UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON D.C. 20549

                                    FORM 10-QSB/A


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

For the Quarter Ended                                   Commission File Number
    June 30, 1996                                            0-18248
---------------------                                   ----------------------

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

        PENNSYLVANIA                                           06-1184427
-------------------------------                             -------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

                           Two Bala Plaza, Suite, 800
                                 Bala Cynwyd, PA 19004
                    ----------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)


                                 (610) 667-7700
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


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

Yes ___X___      No ___

As of the close of the period covered by this report, an aggregate of
3,980,141 shares of the registrant's Class A Common Stock $.005 par value were
outstanding.
<PAGE>
                                                JUDGE IMAGING SYSTEMS, INC.

                                                     FORM 10-QSB INDEX



NUMBER                                                                 PAGE (s)
------                                                                 --------

PART I.  FINANCIAL INFORMATION                                              3

Item 1.  Financial Statements:
           Condensed Balance Sheets as of June 30, 1996
           (Unaudited) and December 31, 1995                                3

           Condensed Statements of Operations (Unaudited)
              for the six months ended June 30, 1996 and 1995               4

           Condensed Statements of Operations (Unaudited)
              for the three months ended June 30, 1996 and 1995             5

           Condensed Statement of Shareholders' Deficiency (Unaudited)
              for the six months ended June 30, 1996                        6

           Condensed Statements of Cash Flows (Unaudited)
              for the six months ended June 30, 1996 and 1995               7

           Notes to Condensed Financial Statements                     8 - 19

Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations                             20


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                 22

Item 2.  Changes in Securities                                             22

Item 3.  Defaults Upon Senior Securities                                   22

Item 4.  Submission of Matters to a Vote of Security Holders               22

Item 5.  Other Information                                                 22

Item 6.  Exhibits and Reports                                              22


         SIGNATURES                                                        23

         FINANCIAL DATA SCHEDULE

                                                       - 1 -




<PAGE>

                           JUDGE IMAGING SYSTEMS, INC.

                            CONDENSED BALANCE SHEETS

                       JUNE 30, 1996 AND DECEMBER 31, 1995


                                              ASSETS

<TABLE>
<CAPTION>
                                                                                     JUNE 30,      DECEMBER 31,
                                                                                       1996           1995
                                                                                       ----           ----

<S>                                                                                 <C>            <C>
CURRENT ASSETS
    Cash                                                                            $     7,578    $    11,310
    Accounts receivable, net of allowance for doubtful accounts
      of  $20,000 in 1996 and $23,000 in 1995                                         2,115,494      1,471,916
    Other receivables-                                                                     --           50,000
    Inventories                                                                         679,366        515,099
    Prepaid expenses and other                                                          215,406        273,672
                                                                                    -----------    -----------
        Total current assets                                                          3,017,844      2,321,997
                                                                                    -----------    -----------

PROPERTY AND EQUIPMENT, NET                                                             439,957        194,870
                                                                                    -----------    -----------

OTHER ASSETS
    Security deposits                                                                    19,603         14,063
                                                                                    -----------    -----------

                                                                                    $ 3,477,404    $ 2,530,930
                                                                                    ===========    ===========

                                  LIABILITIES AND SHAREHOLDERS' DEFICIENCY

CURRENT LIABILITIES
    Equipment notes payable, current portion                                        $    20,055    $    15,150
    Accounts payable and accrued expenses                                             1,355,877        891,829
    Payroll and sales taxes payable                                                     120,566        112,336
    Advances from shareholders                                                          115,723        139,906
    Deferred revenue                                                                    273,690         46,111
    Customer deposits                                                                    33,745           --
                                                                                    -----------    -----------
        Total current liabilities                                                     1,919,656      1,205,332
                                                                                    -----------    -----------

EQUIPMENT NOTES PAYABLE, NET OF CURRENT PORTION                                          60,491         53,233
                                                                                    -----------    -----------

NOTE PAYABLE, BANK                                                                    1,406,960      1,538,425
                                                                                    -----------    -----------

DUE TO AFFILIATE                                                                           --        1,450,450
                                                                                    -----------    -----------

MANDATORILY REDEEMABLE PREFERRED STOCK
    $1,000 stated value, 1,500 shares issued and outstanding                          1,520,000           --
                                                                                    -----------    -----------

SHAREHOLDERS' DEFICIENCY
    Common Stock, $0.01 and $0.005 par value,
      10,000,000 shares authorized,
      3,980,141 and 6,900,577 shares issued and outstanding
      for 1996 and 1995, respectively                                                    39,801         34,503
    Preferred Stock, $0.01 par value,
      3,665,770 shares issued and outstanding, 1995                                        --          366,577
    Preferred Stock - Series A, $0.01 par value,
      5,000,000 shares authorized, 1996
      822,628 shares issued and outstanding                                               8,226           --
    Contributed capital                                                               1,589,576        524,433
    Accumulated deficit                                                              (3,067,306)    (2,642,023)
                                                                                    -----------    -----------
        Total shareholders' deficiency                                               (1,429,703)    (1,716,510)
                                                                                    -----------    -----------

                                                                                    $ 3,477,404    $ 2,530,930
                                                                                    ===========    ===========

</TABLE>


                  See Notes to Condensed Financial Statements.

