROM OPERATIONS. The Company recorded income from
         operations in fiscal 2000 of $680,141 compared to an operating loss of
         $(3,166,163) during fiscal 1999. The improvement was the result of
         significantly higher net sales and improved operating controls.

         OTHER INCOME (EXPENSE). Other income (expense), other than interest
         expense, for fiscal 2000 amounted to $483,330 compared to expense of
         $94,830 in fiscal 1999.

         INTEREST EXPENSE. Interest expense decreased to $927,318 (3.4% of net
         sales) during fiscal 2000, compared to $1,220,695 (6.1% of net sales)
         during fiscal 1999. The lower interest costs were caused by a decrease
         in borrowings by the Company to support the operations. The decrease in
         borrowings is due to improved operating income and capital infusion
         from the private stock offering during fiscal 2000.

         NET INCOME (LOSS) FROM CONTINUING OPERATIONS. The net income from
         continuing operations was $236,153 (0.9% of net sales) in fiscal 2000
         compared to a loss of $(4,481,688) ((22.3)% of net sales) in fiscal
         1999. The improvement in 2000 was primarily the result of the Company's
         improved overall operating performance.

         INCOME TAX PROVISION (BENEFIT). There is no income tax provision for
         fiscal 2000. Income taxes provided in 1999 were $50,000 representing
         alternative minimum taxes owing as a result of the sale of the Core
         Business.

         NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS. The company classified
         its sign and lettering division as discontinued in fiscal 1999 pending
         sale and disposition in May, 1999.

         NET INCOME (LOSS). Net income of $236,153 in fiscal 2000, or 0.9% of
         net sales, compares to net income of $979,074 in fiscal 1999, or 4.9%
         of net sales.

         LIQUIDITY AND CAPITAL RESOURCES

         As a result of the addition of product lines from the Consumer Products
         Business of the Communication Papers Division of Domtar, Inc. of
         Canada, and from the Z-GRAFIX(R) brand image paper from Kansas City,
         Missouri based Z-International, Inc., and the introduction of the
         plastic file cabinet and storage group, the opening of its Waukesha,
         Wisconsin distribution facility, and closing of four warehouse
         locations, the Company has required, and continues to



                                       21
<PAGE>

         require, substantial external working capital. During fiscal 2001,
         operating losses totaled $(4,080,481), and the Company experienced
         negative operating cash flows of $(353,714).

         At the date of this Report, the Company's only available source of
         working capital consists of borrowings available under its revolving
         credit facility, which expires on September 30, 2001. The revolving
         credit facility permits borrowings of up to $9.5 million subject to a
         borrowing base limitation of 75% of the value of the Company's eligible
         accounts receivable and 50% of the value of its qualified inventories.
         Borrowings under the facility bear interest at LIBOR plus 2.5% and are
         secured by substantially all of the Company's assets. Borrowings under
         this facility were $8,406,861 at March 31, 2001. Under the terms of the
         facility, the Company is required to comply with a number of financial
         covenants relating to, among other things, the maintenance of minimum
         net worth, earnings, debt-to-equity ratios and cash flow coverage
         ratios.

         Between March 2001 and June 2001, the Company had been in default of
         two financial covenants under its revolving credit facility with U.S.
         Bank National Association, the Company's primary source of working
         capital, and borrowings under the facility have exceeded permitted
         borrowing base limitations. U.S. Bank has waived these defaults
         effective as of June 30, 2001.

         U.S. Bank has waived the Company's violations of its financial
         covenants as of June 30, 2001. In addition, the Company is in
         discussions with U.S. Bank for an additional mortgage loan. There can
         be no assurance that U.S. Bank will agree to the additional mortgage
         loan or that the Company will be able to refinance or replace its
         revolving credit facility on acceptable terms when and as needed.

         Management believes that its consolidation of multiple distribution
         facilities into its Waukesha, Wisconsin facility, licensing agreements
         with Atlanta Group, BV, and with its Mexican distribution partner, the
         establishment of the direct supply agreement for GeoFile products, and
         local manufacture of products for its Australian subsidiary will
         improve liquidity and contribute positively towards regaining
         compliance with financial covenants. Management has also prepared
         preliminary plans for further operational consolidations, should the
         actions already taken prove insufficient to restore compliance and
         necessary liquidity. The failure to obtain an additional mortgage and
         to extend the expiration date of the revolving credit facility, or to
         otherwise obtain sufficient funds when and as needed to satisfy its
         working capital requirements could force the Company to curtail
         operations, seek extended payment terms from its vendors or seek
         protection under the federal bankruptcy laws.

         The Company operates in a highly competitive environment. Many of the
         Company's competitors are larger, better capitalized and have
         substantially greater financial, marketing and human resources. The
         Company currently does not have the financial ability to make
         significant expenditures for capital equipment, sales, service,
         training and support capabilities, investments in systems, procedures
         and controls, expansions of operations and research and development,
         among many other items that may be necessary to remain competitive.

         The Company issued a total of $1,200,000 in 10% Convertible
         Subordinated Notes dated April 27, 2001. The notes are due and payable
         on or before April 27, 2003 and are subordinated to indebtedness to the
         Company's senior bank lender. At the option of the holder, the notes
         may be converted into shares of the Company's common stock at the rate
         of $.20 per share of stock.

         The report of the Company's auditors dated June 28, 2001 relating to
         the Company's Consolidated Financial Statements for the fiscal year
         ended March 31, 2001 states that the Company's fiscal year 2001 net
         loss, working capital deficiency and accumulated deficit at March 31,
         2001, raise



                                       22
<PAGE>

         substantial doubt about the Company's ability to continue as a going
         concern. The Company's Consolidated Financial Statements for the fiscal
         year ended March 31, 2001 were prepared assuming that the Company will
         continue as a going concern and do not include any adjustments that
         might result from the outcome of this uncertainty.

         NEW ACCOUNTING PRONOUNCEMENTS

         In April, 2001, the Emerging Issues Task force (EITF) reached a
         consensus on certain issues within Issue 00-25 "Vendor Income Statement
         Characterization of Consideration Paid to a Reseller of the Vendor's
         Products". The EITF concluded that consideration from a vendor to a
         reseller of the vendor's products, such as cooperative advertising
         programs, should be recognized as a reduction of revenue when
         recognized in the vendor's income statement. Application of EITF 00-25
         is required no later than in annual or interim financial statement
         periods beginning after December 15, 2001. Upon application of this
         Issue, financial statements for prior periods presented for comparative
         purposes should be reclassified to comply with the income statement
         display requirements. The Company has not yet determined the impact of
         the adoption of this Issue on the Company's consolidated financial
         statements.

         In June, 1998, the Financial Accounting Standards Board issued SFAS No.
         133, "Accounting for Derivative Instruments and Hedging Activities."
         SFAS No. 133, as amended, is effective for fiscal years beginning after
         June 15, 2000. SFAS No. 133, requires that all derivative instruments
         be recorded on the balance sheet at their fair value. Changes in the
         fair value of derivatives are recorded each period in current earnings
         or other comprehensive income (loss), depending on whether a derivative
         is designated as part of a hedge transaction and, if it is, the type of
         hedge transaction. The Company does not expect that the adoption of
         SFAS No. 133 will have a material impact on its consolidated financial
         statements.


         ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

                  Substantially all of the revenue and operating expenses of the
         Company's foreign subsidiaries are denominated in local currencies and
         translated into US dollars at rates of exchange approximating those
         existing at the date of the transactions. Foreign currency translation
         impacts primarily revenue and operating expenses as a result of foreign
         exchange rate fluctuations. The Company's foreign currency transaction
         risk is primarily limited to amounts receivable from its foreign
         subsidiaries, which are denominated in local currencies. To minimize
         foreign currency transaction risk, the Company ensures that its foreign
         subsidiaries remit amounts to the U.S. parent in a timely manner. The
         Company does not currently utilize foreign currency hedging contracts.

         The Company also has foreign exchange translation exposures resulting
         from the translation of foreign currency-denominated earnings into U.S.
         dollars in the Company's consolidated financial statements. Foreign
         currency transaction exposure arises when an operating unit transacts
         business denominated in a currency that is not its own functional
         currency. The Company's transaction risks are attributable primarily to
         inventory purchases from third party vendors.

                  If the U.S. dollar uniformly increases in strength by 10% in
         fiscal year 2002 relative to the currencies in which the Company's
         sales are denominated, income before taxes would decrease by $172,199
         for the fiscal year 2002. This calculation assumes that each exchange
         rate would change in the same direction relative to the U.S. dollar. In
         addition to the direct effects of changes in exchange rates, which are
         a changed dollar value of the resulting sales, changes in



                                       23
<PAGE>

         exchange rates also affect the volume of sales or the foreign currency
         sales price as competitors' products become more or less attractive.
         The Company's sensitivity analysis of the effects of changes in foreign
         currency exchange rates does not factor in a potential change in sales
         levels or local currency prices.




                                       24
<PAGE>



         ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         FINANCIAL STATEMENTS

         The following consolidated financial statements of Geographics, Inc.
         are incorporated into this Item 8 by reference to another section of
         this Report as follows:

<TABLE>
<S>                                                                                                           <C>
         (a)      Independent Auditors' Reports                                                                   F-2
         (b)      Consolidated Balance Sheets as of March 31, 2001 (Restated) and 2000                            F-5
         (c)      Consolidated Statements of Operations for the years ended March 31, 2001 (Restated),            F-6
                  2000 and 1999
         (d)      Consolidated Statement of Stockholders' Equity and Comprehensive Income (Loss) for             F-7
                  the years ended March 31, 2001 (Restated), 2000 and 1999
         (e)      Consolidated Statements of Cash Flows for the years ended March 31, 2001 (Restated),            F-8
                  2000 and 1999
         (f)      Notes to Consolidated Financial Statements                                                      F-9
         (g)      Schedule II -- Valuation and Qualifying Accounts                                                S-1
</TABLE>

        SUPPLEMENTARY DATA: SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED

The Company has determined to restate its annual consolidated financial
statements and its condensed consolidated quarterly financial statements for the
year ended March 31, 2001 to (1) adjust the useful life of the Domtar license
and other intangibles from fifteen years to six years, (2) to correct certain
errors made in compiling the condensed consolidated financial statements for the
three and nine months ended December 31, 2000, which were discovered and
corrected in the quarter and fiscal year ended March 31, 2001, and (3) to
correct the classification of certain expenses from S,G&A expenses to cost of
sales for the three months ended June 30, 2000. The following table summarizes
the restated unaudited condensed consolidated financial information for each of
the fiscal quarters of 2001 and 2000.


<TABLE>
<CAPTION>
                                                                Three Months Ended
                                                                ------------------
                            June 30,                September 30,                December 31,                   March 31,
                            --------                -------------                ------------                   ---------
                       2000         1999          2000          1999          2000           1999          2001          2000
                       ----         ----          ----          ----          ----           ----          ----          ----
                    (Restated)                 (Restated)                  (Restated)                   (Restated)
                    ----------                 ----------                  ----------                   ----------
<S>                 <C>          <C>           <C>            <C>          <C>            <C>          <C>            <C>
Net Sales           $9,204,674   $4,986,364    $10,319,736    $7,035,426   $10,438,833    $8,453,312   $ 6,638,822    $6,779,678
                    ============================================================================================================


Gross Margin        $2,509,995   $1,489,995    $ 2,168,873    $2,033,323   $ 2,215,296    $2,880,740   $(1,487,895)   $1,852,010
                    ============================================================================================================

Net Income/(Loss)   $  259,213   $   (4,281)   $  (579,264)   $   85,893   $  (559,696)   $  221,391   $(4,377,087)   $  (66,850)
                    ============================================================================================================

Net income (loss) per common and common equivalent share:

   - Basic          $     0.01   $    (0.00)   $     (0.02)   $     0.01   $     (0.01)   $     0.01   $     (0.13)   $    (0.00)
                    ============================================================================================================
  - Diluted         $     0.01   $    (0.00)   $     (0.02)   $     0.01   $     (0.01)   $     0.01   $     (0.13)   $    (0.00)
                    ============================================================================================================
</TABLE>



                                       25
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

         None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The following table sets forth the names, ages and positions with the
Company of the executive officers and Directors of the Company as of June 23,
2001. Directors are elected for one year terms or until their successors are
elected and qualified. Officers are elected by the Board and their terms of
office are at the discretion of the Board.

