U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

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

         For the fiscal year ended June 30, 2000

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the transition period from __________ to __________.


                         Commission file number: 0-21853

                         CADAPULT GRAPHIC SYSTEMS, INC.
                 (Name of small business issuer in its charter)

                DELAWARE                             87-0475073
     (State or other jurisdiction of              (I.R.S. Employer
     incorporation or organization)              Identification No.)

     110 Commerce Drive, Allendale, New Jersey              07401
      (Address of principal executive offices)            (Zip Code)

                    Issuer's telephone number: (201) 236-1100

         Securities registered under Section 12(b) of the Exchange Act:

     Title of each class         Name of each exchange on which registered
     -------------------         -----------------------------------------
     Common Stock                AMEX

         Securities registered under Section 12(g) of the Exchange Act:

                                  Common Stock
                                ----------------
                                (Title of class)

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 90 past days.
YES [X] NO [ ]

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will 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-KSB
or any amendment to this Form 10-KSB. [ ]

     State issuer's revenues for its most recent fiscal year: $13,489,839

     The aggregate market value of voting and non-voting stock of the issuer
held by non-affiliates on September 22, 2000 was $4,387,500.


<PAGE>

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

     As of September 22, 2000, 3,228,887 shares of the issuer's common stock
were issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None.

    Transitional Small Business Disclosure Format (check one): YES [ ] NO [X]

                                        2


<PAGE>


                         CADAPULT GRAPHIC SYSTEMS, INC.

                                TABLE OF CONTENTS


PART I                                                                     PAGE

Item 1.    Description of Business                                           4
Item 2.    Description of Property                                          10
Item 3.    Legal Proceedings                                                11
Item 4.    Submission of Matters to a Vote of Security Holders              11

PART II

Item 5.    Market for Common Equity and Related Stockholder Matters         12
Item 6.    Management's Discussion and Analysis or Plan of Operation        14
Item 7.    Financial Statements                                             17
Item 8.    Changes In and Disagreements With Accountants on
           Accounting and Financial Disclosure                              36

PART III

Item 9.    Directors, Executive Officers, Promoters and Control
           Persons; Compliance With Section 16(a) of the Exchange Act       37
Item 10.   Executive Compensation                                           40
Item 11.   Security Ownership of Certain Beneficial Owners and
           Management                                                       45
Item 12.   Certain Relationships and Related Transactions                   47
Item 13.   Exhibits and Reports on Form 8-K                                 49

                                        3




<PAGE>


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

Our Organization History

         We are a Delaware corporation named Cadapult Graphic Systems, Inc. We
originally incorporated under the laws of the State of Utah on August 11, 1983
under the name Communitra Energy, Inc. On July 16, 1985, we filed with the
Secretary of State of the State of Utah Articles of Amendment to our Articles of
Incorporation, changing our name to Seafoods Plus, Ltd. We did not engage in any
substantive business activity from approximately 1988 to June 18, 1998.

         On June 18, 1998, we acquired Cadapult Graphic Systems Inc., a
privately-held New Jersey corporation formed on May 1, 1987 ("CGSI"), in a
transaction viewed as a reverse acquisition. CGSI was a provider of computer
graphics systems, peripherals, supplies and services to visual communicators and
graphics professionals. Pursuant to an Agreement and Plan or Reorganization
dated June 5, 1998, between us, CGSI, all of the shareholders of CGSI, Jenson
Services, Inc., a Utah corporation, Duane S. Jenson and Jeffrey D. Jenson, we
issued 1,650,000 shares of common stock to the shareholders of CGSI in exchange
for all of the outstanding common stock of CSGI. Pursuant to the acquisition,
the shareholders of CSGI became the controlling shareholders of our company, our
officers and directors resigned and elected the CSGI nominees in their places,
and CSGI became our wholly-owned subsidiary.

         On August 14, 1998, we reincorporated under the laws of the State of
Delaware as Cadapult Graphic Systems, Inc. On August 14, 1998, CGSI, our
wholly-owned New Jersey subsidiary, merged into Cadapult.

         In January 1999, we acquired the assets of Tartan Technical, Inc., a
computer graphics products reseller in Massachusetts with $3.5 million of annual
revenues.

         In June 1999, we acquired the assets of WEB Associates, Inc., a
computer graphics products reseller in Pennsylvania with $2.7 million of annual
revenues.

         On August 11, 1999, we formed Media Sciences, Inc., as a wholly-owned
New Jersey subsidiary, for the manufacture and distribution of digital color
printer supplies.

         In August 1999, we amended our Certificate of Incorporation to change
the authorized capital from 50,000,000 shares of common stock, par value $.001
per share, to 25,000,000 shares consisting of 20,000,000 shares of common stock,
par value $.001 per share, and 5,000,000 shares of preferred stock, par value
$.001 per share.

         In December 1999, Media Sciences acquired the assets of ultraHue, Inc.,
a New Mexico corporation, a manufacturer of workgroup color printer supplies.

         As of September 22, 2000, we had 3,228,887 shares of common stock
issued and outstanding and 550,000 shares of preferred stock issued and
outstanding.

         We have not been subject to bankruptcy, receivership or any similar
proceedings.


Our Business

         We are a manufacturer of supplies for digital workgroup color printers
and a provider of computer graphics systems, peripherals, supplies and service
to visual communicators and graphics professionals. We are comprised of two
business units, Media Sciences and Reseller Operations.

                                        4


<PAGE>

         Our wholly owned subsidiary, Media Sciences, manufactures and
distributes supplies, including solid ink, toner and transparency material for
use in Tektronix color printers by Xerox and in QMS color printers. Media
Sciences distributes these products internationally through a network of dealers
and distributors. We intend to grow this business through expansion of our
product line, additional marketing, expansion of our distribution channels and
potentially through joint ventures.

         Our Reseller business develops and implements programs that foster our
Media Sciences business. One such program is No-Cap Color, where color printers
are provided to end users at no charge in exchange for a commitment to purchase
our Media Sciences supplies. Our Reseller business is also a systems integrator
or value added reseller of computer graphics equipment and supplies. We sell
publishing software and workstations, file servers, networks, color scanners,
and color printers and copiers. These products are sold to end users in the
following target markets: Advertising and marketing companies, printers, quick
print shops, service bureaus and the broad corporate market for color printers.

         We have several Internet sites for the marketing and sale of our
products over the Internet. These sites include three e-commerce sites, three
informational or marketing sites, and two Internet based service sites. We plan
to expand our Internet presence through additional e-commerce, informational and
Internet based service sites.

         Operating Strategy

         We have a strategic objective of becoming the leading independent
manufacturer of supplies for digital color business printers. We intend to
achieve this objective through an expansion of our product line, our
distribution and our No-Cap Color printer program.

         The opportunity to sell Media Sciences supplies exists in the installed
base of workgroup, or business, color printers. The installed base are those
printers that have been acquired by end-users and are being used today. Almost
all of these end users are using OEM (Original Equipment Manufacturer) supplies,
or those being produced by, and sold under the label of, the printer
manufacturer such as Tektronix, Xerox or QMS. We believe that as color printers
become more common in the workplace, a subset of these users will seek
alternative supplies to the OEM brand, primarily as a cost savings. If we look
at the color market as being analogous to the monochrome printer and supply
market, an opportunity exists for independent supply manufacturers to achieve
a 20% market share in the aggregate. Our objective is to be the leader within
this market space by providing high quality, less expensive color printer
supplies through the same distribution channels as the OEM supplies are sold.

         In addition to penetrating the installed base, we intend to create a
significant new set of color printer users who are contractually committed to
our supplies. We are striving to achieve this objective through our No-Cap Color
printer program. We believe this program provides a unique opportunity for end
users who are not currently using color printing technology to migrate to color
without the cost and technology risk of buying a printer outright.

         Principal Products and Services

Media Sciences
--------------

         Solid Ink. We manufacture and distribute solid ink for use in the
Tektronix Phaser 340, 350, 360 and 840 color printers, and in the newly
introduced Tektronix Phaser 850 color printer by Xerox. Our ink is sold under
our label, and the label of many of our dealers and distributors. We offer
flexible, custom packaging to meet the needs of our distribution partners.
Our solid ink is typically sold to end users at 20% to 50% less than the
price of the OEM brand.

         Toner Products. We offer two lines of toner products, our TC line and
our RM line. Our TC line of toners includes toner for the Tektronix Phaser 560
and 780. These are new toners offered at a substantial discount to those of the
OEM. Our RM line of toners are remanufactured toners for use in Tektronix Phaser
560, 740 and 780 and QMS Magicolor II color printers. As with our ink, our
toners are sold under our brand and that of our distributors. We plan to expand
our toner offerings both within the Tektronix line of color printers and to
other brands as well.

         Media.  We distribute transparency material for use in solid ink and
color laser printers.

                                        5


<PAGE>

Reseller Operations
-------------------

         No-Cap Color. Our No-Cap Color program provides a customer with one or
more workgroup color printers, at no charge, in return for a commitment to
purchase certain supplies from us. These printers have retail values of up to
$6,000 and include service throughout the duration of the program. We offer
several printers under this program including two business printers, one solid
ink and one laser, and one graphic arts printer. We target the broad corporate
market with this program, as well as certain vertical markets. The printer
remains the property of the company or its assignees at all times.

         Our No-Cap Color program offers benefits to both the end users and
Cadapult. The end users benefit by obtaining color printing technology without a
capital investment and without service costs. Their costs are limited to the
purchase of supplies that they would need to purchase anyway. We benefit by
creating new customers committed to our supplies, thereby creating a
high-margin reoccurring revenue stream.

         Printers for our No-Cap Color program are purchased outright and/or
leased to us by third party leasing companies.

         Systems. Our reseller operations business sells high end computer
graphics equipment and software, including publishing software and workstations,
file servers, networks, color scanners and color printers and copiers. We
typically purchase directly from the manufacturers of the equipment or through
distributors of those products.

         Supplies. Approximately one third of our revenues are derived from the
sale of digital color printer and copier supplies directly to end users. These
supplies include both OEM (Original Equipment Manufacturer) and Media Sciences
supplies.

         Hardware Service and Support. We provide on-site and depot hardware
services on a contract and/or time and materials basis. We repair color
printers, color copiers, plotters and complex graphic arts file servers. We have
grown this business through the active marketing of our services to both our
historical customer base and to those customers acquired by us through the
reseller acquisitions. We plan to leverage our infrastructure and services
capability to add value to our Media Sciences supplies through warranty and
service programs for our Media Sciences customers.

eCadapult
---------

         eCadapult collectively describes our Internet sites, both information
and e-commerce. The mission of eCadapult is to establish an Internet-based
market within the creative graphics industry and the broad corporate market for
our supplies, computer graphics equipment and related services. We have
developed and launched one interactive service, SamplePrint.com, and two
e-commerce sites, Cadapult Storefront and GraphicSmart.com and several
informational web sites as well as our eService site.

         SamplePrint.com. SamplePrint.com is a website dedicated to helping
business buyers evaluate color printer and copier products over the Internet. We
expect SamplePrint.com to function as a one-stop evaluation resource for buyers
of color printing technology-an objective resource for buyers by providing
product information, technical benchmarks, sample prints and other services. A
critical decision making factor for buyers of color printing and copying
equipment is the ability to evaluate the buyers' own images and files printed
from the products. SamplePrint.com allows any buyer to submit files over the
Internet which will be printed and time tested on a variety of printer choices.
We expect the cost of these samples to be borne by the buyer if the manufacturer
of that printer is not a sponsor, or by the manufacturer if it is a sponsor. Our
goal is to provide all samples free to the buyer and have the manufacturers bear
the costs. This service provides a prospective business buyer with the ability
to make a purchase decision based on the image quality of the print samples and
additional information provided on the web site.

         We launched SamplePrint.com in June 1999, with initial sponsorship from
Hewlett-Packard and Okidata. We have seen limited traffic and orders through
SamplePrint.com since its inception.