                                      - 2 -


<PAGE>


                           JUDGE IMAGING SYSTEMS, INC.

                       CONDENSED STATEMENTS OF OPERATIONS

                     SIX MONTHS ENDED JUNE 30, 1996 AND 1995






                                                    1996           1995
                                                    ----           ----

NET REVENUES, including related party revenues
    of $439,000 in 1996 and $364,000 in 1995     $ 6,154,499    $ 3,377,347

COST OF REVENUES                                   4,628,985      2,642,762
                                                 -----------    -----------

GROSS PROFIT                                       1,525,514        734,585

OPERATING EXPENSES
    Selling, general and administrative            1,860,815        858,799
                                                 -----------    -----------

LOSS FROM OPERATIONS                                (335,301)      (124,214)

OTHER EXPENSES, principally interest                 (89,982)      (125,384)
                                                 -----------    -----------

NET LOSS BEFORE PREFERRED DIVIDENDS                 (425,283)      (249,598)

PREFERRED DIVIDENDS EARNED                           (75,600)        (9,165)
                                                 -----------    -----------

NET LOSS ATTRIBUTABLE TO
    COMMON SHAREHOLDERS                          ($  500,883)   ($  258,763)
                                                 ===========    ===========

NET LOSS PER SHARE AND FULLY DILUTED
    NET LOSS PER SHARE ATTRIBUTABLE
    TO COMMON SHAREHOLDERS                       ($     0.15)   ($     0.11)
                                                 ===========    ===========




                  See Notes to Condensed Financial Statements.


                                      - 3 -

<PAGE>

                           JUDGE IMAGING SYSTEMS, INC.

                CONDENSED STATEMENTS OF OPERATIONS -- (Continued)

                    THREE MONTHS ENDED JUNE 30, 1996 AND 1995






                                                    1996            1995
                                                    ----            ----

NET REVENUES, including related party revenues
    of $210,000 in 1996 and $159,000 in 1995     $ 3,685,156    $ 1,398,548

COST OF REVENUES                                   2,663,126      1,244,432
                                                 -----------    -----------

GROSS PROFIT                                       1,022,030        154,116

OPERATING EXPENSES
    Selling, general and administrative            1,108,272        491,106
                                                 -----------    -----------

LOSS FROM OPERATIONS                                 (86,242)      (336,990)

OTHER EXPENSES, principally interest                 (42,632)       (68,322)
                                                 -----------    -----------

NET LOSS BEFORE PREFERRED DIVIDENDS                 (128,874)      (405,312)

PREFERRED DIVIDENDS EARNED                           (56,700)        (4,583)
                                                 -----------    -----------

NET LOSS ATTRIBUTABLE TO
    COMMON SHAREHOLDERS                          ($  185,574)   ($  409,895)
                                                 ===========    ===========

NET LOSS PER SHARE AND FULLY
    DILUTED NET LOSS PER SHARE
    ATTRIBUTABLE TO COMMON
    SHAREHOLDERS - PRIMARY                       ($     0.05)   ($     0.18)
                                                 ===========    ===========


                                      - 4 -

<PAGE>


                           JUDGE IMAGING SYSTEMS, INC.

                 CONDENSED STATEMENT OF SHAREHOLDERS' DEFICIENCY

                         SIX MONTHS ENDED JUNE 30, 1996




<TABLE>
<CAPTION>
                                                                         SERIES A         ADDITIONAL
                            COMMON STOCK          PREFERRED STOCK      PREFERRED STOCK     PAID-IN     ACCUMULATED
                        SHARES        AMOUNT     SHARES     AMOUNT     SHARES    AMOUNT    CAPITAL       DEFICIT         TOTAL
                        ------        ------     ------     ------     ------    ------    -------       -------         -----
<S>                     <C>        <C>          <C>       <C>         <C>      <C>         <C>         <C>             <C>       
BALANCE,
  DECEMBER 31, 1995     6,900,577  $  34,503    3,665,770  $ 366,577     --     $ --     $  524,433    ($2,642,023)   ($1,716,510)

ISSUANCE OF
  SERIES A
  PREFERRED STOCK-           --         --           --         --    822,628    8,226    1,088,611           --        1,096,837

CONVERSION OF
 PREFERRED
 STOCK TO
 COMMON STOCK           3,665,770    366,577   (3,665,770)  (366,577)    --       --           --             --             --

MERGER
 TRANSACTIONS
   (See Note 1)        (6,586,206)  (361,279)        --         --       --       --        (23,468)          --         (384,747)

NET LOSS                     --         --           --         --       --       --           --         (425,283)      (425,283)
                      -----------  ---------  -----------  ---------  -------   ------   ----------    -----------    -----------

BALANCE,
 JUNE 30, 1996          3,980,141  $  39,801         --         --    822,628   $8,226   $1,589,576    ($3,067,306)   ($1,429,703)
                      ===========  =========  ===========  =========  =======   ======   ==========    ===========    ===========

</TABLE>


                  See Notes to Condensed Financial Statements.