<TABLE>
<CAPTION>
NAME                                 AGE                        POSITION
----                                 ---                        --------
<S>                                  <C>                        <C>
James L. Dorman                      68                         President, Chairman of the Board of  Directors, and
                                                                Chief Executive Officer
William T. Graham                    76                         Director
C. Joseph Barnette                   59                         Director
Roger R. Mayer                       61                         Director
Jack Stein                           74                         Director
Brian P. Sullivan                    47                         Executive Vice President and Chief Operating Officer
                                                                - Paper Products
Brad D. Hall                         38                         Vice President -- Marketing
</TABLE>

         James L. Dorman. Mr. Dorman is currently a member of the Board of
Directors of the Company and serves as Chairman of the Board. He also is the
Chairman of the Board, President and Chief Executive Officer of Intercontinental
Trading, Ltd., a position he has held since 1984. Intercontinental Trading
specializes in assisting smaller companies with importing and exporting issues.
In addition, Mr. Dorman is the Chairman and Chief Executive Officer of Amalga
Composites, Inc., a position he has held since 1989. Amalga designs, engineers
and manufacturers composite component parts. Mr. Dorman also is a shareholder,
director and officer of Panint Electric Ltd. of Hong Kong, a developer and
manufacturer of consumer home products.

         William T. Graham. Mr. Graham is currently a director of the Company
and was a shareholder, officer and director and co-founder of Uniek, Inc. from
1987 until July 1998. Uniek, Inc. is engaged in the business of crafts, photo
frames and photo albums, which are distributed to the mass market and office
superstores. Mr. Graham sold his interest in Uniek, Inc. in July 1998. In 1949,
Mr. Graham founded W.T. Rogers, Inc. ("W.T. Rogers"). Under Mr. Graham's
leadership, W.T. Rogers became a leading manufacturer and supplier of office
products to mass-market retailers and office superstores. In 1991, the year
before W.T. Rogers was merged with a wholly-owned subsidiary of Newell, Inc.,
its sales had reached $45,000,000 annually.



                                       26
<PAGE>

DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (continued)

         C. Joseph Barnette. Mr. Barnette is currently a director of the
Company. He is the co-founder and President of Kent Adhesive Products Company
("KAPCO"), a privately held adhesive products company, a position he has held
since KAPCO's beginning in 1972.

         Roger R. Mayer. Mr. Mayer is currently a director of the Company. He
graduated in 1956 from the Milwaukee School of Engineering with a degree in
Industrial Engineering. In 1969, he joined with three partners to form
Manutronics, Inc., a printed circuit technology company. Mr. Mayer sold
Manutronics to Sanmina Corporation in 1999, after which he formed The Colerget
Group, LLC, an equity investment and management firm located in Kenosha,
Wisconsin.

         Jack Stein. Mr. Stein is currently a director of the Company. He is
also the current Chairman of the Board of Stein Gardens & Gifts, a retail chain
of garden centers in Wisconsin. Mr. Stein started that company in 1956 and has
been owner and manager of the business. Mr. Stein has also been a member of the
board of directors of four Milwaukee banks, and is presently holding a position
on the board of several privately held companies, as well as a Director of
Universal Savings bank in Milwaukee.

         Brian P. Sullivan. Mr. Sullivan is the Company's Executive Vice
President and Chief Operating Officer -- Paper Products, a position he has held
since April 2000. Previously, Mr. Sullivan served as the Vice President and
General Manager, Consumer Products Division, of Domtar Papers, a division of
Domtar, Inc., the seventh largest North American forest products company, from
1997 until joining the Company in March of 2000. Prior to 1997, Mr. Sullivan was
employed by Rolodex Corporation, an office products company, as the Vice
President of Sales.

         Brad D. Hall. Mr. Hall is the Company's Vice President of Marketing.
Mr. Hall holds a BA degree in Foreign Languages from Portland State University,
and an MBA in Marketing and International Business from Syracuse University.
Following his studies, Mr. Hall joined the consulting firm of ChaseDesign, as
Project Manager, Planning and Research. In 1991, he joined Keith Clark as
Business Development Manager. After a brief time as Product Manager for the
Globe-Weis brand of products for ATAPCO Office Products, in 1996, Mr. Hall
joined Samsonite in Denver, Colorado and became Director of Marketing -- New
Business. In 1998, Mr. Hall joined SteelWorks, Inc. as Vice President of
Marketing.

BOARD AND COMMITTEE MEETINGS

         During the fiscal year ended March 31, 2001, there were five meetings
of the Board. Each of the directors attended all of the meetings of the Board.


SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         The Company believes that all Forms 3, 4 and 5 required to be filed by
its directors, officers and greater than 10% shareholders were filed on time
during fiscal 2001, except that Messrs. Stein and Mayer were late in filing
their Form 3s.



                                       27
<PAGE>

EMPLOYMENT AGREEMENTS

         The Company entered into an Executive Restated Employment Agreement
with James L. Dorman effective as of May 13, 2000 (the "Restated Employment
Agreement"), which restates a prior employment agreement with Mr. Dorman
effective April 16, 1999. Pursuant to the Restated Employment Agreement, Mr.
Dorman is entitled to receive a base salary of $170,000 per year or such greater
amount as the Board or the appropriate committee thereof may from time-to-time
determine. In addition, Mr. Dorman is entitled options to purchase 250,000
shares of Common Stock at a price of $.45 per share, 500,000 shares at $.50 per
share, and 300,000 shares at $.30 per share, with such option being vested on a
scheduled basis. Under the terms of the Restated Employment Agreement, Mr.
Dorman's employment shall continue until April 17, 2003 or until terminated
according to the terms of the Restated Employment Agreement.

ITEM 11. EXECUTIVE COMPENSATION

         The following table shows compensation paid by the Company for services
rendered during its fiscal years 2001, 2000 and 1999 to (a) the Company's Chief
Executive Officer, (b) the four most highly compensated individuals (other than
the Chief Executive Officer) who were serving as executive officers of the
Company at March 31, 2001 and whose total annual salary and bonus for the fiscal
year 2001 exceeded $100,000; and (c) up to two additional individuals who would
have been included under item (b) above but for the fact that the individual was
not serving as an executive officer of the Company at March 31, 2001
(collectively, the "Named Executive Officers").

<TABLE>
<CAPTION>
                                                                                         LONG TERM COMPENSATION
                                                          ANNUAL COMPENSATION                   AWARDS
                                                  ------------------------------------          ------
                                     YEAR
      NAME AND PRINCIPAL             ENDED                                OTHER ANNUAL   SECURITIES UNDERLYING
          POSITION                 MARCH 31       SALARY       BONUS      COMPENSATION          OPTIONS
          --------                 --------       ------       -----      ------------          -------
<S>                               <C>            <C>          <C>         <C>            <C>
James L. Dorman,                     2001        $169,998        --                --         1,050,000
President, Chairman and CEO          2000         $72,520        --                --           800,000
                                     1999              --        --                --                --

Brian P. Sullivan                    2001        $138,470        --                --                --
Executive Vice President and
Chief Operating Officer -
Paper Products                       2000              --        --                --                --
                                     1999              --        --                --                --
</TABLE>

                        OPTION GRANTS IN FISCAL YEAR 2001


<TABLE>
<CAPTION>
                                                                                      POTENTIAL REALIZABLE VALUE AT
                                  NUMBER OF                                              ASSUMED ANNUAL RATES OF
                                  SECURITIES                                          STOCK PRICE APPRECIATION FOR
                                  UNDERLYING      EXERCISE OR                                  OPTION TERM
                                   OPTION          BASE PRICE                           --------------------------
NAME                             GRANTED (#)        ($/SH)        EXPIRATION DATE          5%              10%
----                             -----------        ------        ---------------          --              ---
<S>                             <C>               <C>             <C>                   <C>              <C>
James L. Dorman                    250,000           $0.45            6/20/10           $82,967          $198,749

Brian P. Sullivan                  250,000           $0.40            6/20/10           $95,467          $211,249

</TABLE>


                                       28
<PAGE>

EMPLOYEE BENEFIT PLANS

         Stock Option Plans

         The Company's 1999 Stock Option Plan authorizes the grant of incentive
stock options within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended, and nonqualified stock options for the purchase of an
aggregate of 4,500,000 shares of common stock, subject to adjustment for stock
splits and similar capital changes. Employees and, in the case of non-qualified
stock options, directors, consultants or any affiliate are eligible to receive
grants under our plans. The Board has the authority to determine the terms of
options granted under the plan, including the price, which will not be less than
the fair market value at the time of grant in the case of incentive stock
options. As of March 31, 2001, the Company had options outstanding to purchase
3,215,000 shares of common stock under the 1999 Stock Option Plan.
401(k) Plan

         The Company has a 401(k) defined contribution retirement plan covering
substantially all full-time employees. The Company matches 10% of employee
pretax contributions up to 18% of employee pretax compensation. The Company
contributed approximately $4,919 to the plan during fiscal year 2001.

DIRECTOR COMPENSATION

         The Company pays each non-employee director a fee of $500 per month and
$750 for each meeting of the Company's Board of Directors attended and options
to purchase up to 60,000 shares of the Company's Common Stock each year.
Directors are entitled to reimbursement for reasonable travel and other
out-of-pocket expenses incurred in connection with attendance of meetings of the
Company's Board of Directors. Directors of the Company who are also employees of
the Company do not receive fees for their services as directors.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of June 12, 2001 with respect to (i)
each shareholder known by the Company to be the beneficial owner of more than
five percent (5%) of the outstanding Common Stock; (ii) each director of the
Company; (iii) each of the Named Executive Officers; and (iv) all current
directors and executive officers as a group. Unless otherwise noted, the Company
believes that the beneficial owners of the Common Stock listed below have sole
investment and voting power with respect to such shares, subject to community
property laws where applicable. This table is based upon information supplied to
the Company by directors, officers, and principal shareholders.




                                       29
<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (continued)

<TABLE>
<CAPTION>
                                                              NUMBER OF SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER                          BENEFICIALLY OWNED                   PERCENT OWNED
------------------------------------                          ------------------                   -------------
<S>                                                           <C>                                 <C>
Sandra J. Martin   (1)                                               3,000,000                           7.9%
4918 Femrite Drive
Madison, WI  53716

William T. Graham                                                    6,495,563                          17.0%
4918 Femrite Drive
Madison, WI  53716

James L. Dorman   (2)                                                3,217,289                           8.4%
c/o Geographics, Inc.
1555 Odell Road
Blaine, WA  98231

C. Joseph Barnette   (3)                                               370,000                           1.0
1000 Cherry St.
Kent, OH  44240-7520

Roger R. Mayer                                                       1,594,333                           4.2%
PO Box 580410
Pleasant Prairie, WI 53158

L & D Investments, Jack Stein, Trustee                               1,666,667                           4.4%


------------------------------------------------------------
Total Executive Officers and Directors as a Group                   13,343,852                          34.9%
(4 persons)   (5)
</TABLE>

*        Represents less than 1% of the outstanding shares of Common Stock.