                                        6


<PAGE>

         Cadapult Storefront. The Cadapult Storefront is our e-commerce site
where existing customers can purchase supplies and products from us directly
over the Internet, 24 hours a day, seven days a week. This storefont is intended
to be an alternative means of placing orders for existing customers. We
integrated our Cadapult Storefront with our accounting and order processing
system to increase efficiency in the ordering process. This e-commerce site
echoes the products and margins associated with our traditional reseller
business.

         GraphicsMart.com. We have developed, but not launched, an additional
e-commerce site as an alternative to the Cadapult Storefront and other Internet
commerce sites. This site will offer a broad selection of computer graphics
products at aggressive discounts. The purpose of this site is to capture the
price sensitive customers and businesses that are moving and will be moving to
the Internet as a source of supply.

         Nocapcolor.com (freecolorprinter.com) This informational web site,
reached through both of these web addresses, fully explains our No-Cap Color
program, its benefits and its commitments. In addition, interested parties can
'apply' for the program by filling out a web based form. The data from this form
provides a lead to Cadapult's sales team. This site has shortened the No-Cap
Color sales cycle.

         Marketing and Sales Plans

         We intend to increase the marketing and sales efforts of both Media
Sciences and our reseller business. The goal of these efforts is to increase
revenues through increased market awareness of our products and programs. Our
reseller business is focusing its sales and marketing efforts around No-Cap
Color, while Media Sciences is focusing its sales and marketing on building our
distribution channel.

         We are expanding our Media Sciences distribution channels through
outside sales efforts and direct mail. We intend to strengthen these channels
through performance based sales incentive programs. We plan to build end-user
awareness of our supplies through advertising and marketing campaigns. Further
we are evaluating a program under which we would bundle printer service with our
supplies to provide even greater value add and impart greater confidence in our
supplies.

         We have initiated an aggressive marketing campaign for No-Cap Color.
The goal of this campaign is to drive potential customers to our No-Cap Color
web site where they can prequalify themselves for the program. Leads generated
through this site are followed up by inside sales people. We are using, or plan
to use, a combination of direct mail, e-mail, affiliate marketing and banner
advertising to drive traffic to www.nocapcolor.com.

         Industry and Market Overview

         The office environment has been dominated by monochrome (black and
white) printers and color monitors. Over the last several years, color printers
have been introduced to the office environment for mission critical applications
where color is a must. Today, however, with the ever increasing quality and
speed of color printers and lower costs of acquisition and ownership, color is
migrating into the broad office environment. This migration has led to flat
monochrome printer sales and growing color printer sales as monochrome printers
are being replaced with color. Industry data shows a compound annual growth rate
in unit placements of 45% to 60% through the year 2004, with 1.4 million units
(including ink-jet) being placed next year alone. The U.S. workgroup color
printer installed base alone is forecasted to be in excess of 13 million units
by the end of 2004.

         Digital color printers (and copiers) create an ongoing requirement for
service and supplies. This reoccurring business often exceeds the original cost
of the device over its lifetime. Today, in the business color printer market,
supplies for these printers are manufactured and distributed by the printer
manufacturer (OEM). There exists little to no competition to these sources of
supplies. As adoption of color printing technology continues, we expect the
demand for alternative supplies to grow dramatically. In the black and white
printer market, third party supply manufacturers provide approximately 20-25% of
the supplies consumed. We believe that a similar opportunity exists in the color
market.

                                        7


<PAGE>

         The market for computer graphics, in which our Reseller business
operates, has exploded over recent years and is expected to continue to expand
at a rapid pace. We focus our products and services on the following markets:

                  -        Digital Pre-Press
                  -        Display Graphics
                  -        Presentation Graphics
                  -        Digital Imaging
                  -        Digital Color Printing

Each of these markets has seen the same evolution in the technology required to
produce high quality results. That is, a shift from very expensive and/or labor
intensive systems and processes to less expensive, automated solutions. This
technology shift has made these systems more accessible to a broader segment of
creative professionals. The result is an ever increasing use of color graphics
for communications.

         Distribution Methods of the Products and Services

         Media Sciences sells through an international network of dealers and
distributors. Our Reseller business sells through direct, Internet and telephone
sales efforts.

         Status of any Publicly Announced New Product or Service

         The development of GraphicsMart.com has been completed, however the
site has not been launched through any advertising or marketing campaign. We
anticipate formally launching this site in late 2000.

         Competition

         Media Sciences primarily competes with the Original Equipment
Manufacturer (OEM) of the printers for which we provide supplies, including
Xerox (selling under the Tektronix label) and QMS. Other than the OEMs, we are
not aware of any other significant competitor that provides solid ink or
toner for use in these printers.

         Approximately 90 days after we announced our No-Cap Color free color
printer program, Tektronix announced their own free color printer program. This
program has continued since Xerox acquired the color printer division from
Tektronix. The Xerox program is structured differently from ours, and we believe
there exists an opportunity for both programs.

         All facets of the reseller business are competitive. The color printer
business has become increasingly competitive as the printers have dropped in
price and as distribution of these printers has expanded through a dramatic
increase in the number of traditional and Internet based resellers. On the
systems side of our business, there are other systems integrators, VARs and
dealers that offer similar or the same products, some of which are substantially
larger and better funded than we are. Within our end user supply business, we
compete with other supply dealers as well as supply only companies that are
often national and catalog based companies. Based on the sales volumes of these
companies, it is often difficult to compete on a price basis. Therefore, we
compete based upon local delivery, better availability and choice of alternative
products.

         We also compete by servicing most of the products we sell, as opposed
to some of our competitors who rely on manufacturer or third party service. In
addition, we offer a unique seven day a week, 24 hours a day premium service on
many products, unlike many of our competitors.

         Principal Suppliers

         We typically purchase directly from the manufacturer of the equipment
or through a distributor of those products. We currently obtain certain
equipment and supplies from a limited number of sources of supply. Our principal
vendor is Tektronix, Inc., whose products account for approximately 25% of
total revenues in 2000 and 34% of total revenues in 1999. The loss of a vendor
agreement with Tektronix may have a material affect on our business and
operations.

                                        8


<PAGE>

         Dependence on Major Customers

         We did not have any customer who represented 10% or more of our
revenues in 2000, but the loss of one or more customers could have a material
affect on our business and operations.

         Intellectual Property

         We regard our trademarks, trade secrets, and proprietary technology and
similar intellectual property as critical to our success, and rely on trademark,
copyright and patent law, trade secret protection and confidentiality and other
agreements with our employees, customers, partners and others to protect our
proprietary rights. We have applied for the registration of trademarks in the
US.

         Need for Government Approval

         Not applicable.

         Government Regulation

         Not applicable.

         Research and Development

         Not applicable.

         Compliance with Environmental Laws

         Not applicable.

         Employees

         We currently have 42 full-time employees, including 7 management level
employees.

                                        9


<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTY

         We maintain our executive offices in approximately 7,212 square feet,
including 1,200 square feet of warehouse space, at Allendale, New Jersey,
pursuant to a lease expiring on March 31, 2002. We also maintain two sales
offices in the eastern United States and one manufacturing facility in New
Mexico. Our corporate offices and sales offices are adequately covered by
insurance.

         We are moving our corporate offices, including warehousing and
manufacturing facilities, to 15,400 square feet at Allendale, New Jersey,
pursuant to a lease commencing on or about January 1, 2001. We use substantially
all of the available space at our present corporate offices and need the larger
facilities to accommodate our increasing warehouse requirements, expanding
service facilities, and to support the manufacturing requirements of our new
Media Sciences division.

         The table below sets forth the location, approximate square footage,
approximate annual rent, use of each location and expiration date of each lease,
including the lease for our new corporate facility. Some of the leases
summarized in the table provide for moderate annual rental increases.

<TABLE>
------------------   -----------   -----------   ----------------------   -----------------
                     Approximate   Approximate                                   Lease
Location             Square Feet   Annual Rent              Use             Expiration Date
------------------   -----------   -----------   ----------------------   -----------------
<S>                     <C>          <C>         <C>                      <C>
40 Boroline Road,       15,400       $184,800    Executive Offices,       Dec. 31, 2010(1)
Allendale, NJ                                    Warehouse, and
                                                 Manufacturing Facility

110 Commerce Drive      7,212        $101,993    Executive Offices        Mar. 31, 2002(2)
Allendale, NJ

24 Westech Drive        4,000        $28,748     Sales Office             Oct. 31, 2000
Tyngsboro, MA

2551 Industry Lane      2,500        $12,000     Sales Office             June 30, 2001
Norristown, PA

5600 McLeod N.E.        2,600        $27,600     Manufacturing Facility   Dec. 31, 2000
Albuquerque, NM
------------------   -----------   -----------   ----------------------   -----------------
</TABLE>

(1)   Lease commences on or about January 1, 2001.
(2)   Lease may be earlier terminated without penalty upon commencement of the
      lease at 40 Boroline Road.

                                       10


<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

         In August 1999, we instituted an action against Tektronix, Inc. before
the Superior Court in New Jersey, which action has been moved before the United
States District Court for the District of New Jersey. In our lawsuit, we seek
certain injunctive relief and an indeterminate amount of damages, and allege
that Tektronix, Inc. violated the New Jersey Franchise Practices Act, the New
Jersey Antitrust Act, federal acts prohibiting restraints of trade, breach of
contract and unfair competition, among other claims. In our lawsuit, we allege
that, in August 1999, Tektronix, Inc. unilaterally, and without notice,
illegally terminated our Tektronix Premier Plus Reseller franchise because we
were selling a non-Tektronix product, Cadapult solid ink that was supplied to us
by ultraHue, Inc. We are informed that Tektronix controlled 97% of the U.S.
solid ink market for digital printers, which essentially were only Tektronix
printers. The results of our pending lawsuit could have material positive or
material adverse consequences to our business. We derived 45% of our fiscal year
1999 revenues from sales and services of Tektronix products. In 1999, the
Tektronix Premier Plus Reseller franchise accounted for about $80,000 of
our gross profit margin based on historical sales, which represented less than
3% of our overall gross profit margin. The lawsuit has only recently commenced,
and it may or may not be resolved in the near future. The lawsuit has been
transferred to the United States District Court, District of Oregon. Although we
do not believe that the loss of the lawsuit would materially impact our business
operations based on historical sales, the reseller franchise provides us with
business leads and promotion of our services which cannot be quantified;
therefore, we do not know and cannot predict whether the loss of all or a part
of this lawsuit will have a material adverse affect on our future business and
operations.

         On April 17, 2000, Xerox Corporation filed a motion before the United
States District Court, Western District of Washington at Seattle, for leave to
intervene in an action between ultraHue, Inc., and Tektronix, Inc. for joinder
of Cadapult and Media Sciences as additional parties and for leave to file and
serve an amended answer. In October 1999, ultraHue had initiated an action
against Tektronix claiming that Tektronix was engaging in illegal business
behavior by informing resellers and end users of Tektronix's belief that
ultraHue ink sticks had cause failures in Tektronix brand printers or had
produced inferior quality output, and by failing to provide marketing assistance
and rebates to resellers who market and sell ultraHue solid ink. Tektronix
denied the claims, stated various affirmative defenses and asserted a
counterclaim for unfair competition. ultraHue denied the counterclaims.  In
December 1999, our subsidiary, Media Sciences, acquired substantially all of the
assets of ultraHue. In January 2000, Xerox acquired substantially all of the
assets of Tektronix's printer business, including Tektronix's claims against
ultraHue. Through the motion for joinder, Xerox sought to intervene in the
action and to assert counterclaims against us alleging that we violated the
Lanham Act, engaged in unfair competition, infringed the design of the Tektronix
ink stick, and infringed certain claims of Xerox's patent, and to seek relief
that may include our profits on sales of ultraHue solid ink, or damages or a
reasonable royalty, injunctive relief from selling the current formulation of
the solid ink, and injunctive relief against patent infringement. On May 10,
2000, the court granted Xerox's motion to join Cadapult and Media Sciences in
the action. We were served with the amended answer on or about May 19, 2000. We
have not had the opportunity to adequately review the amended answer and
counterclaims, and therefore, we are not in a position to assess the validity of
the allegations or the effects of the lawsuit on our operations or financial
condition. While we presently believe that resolution of this litigation will
not have a material adverse affect on our consolidated financial position, an
unfavorable outcome could have a material adverse affect on our results of
operations or cash flow in the quarter or annual period in which this matter is
resolved. We presently intend to deny any wrongdoing, and we intend to
vigorously defend the action, but we can give no assurance that we will prevail
in this litigation.