                                      - 5 -

<PAGE>


                           JUDGE IMAGING SYSTEMS, INC.

                       CONDENSED STATEMENTS OF CASH FLOWS

                     SIX MONTHS ENDED JUNE 30, 1996 AND 1995



                                                            1996        1995
                                                            ----        ----

OPERATING ACTIVITIES
    Net loss                                            ($425,283)   ($249,598)
    Adjustments to reconcile net loss
      to net cash used in operating activities:
        Depreciation                                       49,880       19,658
        Provision for doubtful accounts                    23,000         --
    Changes in operating assets and liabilities:
      (Increase) decrease in:
        Accounts and other receivables                   (562,451)    (126,365)
        Inventories                                      (125,166)     (77,816)
        Prepaid expenses and other                         63,506      (25,698)
      Increase (decrease) in:
        Accounts payable and accrued expenses             381,961       80,989
        Payroll and sales taxes payable                     8,230      (89,473)
        Deferred revenue                                  (72,196)        (234)
        Customer deposits                                 (28,517)        --
                                                        ---------    ---------
           Net cash used in operating activities         (687,036)    (468,537)
                                                        ---------    ---------

INVESTING ACTIVITIES
    Net cash used in investing activities,
      purchases of property and equipment                (121,551)     (20,443)
                                                        ---------    ---------

FINANCING ACTIVITIES
    Cash acquired in business combination                  13,786         --
    Repayments of advances to shareholders                (24,183)     (19,098)
    Principal payments on equipment note borrowings       (11,219)      (5,294)
    Advances from affiliates                               69,550       95,059
    Proceeds from (repayments of) notes payable, bank    (131,465)     417,299
    Issuance of Series A Preferred Stock, net             888,386         --
                                                        ---------    ---------
           Net cash provided by financing activities      804,855      487,966
                                                        ---------    ---------

DECREASE IN CASH                                           (3,732)      (1,014)

CASH, JANUARY 1,                                           11,310        3,782
                                                        ---------    ---------

CASH, JUNE 30,                                          $   7,578    $   2,768
                                                        =========    =========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Cash paid during the six months for interest        $  90,834    $ 100,123
                                                        =========    =========





                  See Notes to Condensed Financial Statements.

                                      - 6 -


<PAGE>



                           JUDGE IMAGING SYSTEMS, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                     SIX MONTHS ENDED JUNE 30, 1996 AND 1995




NOTE 1.        DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
               ACCOUNTING POLICIES

               Description of Business

                      Judge Imaging Systems, Inc. (the "Company") derives its
               revenues from computer sales, repairs, maintenance and providing
               system integration for document management, imaging and workflow,
               principally in the mid-Atlantic and northeastern region of the
               Country. The Company also develops and markets standardized and
               custom software products and systems for the mass storage,
               electronic management and retrieval of information. As a systems
               integrator, the Company designs, assembles, installs and
               maintains image-processing systems. The Company's standardized
               products are sold both through distribution channels and directly
               to end-users.

                      Financial information with regard to the six months and
               the three months ended June 30, 1996 and 1995, is unaudited but
               in the opinion of management contains all adjustments which are
               of a normal, recurring nature and necessary to present fairly the
               Company's results of operations and cash flows. Certain
               information and footnote disclosure normally included in annual
               financial statements have been condensed or omitted in the
               financial information for the six and three months ended June 30,
               1996 and 1995 pursuant to SEC Rules and Regulations. Management
               believes that the disclosures which have been made are adequate.

                      The results of operation for the six and three months
               ended June 30, 1996 are not necessarily indicative of the results
               to be expected for the full year.

                      The financial information with regard to the statement of
               operations for the six months ended June 30, 1995 and the
               December 31, 1995 balance sheet are that of Judge Computer
               Corporation ("Judge") (considered the acquiring corporation for
               accounting purposes, as described in "business combination"). The
               statement of operations for the six months ended June 30, 1996
               includes six months of Judge operations and four months (from
               February 29, 1996, the effective date of merger) of DataImage,
               Inc.'s operations. The statement of operations for the three
               months ended June 30, 1996 includes three months of Judge
               operations and three months of DataImage, Inc's operations.

                      At June 30, 1996, the Company is a 26% owned subsidiary of
               Judge, Inc., a company who, along with other of its subsidiaries,
               provides engineers and other technical professionals on a
               temporary and permanent basis. An additional 49% of the Company's
               voting stock is owned by individuals who are also shareholders of
               Judge, Inc.



                                      - 7 -



<PAGE>

                           JUDGE IMAGING SYSTEMS, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                     SIX MONTHS ENDED JUNE 30, 1996 AND 1995




NOTE 1.        DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
               ACCOUNTING POLICIES  (Continued)

               Business Combination

                      On September 13, 1995, Judge Imaging Systems, formerly
               known as DataImage, Inc. (the "Registrant" and sometimes the
               "Surviving Corporation") entered into a Letter of Intent with
               respect to a proposed merger transaction between the Registrant
               and Judge.

                      On December 1, 1995, the Registrant and Judge executed the
               Agreement and Plan of Merger (the "Merger Agreement") with
               respect to the merger transaction proposed by the Letter of
               Intent. The Merger Agreement was amended effective December 20,
               1995 and February 26, 1996.