(1)      Sandra J. Martin has not filed a Schedule 13D or Schedule 13G with
         respect to her holdings. The share ownership of Ms. Martin is based
         solely upon information previously provided to the Company, and the
         Company is unable to independently verify this information.

(2)      Includes the following: (i) 166,667 shares owned beneficially by Mr.
         Dorman's wife, (ii) 289,511 owned by Panint Electric Ltd., of which Mr.
         Dorman is a stockholder, officer and director, and (iii) currently
         exercisable options to purchase 1,050,000 shares of Common Stock.

(3)      Includes currently exercisable options to purchase 30,000 shares of
         Common Stock, and 66,000 shares beneficially owned by Mr. Barnette's
         wife.

(4)      Includes currently exercisable options to purchase 100,000 shares of
         Common Stock.

(5)      Includes currently exercisable options to purchase 1,062,230 shares of
         Common Stock, currently exercisable warrants to purchase 100,000 shares
         of Common Stock and 522,178 shares indirectly owned.



                                       30
<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


         On April 19, 2000, the Company issued a $1,000,000 subordinated note to
Mr. James L. Dorman, the Company's Chairman of the Board and Chief Executive
Officer, with the proceeds used to assist in acquiring certain assets of the
Consumer Products Business of the Communication Papers Division of Domtar, Inc.
of Canada. The note bore interest at the U.S. Bank's prime lending rate, and was
subordinate to the Company's senior indebtedness to U.S. Bank. The note was paid
in full on May 12, 2000, including accrued interest. In addition to interest on
the note, the Company issued a warrant to Mr. Dorman to purchase 100,000 shares
of Common Stock at $0.45 per share until April 30, 2002. Subsequently, the
warrant was sold to L & D Investments, Jack Stein, Trustee. Mr. Stein is a
director of the Company.

         The Company formed a supply relationship with KAPCO, an Ohio
Corporation owned by Mr. C. Joseph Barnett, Director of the Company, in January
of 2001. KAPCO supplies the Company with blank white business and greeting
cards, and won this business based on competitive price and terms. Products
purchased from KAPCO in fiscal year 2001 amounted to $112,261.

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

         1.       FINANCIAL STATEMENTS

                           (i)      Independent Auditors' Reports

                           (ii)     Consolidated Balance Sheets as of March 31,
                                    2001 (Restated) and 2000

                           (iii)    Consolidated Statements of Operations for
                                    the years ended March 31, 2001 (Restated),
                                    2000 and 1999

                           (iv)     Consolidated Statement of Stockholders'
                                    Equity and Comprehensive Income (Loss) for
                                    the years ended March 31, 2001 (Restated),
                                    2000 and 1999

                           (v)      Consolidated Statements of Cash Flows for
                                    the years ended March 31, 2001 (Restated),
                                    2000 and 1999

                           (vi)     Notes to Consolidated Financial Statements

                                       31
<PAGE>


         EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
         (continued)

         2.       FINANCIAL STATEMENT SCHEDULES

                           (i)      Schedule II-Valuation of Qualifying Accounts

         All other schedules have been omitted because the required information
         is included in the consolidated financial statements or the notes
         thereto, or is not applicable or required.

         3.       EXHIBITS FILED AS PART OF THIS REPORT

         EXHIBIT NUMBER             DESCRIPTION OF DOCUMENT
         --------------             -----------------------

         3.1                        Certificate of Incorporation of Geographics,
                                    Inc. (incorporated by reference to Exhibit
                                    3.1 to the Quarterly Report on Form 10-Q for
                                    the quarter ended September 30, 2000).

         3.2                        Bylaws of Geographics, Inc. (incorporated by
                                    reference to Exhibit 3.2 to the Quarterly
                                    Report on Form 10-Q for the quarter ended
                                    September 30, 2000).

         10.1                       Loan and Security Agreement, dated as of
                                    December 22, 1999, between Geographics, Inc.
                                    and U.S. Bank N.A., Milwaukee, Wisconsin
                                    (incorporated by reference to Exhibit 10.1
                                    to the Company's Quarterly Report on Form
                                    10-Q for the year ended December 31, 1999).

         10.2                       Master Equipment Lease Agreement, dated as
                                    of May 22, 1996 (the "Master Lease"),
                                    between Geographics, Inc. and KeyCorp
                                    Leasing Ltd. (incorporated by reference to
                                    Exhibit 10.2 to the Company's Annual Report
                                    on Form 10-K for the year ended March 31,
                                    1997).

         10.3                       Equipment Schedule No. 4 to the Master
                                    Lease, dated as of December 4, 1996, between
                                    Geographics, Inc. and KeyCorp Leasing Ltd.
                                    (incorporated by reference to Exhibit 10.6
                                    to the Company's Annual Report on Form 10-K
                                    for the year ended March 31, 1997).

         10.4                       Equipment Schedule No. 4 to the Master
                                    Lease, dated as of May 23, 1997, between
                                    Geographics, Inc. and KeyCorp Leasing Ltd.
                                    (incorporated by reference to Exhibit 10.7
                                    to the Company's Annual Report on Form 10-K
                                    for the year ended March 31, 1997).



                                       32
<PAGE>

         10.5                       Agreement for Sale of Business, dated
                                    November 26, 1996, between Geographics, Inc.
                                    and Graham's Graphics Pty. Ltd.
                                    (incorporated by reference to Exhibit 10.8
                                    to the Company's Annual Report on Form 10-K
                                    for the year ended March 31, 1997).

         10.6                       Form of Stock Option Agreement relating to
                                    options granted by Geographics, Inc. prior
                                    to the adoption of the Geographics, Inc.
                                    1996 Stock Option Plan (incorporated by
                                    reference to Exhibit 10.9 to the Company's
                                    Annual Report on Form 10-K for the year
                                    ended March 31, 1997).

         10.7                       Geographics, Inc. 1996 Stock Option Plan
                                    (incorporated by reference to Exhibit 4(a)
                                    to the Company's Registration Statement on
                                    Form S-8 filed on November 26, 1996).

         10.8                       Form of Stock Option Agreements issued
                                    pursuant to the Geographics, Inc. 1996 Stock
                                    Option Plan (incorporated by reference to
                                    Exhibit 4(b) to the Company's Registration
                                    Statement on Form S-8 filed on November 26,
                                    1996).

         10.9                       Warrant Indenture, dated as of February 4,
                                    1997 (the "Warrant Agreement") between
                                    Geographics, Inc. and Montreal Trust Company
                                    of Canada relating to the warrants issued in
                                    the Private Placement (incorporated by
                                    reference to Exhibit 10.13 to the Company's
                                    Annual Report on Form 10-K for the year
                                    ended March 31, 1997).

         10.10                      Form of Warrant to Purchase Common Stock
                                    issued in the Private Placement pursuant to
                                    the Warrant Agreement (incorporated by
                                    reference to Exhibit 10.14 to the Company's
                                    Annual Report on Form 10-K for the year
                                    ended March 31, 1997).

         10.11                      Form of Registration Rights Agreement
                                    between Geographics, Inc. and each purchaser
                                    of units sold in the Private Placement
                                    (incorporated by reference to Exhibit 10.15
                                    to the Company's Annual Report on Form 10-K
                                    for the year ended March 31, 1997).

         10.12                      Financial Advisory Agreement, dated August
                                    6, 1997, between Geographics, Inc. and
                                    Cruttenden Roth, Incorporated (incorporated
                                    by reference to Exhibit 10.16 to the
                                    Company's Quarterly Report on Form 10-Q for
                                    the quarter ended September 30, 1997).



                                       33
<PAGE>

         10.13                      Subscription Agreement, dated October 9,
                                    1997, between Geographics, Inc. and First
                                    Prudential Investment Fund, Inc.
                                    (incorporated by reference to Exhibit 10.17
                                    to the Company's Quarterly Report on Form
                                    10-Q for the quarter ended September 30,
                                    1997).

         10.14                      Amended and Restated Asset Purchase
                                    Agreement by and among Geographics, Inc.,
                                    Identity Group, Inc., and U.S. Bank National
                                    Association, dated May 4, 1998 (incorporated
                                    by reference to Exhibit 10.18 to the
                                    Company's Report on Form 8-K filed on June
                                    29, 1998).

         10.15                      Escrow Agreement by and among Geographics,
                                    Inc., Identity Group, Inc., U.S. Bank
                                    National Association and Lawyers Title
                                    Insurance Corporation, dated May 4, 1998
                                    (incorporated by reference to Exhibit 10.19
                                    to the Company's Report on Form 8-K filed on
                                    June 29, 1998).

         10.16                      Convertible Subordinated Note between
                                    Geographics, Inc. and James L. Dorman, dated
                                    April 29, 1999 (incorporated by reference to
                                    Exhibit 10.22 to the Company's Annual Report
                                    on Form 10-K for the year ended March 31,
                                    1999).

         10.17                      Convertible Subordinated Note between
                                    Geographics, Inc. and William T. Graham,
                                    dated April 29, 1999 (incorporated by
                                    referenced to Exhibit 10.23 to the Company's
                                    Annual Report on Form 10-K for the year
                                    ended March 31, 1999).

         10.18                      Restated Employment Agreement between
                                    Geographics, Inc. and James L. Dorman, dated
                                    as of May 13, 2000 (incorporated by
                                    referenced to Exhibit 10.18 to the Company's
                                    Annual Report on Form 10-K for the year
                                    ended March 31, 2000).

         10.19                      Asset Purchase Agreement dated as of April
                                    1, 2000, by and between Geographics, Inc.
                                    and Domtar Inc. (incorporated by referenced
                                    to Exhibit 10.19 to the Company's Annual
                                    Report on Form 10-K for the year ended March
                                    31, 2000).

         10.20                      $100,000 subordinated note from Geographics.
                                    Inc. to James L. Dorman dated April 27,
                                    2001.

         10.21                      $50,000 subordinated note from Geographics.
                                    Inc. to William T. Graham dated April 27,
                                    2001.

         10.22                      $100,000 subordinated note from Geographics.
                                    Inc. to Jack Stein dated April 27, 2001.

         10.23                      $50,000 subordinated note from Geographics.
                                    Inc. to Roger R. Mayer dated April 27, 2001.



                                       34
<PAGE>

         10.24                      First Amendment, dated April 17, 2000, to
                                    Loan and Security Agreement, dated as of
                                    December 22, 1999, between Geographics, Inc.
                                    and U.S. Bank N.A., Milwaukee, Wisconsin.

         10.25                      Second Amendment, dated June 30, 2001, to
                                    Loan and Security Agreement, dated as of
                                    December 22, 1999, between Geographics, Inc.
                                    and U.S. Bank N.A., Milwaukee, Wisconsin.

         23.1                       Consent of KPMG LLP.





                                       35
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) 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 on
         this th day of March, 2002.

         GEOGRAPHICS, INC.

By:      /s/ James L. Dorman
         ----------------------------------
         James L. Dorman
         President, Chief Executive Officer
         and Chairman of the Board

         Each person whose individual signature appears below hereby authorizes
         and appoints James L. Dorman with full power of substitution and full
         power to act without the other, as his true and lawful attorney-in-fact
         and agent to act in his name, place and stead and to execute in the
         name and on behalf of such person, individually and in the capacity of
         such person stated below, and to file any and all amendments to this
         Report together with any exhibits thereto and any other documents in
         connection therewith, with the Securities and Exchange Commission,
         hereby ratifying and confirming all that said attorneys-in-fact, or his
         substitute or substitutes, may do or cause to be done by virtue hereof.