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

         Not applicable.

                                       11


<PAGE>

                                     PART II

ITEM 5.  MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED
         STOCKHOLDER MATTERS

Market Information

         Beginning August 9, 2000, our common stock was quoted on the American
Stock Exchange under the symbol "GFX".

         From July 10, 1998 to August 8, 2000, our common stock was quoted on
the OTC Bulletin Board under the symbol "GRFX". Before July 10, 1998, our common
stock was listed in the "pink sheets" of the National Quotation Bureau, Inc. and
on the OTC Bulletin Board under the symbol "SEUS". Before the time periods
indicated above, an active trading market for our common stock did not exist.

         The following table sets forth for the periods indicated, the high and
low closing bid prices for a share of the common stock as reported by the OTC
Bulletin Board. The quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission, and may not necessarily represent actual
transactions.

-----------         -------------         ------         ------
Fiscal Year         Quarter Ended          High           Low
-----------         -------------         ------         ------
1999                September 30          $4.000         $2.000
                    December 31           $3.620         $2.125
                    March 31              $3.250         $1.750
                    June 30               $3.562         $2.500
-----------         -------------         ------         ------
2000                September 30          $2.562         $1.937
                    December 31           $3.250         $2.000
                    March 31              $4.375         $2.250
                    June 30               $3.000         $2.062
-----------         -------------         ------         ------

Holders

         The approximate number of holders of record of our common stock as of
September 5, 2000 was 385. As of that date, there were approximately 569
beneficial stockholders, including stockholders holding common stock under
nominee security position listings.

Dividends

         We have never declared any cash dividends on the common stock at any
time. Future cash dividends on the common stock, if any, will be at the
discretion of our Board of Directors and will depend on our future operations
and earnings, capital requirements and surplus, general financial condition,
contractual restrictions, and other factors that the Board of Directors may
consider important.

         Our series A preferred stock bears a fixed dividend at an annual rate
of 11.5%. Dividends are paid in cash each quarter in arrears. The first dividend
payment occurred on January 1, 2000. Unless we have fully paid all dividends on
the outstanding shares of series A preferred stock, we cannot declare or pay
cash dividends, or distribute or set aside assets, for any of our other
securities.

                                       12


<PAGE>

Sale of Unregistered Securities

         On April 1, 2000, we issued 10,000 shares of common stock to Graphics
Un Ltd. In exchange for its rights to a web site address in a transaction
deemed to be exempt under Section 4(2) of the Securities Act.

         We issued to Duncan Yates, an officer of Cadapult, under an oral
employment agreement, effective July 15, 2000, stock options to purchase up to
100,000 shares of common stock in a transaction deemed to be exempt under
Section 4(2) of the Securities Act.  These options vest only after we achieve
certain corporate levels of earnings.  The options are exercisable for five
years at $2.00 per share.  He may exercise 25,000 options following the first
fiscal year that our earnings before interest, taxes, depreciation and
amortization exceed $1,500,000, and a further 25,000 options after the fiscal
year in which such earnings exceed $2,000,000.  He may exercise up to 50,000
options following the end of the 2001 fiscal year if certain sales targets
established by the Board of Directors are achieved.  If we undergo a "change
of control", the incentive based options vest.

                                       13


<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

"Forward-looking" Information

         This report on Form 10-KSB contains certain "forward-looking
statements"within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), which represent our expectations and
beliefs, including, but not limited to statements concerning Cadapult's expected
growth. The words "believe," "expect," "anticipate," "estimate,: "project," and
similar expressions identify forward-looking statements, which speak only as of
the date such statement was made. These statements by their nature involve
substantial risks and uncertainties, certain of which are beyond our control,
and actual results may differ materially depending on a variety of important
factors.

         The following discussion and analysis should be read in conjunction
with the information set forth in the audited financial statements for the year
ended June 30, 2000. On June 24, 1998, we elected to change our fiscal year from
April 30 to June 30.

Results of Operations For The Year Ended June 30, 2000
------------------------------------------------------

Sales. Sales for the year ended June 30, 2000 compared to the year period ended
June 30, 1999 increased approximately 32% to $13,489,839 from $10,227,628. The
increase in sales resulted from a contribution from the ultraHue acquisition of
approximately $2,448,000, a contribution from the WEB acquisition of
approximately $1,768,200 and a decrease in our hardware and end-user supply
sales of approximately $954,000

Cost of Sales. Cost of sales for the year ended June 30, 2000 were $8,522,972 or
approximately 63% of sales, as compared to $7,442,239 or approximately 73% for
the year period ended June 30, 1999. Gross profit margins increased
significantly in the year ended June 30, 2000 due to six months of contribution
from the ultraHue acquisition. Our reseller margins have remained stable despite
margin pressure in the areas of color printers and other low end graphics
hardware and supplies.

Selling, General and Administrative. Selling, general and administrative
expenses for the year ended June 30, 2000 increased to $3,974,762 or 29.5% of
sales from $2,889,200 or 28.2% of sales for the year ended June 30, 1999.
Selling, general and administrative expenses for the year ended June 30, 2000
included approximately $200,000 of legal expenses associated with our litigation
with Tektronix.

Depreciation and Amortization. Depreciation and amortization expenses for the
year ended June 30, 2000 increased to $449,062 from $180,482 for the year ended
June 30, 1999. Approximately $135,000 of the increase in depreciation and
amortization can be attributed to the acquisition of ultraHue with the balance
attributable to the amortization of goodwill resulting from the acquisitions of
Tartan Technical and WEB Associates and depreciation resulting from increased
infrastructure investments.

Interest Expense. Interest expense for the year ended June 30, 2000 increased to
$238,502 from $160,081 incurred for the year ended June 30, 1999. The increase
in 1999 was due primarily to an increase in borrowings to finance our
infrastructure investments.

Income Taxes. For the year ended June 30, 2000, we recorded an income tax
benefit of $144,000. We incurred a Federal and State income tax expense of
$73,000, offset by the elimination of the valuation allowance totaling $217,000
that had been recognized at June 30, 1999. For the year ended June 30, 1999, we
recorded a tax benefit of $217,000 primarily due to a net operating loss
carryforward offset by a valuation allowance of $217,000.

Dividends. For the year ended June 30, 2000, we paid $301,772 of stock dividends
to our preferred shareholders of record as of June 30, 2000.

                                       14


<PAGE>

Net Income (Loss). For the year ended June 30, 2000, we earned $146,769 or $0.05
basic and $0.04 diluted earnings per share, applicable to common shareholders as
compared to a net loss of $444,374 or $0.16 per share for the year ended June
30, 1999. At June 30, 2000 there were 3,176,090 basic weighted average shares
outstanding and 3,508,134 diluted weighted average shares outstanding. The
conversion of the Series A convertible preferred stock has been excluded from
the computation of diluted earnings per share for the year ended June 30, 2000,
as the conversion would be anti-dilutive after adding back preferred stock
dividends to net income.

Results of Operations For The Year Ended June 30, 1999
------------------------------------------------------

Sales. Sales for the year ended June 30, 1999 compared to the year period ended
April 30, 1998 increased approximately 44% to $10,227,628 from $7,103,906. The
revenue mix in 1999 has shifted with supplies revenue increasing as a percentage
of total sales, while systems revenue has decreased as a percentage of total
sales. Service revenues, as a percentage of sales have remained consistent.
Approximately $1,365,000 of the increase in sales can be attributed to the
Tartan acquisition, $103,000 to the WEB Associates acquisition, and $1,655,000
to our internal growth.

Cost of Sales. Cost of sales for the year ended June 30, 1999 were $7,442,239 or
approximately 73% of sales, as compared to $5,174,402 or approximately 73% for
the year period ended April 30, 1998. Gross profit margins remained stable for
the year ended June 30, 1999 as compared to the year ended April 30, 1998
despite the acquisition of businesses that were previously generating
significantly lower margins. This was achieved primarily through the conversion
of manufacturer service agreements to agreements fulfilled by us and through the
sale of private label supplies.

Selling, General and Administrative. Selling, general and administrative
expenses for the year ended June 30, 1999 increased to $2,889,200 from
$2,138,915 for the year ended April 30, 1998. Selling, general and
administrative expenses were approximately 30% of sales for both periods.
Selling, general and administrative expenses for the year ended June 30, 1999
included increased legal of about $9,000, accounting fees of about $17,500, and
consulting fees of about $15,200 associated with the merger with Seafoods Plus,
Ltd. in June of 1998, with being a publicly held company, the amortization of
goodwill of about $62,000 resulting from acquisitions, and to increase in
payroll attributable to the acquisitions and development of the our
infrastructure for future growth of about $470,000. Selling, general and
administrative expenses for the year ended June 30, 1999 includes a one time
expense of $130,000 for the development of SamplePrint.com.

Interest Expense. Interest expense for the year ended June 30, 1999 increased to
$160,081 from $90,829 incurred for the year ended April 30, 1998. The increase
in 1999 was due primarily to an increase in borrowings to finance our increased
receivables and inventory due to the acquisitions.

Income Taxes. For the year ended June 30, 1999, we recorded a tax benefit of
$217,000 primarily due to a net operating loss carryforward offset by a
valuation allowance of $217,000. For the one year ended April 30, 1998, we
recorded a tax benefit of $62,498 primarily due to the utilization of a net
operating loss carryback.

Net Income (Loss). For the one year ended June 30, 1999, we had a net loss of
$444,374 or $0.16 per share as compared to a net loss of $219,242 or $0.14 per
share for the year ended April 30, 1998. We had a loss before income taxes in
the fourth quarter of the year ended June 30, 1999 totaling $314,978 as compared
to an average loss of approximately $43,132 for the previous three quarters.
Contributing to the additional loss were approximately $130,000 for development
costs related to SamplePrint.com and $40,000 for year end adjustments to
inventory and the allowance for doubtful accounts. Additional loss was due to a
shortfall of approximately $250,000 in sales resulting in $70,000 gross profit
reduction. Additional loss of $30,000 was due to additional general and
administrative costs relating to the two business acquired earlier in the year.

                                       15


<PAGE>

Liquidity and Capital Resources
-------------------------------

         We experienced positive cash flow of $835,685 for the year ended June
30, 2000. Cash used in operations resulted in positive cash flows of $580,844
primarily due to a profit of $448,541, non cash charges for depreciation,
amortization and issuance of our securities for services of $520,062, a decrease
in inventory of $211,024, a decrease in accounts receivable of $160,641, an
increase in deferred revenue of $172,344 and an increase in accrued expenses and
other current liabilities of $172,344 offset by the non-cash income tax benefit
of $181,000, a decrease in accounts payable $736,626 and an increase in pre-paid
expenses and security deposits of $183,708.

         For the year ended June 30, 2000 the cash we used in investing
activities included the purchase of equipment, two URLs and the net assets of
ultraHue for a total of $2,892,714.

         We generated cash from the sale of our common and preferred stock of
$4,715,520 for the year ended June 30, 2000. With these proceeds, we executed
the ultraHue acquisition and repaid $738,888 in bank debt.