                      During 1996 and prior to the consummation of the Merger,
               Judge had the following equity transactions:

                 *   3,665,770 shares of Company preferred stock were converted
                     into Company common stock;

                 *   The Company's Board of Directors resolved to increase the
                     authorized preferred stock by 1,150,000 shares and divide
                     such shares into 1,125,000 shares of Series A Convertible
                     Preferred Stock, par value of $.01 and 25,000 shares of
                     Series B Preferred Stock, par value $.01;

                 *   $1,520,000 of advances from Judge, Inc./Judge Technical
                     Services, Inc. were converted into 1,500 shares of
                     Company Series B Preferred Stock;

                 *    The Company raised approximately $888,000 (net of
                      related costs of approximately $208,000) in a private
                      placement offering of Series A Convertible Preferred
                      Stock. 822,628 shares were issued in the offering at a
                      price per share of $1.33. The Preferred A Stock is
                      convertible at the holder's option, and conversion is
                      mandatory at the time of a subsequent public offering
                      of common stock in excess of $5 million dollars. The
                      Preferred Stock carries a cumulative dividend of 7% per
                      year and holders will have a liquidation preference
                      prior to the common stock shareholders and all other
                      existing classes. In the event Judge Imaging System,
                      Inc. (the surviving company) has not closed on a
                      subsequent public offering by the eighth anniversary of
                      the merger, then the Company will have the right to
                      redeem the stock.




                                      - 8 -


<PAGE>



                           JUDGE IMAGING SYSTEMS, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                     SIX MONTHS ENDED JUNE 30, 1996 AND 1995




NOTE 1.        DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
               ACCOUNTING POLICIES  (Continued)

                      The merger transaction was consummated effective February
               29, 1996. A brief summary of the merger transaction follows:

                  *   In the merger, Judge, a privately-owned corporation, was
                      merged into DataImage, with DataImage as the surviving
                      entity in the merger. Following the merger, the separate
                      existence of Judge ceased, and DataImage continued as the
                      surviving corporation under Delaware law using the name
                      "Judge Imaging Systems, Inc." (the "Surviving
                      Corporation") with all of the rights, powers, and
                      privileges, and subject to all of the duties and
                      liabilities of DataImage and Judge combined. Following the
                      merger, the Surviving Corporation continued to be a public
                      reporting company;

                  *   At the effective time of the merger, the Certificate of
                      Incorporation of DataImage as the Surviving Corporation
                      was amended to: change its name to Judge Imaging
                      System, Inc., and to authorize a class of 5,000,000
                      shares of preferred stock (the "Preferred Stock") in
                      addition to the 10,000,000 shares of common stock
                      previously authorized ("Common Stock"). The 5,000,000
                      shares of Preferred Stock are divided into 1,125,000
                      shares of Series A Convertible Preferred Stocks and
                      1,500 shares of Series B Convertible Stock; the
                      remaining shares of Preferred Stock are "blank check"
                      shares issuable at the discretion of the Board of
                      Directors of the Surviving Corporation. The Series A
                      Convertible Preferred Stock and the Series B
                      Convertible Preferred Stock of the Surviving
                      Corporation have essentially the same rights and
                      privileges as the Series A Convertible Preferred Stock
                      and the Series B Preferred Stock of Judge existing
                      immediately prior to the merger. The Series A
                      Convertible Preferred Stock is convertible into Common
                      Stock at a 1 to 1 ratio, has a preference in
                      liquidation, and bears a 7% cumulative dividend. The
                      Series B Preferred Stock is nonvoting, nonconvertible,
                      has no liquidation preference, and bears a 10%
                      cumulative dividend;

                  *   At the effective time of the merger, each DataImage
                      shareholder automatically received one share of Surviving
                      Corporation Common Stock in exchange for every 31.960868
                      shares of issued and outstanding DataImage Common Stock
                      owned by such shareholder as of the effective time of the
                      merger;

                  *   At the effective time of the merger, each holder of Judge
                      Common Stock automatically received shares of Surviving
                      Corporation Common Stock. The number of shares received
                      was calculated as one share of Surviving Corporation
                      Common Stock for every 2.832693723 shares of Judge Common
                      Stock held;


                                      - 9 -

<PAGE>

                           JUDGE IMAGING SYSTEMS, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                     SIX MONTHS ENDED JUNE 30, 1996 AND 1995





NOTE 1.        DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
               ACCOUNTING POLICIES  (Continued)

                  *   At the effective time of the merger, each Judge
                      shareholder received one share of Surviving corporation
                      Series A Convertible Preferred Stock for each share of
                      Judge Series A Convertible Preferred Stock held, and one
                      share of Surviving Corporation Series B Preferred Stock
                      for each share of Judge Series B Preferred Stock held;