         Pursuant to the requirements of the Securities Exchange Act of 1934,
         the following persons on behalf of the Registrant, and in the
         capacities and on the date indicated have signed this Report below.



         /s/ James L. Dorman                            March   , 2002
         ---------------------------------------
         James L. Dorman
         President, Chief Executive Officer
         and Chairman of the Board



         /s/ William T. Graham                          March   , 2002
         ---------------------------------------
         William T. Graham
         Director



         /s/ C. Joseph Barnette                         March   , 2002
         ---------------------------------------
         C. Joseph Barnette
         Director



         /s/ Roger R. Mayer                             March   , 2002
         ---------------------------------------
         Roger R. Mayer
         Director



                                       36
<PAGE>



                             SIGNATURES (continued)


         /s/ Jack Stein                                      March   , 2002
         --------------------------------------------
         Jack Stein
         Director


         /s/ Michael Oakes                                   March   , 2002
         --------------------------------------------
                  Michael Oakes
                  Controller



                                       37
<PAGE>

                                                               GEOGRAPHICS, INC.
                                                               TABLE OF CONTENTS
                                                   MARCH 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------


                                                                         PAGE



INDEPENDENT AUDITORS' REPORTS.............................................F-2

CONSOLIDATED FINANCIAL STATEMENTS

   Balance Sheets.........................................................F-5

   Statements of Operations...............................................F-6

   Statement of Stockholders' Equity and Comprehensive Income (Loss)......F-7

   Statements of Cash Flows...............................................F-8

   Notes to Financial Statements..........................................F-9







                                      F-1
<PAGE>



INDEPENDENT AUDITORS' REPORT

The Board of Directors
Geographics, Inc.:

We have audited the accompanying consolidated balance sheet of Geographics, Inc.
and subsidiaries as of March 31, 2001, and the related consolidated statements
of operations, stockholders' equity and comprehensive income (loss), and cash
flows for the year then ended. In connection with our audit of the consolidated
financial statements, we have also audited the financial statement Schedule II
for the year ended March 31, 2001, included in Item 14 of the Company's annual
report on Form 10-K for the year ended March 31, 2001. These consolidated
financial statements and financial statement schedule are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement schedule based on our
audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

As discussed in note 3 to the consolidated financial statements, the Company has
restated its consolidated financial statements as of and for the year ended
March 31, 2001 to change the useful life of the Domtar licanse and other
intangibles from fifteen years to six years, resulting in an increase in net
loss of $250,000.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Geographics, Inc. as
of March 31, 2001, and the results of their operations and their cash flows for
the year then ended in conformity with accounting principles generally accepted
in the United States of America. Also in our opinion, the related financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly, in all material respects,
the information set forth therein.

The accompanying consolidated financial statements and financial statement
schedule have been prepared assuming that the Company will continue as a going
concern. As discussed in note 3 to the consolidated financial statements, the
Company has suffered a net loss, has a working capital deficiency and an
accumulated deficit that raises substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also
described in note 3. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


/s/ KPMG LLP

June 28, 2001, except as to note 3, which is as of March 1, 2002
Seattle, Washington




                                      F-2
<PAGE>



INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Geographics, Inc.



We have audited the consolidated balance sheet of Geographics, Inc. and
subsidiaries as of March 31, 2000 and the related consolidated statements of
operations, stockholders' equity and comprehensive income (loss) and cash flows
for the year then ended. In connection with our audit of the consolidated
financial statements, we also audited financial statement Schedule II for the
year ended March 31, 2000, included in Item 14 of the Company's annual report on
Form 10-K. These financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Geographics, Inc.
and subsidiaries as of March 31, 2000, and the results of their operations and
their cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States of America. Also, in our
opinion, the related financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.



/S/ KPMG LLP

Chartered Accountants


Vancouver, Canada
July 13, 2000



                                      F-3
<PAGE>

INDEPENDENT AUDITOR'S REPORT

To the Stockholders
Geographics, Inc.

We have audited the accompanying consolidated statements of operations,
stockholders' equity (deficit) and comprehensive income, and cash flows of
Geographics, Inc. and subsidiaries for the year ended March 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion the consolidated financial statements referred to above, present
fairly in all material respects, the consolidated results of operations and cash
flows of Geographics, Inc. and subsidiaries for the year ended March 31, 1999,
in conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has incurred substantial operating losses in
1999 and is out of compliance with its borrowing agreements, which raise
substantial doubt about its ability to continue as a going concern. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.


/S/ Moss Adams LLP



Bellingham, Washington
May 7, 1999



                                      F-4
<PAGE>



                                                               GEOGRAPHICS, INC.
                                                     CONSOLIDATED BALANCE SHEETS
                                                         MARCH 31, 2001 AND 2000
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                      ASSETS

                                                                                    2001            2000
                                                                                ------------    ------------
                                                                                 (Restated)

<S>                                                                             <C>             <C>
CURRENT ASSETS
    Cash and cash equivalents                                                   $    421,049    $    360,612
    Accounts receivable
       Trade receivables, net of allowance for doubtful
          accounts, sales returns and cash discounts of
          $1,041,696 and $1,587,469 in 2001 and 2000, respectively                 7,188,772       6,053,810
       Other receivables                                                             155,281          25,555
    Inventories                                                                    6,634,321       5,301,171
    Prepaid expenses, deposits, and other current assets                             603,950         562,244
                                                                                ------------    ------------
          Total current assets                                                    15,003,373      12,303,392

PROPERTY, PLANT AND EQUIPMENT, net                                                 9,007,234       9,304,864

LICENSES, TRADEMARKS AND OTHER INTANGIBLE ASSETS, net of
    accumulated amortization of $710,327 and $101,300 in 2001 and
       2000, respectively                                                          2,876,512         317,170

OTHER ASSETS                                                                         198,377         442,018
                                                                                ------------    ------------

TOTAL ASSETS                                                                    $ 27,085,496    $ 22,367,444
                                                                                ============    ============




                                       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Bank overdrafts                                                             $    975,489    $    259,551
    Note payable to bank                                                           8,406,861       5,764,627
    Accounts payable                                                               5,401,482       3,699,532
    Accrued liabilities                                                            4,237,110       2,083,523
    Current portion of long-term debt                                                974,790       1,368,212
                                                                                ------------    ------------
          Total current liabilities                                               19,995,732      13,175,445

LONG-TERM DEBT                                                                     1,628,908       3,539,926
                                                                                ------------    ------------
          Total liabilities                                                       21,624,640      16,715,371
                                                                                ------------    ------------

STOCKHOLDERS' EQUITY
    Common stock, $0.001 par value - 100,000,000 shares authorized; 38,191,676
       and 26,965,589 shares issued and outstanding in
       2001 and 2000, respectively                                                    38,192          26,966
    Additional paid-in capital                                                    26,190,460      20,950,859
    Accumulated other comprehensive income (loss)                                   (418,528)       (233,318)
    Accumulated deficit                                                          (20,349,268)    (15,092,434)
                                                                                ------------    ------------
          Total stockholders' equity                                               5,460,856       5,652,073
                                                                                ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                      $ 27,085,496    $ 22,367,444
                                                                                ============    ============
</TABLE>



COMMITMENTS, CONTINGENCIES AND
SUBSEQUENT EVENT

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



                                      F-5
<PAGE>



                                                               GEOGRAPHICS, INC.
                                           CONSOLIDATED STATEMENTS OF OPERATIONS
                                       YEARS ENDED MARCH 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                                   2001            2000            1999
                                                                               ------------    ------------    ------------
                                                                                (Restated)
<S>                                                                            <C>             <C>             <C>
SALES
    Sales                                                                      $ 43,148,879    $ 32,019,946    $ 23,127,452
    Less sales returns and allowances                                             6,546,814       4,765,164       3,072,438
                                                                               ------------    ------------    ------------
          Net sales                                                              36,602,065      27,254,782      20,055,014

COST OF SALES                                                                    31,195,793      18,998,712      11,931,097
                                                                               ------------    ------------    ------------

       Gross margin                                                               5,406,272       8,256,070       8,123,917

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                                      9,486,753       7,575,929      11,290,080
                                                                               ------------    ------------    ------------
       Income (loss) from operations                                             (4,080,481)        680,141      (3,166,163)
                                                                               ------------    ------------    ------------

OTHER INCOME (EXPENSE)
    Other income (expense)                                                          (34,294)        484,792          31,291
    Gain (Loss) on sales of property and equipment                                    1,718          (1,462)       (126,121)
    Interest expense                                                             (1,143,777)       (927,318)     (1,220,695)
                                                                               ------------    ------------    ------------
       Total other income (expense)                                              (1,176,353)       (443,988)     (1,315,525)
                                                                               ------------    ------------    ------------

NET INCOME (LOSS) FROM CONTINUING OPERATIONS                                     (5,256,834)        236,153      (4,481,688)

DISCONTINUED OPERATIONS
    Income from operations of Core Business                                              --              --         110,476
    Gain on disposal of Core Business, net of
       alternative minimum tax of $50,000                                                --              --       5,350,286
                                                                               ------------    ------------    ------------

NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS                                           --              --       5,460,762
                                                                               ------------    ------------    ------------

NET INCOME (LOSS)                                                              $ (5,256,834)   $    236,153    $    979,074
                                                                               ============    ============    ============



BASIC INCOME (LOSS) PER SHARE
    Income (Loss) from continuing operations                                   $      (0.15)   $       0.01    $      (0.45)
    Discontinued operations                                                              --              --            0.55
                                                                               ------------    ------------    ------------
    Net income (loss)                                                          $      (0.15)   $       0.01    $       0.10
                                                                               ============    ============    ============



DILUTED INCOME (LOSS) PER SHARE
    Income (Loss) from continuing operations                                   $      (0.15)   $       0.01    $      (0.45)
    Discontinued operations                                                              --              --            0.55
                                                                               ------------    ------------    ------------
                                                                                                                       0.55
    Net income (loss)                                                          $      (0.15)   $       0.01    $       0.10
                                                                               ============    ============    ============



SHARES USED IN COMPUTING INCOME (LOSS) PER SHARE
    Basic                                                                        35,283,729      19,442,115       9,857,252
                                                                               ============    ============    ============
    Diluted                                                                      35,283,729      20,599,160       9,857,252
                                                                               ============    ============    ============
</TABLE>

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



                                      F-6
<PAGE>




                                                               GEOGRAPHICS, INC.
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME (LOSS)
                                       YEARS ENDED MARCH 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                              Retained
                                                      Common stock            Additional      Earnings
                                                 ------------------------       paid-in     (Accumulated
                                                   Shares        Amount         Capital       Deficit)
                                                 ---------    ------------   ------------   ------------
<S>                                              <C>          <C>            <C>            <C>
BALANCE, March 31, 1998                          9,857,252    $      9,857   $ 15,759,161   $(16,307,661)
                                                ==========    ============   ============   ============

Comprehensive income
    Net income                                          --              --             --        979,074
    Foreign currency translation adjustment             --              --             --             --

    Comprehensive income                                --              --             --             --
                                                ----------    ------------   ------------   ------------
BALANCE, March 31, 1999                          9,857,252    $      9,857   $ 15,759,161   $(15,328,587)
                                                ==========    ============   ============   ============
Comprehensive income
    Net income                                          --              --             --        236,153
    Foreign currency translation adjustment             --              --             --             --

    Comprehensive income
Stock-based compensation                                --              --        132,944             --
Issuance of common stock                        17,108,337          17,109      5,058,754             --
                                                ----------    ------------   ------------   ------------
BALANCE, March 31, 2000                         26,965,589    $     26,966   $ 20,950,859   $(15,092,434)
                                                ==========    ============   ============   ============
Comprehensive income (loss)
    Net income (loss) (restated)                        --              --             --     (5,256,834)
    Foreign currency translation adjustment             --              --             --             --