         We experienced positive cash flow of $10,336 for the year ended June
30, 1999. Cash used in operations resulted in negative cash flows of $221,653
primarily due to a loss of $444,374 offset by a non cash charge to depreciation
and amortization of $180,494 , a decrease in accounts receivable of $89,130 and
a decrease in inventory of $170,259 and a increase in deferred revenue of
$149,489, and a decrease in accounts payable of $473,241. Cash used in investing
activities was primarily comprised of purchase of equipment and the acquisitions
of WEB Associates and Tartan Technical. The above uses of cash were offset by
increased borrowing under the Company's credit facility and proceeds from the
sale of common stock.

         We have an agreement with a lender under which we can borrow up to
$6,000,000 under a revolving line-of-credit, subject to availability of
collateral. Under the line-of-credit, the available credit is 50% of eligible
inventory, which available credit cannot exceed $1,000,000 plus 85% of eligible
receivables. Borrowings bear interest at .50% over the lender's base rate, are
payable on demand and are collateralized by all of our assets. As of June 30,
2000, we had used $1,025,683 of this line. As of June 30, 1999, we had used
$1,677,024 of this line.

         In August 1998, we completed a private placement for $655,000,
consisting of 524,000 shares of common stock at a purchase price of $1.25.
Expenses associated with the private placement were approximately $35,000,
providing us with net proceeds of $620,000. We used substantially all of the
proceeds in the retirement of bank debt assumed in the acquisition of Tartan in
January 1999.

         In September 1999, we completed a private placement for $255,500
consisting of 127,750 shares of common stock at a purchase price of $2.00.
Expenses associated with the private placement were approximately $15,000,
providing us with net proceeds of $240,200. We used substantially all of the
proceeds to invest in our Internet initiatives, including SamplePrint.com and
the upgrade of our accounting system in preparation for our Internet storefront.

                                       16


<PAGE>

         On October 1, 1999, we entered into a managing dealer agreement with a
placement agent for a proposed private offering of $5,000,000. The private
offering was of 500,000 units of our securities with a face value of $10.00 per
unit. Each unit consisted of one share of convertible adjustable preferred stock
and one warrant to purchase two shares of common stock at $4.50. For two years,
each share of series A preferred stock is convertible into 3.077 shares of
common stock. After each of two and four years from the date of closing, the
conversion rate of one share of series A preferred stock into shares of common
stock adjusts. At the adjusted conversion rate, the number of shares of common
stock received equals $10 divided by 75% of the average bid price of our common
stock during the 90 days preceding each of the two and four year anniversary
dates. A maximum of five shares of common stock will be issued upon conversion
of a share of series A preferred stock. In addition, the preferred stock will
carry a dividend, paid quarterly, of 11.5% per annum. The offering was sold to
accredited investors only in states where permitted. The proceeds of the
offering were used to fund the ultraHue acquisition, for the expansion of our
No-Cap Color printer program and for working capital. In December 1999, our
Board of Directors approved an increase of the private placement to $5,500,000.
We closed this offering on March 10, 2000 having sold 550,000 units,
representing 550,000 shares of Series A Preferred Stock and 1,100,000 warrants
to purchase common stock for $4.50, providing us with net proceeds of
$4,566,549.

Capital Expenditures
--------------------

         We have a material commitment for a capital expenditure of $450,000 for
development of a new Media Sciences product line. We anticipate capital
expenditures of approximately $300,000 to $400,000 relating to the move of our
headquarters facility and our manufacturing facility. In addition, we plan to
acquire at least $3,000,000 of color printers for our No-Cap Color printer
program.

Inflation
---------

         We have historically offset any inflation in operating costs by a
combination of increased productivity and price increases, where appropriate. We
do not expect inflation to have a significant impact on our business in the
future.

Seasonality
-----------

         We anticipate that our cash flow from operations will be significantly
greater in the fall and winter months than in the spring and summer months due
to the purchasing cycles associated with our products. If we are unable to
generate sufficient cash flows from operations during the seasons of peak
operations, we may be required to utilize other cash reserves, if any, or seek
additional equity or debt financing to meet operating expenses, and there can be
no assurance that there will be any other cash reserves or that additional
financing will be available or, if available, on reasonable terms.


ITEM 7.  FINANCIAL STATEMENTS

Financial Report - June 30, 2000

Independent Auditors' Report                                            F-1
Consolidated Balance Sheets                                             F-2
Consolidated Statements of Operations                                   F-3
Consolidated Statements of Changes in Shareholders' Equity              F-4
Consolidated Statements of Cash Flows                                   F-5
Notes to Consolidated Financial Statements                              F-7

                                       17


<PAGE>

                          INDEPENDENT AUDITORS' REPORT





To the Board of Directors and Shareholders of
Cadapult Graphic Systems, Inc.


We have audited the accompanying consolidated balance sheets of Cadapult Graphic
Systems, Inc. and subsidiary as of June 30, 2000 and 1999, and the related
consolidated statements of operations, changes in shareholders' equity and cash
flows for the years then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 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 audits provide a reasonable basis
for our opinion.


In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Cadapult Graphic Systems, Inc. and subsidiary at June 30, 2000 and 1999, and the
consolidated results of their operations and their cash flows for the years then
ended in conformity with generally accepted accounting principles.



                                               /S/ WISS & COMPANY, LLP

                                               WISS & COMPANY, LLP


Livingston, New Jersey
August 10, 2000


                                       F-1



<PAGE>

                         CADAPULT GRAPHIC SYSTEMS, INC.
                                 AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
                                                                         June 30,
                                                                 -------------------------
                     ASSETS                                          2000          1999
                                                                 -----------   -----------
<S>                                                              <C>           <C>
CURRENT ASSETS:
  Cash and equivalents .......................................   $   868,842   $    33,157
  Accounts receivable, less allowance for doubtful
    accounts of $35,000 ......................................     2,190,903     1,950,399
  Inventories ................................................     1,262,219     1,276,621
  Deferred income taxes ......................................       181,000            --
  Prepaid expenses and other current assets ..................       172,481        77,471
                                                                 -----------   -----------
      Total Current Assets ...................................     4,675,445     3,337,648
                                                                 -----------   -----------

PROPERTY AND EQUIPMENT, NET ..................................       761,133       627,029
                                                                 -----------   -----------

OTHER ASSETS:
  Goodwill and other intangible assets, net ..................     4,408,815       835,889
  Deferred acquisition costs .................................        12,731        34,542
  Security deposits ..........................................       122,221        33,523
                                                                 -----------   -----------
                                                                   4,543,767       903,954
                                                                 -----------   -----------
                                                                 $ 9,980,345   $ 4,868,631
                                                                 ===========   ===========

        LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Note payable to bank .......................................   $ 1,025,683   $ 1,677,024
  Note payable relating to acquired business .................     1,160,000            --
  Current maturities of long-term debt .......................        69,445        87,547
  Accounts payable ...........................................     1,075,828     1,710,861
  Accrued expenses and other current liabilities .............       290,996       131,767
  Deferred revenues ..........................................       466,433       294,089
                                                                 -----------   -----------
    Total Current Liabilities ................................     4,088,385     3,901,288
                                                                 -----------   -----------

OTHER LIABILITIES:
  Long-term debt, less current maturities ....................            --        69,445
  Note payable to affiliate ..................................            --        20,832
                                                                 -----------   -----------
                                                                          --        90,277
                                                                 -----------   -----------
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
  Common stock, $.001 par value,
    Authorized 20,000,000 shares; issued 3,228,451
    shares in 2000 and 3,058,308 in 1999 .....................         3,228         3,058
  Series A Convertible Preferred stock, $.001 par value,
    Authorized 1,000,000 shares; issued 550,000 shares in 2000           550            --
  Additional paid-in capital .................................     5,888,182     1,171,782
  Retained earnings (deficit) ................................            --      (297,774)
                                                                 -----------   -----------
    Total Shareholders' Equity ...............................     5,891,960       877,066
                                                                 -----------   -----------
                                                                 $ 9,980,345   $ 4,868,631
                                                                 ===========   ===========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       F-2


<PAGE>

                         CADAPULT GRAPHIC SYSTEMS, INC.
                                 AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>

                                                          Year Ended June 30,
                                                      ----------------------------
                                                          2000            1999
                                                      ------------    ------------
<S>                                                   <C>             <C>
NET SALES .......................................     $ 13,489,839    $ 10,227,628
                                                      ------------    ------------

COSTS AND EXPENSES:
  Cost of sales .................................        8,522,972       7,442,239
  Selling, general and administrative expenses ..        3,974,762       2,889,200
  Depreciation and amortization .................          449,062         180,482
                                                      ------------    ------------
                                                        12,946,796      10,511,921
                                                      ------------    ------------

INCOME (LOSS) FROM OPERATIONS ...................          543,043        (284,293)

INTEREST EXPENSE, NET ...........................          238,502         160,081
                                                      ------------    ------------

INCOME (LOSS) BEFORE INCOME TAXES (CREDITS) .....          304,541        (444,374)

INCOME TAX CREDIT ...............................         (144,000)             --
                                                      ------------    ------------

NET INCOME (LOSS) ...............................     $    448,541    $   (444,374)
                                                      ============    ============

PREFERRED STOCK DIVIDENDS .......................     $    301,772    $         --
                                                      ============    ============

INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS       $    146,769    $   (444,374)
                                                      ============    ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  Basic .........................................        3,176,090       2,844,819
                                                      ============    ============
  Diluted .......................................        3,508,134       2,844,819
                                                      ============    ============

NET INCOME (LOSS) PER COMMON SHARE:
  Basic .........................................     $        .05    $      (0.16)
                                                      ============    ============
  Diluted .......................................     $        .04    $      (0.16)
                                                      ============    ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       F-3



<PAGE>

                         CADAPULT GRAPHIC SYSTEMS, INC.
                                 AND SUBSIDIARY

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>

                                                            Common Stock     Preferred Stock  Additional  Retained      Total
                                                          -----------------  ---------------    Paid-in    Earning   Shareholders'
                                                            Shares   Amount  Shares   Amount    Capital   (Deficit)     Equity
                                                          ---------  ------  -------  ------  ----------  ---------  -------------
<S>                                                       <C>        <C>     <C>      <C>     <C>         <C>        <C>
BALANCES, JUNE 30, 1998                                   2,583,518  $2,583       --  $   --  $  423,167  $ 146,600  $     572,350

YEAR ENDED JUNE 30, 1999:
 Sale of common stock through private placement .......     228,000     228       --      --     249,772         --        250,000
 Issuance of common stock for acquisition - Tartan ....      92,850      93       --      --     185,607         --        185,700
 Issuance of warrants for legal services ..............          --      --       --      --      20,510         --         20,510
 Sale of common stock through private placement .......      67,750      68       --      --     120,432         --        120,500
 Issuance of common stock for acquisition - Web .......      86,190      86       --      --     172,294         --        172,380
 Net loss .............................................          --      --       --      --          --   (444,374)      (444,374)
                                                          ---------  ------  -------  ------  ----------  ---------  -------------

BALANCES, JUNE 30, 1999 ...............................   3,058,308   3,058       --      --   1,171,782   (297,774)       877,066

YEAR ENDED JUNE 30, 2000:
 Sale of common stock through private placement, net ..      60,000      60       --      --     119,640         --        119,700
 Sale of preferred stock through private placement, net          --      --  550,000     550   4,565,999         --      4,566,549
 Issuance of common stock for services ................      35,435      35       --      --      70,965         --         71,000
 Issuance of stock for acquisition ....................      34,818      35       --      --      81,570         --         81,605
 Issuance of stock for purchase price adjustment ......      16,473      17       --      --         (17)        --             --
 Exercise of employee stock options ...................      23,417      23       --      --      29,248         --         29,271
 Preferred stock dividend, 11.5% ......................          --      --       --      --    (151,005)  (150,767)      (301,772)
 Net income ...........................................          --      --       --      --          --    448,541        448,541
                                                          ---------  ------  -------  ------  ----------  ---------  -------------