                  *   The conversion ratios were calculated so that, after
                      giving effect to certain Reserved Shares for issuance
                      to employees following the merger and assuming the
                      conversion of all Series A Convertible Preferred Stock
                      to Common Stock, there are approximately 5,000,000
                      shares of Common Stock of the Surviving Corporation
                      outstanding immediately following the merger, of which
                      holder of DataImage Common Stock immediately prior to
                      the merger will receive in the aggregate approximately
                      5% (approximately 250,000 shares) and the holder of
                      Judge Common Stock and Series A Convertible Preferred
                      Stock immediately prior to the merger will receive in
                      the aggregate approximately 95% (approximately
                      4,750,000 shares). The Series B Preferred Stock is not
                      included in the foregoing percentage calculations. As a
                      result, the business combination was accounted for as a
                      "reverse acquisition" whereby Judge, in substance, was
                      to acquire DataImage, allocating the fair value of
                      Judge stock exchanged over the relative fair value of
                      assets and liabilities of DataImage (assumed to equal
                      its book value) prior to Judge being merged into
                      DataImage (surviving corporation). No value was to be
                      ascribed to DataImage's net loss carryforwards as a
                      result of limitations on these carryforwards subsequent
                      to the change in control. DataImage was to remain a
                      Registrant under the Securities and Exchange Commission
                      Rule.

                      As a consequence, a change in control of the Registrant
               has occurred effective upon the consummation of the merger. The
               consideration given for such change in control is the exchange of
               certificates described in the Merger Agreement and previously
               described above. The basis of the change in control includes a
               change in the Directors of the Registrant and change in the share
               ownership of the Registrant.




                                     - 10 -

<PAGE>




                           JUDGE IMAGING SYSTEMS, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                     SIX MONTHS ENDED JUNE 30, 1996 AND 1995




NOTE 1.        DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
               ACCOUNTING POLICIES  (Continued)

                      The persons from whom control of the Registrant was
               acquired upon the merger pursuant to the exchange of securities
               described above were Canaan Capital Limited Partnership and
               Canaan Capital Offshore Limited Partnership C.V. (collectively
               the "Partnerships"). The Partnerships acquired control of the
               Registrant pursuant to an agreement with the Registrant dated
               November 20, 1995 (the "Agreement"). As a result of the
               Agreement, the Partnerships immediately acquired an aggregate of
               1,700,000 shares of DataImage Common Stock in addition to the
               362,499 shares previously held, resulting in the ownership by the
               Partnerships as of the record date of the Special Meeting of
               Shareholders of approximately 51.4% of the issued and outstanding
               shares of DataImage Common Stock, and effective voting control of
               the Registrant as of such date. As a further result of the
               Agreement, immediately prior to the closing of the merger, the
               Partnerships acquired in the aggregate an additional 3,980,214
               shares of DataImage Common Stock, resulting in the ownership as
               of the closing of the proposed merger transaction by the
               Partnerships of 6,042,713 of the 7,990,217 shares issued and
               outstanding at that time, representing approximately 75.6% of
               such issued and outstanding shares of DataImage Common Stock.

                      Judge and DataImage anticipate that the proposed merger
               transaction will qualify as a "reorganization" to Section 368(a)
               of the Internal Revenue Code of 1986, as amended (the "Code"),
               and that Judge and DataImage will each be a party to the
               reorganization within the meaning of section 368(b) of the Code.
               Judge and DataImage further anticipate that no gain or loss will
               be recognized by Judge or DataImage by reason of the merger.

                      At June 30, 1996, the capital structure of the Company is
               as follows:

                      Common Stock -

                      $.01 par value, 10,000,000 shares authorized, 3,980,141
                      shares issued and outstanding;

                      Preferred Stock -

                      5,000,000 shares authorized divided into 1,125,000 shares
                      of Series A, 1,500 shares of Series B with the remainder
                      "blank check" shares; 822,628 shares of Series A issued
                      and outstanding and 1,500 shares of Series B issued and
                      outstanding.


                                     - 11 -


<PAGE>



                           JUDGE IMAGING SYSTEMS, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                     SIX MONTHS ENDED JUNE 30, 1996 AND 1995




NOTE 1.        DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
               ACCOUNTING POLICIES  (Continued)

               Revenue Recognition and Deferred Revenues

                      Revenues are recorded as income in the period in which the
               merchandise is shipped or the services are rendered. Revenues
               billed in advance for warranties and maintenance contracts are
               deferred and recorded as income in the period in which the
               services are rendered.

                      Revenue from sales of the Company's image-processing
               systems is recognized at the date of shipment of the system,
               provided that any work to complete installation of the systems is
               routine in nature and costs are not significant. The system
               components are assembled and tested with the developed software
               in the Company's facilities prior to delivery. Where installation
               is significant to the completion of the contract revenue is
               recognized when the installation is completed and accepted by the
               customer.

                      Software incorporated into the systems is licensed under a
               perpetual, non-exclusive, non-transferable license, and revenue
               is recognized as part of the completed system. Service contract
               revenue is recorded ratably over the term of the contract.
               Substantially all service contracts expire within the year ending
               December 31, 1996.

                      At June 30, 1996, $273,690 of warranty, maintenance and
               service contract revenue has been deferred.

               Inventories

                      Inventories of computer and related supplies and equipment
               held for resale are valued at the lower of cost (first-in,
               first-out) or market.