    Comprehensive income (loss) (restated)
Stock-based compensation                                --              --        217,976             --
Issuance of common stock                        11,226,087          11,226      5,021,625             --
                                                ----------    ------------   ------------   ------------
BALANCE, March 31, 2001                         38,191,676    $     38,192   $ 26,190,460   $(20,349,268)
                                                ==========    ============   ============   ============

<CAPTION>
                                                 Accumulated
                                                    Other            Total          Total
                                                Comprehensive   Stockholders'    Comprehensive
                                                Income (Loss)       Equity       Income (Loss)
                                                -------------   -------------   --------------
<S>                                             <C>             <C>             <C>
BALANCE, March 31, 1998                         $     33,899    $   (504,744)
                                                ============    ============


Comprehensive income
    Net income                                            --         979,074    $    979,074
    Foreign currency translation adjustment         (191,122)       (191,122)       (191,122)
                                                                                ------------
    Comprehensive income                                  --              --    $    787,952
                                                ------------    -----------Y-    ============
BALANCE, March 31, 1999                         $   (157,223)   $    283,208
                                                ============    ============
Comprehensive income
    Net income                                                       236,153    $    236,153
    Foreign currency translation adjustment          (76,095)        (76,095)        (76,095)
                                                                                ------------
    Comprehensive income                                                        $    160,058
                                                                                ============
Stock-based compensation                                  --         132,944
Issuance of common stock                                  --       5,075,863
                                                ------------    ------------
BALANCE, March 31, 2000                         $   (233,318)   $  5,652,073
                                                ============    ============
Comprehensive income (loss)
    Net income (loss) (restated)                                  (5,256,834)   $ (5,256,834)
    Foreign currency translation adjustment         (185,210)       (185,210)       (185,210)
                                                                                ------------
    Comprehensive income (loss) (restated)                                      $ (5,442,044)
                                                                                ============
Stock-based compensation                                  --         217,976
Issuance of common stock                                  --       5,032,851
                                                ------------    ------------
BALANCE, March 31, 2001                         $   (418,528)   $  5,460,856
                                                ============    ============
</TABLE>

           See accompanying notes to consolidated financial statements




                                      F-7
<PAGE>



                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                       YEARS ENDED MARCH 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                 2001          2000            1999
                                                             -----------    -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES                           (RESTATED)
<S>                                                           <C>           <C>            <C>
    Net income (loss)                                        $(5,256,834)  $   236,153    $   979,074
    Adjustments to reconcile net income (loss)  to net
    cash flows provided by (used in) operating activities
       Depreciation and amortization                           2,048,560      1,329,517      2,855,906
       Gain on sale of Core business                                  --             --     (5,350,286)
       Disposal of property and equipment                         (1,718)         1,462        126,121
       Stock-based compensation                                  150,976        132,944             --

       Interest on debentures                                     67,000             --             --
       Inventory valuation adjustment                            844,428             --             --
    Changes in  operating assets and liabilities
       Trade receivables                                      (1,134,962)    (3,005,055)     1,096,906
       Other receivables                                        (129,727)       235,536       (113,041)
       Inventories                                              (408,544)    (1,768,487)     2,395,474
       Prepaid expenses, deposits and other current assets       (41,705)       291,113       (122,050)
       Accounts payable                                        1,341,886        738,453       (324,388)
       Accrued liabilities                                     2,166,926       (812,809)       157,412
                                                             -----------    -----------    -----------
          Net cash flows from operating activities              (353,714)    (2,621,173)     1,701,128
                                                             -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
    Net proceeds from sale of Core business                           --             --      6,448,073
    Purchase of plant and equipment                           (1,104,341)      (444,479)      (308,980)
    Purchase of certain Innovative Storage Design assets              --        (60,883)            --
    Proceeds from sales of equipment                              65,456         14,355             --
    Other assets                                                  98,322       (391,687)       (27,458)
    Purchase of  certain Z International assets                 (100,000)            --             --
    Purchase of certain Domtar Consumer Products assets       (4,606,924)            --             --
                                                             -----------    -----------    -----------
       Net cash flows from investing activities               (5,647,487)      (882,694)     6,111,635
                                                             -----------    -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES
    Increase in (repayment of) bank overdrafts                   715,938          6,126        (48,291)
    Net borrowings (repayment of) on note payable to bank      2,642,234      1,867,715     (6,403,896)
    Repayment of long-term debt                               (2,304,440)    (2,940,895)    (1,354,565)
    Proceeds from notes payable to officers and directors      1,000,000             --             --
    Repayments of notes payable to officer and directors      (1,000,000)            --             --
    Proceeds from issuance of common stock                     5,032,851      4,875,583             --
                                                             -----------    -----------    -----------
       Net cash flows from financing activities                6,086,583      3,808,529     (7,806,752)
                                                             -----------    -----------    -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH                          (24,945)       (75,017)      (191,122)
                                                             -----------    -----------    -----------
NET CHANGE IN CASH                                                60,437        229,645       (185,111)

CASH, beginning of year                                          360,612        130,967        316,078
                                                             -----------    -----------    -----------

CASH, end of year                                            $   421,049    $   360,612    $   130,967
                                                             ===========    ===========    ===========


SUPPLEMENTAL CASH FLOW INFORMATION
    Cash paid during the year for interest                   $ 1,138,929    $   875,272    $ 1,044,421
                                                             ===========    ===========    ===========
    Non-cash financing and investing activities -
       Acquisition of fully reserved Domtar Inventory        $   223,354    $        --    $        --
                                                             ===========    ===========    ===========
       Acquisition of Z-International inventory for credit   $   360,063    $        --    $        --
                                                             ===========    ===========    ===========
       Common stock issued for assets                        $        --    $   200,280    $        --
                                                             ===========    ===========    ===========
       Financing obtained in acquisition of equipment        $        --    $   135,982    $        --
                                                             ===========    ===========    ===========
</TABLE>



See accompanying notes to consolidated financial statements


                                      F-8
<PAGE>


                                                               GEOGRAPHICS, INC.
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                       YEARS ENDED MARCH 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------

NOTE 1 - DESCRIPTION OF OPERATIONS

        Geographics, Inc. (the "Company") is a Delaware corporation with its
        offices and main manufacturing and distribution facilities located in
        Blaine, Washington. The Company also has sales, warehousing and
        distribution facilities near Sydney, Australia, and Waukesha, Wisconsin.
        The Company is a manufacturer of designer stationery, value-added papers
        and ready-to-assemble filing and storage systems. (See Note 5 regarding
        the sale of certain business operations and product line acquisitions.)


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
        include the accounts of the Company and its wholly-owned subsidiaries,
        Geographics (Europe) Limited, Geographics Pty. Limited and Geographics
        Marketing Canada Inc. (which was dissolved in October, 1999, with
        operations continued by the Company). Significant intercompany
        transactions and balances have been eliminated in consolidation.

        CASH AND EQUIVALENTS - Cash and cash equivalents include cash on deposit
        with banks and other highly liquid investments with original maturities
        of ninety days or less.

        CASH AND OVERDRAFT BALANCES - The Company maintains its cash in bank
        deposit accounts which, at times, may exceed federally insured limits.
        The Company has not experienced any losses in such accounts.

        The nature and content of bank overdrafts include disbursements from the
        payroll checking account, which are covered via transfers of funds from
        the general operating cash account as payroll checks are presented for
        payment. The Company also has an account for which the bank funds
        disbursements as they are presented for payment via an overnight
        investment sweep account.

        ACCOUNTS RECEIVABLE - The Company typically offers credit terms to its
        customers, which generally require payment within sixty days. Management
        considers all accounts receivable in excess of the allowance for
        doubtful accounts to be fully collectible.

        INVENTORIES - Inventories are valued at the lower of cost on a first-in,
        first-out (FIFO) basis or estimated net realizable value.

        PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment is stated
        at historical cost. Depreciation and amortization is provided based on
        useful lives of the assets (buildings - fifteen to forty years;
        machinery and equipment - three to fifteen years; computers and software
        - three to ten years; vehicles - five to eight years), using primarily
        the straight-line method. Betterments, renewals and repairs that extend
        the life of assets are capitalized. Repairs and maintenance items are
        expensed when incurred. Depreciation and amortization expense, including
        amortization expense on capitalized leased equipment, was $1,257,153,
        $1,329,517 and $2,855,906 during the years ended March 31, 2001, 2000
        and 1999, respectively.

        LICENSES, TRADEMARKS, AND OTHER INTANGIBLE ASSETS - Licenses, trademarks
        and other intangible assets are stated at historical cost. Amortization
        is provided on a straight-line basis based on a useful life of six
        years.

        INCOME TAXES - The Company accounts for income taxes using the asset and
        liability method. Under this method, deferred tax assets and liabilities
        represent the estimated tax effects of future deductible or taxable
        amounts attributed to differences between the financial statement
        carrying amounts and the tax bases of existing assets and liabilities.
        This method also allows recognition of income tax benefits for loss
        carryforwards, credit carryforwards and certain temporary differences
        for which tax benefits have not previously been recorded. The tax
        benefits recognized as assets must be reduced by a valuation allowance
        where it is more likely than not the benefits may not be realized. The
        effect on deferred income tax assets and liabilities of a change in tax
        rates is included in income in the period that includes the substantial
        enactment date.

                                      F-9
<PAGE>


        FOREIGN CURRENCY TRANSLATION - The functional currency of the Company's
        non-U.S. subsidiaries is the applicable local currency. The translation
        of the applicable foreign currency denominated financial statements into
        the Company's functional currency, U.S. dollars, is calculated for
        assets and liabilities at the exchange rates in effect as of the balance
        sheet dates. Income and expense items are translated at the average
        exchange rate for the year. The resulting translation adjustments are
        recorded as other comprehensive income (loss) within the consolidated
        statements of stockholders' equity and comprehensive income (loss).
        Transaction gains and losses are reported in net income in the period
        they are realized.

        USE OF ESTIMATES - The preparation of consolidated financial statements
        in conformity with generally accepted accounting principles in the
        United States of America requires management to make estimates and
        assumptions that affect the reported amounts of assets and liabilities
        at the date of the consolidated financial statements and the reported
        amounts of revenues and expenses during the reporting period. Actual
        results could differ from those estimates.

        REVENUE RECOGNITION - Goods are shipped to the customer, F.O.B.
        destination. Sales are recorded and recognized as revenue when product
        is received by the customer.

        ADVERTISING COSTS - Advertising costs are charged to expense in the
        period in which they occur except for direct response advertising which
        is capitalized and amortized over its expected period of future
        benefits. Direct response advertising consists primarily of
        advertisements placed with industry related catalogs and are amortized
        over the period following the mailing date at a rate approximating the
        rate and timing of customer response.

        The Company also participates with its customers in cooperative
        advertising and other promotional programs, in which the Company
        contributes to customers' advertising costs. Advertising expense
        amounted to $1,384,315, $755,074 and $589,569 during the years ended
        March 31, 2001, 2000 and 1999, respectively.

        NET INCOME (LOSS) PER SHARE - Basic net income (loss) per share amounts
        are computed based on the weighted average number of shares outstanding
        during the period after giving retroactive effect to stock dividends and
        stock splits. Diluted net income (loss) per share amounts are computed
        by determining the number of additional shares that are deemed
        outstanding due to stock options and warrants under the treasury stock
        method, and which are anti-dilutive.

        FAIR VALUE OF FINANCIAL INSTRUMENTS - The Company's financial
        instruments, other than cash, consist primarily of cash equivalents,
        accounts receivable, bank overdrafts, accounts payable, accrued
        liabilities, note payable and long-term debt. The fair value of these
        instruments approximates their carrying amounts based upon their
        short-term nature or current market indicators such as prevailing
        interest rates.