BALANCES, JUNE 30, 2000 ...............................   3,228,451  $3,228  550,000  $  550  $5,888,182  $      --  $   5,891,960
                                                          =========  ======  =======  ======  ==========  =========  =============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       F-4



<PAGE>

                         CADAPULT GRAPHIC SYSTEMS, INC.
                                 AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
                                                             Year Ended June 30,
                                                         --------------------------
                                                             2000           1999
                                                         -----------    -----------
<S>                                                      <C>            <C>
Net income (loss) ....................................   $   448,541    $  (444,374)
  Adjustments to reconcile net income(loss) to net
  cash flows from operating activities:
    Depreciation and amortization ....................       449,062        180,494
    Deferred income taxes ............................      (181,000)            --
    Issuance of common stock and warrants for services        71,000         20,510
    Provision for bad debts ..........................        10,298          6,000
    Changes in operating assets and liabilities:
      Accounts receivable ............................       160,641         89,130
      Inventories ....................................       211,024        170,259
      Prepaid and refundable income taxes ............            --         46,295
      Prepaid expenses and other current assets ......       (95,010)        35,710
      Security deposits ..............................       (88,698)        (2,180)
      Accounts payable ...............................      (736,626)      (473,241)
      Accrued expenses and other current liabilities .       159,268            255
      Deferred revenues ..............................       172,344        149,489
                                                         -----------    -----------
        Net cash flows from operating activities .....       580,844       (221,653)
                                                         -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment ................      (144,631)      (303,271)
  Purchase of intangible assets ......................      (267,401)      (102,350)
  Cost of net assets of acquired businesses ..........    (2,502,493)      (242,200)
  Deferred acquisition costs .........................        21,811        (34,542)
                                                         -----------    -----------
        Net cash flows from investing activities .....    (2,892,714)      (682,363)
                                                         -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Note payable to bank, net ..........................      (651,341)       333,071
  Payments on long-term debt .........................       (87,547)       (89,219)
  Attorney escrow account ............................            --        320,000
  Advances from officer ..............................            --        (20,000)
  Note payable to affiliate ..........................       (20,832)            --
  Due to seller ......................................      (506,473)            --
  Preferred stock dividends ..........................      (301,772)            --
  Sale of common stock ...............................       148,971        370,500
  Sale of preferred stock ............................     4,566,549             --
                                                         -----------    -----------
        Net cash flows from financing activities .....     3,147,555        914,352
                                                         -----------    -----------

NET CHANGE IN CASH AND EQUIVALENTS ...................       835,685         10,336

CASH AND EQUIVALENTS, BEGINNING OF YEAR ..............        33,157         22,821
                                                         -----------    -----------

CASH AND EQUIVALENTS, END OF YEAR ....................   $   868,842    $    33,157
                                                         ===========    ===========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       F-5



<PAGE>

                         CADAPULT GRAPHIC SYSTEMS, INC.
                                 AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Continued)

<TABLE>
                                                               Year Ended June 30,
                                                           --------------------------
                                                               2000           1999
                                                           -----------    -----------
<S>                                                        <C>            <C>
SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid ......................................     $   174,982    $   155,846
                                                           ===========    ===========
  Income taxes paid ..................................     $        --    $        --
                                                           ===========    ===========
  Inventories transferred to equipment ...............     $   174,907    $        --
                                                           ===========    ===========
  Issuance of common stock upon partial satisfaction
  of Tartan acquisition contingency" .................     $    81,605    $        --
                                                           ===========    ===========

Non cash investing activities- Acquisition of businesses:
    Fair value of assets acquired ....................     $ 4,168,966    $ 1,459,457
    Fair value of liabilities assumed ................              --       (859,177)
    Fair value of common stock issued ................              --       (358,080)
    Due to seller ....................................        (506,473)            --
    Note payable to seller ...........................      (1,160,000)            --
                                                           -----------    -----------
      Net cash payment ...............................     $ 2,502,493    $   242,200
                                                           ===========    ===========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       F-6



<PAGE>

                         CADAPULT GRAPHIC SYSTEMS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1   -   NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT
             ACCOUNTING POLICIES:

         Nature of the Business - Cadapult Graphic Systems, Inc. and subsidiary,
collectively referred to as the "Company", provide computer graphic systems,
peripherals, supplies, training and service to visual communicators and graphics
professionals. The Company is a systems integrator and a value added
dealer/reseller of computer graphics equipment and supplies to customers. The
Company also manufactures and distributes solid ink and toner products for use
in color printers. The Company has its corporate headquarters in New Jersey and
has offices in Massachusetts, Washington, New Mexico and Pennsylvania.

         Principles of Consolidation - The consolidated financial statements
include the accounts of Cadapult and its wholly-owned subsidiary Media Sciences,
Inc. All significant intercompany balances and transactions have been eliminated
in consolidation.

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

         Revenue Recognition - Revenue is recognized at the point of shipment
for goods sold, and ratably through the duration of service contracts. Deferred
revenue consists principally of billings on service contracts prior to rendering
related services.

         Cash Equivalents - Cash equivalents include all highly liquid short
term investments purchased with original maturities of three months or less.

         Concentration of Credit Risk - Financial instruments that potentially
subject the Company to concentration of credit risk consists primarily of cash
and unsecured trade receivables. The Company maintains its cash balances in
financial institutions which are insured by the Federal Deposit Insurance
Corporation up to $100,000 each. At June 30, 2000, the Company has uninsured
balances totalling approximately $950,000.

         Concentrations of credit risk with respect to all trade receivables are
considered to be limited due to the quantity of customers comprising the
Company's customer base. The Company performs ongoing credit evaluations of its
customers' financial condition and does not require collateral. Management feels
that credit risk beyond the established allowance at June 30, 2000 is limited.

         Inventories - Inventories are stated at the lower of cost (specific
identification method) or market.

         Property and Equipment - Property and equipment are stated at cost. The
Company provides for depreciation using straight-line and accelerated methods by
charges to income at rates based upon the recovery periods of 3 to 7 years for
furniture and equipment and over the useful lives or the lease term, if shorter,
for leasehold improvements.

                                       F-7



<PAGE>

                         CADAPULT GRAPHIC SYSTEMS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         Goodwill and Other Intangible Assets - Goodwill consists of the excess
of cost over fair market value of the net assets of acquired businesses. The
intangible assets are being amortized on the straight-line method over the
following years:

                                                                Life (Years)
                                                                -----------
               Goodwill                        $4,567,521             15
               Covenants-not-to-compete            51,000            3-5
               Financing costs                    114,880            1-3
                                               ----------
                                                4,733,401
               Accumulated amortization           324,586
                                               ----------

                                               $4,408,815
                                               ==========

         During the years ended June 30, 2000 and 1999, the Company capitalized
$40,000 and $54,048 of financing costs and $3,785,851 and $49,302 of costs
associated with the purchase of businesses referred to in Note 2.

         The carrying value of intangible assets is periodically reviewed by the
Company based on expected future undiscounted operating cash flows. Based upon
its most recent analysis, the Company believes that no material impairment
exists at June 30, 2000.

         Income Taxes - Deferred income taxes reflect the net tax effects of
temporary differences between financial statement carrying amounts of existing
assets and liabilities and their respective tax bases and operating loss
carryforwards.

         Employee Benefit Plan - The Company has a 401(k) savings/retirement
plan for all of its eligible employees. The plan allows for employee
contributions to be matched by the Company. Contributions made by the Company
for the years ended June 30, 2000 and 1999 were $14,889, and $14,502,
respectively.

         Deferred Acquisition Costs - Acquisition costs have been deferred,
pending the outcome of negotiations. If the acquisition is completed, these
costs will be capitalized; otherwise they will be charged to expense.

         Earnings (Loss) Per Share - Basic earnings (loss) per share is based
upon net income (loss) less preferred dividends divided by the weighted average
number of common shares outstanding during the period. Diluted earnings per
share is based on the weighted average number of shares outstanding adjusted for
the incremental shares attributable to outstanding options, dilutive securities,
warrants and other potentially dilutive securities.

         Stock Options - The Company accounts for stock option grants using the
intrinsic value based method prescribed by APB Opinion No. 25. Since the
exercise price equaled or exceeded the estimated fair value of the underlying
shares at the date of grant, no compensation expense was recognized in 2000 and
1999 for stock option grants.

                                       F-8



<PAGE>

                         CADAPULT GRAPHIC SYSTEMS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         Had compensation cost been based upon fair value of the option on the
date of grants, as prescribed by SFAS No. 123, the Company's proforma net income
(loss) and net income (loss) per share would have been $(242,000) and $(.08) in
2000 and $(1,018,000) and $(.36) in 1999, using the Black-Scholes option pricing
model.

         The fair value of options granted in 2000 and 1999 were estimated at
the date of grant using a Black-Scholes option pricing model with the following
weighted-average assumptions, respectively: risk-free interest rates of 6.0%,
dividend yield of 0.0%, volatility factors of the expected market price of the
Company's Common Stock of 198% in 2000 and 108% in 1999 and a weighted-average
expected life of the options of five years.

         The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of normal publicly traded options, and
because changes in the subjective input assumptions can materially affect the
fair value estimate, in management's opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of its employees
stock options.

NOTE 2   -   PURCHASE OF BUSINESSES:

         On January 7, 1999, the Company issued 185,700 shares of its
unregistered and restricted common stock in exchange for certain assets and the
assumption of certain liabilities of Tartan Technical, Inc. ("Tartan") a
Massachusetts corporation. The assets purchased included accounts receivable,
inventories, property and equipment and the liabilities assumed included notes
payable and accounts payable. The excess of the purchase price and related costs
over the fair value of the net liabilities assumed ($321,789) was allocated to
goodwill. As of June 30, 1999, 92,850 of the shares were held in escrow pursuant
to the resolution of a contingency based on Tartan achieving certain gross
profit levels over the next two years. As of June 30, 2000, Tartan earned 34,818
shares (valued at $81,605) and forfeited 11,607 shares. A total of 46,425 shares
remain in escrow. When the contingency is resolved, some or all of the 46,425
remaining shares will either be recorded by the Company as an additional cost of
Tartan, or cancelled.

         Effective June 18, 1999, the Company acquired for $242,200 in cash and
the issuance of 172,380 shares of its unregistered and restricted common stock,
certain assets and assumed certain liabilities of WEB Associates, Inc. ("WEB") a
Pennsylvania corporation. The assets purchased included accounts receivable,
inventories, property and equipment and a covenant not-to-compete and the
liabilities included accounts payable. The excess of the purchase price and
related costs over the fair value of net assets ($89,996) was allocated to
goodwill. Currently, 86,190 of the shares are held in escrow pursuant to the
resolution of a contingency based on WEB achieving certain gross profit levels
through June 2001. When the contingency is resolved, some or all of the 86,190
shares will either be recorded by the Company as an additional cost of WEB, or
cancelled.

                                       F-9



<PAGE>

                         CADAPULT GRAPHIC SYSTEMS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         On December 13, 1999, Media Sciences, Inc. ("Media") completed the
acquisition of substantially all of the assets of ultraHue, Inc. for $2,340,000
in cash, and a note payable for $1,160,000 bearing interest at 7% per annum, due
on December 13, 2000. Media also agreed to acquire accounts receivable and
inventories, and assume accounts payable and reimburse ultraHue, as those
receivables are collected and inventory sold. In addition, the Asset Purchase
Agreement provides for an additional purchase price of 10-30% of Media Sciences'
profits (as defined) for three years.

         The following unaudited pro forma consolidated results of operations
for the years ended June 30, 2000 and 1999, assume the Tartan, WEB and ultraHue
acquisitions had occurred on July 1, 1998, giving effect to purchase accounting
adjustments and financing. The pro forma results have been prepared for
informational purposes only and do not reflect any benefit from economies, which
might be achieved from combined operations. The pro forma results do not
represent results which would have occurred if the acquisition had taken place
on the basis assumed above, nor are they indicative of the results of future
combined operations.