               Management's Estimates

                      The preparation of financial statements in conformity with
               generally accepted accounting principles requires management to
               make estimates and assumption that affect the reported amounts of
               assets and liabilities and disclosure of contingent assets and
               liabilities at the date of the financial statements and reported
               amounts of revenues and expenses during the reporting period.
               Actual results could differ from those estimates.


                                     - 12 -


<PAGE>

                           JUDGE IMAGING SYSTEMS, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                     SIX MONTHS ENDED JUNE 30, 1996 AND 1995




NOTE 1.        DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
               ACCOUNTING POLICIES  (Continued)

               Income Taxes

                      Deferred taxes are accounted for in accordance with
               Statement of Financial Accounting Standards ("Statement") No.
               109, "Accounting for Income Taxes." The Statement requires the
               use of the liability method to account for income taxes. Deferred
               income taxes are provided for the difference between the tax
               basis of an asset or liability and its reported amount in the
               financial statements at the currently enacted tax rates that are
               expected to be in effect when the taxes are actually paid or
               recovered.

                      Deferred income taxes arise principally from temporary
               differences between financial and income tax reporting, including
               differences relating to depreciation methods used, amounts
               recorded for inventory capitalization, the availability of net
               operating loss carryforwards and certain other differences.
               Deferred income tax assets are reduced by a valuation allowance
               when, based on the weight of evidence available, it is more
               likely than not that some portion or all of the deferred tax
               assets will not be realized.

                      Deferred income taxes are primarily the result of net
               operating loss carryforwards and are completely reduced by a
               valuation allowance at June 30, 1996.

               Net Income (Loss) Per Share

                      Net income (loss) per share and fully diluted net income
               (loss) per share attributable to common shareholders is based on
               the weighted average number of shares of common stock outstanding
               during the periods. The assumed conversion of certain convertible
               preferred stock has not been considered in the calculations of
               loss per share in 1996, since the effect of such
               conversions/exercise would be antidilutive. The weighted average
               number of shares outstanding during the six months ended June 30,
               1996 and 1995 were 3,435,436 and 2,333,204, respectively. The
               weighted average number of shares outstanding, primary and fully
               dilutive, during the three months ended June 30, 1996 and 1995
               were 3,980,141 and 2,333,204, respectively.



                                     - 13 -

<PAGE>

                           JUDGE IMAGING SYSTEMS, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                     SIX MONTHS ENDED JUNE 30, 1996 AND 1995





NOTE 2.        PRO-FORMA RESULTS OF OPERATIONS

                      The following sets forth the combined results of operation
               for both Judge and DataImage for the six months ended June 30,
               1996 and 1995, as if the business combination occurred at January
               1, 1996 and 1995, respectively.


<TABLE>
<CAPTION>
                                   THREE MONTHS ENDED             SIX MONTHS ENDED
                                        JUNE 30,                       JUNE 30,
                                  --------------------           -------------------
                                  1996            1995           1996           1995
                                  ----            ----           ----           ----
<S>                           <C>            <C>            <C>             <C>

Net revenues                   $ 3,685,156    $ 1,635,565    $ 6,277,191    $ 4,023,274

Cost of Revenues                 2,663,126      1,345,172      4,689,435      3,015,388
                               -----------    -----------    -----------    -----------

Gross Profit                     1,022,030        290,393      1,587,756      1,007,886

Operating Expenses:
    Selling, general
    and administrative           1,108,272        633,685      1,945,961      1,190,922
                               -----------    -----------    -----------    -----------

Operating Profit (Loss)            (86,242)      (343,292)      (358,205)      (183,036)

Other Income (Expenses), net       (42,632)       (80,991)       (89,999)      (140,056)
                               -----------    -----------    -----------    -----------

Net Income (Loss)              ($  128,874)   ($  424,283)   ($  448,204)   ($  323,092)
                               ===========    ===========    ===========    ===========
</TABLE>


                      Notes to Pro-Forma results of Operations:

               (1)    Interest expense adjusted due to the conversion of
                      DataImage, Inc.'s Canaan Capital stockholders' notes
                      payable to common stock.

               (2)    Primary and fully-diluted net income (loss) per share of
                      common stock is calculated as follows (the assumed
                      conversion of certain convertible preferred stock has not
                      been considered in the calculation since the effect of
                      such conversion would be antidilutive):


                                     - 14 -

<PAGE>

                           JUDGE IMAGING SYSTEMS, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                     SIX MONTHS ENDED JUNE 30, 1996 AND 1995





NOTE 2.        PRO-FORMA RESULTS OF OPERATIONS (Continued)


<TABLE>
<CAPTION>
                                         THREE MONTHS ENDED            SIX MONTHS ENDED
                                               JUNE 30,                     JUNE 30,
                                         -------------------           ------------------
                                         1996           1995           1996          1995
                                         ----           ----           ----          ----
           
<S>                                  <C>           <C>             <C>            <C>
Net Income (Loss)                    ($  128,874)   ($  424,283)   ($  448,204)   ($  323,092)

7% Cumulative Dividend On
    Series A Preferred Stock             (19,200)       (19,200)       (38,400)       (38,400)

Less 10% Cumulative Dividends
    On Series B Preferred Stock          (37,500)       (37,500)       (75,000)       (75,000)
                                     -----------    -----------    -----------    -----------