        STOCK-BASED COMPENSATION - The Company follows the provisions of
        Statement of Financial Accounting Standards (SFAS) No. 123, Accounting
        for Stock-Based Compensation. This statement permits a company to choose
        either a new fair-value method or the Accounting Principles Board (APB)
        Opinion No. 25, Accounting for Stock Issued to Employees,
        intrinsic-value based method of accounting for stock-based compensation
        arrangements. SFAS No 123 requires pro forma disclosure of net income
        (loss) and income (loss) per share computed as if the fair-value based
        method had been applied in financial statements of companies that
        continue to account for such arrangements under APB Opinion No. 25. The
        Company has elected to continue to record stock-based compensation using
        the APB Opinion No. 25 intrinsic-value-based method.

        IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF
        - Long-lived assets and certain identifiable intangibles are reviewed
        for impairment whenever events or changes in circumstances indicate that
        the carrying amount of an asset may not be recoverable. Recoverability
        of assets to be held and used is measured by a comparison of the
        carrying amount of an asset to future net cash flows expected to be
        generated by the asset. If such assets are considered to be impaired,
        the impairment to be recognized is measured by the amount by which the
        carrying amount of the assets exceed the fair value of the assets.
        Assets to be disposed of are reported at the lower of the carrying
        amount or fair value less costs to sell.



                                      F-10
<PAGE>

        COMPREHENSIVE INCOME (LOSS) - The Company reports comprehensive income
        (loss), which includes the Company's net income (loss) as well as
        changes in equity from other non-owner sources. In the Company's case
        through the date of the consolidated financial statements, the other
        changes in equity included in comprehensive income (loss) comprise
        cumulative foreign currency translation adjustments.

        RECENT ACCOUNTING PRONOUNCEMENTS - In June, 1998, the Financial
        Accounting Standards Board issued SFAS No. 133, "Accounting for
        Derivative Instruments and Hedging Activities." SFAS No. 133, as
        amended, is effective for fiscal years beginning after June 15, 2000.
        SFAS No. 133, requires that all derivative instruments be recorded on
        the balance sheet at their fair value. Changes in the fair value of
        derivatives are recorded each period in current earnings or other
        comprehensive income (loss), depending on whether a derivative is
        designated as part of a hedge transaction and, if it is, the type of
        hedge transaction. The Company does not expect that the adoption of SFAS
        No. 133 will have a material impact on its consolidated financial
        statements.

        In April, 2001, the Emerging Issues Task force (EITF) reached a
        consensus on certain issues within Issue 00-25 "Vendor Income Statement
        Characterization of Consideration Paid to a Reseller of the Vendor's
        Products". The EITF concluded that consideration from a vendor to a
        reseller of the vendor's products, such cooperative advertising
        programs, should be recognized as a reduction of revenue when recognized
        in the vendor's income statement. Application of EITF 00-25 is required
        no later than in annual or interim financial statement periods beginning
        after December 15, 2001. Upon application of this Issue, financial
        statements for prior periods presented for comparative purposes should
        be reclassified to comply with the income statement display
        requirements. The Company has not yet determined the impact of the
        adoption of this Issue on the Company's consolidated financial
        statements.

NOTE 3 - RESTATEMENT AND CHANGE IN ACCOUNTING POLICY

        The Company has determined to restate its annual consolidated financial
        statements for the year ended March 31, 2001 to adjust the useful life
        of the Domtar license and other intangibles from 15 years to 6 years.
        The following sets forth the effect of this adjustment:

<TABLE>
<CAPTION>
                                                               AS PREVIOUSLY                                    AS
                                                                  REPORTED             ADJUSTMENT            RESTATED
                                                                  --------             ----------            --------
<S>                                                           <C>                    <C>                  <C>
At March 31, 2001:

        Licenses, Trademarks and Other Intangible Assets        $  3,126,512         $   (250,000)        $  2,876,512

       Total Assets                                               27,335,496             (250,000)          27,085,496

       Accumulated Deficit                                       (20,099,268)            (250,000)         (20,349,268)

       Stockholders' Equity                                        5,710,856             (250,000)           5,460,856

        Total Liabilities and Stockholders' Equity              $ 27,335,496         $   (250,000)        $ 27,085,496

FOR THE TWELVE MONTHS ENDED MARCH 31, 2001:

        Cost of Sales                                           $ 30,945,793         $    250,000         $ 31,195,793

       Gross Margin                                                5,656,272             (250,000)           5,406,272

       Income (Loss) From Continuing Operations                   (5,006,834)            (250,000)          (5,256,834)

       Net Income (Loss)                                        $ (5,006,834)        $   (250,000)        $ (5,256,834)

        Net Income (Loss) Per Share                             $      (0.14)        $      (0.01)        $      (0.15)

</TABLE>


NOTE 4 - GOING CONCERN

       The Company's consolidated financial statements have been prepared
       assuming the company will continue as a going concern.


       The Company incurred a net loss of $5,256,834 in fiscal year 2001, has a
       working capital deficiency of $4,992,359 and an accumulated deficit of
       $20,349,268 at March 31, 2001. In order for the Company to



                                      F-11

<PAGE>

       continue as a going concern it must achieve profitability or obtain
       adequate financing to fund its obligations as they become due.


       The Company is focusing on initiatives that specifically address the need
       to increase cash provided by operating activities. Some of these
       initiatives include, but are not limited to consolidation of multiple
       facilities into its Waukesha, Wisconsin facility, licensing agreements
       with Atlanta Group, BV, and with its Mexican distribution partner, the
       establishment of a direct supply agreement for GeoFile products, and
       local manufacture of products for its Australian subsidiary. Management
       has also prepared preliminary plans for further operational efficiency
       improvements should the actions already taken prove insufficient to
       restore profitability and improve liquidity.

       The Company's ability to obtain additional cash if and when needed could
       have a material adverse effect on its financial position, results of
       operations and its ability to continue as a going concern. The
       consolidated financial statements do not include any adjustments that
       might result from the outcome of this uncertainty.

NOTE 5 - ACQUISITIONS AND DIVESTITURE

       Effective as of April 1, 2000, the Company acquired certain inventory,
       licenses and trademark rights of the Consumer Products Business of the
       Communication Papers Division of Domtar, Inc. of Canada, for a total
       consideration of $4,781,140, plus expenses of $49,138. Under the
       provisions of the agreement with Domtar, the Company was granted an
       exclusive worldwide license to convert, distribute and sell products
       under certain exclusive Domtar trademarks, and a non-exclusive license to
       use the Domtar Trademark. The initial term of the licenses is for a
       three-year period extending to March 31, 2003, extendable at the
       Company's option for an additional three-year period, and annually
       thereafter, unless terminated by either party. The licenses remain
       exclusive providing annual sales achieve certain minimum sales levels or
       minimum royalty payments are made. The agreement also provides for the
       payment of royalties on sales of the Domtar products, an option by Domtar
       to repurchase the assets at a premium, and the purchase of paper from
       Domtar.

       To expand its product offerings and customer base, as of December 18,
       2000, the Company entered into an agreement to acquire certain assets of
       the Z-GRAFIX(R) brand image paper from Kansas City, Missouri based
       Z-International, Inc. The Company and Z-International have entered into a
       license agreement for the Company to use the Z-GRAFIX name. Under the
       terms of the agreement, the Company has made an initial payment of
       $100,000, will pay for inventory as sold, and will negotiate for the
       payment of remaining inventory, if any, at a future date. The agreement
       also provides for the payment of commissions on net sales, for a period
       not to exceed three years.

       Effective July 1, 1999, the Company acquired substantially all of the
       assets of Innovative Storage Designs, consisting of inventories,
       drawings, tooling, patents, know-how and certain other assets used in the
       manufacturing and sale of ready-to-assemble file storage systems. The
       purchase price, composed of cash, the assumption of certain liabilities
       and issuance of 556,711 shares of common stock of the Company, amounting
       to $261,000. In addition, the purchase agreement provides for the payment
       of royalties on future sales of files at the rate of 1 1/2% on sales of
       single drawer file cabinets and single drawer storage cabinets up to a
       maximum of $150,000, and the issuance of common stock of the Company at
       the rate of 25,000 shares for each $500,000 of the first $10,000,000 in
       sales of the specified products. No royalties are payable subsequent to
       March 31, 2001.

       To broaden its European distribution channels, as of October 31, 2000,
       the Company entered into an agreement with Atlanta Group BV, the European
       subsidiary of Smead Manufacturing Corporation to sell certain assets of
       Geographics Europe, Ltd., the Company's European subsidiary. The assets
       sold consist of inventory, customer files, customer records, sales
       history, sales orders, supply contracts, goodwill and know-how, which
       represent all of the assets necessary to operate the business. The
       Company has retained ownership of its designs, copyrights and trademarks,
       and has provided an exclusive license to Smead/Atlanta Group for the use
       of the Geographics brand for paper products and a non-exclusive license
       to the Geofile brand for file and storage products in exchange for
       royalty payments on sales of the licensed products. Atlanta Group BV is
       headquartered Hoogezand, The Netherlands, and also has distribution
       facilities in Austria, Belgium, England, France, Germany, Spain, Portugal
       and Switzerland. Under the terms of the agreement, the Company has
       received approximately $500,000 in initial proceeds, and will receive
       royalties of 5% of the sales of all of the Company's products sold by the
       Smead/Atlanta Group.




                                      F-12
<PAGE>

       On May 4, 1998, the Company sold substantially all of its signage and
       lettering operating assets, licenses, inventory and other rights
       (collectively the "Core Business") to Identity Group, Inc. for total
       consideration of $6,673,182. In connection with the sale, the Company
       recorded a gain of $5,350,286 or $.55 per share in the first quarter of
       fiscal 1999. The available net proceeds from the sale were used to reduce
       the outstanding balance on the Company's revolving credit line.

       Summarized results of operations for the Core Business for the year ended
       March 31,1999 are as follows:

<TABLE>
<CAPTION>
                                                    1999
                                                  --------
<S>                                               <C>
       Net sales                                  $751,539
                                                  ========
       Income from operations                     $139,035
                                                  ========
       Income from discontinued operations        $110,476
                                                  ========
</TABLE>

NOTE 6 - INVENTORIES

         Inventories consisted of the following at March 31:

<TABLE>
<CAPTION>
                                                    2001              2000
                                                 ----------        ----------
<S>                                              <C>               <C>
       Raw materials                             $  809,794        $  619,463
       Work-in-progress                           1,121,778         1,096,799
       Finished goods                             4,702,749         3,584,909
                                                 ----------        ----------
                                                 $6,634,321        $5,301,171
                                                 ==========        ==========
</TABLE>

NOTE 7 - PROPERTY, PLANT AND EQUIPMENT

       Property, plant and equipment consisted of the following:

<TABLE>
<CAPTION>
       As of March 31, 2001                                                 Accumulated
       --------------------                                                 Depreciation
                                                                                And              Net Book
                                                             Cost           Amortization           Value
                                                         -----------        -----------        -----------
<S>                                                      <C>                <C>                <C>
       Land                                              $   114,563        $        --        $   114,563
       Buildings                                           3,999,757          1,127,006          2,872,751
       Machinery & equipment                               4,102,195          2,332,449          1,769,746
       Machinery & equipment under capital lease           7,154,598          3,171,677          3,982,921
       Computers and software                                412,709            239,648            173,061
       Vehicles                                              215,276            150,663             64,613
       EDP installation-in-progress                           29,579                 --             29,579
                                                         -----------        -----------        -----------
                                                         $16,028,677        $ 7,021,443        $ 9,007,234
                                                         ===========        ===========        ===========

<CAPTION>
       As of March 31, 2000                                                 Accumulated
       --------------------                                                 Depreciation
                                                                                And              Net Book
                                                             Cost           Amortization           Value
                                                         -----------        -----------        -----------
<S>                                                      <C>                <C>                <C>
        Land                                             $   114,563        $        --        $   114,563
        Buildings                                          3,881,071          1,037,638          2,843,433
        Machinery & equipment                              3,488,224          2,085,411          1,402,813
        Machinery & equipment under capital lease          7,162,416          2,518,975          4,643,441
            Computers and software                           312,086            134,934            177,152
        Vehicles                                             240,837            138,995            101,842
        EDP installation-in-progress                          21,620                 --             21,620
                                                         -----------        -----------        -----------
                                                         $15,220,817        $ 5,915,953        $ 9,304,864
                                                         ===========        ===========        ===========

</TABLE>



                                      F-13
<PAGE>

NOTE 8 - LEASES

        The Company conducts certain operations in leased facilities, under
        leases that are classified as operating leases for financial statement
        purposes. The leases require the Company to pay real estate taxes,
        common area maintenance, and certain other expenses. Lease terms,
        excluding renewal option periods exercisable by the Company at escalated
        rents, expire at various times through 2008. At March 31, 2001, the
        Company had future minimum lease commitments of $2,548,284. Rental
        expense under all operating leases was $463,534, $125,838 and $86,235
        during the years ended March 31, 2001, 2000 and 1999, respectively.