                                                        Year Ended June 30,
                                                     -------------------------
                                                         2000          1999
                                                     -----------   -----------

Net sales                                            $14,752,396   $15,292,999
                                                     ===========   ===========

Net income (loss) applicable to common shareholders  $    58,269   $  (952,020)
                                                     ===========   ===========

Basic and diluted income (loss) per share                   $.02         $(.32)
                                                            ====         =====


NOTE 3   -   PROPERTY AND EQUIPMENT:

         Property and equipment are summarized as follows:

                                                             June 30,
                                                     ------------------------
                                                        2000          1999
                                                     ----------    ----------

Office equipment                                     $1,311,404    $  997,359
Furniture and fixtures                                  205,646       165,213
Automobiles                                              60,980        65,379
Leasehold improvements                                   98,568        98,568
                                                     ----------    ----------
                                                      1,676,598     1,326,519
Less: Accumulated depreciation and amortization         915,465       699,490
                                                     ----------    ----------
                                                     $  761,133    $  627,029
                                                     ==========    ==========

NOTE 4   -   NOTE PAYABLE TO BANK:

         The Company has an agreement with a bank under which it can borrow up
to $6,000,000 under a revolving line-of-credit, subject to availability of
collateral. Borrowings bear interest at .50% over the bank's base rate, are
payable on demand and are collateralized by all assets of the Company.

                                      F-10



<PAGE>

                         CADAPULT GRAPHIC SYSTEMS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5   -   LONG-TERM DEBT:

         A summary of long-term debt follows:

                                                                   June 30,
                                                 Interest   --------------------
              Description                         Rate         2000       1999
----------------------------------------------   --------   ---------  ---------

Loan payable in monthly installments of $6,944
  plus interest through April 2001,
  collateralized by all assets of the Company    1% over
                                                 prime      $ 69,445   $ 152,778

Loan payable in monthly installments of
  principal and interest of $543 through
  February 2000, collateralized by an
  automobile                                     8.49%             -       4,214
                                                            --------   ---------
                                                              69,445     156,992
Less:  Current maturities                                     69,445      87,547
                                                            --------   ---------
                                                            $      -   $  69,445
                                                            ========   =========

NOTE 6   -  INCOME TAXES:

         The components of the income tax credit for the year ended June 30,
2000, are summarized as follows:

                                  Current       Deferred          Total
                                  -------       ---------       ---------

        Federal                   $     -       $ (94,000)      $ (94,000)
        State and local            37,000         (87,000)        (50,000)
                                  -------       ---------       ---------

                                  $37,000       $(181,000)      $(144,000)
                                  =======       =========       =========

         The Company recognizes deferred tax assets, net of applicable reserves,
related to net operating loss carryforwards and certain temporary differences.
The Company is required to recognize a future tax benefit to the extent that
realization of such benefit is more likely than not. Otherwise a valuation
allowance is applied. At June 30, 2000, the Company believes that the "more
likely than not" criteria have been met, and accordingly, the valuation
allowance totaling $217,000 that had been recognized at June 30, 1999, was
removed.

         The Company has available federal net operating loss carryforwards of
approximately $245,000 which expire through 2019. The Company's utilization of
its net operating loss carryforwards may be limited pursuant to Internal Revenue
Code Section 382 if cumulative changes in ownership are in excess of 50% within
a three-year period.

                                      F-11



<PAGE>

                         CADAPULT GRAPHIC SYSTEMS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         A reconciliation of income tax expense (benefit) provided at the
federal statutory rate (34%) to income tax expense (benefit) is as follows:

                                                    Year Ended June 30,
                                                   ---------------------
                                                     2000        1999
                                                   ---------   ---------

Income tax expense (benefit) computed at federal
  statutory rate                                   $ 103,544   $(151,087)
State income taxes (net of federal benefit)          (36,197)    (26,662)
Other                                                  5,653       8,749
Change in valuation allowance                       (217,000)    169,000
                                                   ---------   ---------

                                                   $(144,000)  $       -
                                                   =========   =========

         Significant components of the Company's deferred tax assets are as
follows:

                                                          June 30,
                                                   ---------------------
                                                     2000        1999
                                                   ---------   ---------

Net operating loss carryforwards                   $ 160,000   $ 193,000
Accruals and reserves                                 21,000      24,000
                                                   ---------   ---------
                                                     181,000     217,000
   Less: valuation allowance                               -     217,000
                                                   ---------   ---------

       Total deferred tax assets                   $ 181,000   $       -
                                                   =========   =========


NOTE 7   -   SHAREHOLDERS' EQUITY:

         a)     Stock Compensation Plan:

         The Company has an incentive stock option (the "1998 Plan"), pursuant
to which 500,000 shares of common stock have been reserved. The stock options
(which may be "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended) entitle the holder to purchase shares
of the Company's common stock for up to ten years from the date of grant (five
years for persons owning more than 10 percent of the total combined voting power
of the Company) at a price not less than the fair market value (110% of fair
market value for persons owning more than 10% of the combined voting power of
the Company) of the common stock on the date of grant. In general, any employee,
director, officer or exclusive agent of, advisor or consultant to, the Company
or a related entity is eligible to participate in the Plan. The stock options
are nontransferable, except upon death.

                                      F-12



<PAGE>

                         CADAPULT GRAPHIC SYSTEMS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         Share option activity for the Plan since July 1, 1998, follows:

                                                                   Weighted
                                                               Average Exercise
                                             Outstanding            Price
                                             -----------            ------
             Balance at July 1, 1998             138,182            $ 1.30

             Year ended June 30, 1999:
                 Granted                         225,450              2.38
                 Cancelled                       (45,739)            (2.07)
                                                 -------            ------

             Balance at June 30, 1999            317,893              1.93

             Year ended June 30, 2000:
                 Granted                          67,452              2.59
                 Exercised                       (23,417)             1.25
                 Cancelled                       (81,000)             2.36
                                                 -------            ------

             Balance at June 30, 2000            280,928            $ 2.04
                                                 =======            ======

                The following table summarizes information about outstanding and
         exercisable options at June 30, 2000:

<TABLE>
                           Options Outstanding                                   Options Exercisable
---------------------------------------------------------------------     --------------------------------
                                                           Weighted
                                                           Average
                                        Weighted          Remaining
Range of Exercise        Number          Average         Contractual        Number        Weighted Average
     Prices           Outstanding     Exercise Price      Life-Years      Exercisable      Exercise Price
-----------------     -----------     --------------     ------------     -----------     ----------------
<S>                       <C>             <C>                <C>            <C>                 <C>
$0.00 to $2.00            186,576         $1.60              8.02           121,276             $1.38
$2.01 to $3.00             53,152          2.61              9.75            15,000              2.26
$3.01 to $4.00             41,200          3.28              9.39            41,200              3.28
                          -------         -----              ----           -------             -----

                          280,928         $2.04              8.54           177,476             $1.90
                          =======         =====              ====           ========            =====
</TABLE>

                The Company granted its President five year stock options to
purchase up to 500,000 shares which vest upon the Company attaining certain
specified milestones, are exercisable at $1.375 per share, and expire in June
2003. A total of 250,000 options are vested at June 30, 2000.

                                      F-13



<PAGE>

                         CADAPULT GRAPHIC SYSTEMS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                The Company granted two employees five year stock options to
         purchase up to 100,000 shares which vest upon the Company attaching
         certain specified milestones and are exercisable at $2.00 per share and
         expire in March 2004. A total of 100,000 options are vested at June 30,
         2000.

                In December 1999, the Company granted two employees five year
         stock options to purchase up to 50,000 shares which vest ratably over
         three years, are exercisable at $3.00 per share and expire in December
         2004.

         b)     Private Placements:

                In August 1998, the Company completed a private placement
         through the sale of 524,000 shares of its common stock for net proceeds
         of approximately $620,000, including conversion of a $50,000 note
         payable to a related party.

                In June 1999, the Company sold 67,750 shares of its common stock
         for $2.00 per share for net proceeds of approximately $120,500.

                In September 1999, the Company sold 60,000 shares of its common
         stock for $2.00 per share for net proceeds of $119,700.

         c)     Common Stock:

                During the year ended June 30, 2000, the Company issued 35,435
         shares of its common stock for services valued at $71,000.

         d)     Warrants:

                In August 1998, and February 1999, the Company issued 105,000
         warrants to purchase its common stock at between $4.00-$5.00 per share
         in exchange for legal services which were subsequently capitalized. The
         warrants, which had a value of $20,510, using the Black-Scholes pricing
         model, expire through February 15, 2004.

                In October 1999, the Company issued 30,000 warrants to purchase
         its common stock at between $3.00 - $4.00 per share in exchange for
         investor relation services which were subsequently capitalized. The
         warrants, which were valued at approximately $100,000 using the
         Black-Scholes pricing model, were recognized as a cost of issuance of
         the Series A Preferred shares and expire on September 29, 2004.

         e)     Amendments to Certificate of Incorporation:

                  In August 1999, the Company's Board of Directors amended its
         Certificate of Incorporation reducing the number of authorized shares
         of $.001 par value common stock to twenty million shares and authorized
         five million shares of $.001 par value preferred stock.

                                      F-14



<PAGE>

                         CADAPULT GRAPHIC SYSTEMS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         f)     Preferred Stock:

                The Company's Certificate of Incorporation authorizes the
         issuance of up to 5,000,000 shares of Preferred Stock. The Board of
         Directors is authorized to issue shares of Preferred Stock from time to
         time in one or more series and to establish and designate any such
         series and to fix the number of shares and the relative conversion
         rights, voting rights, terms of redemption and liquidation. In December
         1999, the Board authorized the issuance of up to 1,000,000 shares of
         Series A Preferred Stock.

                On March 10, 2000, the Company completed a private placement
         wherein it sold 550,000 units for $10.00 per unit representing 550,000
         shares of its Series A Preferred Stock and 1,100,000 warrants
         exercisable for five years to purchase one share of common stock for
         $4.50 per share. Net proceeds received from the sale totalled
         $4,566,549.

                Dividends on the Series A Preferred Stock accrue at a rate of
         11.5% per annum and are payable quarterly. Each Series A share is
         convertible at the option of the holder at a rate of 3.077 shares of
         common stock for one Series A share. The conversion price shall adjust
         to 75% of the average bid price for the 90 days preceding the 24th
         month anniversary of the closing of the offering and again on the 48th
         month anniversary. Under no circumstances can a new conversion price be
         below $2.00 per share.

                The discount, if any, resulting from allocation of the proceeds
         to the beneficial conversion feature is analogous to a dividend and
         will be recognized as a return to preferred shareholders over the
         minimum period from the date of issuance through the date of earliest
         conversion using the effective yield method.

                The Company has the right to call the Series A shares at $15.00
         per share, at any time. Holders have the right to convert upon receipt
         of the call notice.

                In connection with the private placement, the placement agent
         received a commission and non accountable expense allowance equal to
         13% of the proceeds of the offering, five year warrants to purchase up
         to 236,500 shares of the Company's common stock at $1.65 per share and
         up to 590,000 shares of the Company's common stock at $3.75 per share.
         The value of the warrants was recognized as a cost of issuance of the
         Series A shares.

                                      F-15



<PAGE>

                         CADAPULT GRAPHIC SYSTEMS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8   -   COMMITMENTS AND CONTINGENCIES:

         Leases - The Company leases its premises under lease agreements which
expire through 2010 and an automobile and equipment under operating leases that
expire through 2003. Future minimum lease payments are as follows:

                   Year Ending June 30,
                   --------------------

                         2001                                    $  311,491
                         2002                                       317,344
                         2003                                       252,374
                         2004                                       184,800
                         2005                                       184,800
                         2006 and thereafter                      1,250,809
                                                                 ----------
                                                                 $2,501,618
                                                                 ==========

         Rent expense amounted to $216,764 and $198,199 for the years ended June
30, 2000 and 1999, respectively.