Net Loss Attributable To
    Common Shareholders              ($  185,574)   ($  480,983)   ($  561,604)   ($  436,492)
                                     ===========    ===========    ===========    ===========


Weighted Average Number of
    Shares                           $ 3,980,141    $ 3,980,141    $ 3,980,141    $ 3,980,141
                                     ===========    ===========    ===========    ===========

Net Loss Per Share Attributable To
    Common Shareholders              ($     0.05)   ($     0.12)   ($     0.14)   ($     0.11)
                                     ===========    ===========    ===========    ===========


</TABLE>


                                     - 15 -

<PAGE>



                           JUDGE IMAGING SYSTEMS, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                     SIX MONTHS ENDED JUNE 30, 1996 AND 1995



NOTE 3.        NOTE PAYABLE, BANK

                      During 1995, the Company consolidated its line of credit
               along with certain affiliated entities lines into a $5,500,000
               line of credit. During 1996, the Bank line of credit was
               increased to $6,400,000. Outstanding borrowings relating to the
               Company at June 30, 1996 were $1,406,960. Interest on the line is
               prime plus 1% (9.5% at December 31, 1995 and 9.25% at June 30,
               1996). Maximum borrowings under the new facility are limited to
               80% of qualified accounts receivable, as defined. The line of
               credit was originally due in full on May 31, 1997, but was
               extended by the Bank until 1998. The line is collateralized by
               substantially all of the Company's assets as well as
               substantially all of Judge, Inc. and Judge Technical Services,
               Inc.'s assets, is personally guaranteed by certain shareholders
               and certain affiliated companies. The line contains financial
               covenants, certain of which were in violation at June 30, 1996
               but which were waived by the Bank. In addition, the Company, as
               well a each of its affiliates, is jointly and severally
               responsible for all of the debt outstanding under the line.

                      Included in accounts payable and accrued expenses at June
               30, 1996 were approximately $550,000 of bank overdrafts.

NOTE 4.        RELATED PARTY TRANSACTIONS

                      The Company had advances from Judge, Inc. and Judge
               Technical Services, Inc. amounting to $1,450,450 at December 31,
               1995. These advances increased to $1,520,000 during the first
               quarter of 1996. At the effective time of the Merger, these
               advances were converted into 1,500 shares of Company Series B
               Preferred Stock (the "shares"). The shares are not convertible,
               nor do they have any liquidation preference and carry a 10%
               cumulative annual dividend. Dividend payments are permitted,
               contingent upon certain profit goals set forth by the Company.
               Partial and full redemption of the $1,500,000 face amount is
               permitted, contingent upon the dollar value of proceeds raised in
               a subsequent public offering. Subsequent to the closing of the
               Merger, such shares were converted into 1,500 shares of Series B
               Preferred Stock of the surviving corporation from the merger. The
               Surviving Corporation shares have the same rights and privileges
               as the predecessor shares, and is mandatorily redeemable
               automatically upon the tenth anniversary of issuance or upon a
               subsequent public offering of at least $6,000,000.

                      During the six months ended June 30, 1996 and 1995, the
               Company billed a subsidiary of Judge, Inc. for consulting and
               related technical advisory services in the amount of $45,000 and
               $240,000, respectively. Such amounts are included in net revenues
               in the accompanying statement of operations. During the six
               months ended June 30, 1996 and 1995, the Company sold
               approximately $394,000 and $124,000, respectively, of
               computer-related equipment to Judge, Inc.
               and/or its subsidiaries.


                                     - 16 -


<PAGE>

                           JUDGE IMAGING SYSTEMS, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                     SIX MONTHS ENDED JUNE 30, 1996 AND 1995





NOTE 5.        PREFERRED STOCK

                      Holders of preferred stock at December 31, 1995 were
               entitled to vote as a single class with the holders of the
               Company's common stock. In addition, holders of preferred stock
               were entitled to receive cumulative dividends at the annual rate
               of $.005 per share. Cumulative dividends in arrears at December
               31, 1995 were approximately $74,000. No dividends were declared
               or paid in 1995. During 1996, preferred stockholders waived such
               dividends due and converted their preferred stock into common
               stock (see Note 1).


NOTE 6.        STATEMENT OF CASH FLOWS

               Supplemental Disclosure of Noncash Financing Transactions:

               During 1996, $1,520,000 of advances from affiliates were
               converted to mandatorily redeemable preferred stock.

               During 1996, $366,577 of preferred stock was converted to common
               stock.

               During 1996, a $50,000 note receivable was forgiven due to the
               business combination.

               Supplemental Disclosure of Noncash Investing Activities:

               During 1996, the Company entered into certain financing
               arrangements for the purchase of property and equipment in the
               amount of approximately $23,000.

               During 1995, the Company entered into certain financing
               arrangements for the purchase of property and equipment in the
               amount of approximately $15,000.