        Future minimum lease payments for the noncancelable operating leases and
        future minimum capital lease payments as of March 31, 2001 are:

<TABLE>
<CAPTION>
                    YEAR ENDING MARCH 31                    CAPITAL LEASES      OPERATING LEASES
       ----------------------------------------------       --------------      ----------------
<S>                                                         <C>                 <C>
       2002                                                   $ 1,176,911         $   400,054
       2003                                                       899,222             400,054
       2004                                                       767,164             361,676
       2005                                                       127,573             354,000
       2006                                                            --             354,000
       Thereafter                                                      --             678,500
                                                              -----------         -----------

                     Total minimum lease payments               2,970,870         $ 2,548,284
                                                                                  ===========

       Less amount representing interest (at rates
           ranging from 8.25% to 11.42%)                         (367,172)
                                                              -----------

                     Present value of net minimum
                       capital lease payments                   2,603,698

       Less current installments of obligations under
           capital leases                                         974,790
                                                              -----------

                     Obligations under capital leases,
                       excluding current installments         $ 1,628,908
                                                              ===========

</TABLE>

NOTE 9 - NOTE PAYABLE

        The Company has a revolving credit agreement with a bank to borrow up to
        $9,500,000. The credit facility expires and outstanding borrowings
        thereunder are due as of September 30, 2001. The borrowings under the
        agreement are subject to borrowing base limitations of 75% of eligible
        accounts receivable and 50% of qualified inventories. Interest on
        outstanding advances is payable monthly at the bank's daily LIBOR rate,
        (5.1% at March 31, 2001) plus 2.5%. Total outstanding advances under the
        revolving credit agreement were $8,406,861 and $6,764,627 at March 31,
        2001 and 2000, respectively. The revolving credit agreement contains
        restrictive covenants with which the Company was not in compliance at
        March 31, 2001. The Company subsequently amended the credit facility and
        received a waiver of prior defaults as of June 30, 2001. The revolving
        credit agreement is secured by substantially all of the assets of the
        Company and restricts the payment of dividends.


                                      F-14
<PAGE>


NOTE 10 - FEDERAL INCOME TAXES

        The total tax provision for the years ended March 31, differs from the
        amount computed using the statutory federal income tax rate as follows:

<TABLE>
<CAPTION>
                                                             2001                        2000                        1999
                                                 ------------------------     ------------------------    ------------------------
                                                     Amount          %            Amount          %          Amount           %
                                                 ------------   ---------     -----------     --------    ------------    --------
<S>                                             <C>              <C>          <C>             <C>         <C>             <C>
       Tax expense (benefit) at statutory
              rate on continuing operations      $(1,787,000)     (34.0)      $    80,240        34.0      $(1,524,000)     (34.0)
       Other differences, net                        506,000       10.1           (80,240)      (34.0)         240,000        5.4

       Change in valuation allowance
              for deferred tax assets              1,281,000       23.9                --          --         (573,000)     (12.8)
       Benefit absorbed by income from
              discontinued operations                     --         --                --          --        1,857,000       41.4
                                                 -----------       ----       -----------       -----      -----------       ----
              Total income tax provision
                 (benefit)                       $        --         --%      $        --          --%     $        --         --%
                                                 ===========       ====       ===========       =====      ===========       ====

</TABLE>

        The significant components of deferred income tax expense (benefit) for
        the years ended March 31, are as follows:

<TABLE>
<CAPTION>
                                                                         2001              2000              1999
                                                                     -----------       -----------       -----------
<S>                                                                  <C>               <C>               <C>
          Change in valuation allowance for deferred tax assets      $ 1,281,000       $   159,000       $  (592,000)
          Depreciation of plant and equipment                            388,000          (229,000)         (138,000)
          Amortization of goodwill and intangibles                       (96,000)            3,000            78,000
          Change in allowance for doubtful accounts                      (64,000)          (45,000)           79,000
          Inventory differences                                           63,000           (52,000)          (24,000)
          Effect of net operating loss carryforwards                  (1,568,000)               --           593,000
          Other differences, net                                          (4,000)          164,000             4,000
                                                                     -----------       -----------       -----------
       Total deferred income tax expense (benefit)                   $        --       $        --       $        --
                                                                     ===========       ===========       ===========
</TABLE>

        The tax effects of temporary differences that give rise to significant
        portions of the deferred tax assets and deferred tax liabilities at
        March 31 are as follows:

<TABLE>
<CAPTION>
                                                                           2001              2000              1999
                                                                       -----------       -----------       -----------
<S>                                                                    <C>               <C>               <C>
       Deferred Tax Assets
          Net operating losses                                         $ 6,538,000       $ 4,970,000       $ 4,970,000
          Inventory, principally due to additional cost
             inventoried for tax purposes and financial                    249,000           312,000           260,000
             statement allowances
          Goodwill and intangible assets, principally due to
             amortization differences                                      246,000           150,000           254,000
          Accruals for financial reporting purposes                        157,000           116,000            30,000
          Alternative minimum tax credit carryforwards                      33,000            83,000            83,000
          Accounts receivable, due to allowance for doubtful
             accounts                                                      347,000           283,000           238,000
          Other differences, net                                            13,000                --            22,000
                                                                       -----------       -----------       -----------
               Net deferred tax assets                                   7,583,000         5,914,000         5,857,000

       Deferred Tax Liabilities
          Plant and equipment, principally due to depreciation
             differences                                                   908,000           520,000           622,000
                                                                       -----------       -----------       -----------
               Net deferred tax assets before valuation allowance        6,675,000         5,394,000         5,235,000
          Valuation allowance                                           (6,675,000)       (5,394,000)       (5,235,000)
                                                                       -----------       -----------       -----------
               Net deferred tax assets                                 $        --       $        --       $        --
                                                                       ===========       ===========       ===========
</TABLE>



                                      F-15
<PAGE>

        Based on the Company's current operating income and expectations for the
        future, management has determined that future income will not more
        likely than not be sufficient to fully recognize all deferred tax assets
        existing at March 31, 2001. Accordingly, the Company does not recognize
        any carrying value of net deferred tax assets.

        Net operating loss carryforwards approximating $17,200,000 are available
        to offset future United States federal taxable income, and expire from
        2012 through 2020. In addition, net operating losses on foreign
        operations of approximately $2,300,000 are available to the Company to
        offset future foreign taxable income, subject to foreign tax rules.

NOTE 11 - STOCKHOLDERS' EQUITY

        REINCORPORATION - On October 16, 2000, the Company consummated its
        merger into a wholly-owned Delaware subsidiary, pursuant to which each
        outstanding share of common stock of the existing Wyoming corporation
        was converted into an equal number of identical securities of the
        Delaware corporation. In connection with the reincorporation, the par
        value of the Company's common stock was changed from no par value to
        $.001 per share. The surviving entity, also named Geographics, Inc. is a
        Delaware corporation with a Board of Directors and shareholders
        identical to that of the former Geographics, Inc., which was a Wyoming
        corporation. These consolidated financial statements retroactively
        reflect the change in par value of the Company's common stock for all
        periods presented.

        STOCK OPTION AND INCENTIVE PLANS - As of March 31, 2001, the Company had
        reserved 4,500,000 shares of common stock for issuance to key employees,
        officers and directors pursuant to the 1999 Stock Option Plan. Options
        granted under the Plan qualify as incentive stock options and will
        generally not be taxable to the holder until the share subject to the
        option is ultimately sold by the holder of the option. Options to
        purchase the Company's common stock are granted at a price equal to or
        greater than the market price of the stock at the date of grant, and are
        exercisable pursuant to the terms of the grant. All options expire no
        more than ten years after the date of grant. Compensation expense
        recognized in the accounts related to stock options during the years
        ended March 31, 2001 and 2000 was $125,676 and $132,944, respectively.
        No compensation expense was recognized during the year ended March 31,
        1999.

        Pro forma information regarding net income (loss) and income(loss) per
        share is required by Statement of Financial Accounting Standards No. 123
        Accounting for Stock-Based Compensation. The pro forma information
        recognizes, as compensation, the estimated present value of stock
        options granted using an option valuation model. Pro forma income (loss)
        per share amounts also reflect an adjustment for an assumed purchase of
        stock from proceeds deemed obtained from the issuance of stock options
        that are dilutive. The weighted fair value of options issued during the
        years ended March 31, 2001 and 2000 is estimated at $0.29 and $0.30,
        respectively per option.

        The following assumptions were used during the years ended March 31 to
        estimate the fair value of the options:

<TABLE>
<CAPTION>
                                                        2001         2000         1999
                                                      -------      -------      -------
<S>                                                   <C>          <C>          <C>
       Risk-free interest rate                           5.81%        5.06%        5.19%
       Dividend yield rate                                 --%          --%          --%
       Price volatility                                   100%          99%         205%
       Weighted average expected life of options       2.0 yr.      2.0 yr.       0.5 yr
</TABLE>

        Management believes that the assumptions used in the option pricing
        model are highly subjective and represent only one estimate of possible
        value, as there is no active market for the options granted. The fair
        value of the options granted that are recognized in pro forma net income
        is shown below:

        Pro forma disclosures for the years ended March 31 are as follows:


<TABLE>
<CAPTION>
                                                                  2001              2000             1999
                                                              -----------       -----------      -----------
                                                               (Restated)
<S>                                                           <C>               <C>              <C>
       Net income (loss) as reported                          $(5,256,834)      $   236,153      $   979,074
       Additional compensation expense for fair value of
               stock options                                      320,909           156,618           36,000
       Pro forma net income (loss)                            $(5,577,743)      $    79,535      $   943,074
</TABLE>


                                      F-16
<PAGE>
<TABLE>
<S>                                               <C>          <C>      <C>
       Pro forma net income (loss) per share

         Basic                                    $  (0.15)    $  --    $  0.10
         Diluted                                  $  (0.15)    $  --    $  0.10
</TABLE>

The changes in stock options outstanding are as follows:

<TABLE>
<CAPTION>
                                        Nonqualified        Weighted
                                        Common Stock     Option Price
                                           Options         Per Share
                                           -------         ---------
<S>                                    <C>               <C>
       BALANCE, March 31, 1998             173,500           $2.18
          Granted                          100,000            0.47
          Exercised                             --              --
          Expired                          (10,000)           0.83
                                        ----------           -----
       BALANCE, March 31, 1999             263,500            1.51
          Granted                        1,710,000            0.41
          Exercised                             --              --
          Expired                         (163,500)           2.14
                                        ----------           -----
       BALANCE, March 31, 2000           1,810,000            0.41
          Granted                        1,505,000            0.42
          Exercised                             --              --
          Expired                         (100,000)           0.47
                                        ----------           -----

       BALANCE, March 31, 2001           3,215,000           $0.41
                                        ==========           =====
</TABLE>

<TABLE>
<CAPTION>
                                              Options Outstanding                      Options Exercisable
                              --------------------------------------------------- -----------------------------
                                                    Weighted
                                                     Average          Weighted                       Weighted
              Range of                              Remaining          Average                        Average
              Exercise             Number          Contractual        Exercise        Number         Exercise
               Prices            Outstanding          Life              Price       Exercisable        Price
       ---------------------  ---------------  ----------------- ---------------- ---------------  ------------
<S>                           <C>              <C>                <C>              <C>             <C>
            Up to $0.50           3,215,000        9.42 years           $0.41        1,542,500          $0.41
</TABLE>

        WARRANTS - Effective November 17, 1999, the Company issued warrants to
        Culverwell & Co. to purchase 135,000 shares of common stock at an
        exercise price of $.33 1/3 per share, exercisable until August 31, 2001.
        These warrants remain outstanding at March 31, 2001.