         Employment Agreements - On May 1, 1998, the Company entered into a five
year employment agreement with its President for a base salary of $130,000 per
annum subject to certain adjustments, and three year employment agreements with
three employees providing for aggregate compensation of $270,000 per annum. In
2000, the Company entered into three year employment agreements with two
employees providing for aggregate compensation of $160,000 per annum.

         Litigation - In August 1999, the Company commenced a lawsuit against a
major supplier which alleges various causes of action including alleged
violations of the New Jersey Franchise Practices Act, breach of contract and
unfair competition. The supplier has denied these claims and brought
counterclaims against the Company alleging that the Company engaged in unfair
competition and had infringed on certain patents owned by it.

         It is too early in the discovery process for the Company or its
attorneys to evaluate the likelihood of an unfavorable outcome or a range of
potential loss. The Company and its attorneys believe they have substantial and
meritorious defenses to the adverse claims and are reasonably confident that the
likelihood of an unfavorable outcome is relatively low.


NOTE 9   -   MAJOR SUPPLIER:

         Direct purchases from one supplier accounted for approximately 25% of
total purchases in 2000 and 34% in 1999. If the supplier fails to provide the
required inventories, it may have a negative impact on the Company. (See Note
8).

                                      F-16



<PAGE>

                         CADAPULT GRAPHIC SYSTEMS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 10  -   EARNINGS PER COMMON SHARE:

         Basic earnings per common share is computed using the weighted average
number of common shares outstanding. Diluted earnings per common share is
computed using the weighted average number of shares outstanding for the
incremental shares attributed to outstanding options and warrants to purchase
common stock , and other potentially dilutive securities.

The following table sets forth the computation of basic and diluted earnings per
common share:

                                                   Year Ended June 30,
                                               -------------------------
                                                   2000          1999
                                               -----------   -----------
Numerator:
  Net income (loss) - basic                    $   146,769   $  (444,374)
                                               ===========   ===========
  Net income (loss) - diluted                  $   146,769   $  (444,374)
                                               ===========   ===========

Denominator:
  Denominator for basic earnings per
    common share:

    Weighted average shares                      3,176,090     2,844,819

  Effect of dilutive securities-
    Employee stock options and warrants            332,044             -
                                               -----------   -----------

  Denominator for diluted earnings per
    common share                                 3,508,134     2,844,819
                                               ===========   ===========

  Earnings (loss) per common share:
    Basic                                      $       .05   $      (.16)
                                               ===========   ===========

    Diluted                                    $       .04   $      (.16)
                                               ===========   ===========


                                      F-17



<PAGE>

                         CADAPULT GRAPHIC SYSTEMS, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


         The following warrants and options to purchase common stock were
excluded from the computation of diluted earnings per share for the years ended
June 30, 2000 and 1999 because their exercise price was greater than the average
market price of the common stock for those years:

                                                        Year Ended June 30,
                                                      -----------------------
                                                        2000           1999
                                                      ---------       -------

              Anti-dilutive warrants and options      1,884,200       105,000
                                                      =========       =======

         The conversion of the Series A convertible preferred stock has been
excluded from the computation of diluted earnings per share for the year ended
June 30, 2000 as the conversion would be anti-dilutive after adding back
preferred stock dividends to net income.

NOTE 11  -   FOURTH QUARTER ADJUSTMENTS (UNAUDITED):

         The Company had a loss before income taxes in the fourth quarter of the
year ended June 30, 1999 totaling $314,978 as compared to an average loss of
approximately $43,132 for the previous three quarters. Contributing to the
additional loss were approximately $130,000 for development costs related to
SamplePrint.com and $40,000 for year-end adjustments to inventories and the
allowance for doubtful accounts. Additional loss was due to a shortfall of
approximately $250,000 in sales resulting in $70,000 gross profit reduction and
$30,000 due to general and administrative costs relating to the two businesses
acquired earlier in the year.

                                      F-18



<PAGE>

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE

         On July 6, 1998, we informed Mantyla, McReynolds & Associates that it
had been dismissed as our principal accountants. The former principal
accountants' report on the financial statements neither contained an adverse
opinion or disclaimer of opinion, nor was modified as to uncertainty, audit
scope, or accounting principles. Our decision to change our principal accountant
was recommended and approved by our Board of Directors. There were no
disagreements with the former accountants on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure. We
have authorized the former accountants to respond fully to all inquires of the
successor accountant concerning any matter.

         On July 6, 1998, we engaged Wiss & Company, LLP as our principal
accountants. Wiss & Company had been the principal accountants for CGSI since
April 23, 1998. Pursuant to a reverse acquisition which was completed on June
18, 1998, we acquired CGSI became as a wholly-owned subsidiary. Following the
acquisition, our Board of Directors selected Wiss & Company to serve as our
principal accountants.

                                       36


<PAGE>

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Our Management

         The persons listed in the table below are our present directors and
executive officers.

----------------   ---   --------------------------------------------------
Name               Age   Position
----------------   ---   --------------------------------------------------
Michael W. Levin   35    Chief Executive Officer, President and Chairman of
                         the Board
Frances Blanco     39    Vice President Marketing and Investor Relations,
                         Treasurer, Secretary and Director
Duncan Huyler      39    Vice President Technical Services
Duncan Yates       30    Vice President Sales
Paul C. Baker      62    Director
Edwin Ruzinsky     66    Director
Donald Gunn        48    Director and Vice President of Media Sciences
Henry Royer        68    Director
Stanley Brooks     52    Director
----------------   ---   --------------------------------------------------

         Edwin Ruzinsky became a director on August 27, 1999. Donald Gunn and
Henry Royer became directors on December 23, 1999. Duncan Yates became an
officer on July 15, 2000. Stanley Brooks became a director on September 7, 2000.

         Our directors are elected annually to serve for one year and hold
office until the next annual meeting of the shareholders and until their
successors are elected and qualified. Our Board of Directors may increase the
size of the Board of Directors. Any director who fills a position created by the
Board of Directors serve until the next annual meeting of the shareholders. Our
officers are elected by the Board of Directors at the first meeting after each
annual meeting of our shareholders, and hold office until their death,
resignation or removal from office.

Management Profiles

Michael W. Levin, Chief Executive Officer, President and Chairman of the Board:

         Mr. Levin has served as our Chief Executive Officer, President and
Chairman of the Board since June 18, 1998. Before June 1998, he had served as
President, Treasurer, Secretary and Chairman of CGSI since 1987, when he founded
CGSI while attending Lehigh University. He is responsible for a senior
management team as well as merger and acquisition activity and corporate
finance. He earned a Bachelor of Science degree in Mechanical Engineering from
Lehigh University in 1987, graduating summa cum laude.

                                       37


<PAGE>

Frances Blanco, Vice President of Marketing and Investor Relations, Treasurer,
Secretary and Director:

         Ms. Blanco has served as our Vice President of Marketing and Investor
Relations, Treasurer, Secretary and a Director since June 18, 1998.From 1993 to
June 18, 1998, she served as Vice President of Marketing and Investor Relations,
Treasurer, Secretary and a director of CGSI. Ms. Blanco manages all aspects of
marketing, including brand identity, demand creation and vendor relationships
for us as well as investor relations. From 1984 through 1989, Ms. Blanco was a
Reseller Account Manager at Lotus, where she designed and implemented marketing
programs. From August 1989 through June 1993, Ms. Blanco served as a Business
Development Manager at Tektronix, Inc., where she was responsible for the
development of long term and strategic customers. She earned a Bachelor of
Science degree in Marketing from Bentley College in 1982 and a Masters of
Business Administration degree from Boston College in 1985.

Duncan Huyler, Vice President of Technical Services:

         Mr. Huyler has served as our Vice President of Technical Services since
June 18, 1998. From 1993 to June 18, 1998, he served as Vice President of
Technical Services for CGSI. Mr. Huyler manages all the technical aspects for
us, including running the business under its own P/L, developing service plans,
hiring staff, developing and implementing training programs and obtaining
service authorizations. From May 1983 through October 1987, Mr. Huyler served in
the U.S. Army. From September 1988 through August 1993, Mr. Huyler worked for
Lord & Taylor, where his positions included Senior Financial Analyst and
Director of Systems. Mr. Huyler graduated from Cornell University in 1983 with a
Bachelor of Science degree in Business and earned a Masters of Business
Administration from the University of Louisville in 1987.

Duncan Yates, Vice President of Sales

         Mr. Yates has served as Vice President of Sales since July 15, 2000.
Prior to July 15, he served as the Regional Sales Manager for Cadapult, which he
joined in 1993. Mr. Yates manages all aspects of direct sales for the company's
value added reseller business, including achieving quarterly revenue and gross
profit targets, developing sales plans and strategies, hiring and training sales
staff, and implementing vertical market pilot programs. Mr. Yates is a 1992
graduate of Western Maryland College with a Bachelor of Science degree in
Political Science.

Paul C. Baker, Director:

         Mr. Baker has served as a Director since June 18, 1998. From 1986 to
the present, he has been President of Sherwood Partners, Inc., a venture capital
and management consulting company, which he founded, that focuses on developing
companies with high growth potential. Prior to founding Sherwood Partners, Inc.
in 1986, Mr. Baker held numerous positions during his twenty-five years of
employment with American Cyanamid Co. At Cyanamid, Mr. Baker held several
domestic and international management positions, including President of Domestic
Operations from April 1975 through October 1979, President of Shulton Inc. from
October 1977 through October 1979 and Group Vice President of Cyanamid from
October 1979 through December 1984. Mr. Baker graduated from Lehigh University
in 1959 with a Bachelor of Arts degree in Liberal Arts, earned a B.S.I.E. degree
in Engineering in 1960 from Lehigh University, and received a Masters in
Business Administration in 1963 from Fairleigh Dickinson University.

Edwin Ruzinsky, Director:

         Mr. Ruzinsky has served as a Director since August 27, 1999.He is a
Certified Public Accountant and a Certified Management Consultant. Prior to his
retirement on June 1, 1996 as a Partner in Deloitte Consulting LLC, a
wholly-owned subsidiary of Deloitte & Touche LLP, he served for many years as
the firm's National Director-Media Industry Services. He previously served Times
Mirror Company as Vice President of Finance & Administration/Book Publishing
Group and Parents' Magazine Enterprises, Inc. as Chief Accounting Officer. Mr.
Ruzinsky continues serving as a member of the Pace University/Dyson School of
Liberal Arts & Sciences/Master of Science in Publishing Advisory Board. He is
currently a member of the Board of Dowden Publishing Company, Inc., a provider
of specialized publications and customized communication products for healthcare
professionals and consumers. In addition, he has been a consultant to The CPA
Journal, published by the New York State Society of Certified Public
Accountants, for the past twenty-five years.

                                       38


<PAGE>

Donald Gunn, Director:

         Mr. Gunn has served as a Director since December 23, 1999. Since
December 13, 1999, he has served as Vice President of Media Sciences. He founded
ultraHue, Inc., a manufacturer of ink and toner products for computer printers
in March 1996. He served as President and Chief Executive Officer of ultraHue
until we acquired ultraHue on December 13, 1999. From June 1997 to November
1998, he served as the Western Sales Manager for Invention Machine Corporation,
a Boston based provider of software designed to aid engineers in the development
of engineering solutions. From August 1995 to May 1997, he worked as Regional
Manager for the Pacific Northwest for 3D Systems, located in Valencia,
California, a company that produces stereo lithography machines. From October
1987 to August 1995, he worked for the Color Printer Division of Tektronix,
Inc., located in Wilsonville, Oregon, in various sales and marketing positions,
including Major Account Manager and VAR Account Manager for the Western United
States. From July 1986 to October 1987, he worked as a sales manager for Silma,
Inc., located in Santa Clara, California, a company that produced software for
industrial equipment. From January 1985 to June 1986, he as the Western Area
Sales Manager for AAB Robotics, located in Fort Collins, Colorado, a company
that produced equipment for the welding industry.He received a Bachelors of
Science degree in Electrical Engineering from the University of Illinois in
1974.