                                     - 17 -



<PAGE>

                           JUDGE IMAGING SYSTEMS, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

                     SIX MONTHS ENDED JUNE 30, 1996 AND 1995




NOTE 6.        STATEMENT OF CASH FLOWS (Continued)

               Supplemental Disclosure of Noncash Investing and Financing
               Activities:

               Effective February 29, 1996, Judge Computer Corporation and
               DataImage effected a business combination:

                  Acquisition of Business:
                    Inventories                                      $  39,101
                    Accounts Receivable                                104,127
                    Property and Equipment                             150,034
                    Other Assets                                        10,780
                                                                     --------- 
                                                                       304,042
                                                                     --------- 

                    Accounts Payable and Accrued Expenses              (82,087)
                    Due to Judge                                      (100,000)
                    Deferred Revenue and Customer Deposits            (362,037)
                                                                     --------- 
                                                                      (544,124)
                                                                     --------- 

                    Net liabilities assumed in business combination  ($240,082)
                                                                     ========= 


                                     - 18 -


<PAGE>


Item 2.               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS FOR THE SECOND
                      QUARTER ENDING AND THE SIX MONTHS ENDING JUNE 30, 1996


Results of Operation

Second quarter 1996 and six months ending June 30, 1996 compared to second
quarter 1995 and six months ending June 30, 1995.

                        The Company reflected an improvement in operations for
the second quarter of 1996 versus the first quarter of 1996. The Company
lost $128,874 before preferred dividends for the second quarter of 1996 as
compared to $296,409 for the first quarter of 1996. The loss of $128,874 for the
second quarter of 1996 is still an improvement when compared to the loss of
$405,312 for the second quarter of 1995. This result is attributable to a 164%
increase in net revenue and a corresponding increase in gross profit margin from
11% to 28%, but was also offset by an increase operating expenditures of 101%
compared to the corresponding period in 1995.

                        For the six months ending June 30, 1996, however, the
Company reflected a loss before preferred dividends of $425,283 versus a
loss for the same period in 1995 of $249,598. This $175,685 increase in loss is
due primary to increased Operating Expenses (selling, general and
administration) which was primarily due to increases in staffing necessary to
support the revenue growth. Preferred dividends earned increased by $52,117 for
the second quarter of 1996 as compared to the second quarter of 1995, and
increased $66,435 for the six months ended June 30, 1996 compared to June 30,
1995. These increases are a result of the issuance of additional preferred stock
to certain investors concurrent with the effectiveness of the merger with
DataImage, Inc. on February 29, 1996.

                        Backlog of orders as of June 30, 1996 was $1,800,000
compared to $703,000 at June 30, 1995. This 156% increase is primarily
attributable to increased business in the Company's imaging operations.

                        Revenues for the second quarter of 1996 increased 166%
as compared to revenues for the second quarter of 1995. This increase is
attributable to a 69% increase in network and service revenues as compared to
the network and service revenues for the second quarter of 1995, as well as a
465% increase in the imaging revenues for the second quarter of 1996. Revenues
for the six months ending June 30, 1996 increased 82% as compared to the same
period for 1995. This increase is mostly attributable to the above-referenced
increase in imaging revenues, which was associated with the Company's increased
marketing effort.

                        Gross profit margin for the second quarter of 1996 was
28% versus 11% for the second quarter of 1995. This increase in margin is a
result of the realization of economies of scales as well as an increase in
imaging revenues, which produce higher margins. For the same reasons, the gross
profit margin for the six months ending June 30, 1996 increased to 25% versus
22% for the same period in 1995.

                        Operating expenditures increased approximately 147% for
the second quarter of 1996 and 117% for the six months ending June 30, 1996
versus the comparable periods in the prior year. This increase is primarily
attributable to the Company's increase in staffing associated with increased
sales. Staffing levels increased to 85 employees as of June 30, 1996 versus 50
employees as of June 30, 1995.

                                     - 20 -


<PAGE>


Liquidity and Capital Resources

                        The Company's principal lender has agreed to increase
the Company's credit facility to accommodate its continued growth. The
Company believes that the increase in the bank credit facility as well as cash
generated from operations will be sufficient to support the anticipated level of
operations and capital expenditures through fiscal 1996.

Financial Condition at June 30, 1996 versus December 31, 1995.

                        Current assets increased to $3,017,000 as of June 30,
1996 from $2,322,000 as of December 31, 1995. This increase was primarily
attributable to an increase in receivables of $644,000 associated with the
increased sales, with the balance of the increase originating from higher
inventory levels. Offsetting the increase in current assets of $696,000 was an
increase in current liabilities of $714,000. These accounts reflect the
increased liabilities attributable to a higher level of business activity,
increased revenues and the merger of DataImage, Inc.

                        Property, plant and equipment increased from $195,000
as of December 31, 1995 to $440,000 as of June 30, 1996. This increase
reflects the DataImage acquisition as well as the equipment needed to support
the Company's revenue growth.

                        Notes payable to the Company's principal lender
decreased in the second quarter by $131,000 from December 31, 1995, due to
the utilization of a portion of the private placement proceeds. The line of
credit relating to notes payable contains financial covenants, certain of which
were in violation at June 30, 1996 but which were waived by the lender. The
Company received net cash proceeds from the issuance of Preferred Series "A"
stock on February 29, 1996 of cash of approximately $888,000, which provided
working capital to assist the Company's growth in 1996.