        In addition, as further described in Note 13, warrants to purchase
        100,000 shares of common stock at $0.45 per share were outstanding at
        March 31, 2001. These warrants expire as of April 30, 2002.

NOTE 12 - INCOME (LOSS) PER SHARE

        The numerators and denominators of basic and diluted income (loss) per
        share during the years ended March 31 are as follows:

<TABLE>
<CAPTION>
                                                                                     2001            2000           1999
                                                                                ------------    ------------   ------------
                                                                                  (Restated)
<S>                                                                             <C>             <C>            <C>
       Net income (loss) (numerator)                                            $ (5,256,834)   $    236,153   $    979,074
                                                                                ============    ============   ============

       Shares used in the calculation (denominator)
         Weighted average shares outstanding                                      35,283,729      19,442,115      9,857,252
         Effect of dilutive stock options and warrants                                    --       1,157,045             --
                                                                                ------------    ------------   ------------

         Diluted shares                                                           35,283,729      20,599,160      9,857,252
                                                                                ============    ============   ============
</TABLE>

        Outstanding stock options and warrants that could potentially dilute
        basic net income (loss) per share in the future that were not included
        in the computation of diluted net income (loss) per share during the
        year ended



                                      F-17
<PAGE>
        March 31, 2001 because to do so would have been anti-dilutive, were
        3,450,000 shares.

NOTE 13 - RELATED PARTY TRANSACTIONS

        On April 19, 2000, the Company issued a $1,000,000 subordinated note to
        the Company's Chief Executive Officer, with the proceeds used to fund
        the Company's operations. The note bore interest at US Bank's prime
        lending rate, and the note was subordinated to the Company's senior
        indebtedness to US Bank. The note was paid in full on May 12, 2000,
        including accrued interest. In addition to interest on the note, the
        Company issued warrants to purchase 100,000 shares of common stock at
        $0.45 per share until April 30 2002. These warrants were subsequently
        purchased by L & D Investments, of which Mr. Jack Stein, a director is a
        trustee. The fair market value of these warrants of $67,000 was recorded
        as interest expense during the year ended March 31, 2001.

        The Company leased a warehouse from Mr. William T. Graham, a director,
        under the terms of a lease which expired December 31, 2000. Total rent
        paid under the terms of the lease was approximately $64,000 and $20,253
        during the years ended March 31, 2001 and 2000, respectively. No rent
        was paid during the year ended March 31, 1999.

        The Company leased office space from Mr. James L. Dorman, CEO President
        and Director, under the terms of a lease which expired December 31,
        2000. Total rent paid under the terms of the lease was approximately
        $15,500 and $11,688 during the years ended March 31, 2001 and 2000,
        respectively. No rent was paid during the year ended March 31, 1999.
        Additionally, the Company leased certain equipment from a leasing
        company of which Mr. Dorman was an officer and major shareholder. Total
        lease payments amounted to $46,968 and $12,737 during the years ended
        March 31, 2001 and 2000, respectively. No rent was paid during the year
        ended March 31, 1999.

        The Company engaged the services of Michael Best & Friedrich of Madison,
        Wisconsin as general legal counsel during the years ended March 31, 2001
        and 2000. Mr. Tod B. Linstroth, senior partner of Michael Best &
        Freidrich, is also Corporate Secretary of the Company. The Company
        incurred a total of $347,198 and $426,992 in legal expenses with Michael
        Best & Friedrich during the years ended March 31, 2001 and 2000,
        respectively. No expenses were incurred during the year ended March 31,
        1999.

        The Company formed a supply relationship with KAPCO, an Ohio Corporation
        owned by Mr. C. Joseph Barnett, Director of the Company, in January of
        2001. KAPCO supplies the Company with blank white business and greeting
        cards, and won this business based on competitive price and terms from
        the former supplier. Products purchased from KAPCO during the year ended
        March 31, 2001 amounted to $112,261.

NOTE 14 - EMPLOYEE BENEFIT PLANS

        The Company has a retirement savings plan, which permits eligible
        employees to make contributions to the plan on a pretax salary reduction
        basis in accordance with the provisions of Section 401(k) of the
        Internal Revenue Code. The Company makes a matching contribution of 10%
        of the employee's pretax contribution. Eligible employees may contribute
        up to 18% of their pretax compensation. Total expense related to this
        plan was $4,919, $9,801 and $16,884 during the years ended March 31,
        2001, 2000 and 1999, respectively.

NOTE 15 - OTHER COMMITMENTS AND CONTINGENCIES

        The Company is occasionally subject and party to various legal actions
        arising in the normal course of business. The Company believes the
        ultimate liability, if any, arising from such claims or contingencies is
        not likely to have a material adverse effect on the Company's
        consolidated results of operations or financial condition.



                                      F-18
<PAGE>


NOTE 16 - INFORMATION ABOUT CREDIT RISK AND BUSINESS CONCENTRATIONS

        Assets for which the Company has credit risk include trade accounts
        receivable, which amounted to $7,188,772 and $6,053,810 at March 31,
        2001 and 2000, respectively. The Company's trade customers are
        concentrated in the retail office products industry and mass market
        retail stores. Amounts due from three customers approximated 82% and 69%
        of the total accounts receivable at March 31, 2001 and 2000,
        respectively.

        Historically, a substantial portion of the Company's sales have been to
        a limited number of customers. Concentration of sales to the Company's
        five largest customers were 80%, 65% and 60% during the years ended
        March 31, 2001, 2000 and 1999, respectively. The Company expects that
        sales to relatively few customers will continue to account for a high
        percentage of its net sales in the foreseeable future and believes
        that its financial results depend in significant part upon the success
        of these few customers. Although the composition of the group comprising
        the Company's largest customers may vary from period to period, the loss
        of a significant customer or any reduction in orders by any significant
        customers, including reductions due to market, economic or competitive
        conditions in the designer stationary or specialty papers industry, may
        have a material adverse effect on the Company's business, financial
        condition and results of operations.

        The Company purchases goods from many vendors. One vendor accounted for
        a significant portion of the Company's total merchandise purchases
        during the years ended March 31, 2001, 2000 and 1999. The Company
        purchases commodity paper and other related products from this
        broker/vendor that could be supplied by other sources. The Company does
        not consider itself dependent on any single source for materials to
        manufacture its products.

        Financial information relating to foreign and domestic operations and
        export sales is as follows. Sales are attributed to the country where
        product delivery is specified by the customer.

<TABLE>
<CAPTION>
                                                                                            Years ended March 31,
                                                                                --------------------------------------------
       Net sales to domestic and foreign customers                                  2001            2000            1999
                                                                                ------------    ------------    ------------
                                                                                  (Restated)
<S>                                                                             <C>             <C>             <C>
       North America                                                            $ 33,673,253    $ 23,602,305    $ 16,488,463
         United Kingdom                                                            1,528,235       2,152,093       1,021,474
         Other European Countries                                                         --              --       1,054,000
         Australia                                                                 1,400,576       1,499,884       1,491,077
                                                                                ------------    ------------    ------------
             Total                                                              $ 36,602,065    $ 27,254,782    $ 20,055,014
                                                                                ============    ============    ============

       Operating profit (loss)
         North America                                                          $ (3,610,736)   $    937,632    $ (2,581,464)
         United Kingdom                                                             (476,487)       (344,869)       (550,609)
         Australia                                                                     6,742          87,378         (34,090)
                                                                                ------------    ------------    ------------

             Total                                                              $ (4,080,481)   $    680,141    $ (3,166,163)
                                                                                ============    ============    ============
<CAPTION>

                                                                                                  March 31,
                                                                                --------------------------------------------
                                                                                    2001            2000            1999
                                                                                ------------    ------------    ------------
<S>                                                                             <C>             <C>             <C>
       Property, Plant and Equipment
         United States                                                          $  8,855,324    $  9,125,809    $  9,778,864
         United Kingdom                                                               39,938         126,159         108,793
         Australia                                                                    81,973          52,896          57,977
                                                                                ------------    ------------    ------------

             Total                                                              $  9,007,234    $  9,304,864    $  9,945,634
                                                                                ============    ============    ============
</TABLE>


        International sales accounted for approximately 21%, 25% and 36% of the
        Company's total net sales during he years ended March 31, 2001, 2000,
        and 1999, respectively. International sales were concentrated in Canada,
        Europe and Australia. As a result of such international sales, a
        significant portion of the Company's revenues will be subject to certain
        risks, including unexpected changes in regulatory requirements, exchange
        rates, tariffs and other barriers, political and economic instability
        and other risks.




                                      F-19
<PAGE>


NOTE 17 - SUBSEQUENT EVENT

     The Company issued a total of $1,200,000 in 10% Convertible Secured
     Subordinated Notes dated April 27, 2001. The notes bear interest at the
     rate of 10%, are due and payable on or before April 27, 2003 and are
     subordinated to indebtedness to the Company's senior bank lender. At the
     option of the holder, the notes may be converted into shares of the
     Company's common stock at the rate of $.20 per share of stock, in the
     minimum amount of $10,000 and $5,000 increments thereafter. The following
     officers and directors of the Company acquired notes pursuant to the
     offering:

<TABLE>
<S>                                 <C>                   <C>
         James L. Dorman            CEO & Director        $  100,000

         William T. Graham          Director                  50,000

         Jack Stein                 Director                 100,000

         Roger R. Mayer             Director                  50,000
                                                          ----------

                                                          $  300,000
                                                          ==========

</TABLE>



                                      F-20
<PAGE>
                                   SCHEDULE II

                                GEOGRAPHICS, INC.

                        VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
                                                  Balance at                                                  Balance at
                                                    April 1            Additions          Deductions           March 31
                                                    -------            ---------          ----------           --------
<S>                                               <C>                 <C>                 <C>                 <C>
       Allowance for Doubtful Accounts,
       Sales Returns and Cash Discounts:
          Years ended March 31, 1999              $  930,958          $1,511,520          $1,545,815          $  896,663
          Years ended March 31, 2000              $  896,663          $1,204,618          $  375,039          $1,587,469
          Years ended March 31, 2001              $1,587,469          $2,608,112          $3,153,885          $1,041,696

</TABLE>



                                       S-1