Henry Royer, Director:

         Henry Royer has served as a Director since December 23, 1999. From 1950
until 1962, he was employed for four years by Pillsbury Mills and for four years
by Peavey Company as a grain merchandiser. From 1962 through 1965, he was
employed as Treasurer and served on the Board of Lehigh Sewer Pipe and Tile. He
joined First National Bank of Duluth in 1965, where he served in various
capacities, including Assistant Cashier, Assistant Vice President, Assistant
Manager of the Commercial Loan Department and Senior Vice President in Charge of
Loans. When he left First National Bank in 1983, he was serving as Executive
Vice President/Loans. He then joined The Merchants National Bank of Cedar
Rapids, currently called Firstar Bank Cedar Rapids, N.A., where he served as
Chairman and President until August 1994. From September 1994 through December
31, 1997, he served as the President and Chief Executive Officer of River City
Bank, Sacramento, California. He served as an Independent Trustee of Berthel
Growth & Income Trust I from its date of inception in 1995 through February 5,
1999, when he resigned. He joined Berthel Fisher & Company Planning Inc. in
February 1999 and was elected President in July 1999. He was elected President
of Berthel SBIC, LLC in August 1999. He graduated in 1953 from Colorado College
with a B.A. in Money and Banking.

Stanley Brooks, Director:

         Stanley C. Brooks has served as a Director since September 7, 2000. He
is the Chairman and President of Brookstreet Securities Corporation. He has
served in this capacity for the past 10 years. Brookstreet is a nationally
recognized Irvine, California based full service investment banking and
corporate finance firm with memberships in the NASD, BSE, NFA, RIBA, and SiPC.
Founded in 1990, Brookstreet has in excess of 110 branch offices throughout the
50 states. Prior to his development of Brookstreet, Stanley Brooks held both
Executive and Senior Vice President Positions from 1976 to 1990 with three
regional independent brokerage firms.

Section 16(a) Beneficial Ownership Reporting Compliance

         Section 16(a) of the Securities Exchange Act of 1934 requires
Cadapult's directors and executive officers, and persons who own more than ten
percent of Cadapult's common stock, to file with the SEC initial reports of
beneficial ownership and reports of changes in beneficial ownership of
Cadapult's common stock. Such persons are also required by SEC regulations to
furnish Cadapult with copies of all such Section 16(a) forms they file. Based
solely on a review of the copies of such reports furnished to Cadapult, Cadapult
is not aware of any delinquencies in the filing of such reports.

                                       39


<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

Summary Compensation Table

         The table below sets forth information concerning the annual and long
-term compensation during our last three fiscal years of our Chief Executive
Officer and other most highly compensated employees and all of our other
officers and directors. In reviewing the Summary Compensation Table below,
consider that:

              - On June 18, 1998, we acquired CGSI, a privately-held company.
                In 1998, Cadapult changed its fiscal year end from December 31
                to April 30, and CGSI changed its fiscal year end from April
                30 to June 30. The 1998 fiscal year compensations in the table
                below includes the operations of CGSI for the period May 1,
                1997 through April 30, 1998.
              - Michael Levin became an officer and director on June 18, 1998.
              - Frances Blanco became an officer and director on June 18, 1998.
              - Duncan Huyler became an officer on June 18, 1999.
              - Paul Baker became a director on June 18, 1998.
              - Edwin Ruzinsky became a director on August 27, 1999.
              - Donald Gunn became a director of Cadapult and an officer of
                Media Sciences on December 23, 1999.
              - Henry Royer became a director on December 23, 1999. For
                purposes of the Executive Compensation section, we are
                reporting as compensation to Mr. Royer certain options granted
                to Berthel SBIC. Mr. Royer is President of Berthal SBIC and
                deemed a beneficial owner of securities held by Berthel SBIC.
              - Duncan Yates became an officer on July 15, 2000.  His 1998
                compensation covers a ten month period.
              - Our matching contributions to employees' 401(k) plan are
                included in the table as all other compensation.

<TABLE>

--------------------------------------- ------------------------------------- ------------------------ --------------
                                                                              Long Term Compensation
                                                                              ------------------------
                                                Annual Compensation                   Awards
                                        ------------------------------------- ------------------------
                                                                               Securities Underlying     All Other
Name and Principal Position               Year       Salary         Bonus        Options/SARS (#)      Compensation
--------------------------------------- --------- -------------- ------------ ------------------------ --------------
<S>                                       <C>          <C>           <C>                      <C>             <C>
Michael W. Levin                          2000         $131,717           $0                        0         $2,503
  Chief Executive Officer, President      1999         $130,000           $0                  500,000         $2,379
  and Chairman Of the Board               1998         $141,583           $0                   51,223         $2,727

Frances Blanco                            2000          $85,493       $9,920                        0         $2,554
  Vice President, Treasurer, Secretary    1999          $80,000      $10,000                  100,000         $2,021
  and Director                            1998          $75,000      $25,000                    7,741         $2,158

Duncan Huyler                             2000          $96,725           $0                        0         $1,765
  Vice President                          1999          $95,000           $0                  100,000         $4,630
                                          1998          $91,000      $25,000                    9,265         $3,867

Duncan Yates                              2000         $112,389           $0                    3,000           $900
  Vice President                          1999          $93,467      $25,000                   14,000           $900
                                          1998          $59,761           $0                    8,430           $602

Paul C. Baker                             2000               $0           $0                        0             $0
  Director                                1999               $0           $0                   33,000             $0
                                          1998               $0           $0                        0             $0

Edwin Ruzinsky                            2000               $0           $0                   10,000             $0
  Director

Donald Gunn                               2000          $43,333           $0                   50,001             $0
  Director

Henry Royer                               2000               $0           $0                   10,000             $0
  Director
--------------------------------------- --------- -------------- ------------ ------------------------ --------------
</TABLE>

                                       40


<PAGE>

Option/SAR Grants in Last Fiscal Year - Individual Grants

         The table below sets forth information concerning options granted
during the fiscal year ended June 30, 2000 to those persons named in the
preceding Summary Compensation Table. The percentage of total options is based
155,304 options granted to officers, directors, and employees, including options
during the 2000 fiscal year. None of the options held by those individuals
listed in the Summary Compensation Table were exercised in fiscal year ended
2000.

<TABLE>
---------------------------- ------------------------- -------------------------- ---------------- -----------------
                                Number of Securities        Percent of Total
                              Underlying Options/SARs    Options/SARs Granted to     Exercise of
                                      Granted                 Employees in           Base Price        Expiration
           Name                         (#)                    Fiscal Year             ($/Sh)             Date
---------------------------- ------------------------- -------------------------- ---------------- -----------------
<S>                                   <C>                       <C>                    <C>             <C>
Michael W. Levin                           0                        -                      -                  -
Frances Blanco                             0                        -                      -                  -
Duncan Huyler                              0                        -                      -                  -
Duncan Yates                           3,000                      1.9%                 $2.00           10-01-10
Paul C. Baker                              0                        -                      -                  -
Edwin Ruzinsky                        10,000                      6.4%                 $2.06           08-27-04
Donald Gunn                           50,001                     32.2%                 $3.00           12-13-04
Henry Royer                           10,000                      6.4%                 $3.13           12-10-04
---------------------------- ------------------------- -------------------------- ---------------- -----------------
</TABLE>


Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values

         The following table sets forth information concerning the value of
unexercised stock options at June 30, 2000 for those individuals named in the
Summary Compensation Table. We calculated the dollar values in the table by
multiplying the number of options by the difference between the fair market
value of a share of common stock underlying an option and the exercise price of
the option. The last sale price of a share of our common stock on June 30, 2000
was $2.187, as reported by the OTC Bulletin Board.

<TABLE>
------------------------- ----------------- ----------- ------------------------------ -------------------------------
                              Number of                     Number of Unexercised           Value of Unexercised
                           Shares Acquired    Value         Securities Underlying        In-the-Money Options/SARs
Name                         on Exercise     Realized      Options/SARs at FY-end                 at FY-end
                                                        ------------------------------ -------------------------------
                                                         Exercisable   Unexercisable    Exercisable    Unexercisable
------------------------- ----------------- ----------- -------------- --------------- --------------- ---------------
<S>                                                           <C>             <C>            <C>             <C>
Michael W. Levin                 -              -             301,223         250,000        $658,775        $546,750
Frances Blanco                   -              -              57,741          50,000        $126,280        $109,350
Duncan Huyler                    -              -              59,265          50,000        $129,613        $109,350
Duncan Yates                     -              -              19,430           6,000         $42,493         $13,122
Paul Baker                       -              -              33,000               0         $72,171              $0
Edwin Ruzinsky                   -              -              10,000               0         $21,870              $0
Donald Gunn                      -              -                   0          50,001              $0        $109,352
Henry Royer                      -              -              10,000               0         $21,870              $0
------------------------- ----------------- ----------- -------------- --------------- --------------- ---------------
</TABLE>

                                       41


<PAGE>

Director Compensation

         We have a compensation plan for our independent directors. Eligible
outside directors are paid $3,000 per year, payable quarterly, for attendance at
regular and special meetings and may be reimbursed for their reasonable
out-of-pocket expenses incurred in connection with their attendance at meetings
of the Board of Directors and for other expenses incurred in their capacity as
directors of Cadapult. Outside directors are also granted five year options to
purchase 10,000 shares of common stock, exercisable at the fair market value on
the date of appointment to the Board, and will be granted, annually, additional
options to purchase 5,000 shares of common stock on each July 1 for continued
service on the Board.

Employment Agreements with Named Executive Officers

Michael W. Levin

         Michael W. Levin serves as our Chief Executive Officer and President
pursuant to a five year employment agreement that began on May 1, 1998, as
amended September 1, 1998. His current annual salary is $130,000. His salary
increases annually by the cost-of-living adjustments tied to the Consumer Price
Index. We may increase his salary at any time. Commencing in his third year of
employment and each year after, his annual salary increases, per quarter, by one
percent of our earnings before interest, taxes, depreciation and amortization in
the prior fiscal year. We granted 500,000 five-year options to purchase 500,000
shares of common stock. These options vest only after we achieve certain
corporate levels of earnings. The exercise price for the options is $1.375 per
share. He may exercise 125,000 options following the first fiscal year that our
earnings before interest, taxes, depreciation and amortization exceeds each of
$500,000, $1,000,000, $1,500,000 and $2,000,000. Options to purchase 250,000
shares vested due to the achievement of the first two vesting criteria in the
2000 fiscal year. These options are cumulative and are subject to anti-dilution
rights.

         He also receives:

              - death benefits of $100,000,
              - a fifteen year term life insurance policy for $1,000,000,
              - a luxury automobile, and
              - reimbursement for reasonable travel and other business related
                expenses.

         We may also award him financial or other bonuses as determined by the
Board of Directors.

         If we undergo a "change of control", we must pay him an amount equal to
290% of his salary and his incentive based options shall vest immediately. He
has the right to terminate his employment if we undergo a change in control. As
defined in his employment agreement, a change of control refers to

              - a change in our ownership or management that must be reported
                in under the Exchange Act of 1934;
              - the acquisition of 25% or more of our common stock or our
                voting securities;
              - a change in a majority of our Board of Directors that our Board
                does not approve of or that results from a proxy contest);
              - a reorganization, merger, consolidation or sale of
                substantially all of our assets after which our shareholders
                do not own, in the same proportion, more than 50% of the
                voting power, after which a majority of the board of directors
                changes, and after which a new shareholder beneficially owns
                25% or more of the voting power; or
              - shareholder approval of  our liquidation or dissolution.

                                       42


<PAGE>

Frances Blanco

         Frances Blanco serves as our Vice President of Marketing and Investor
Relations, Treasurer and Secretary pursuant to a three year employment agreement
that began on May 1, 1998 and was amended on March 5, 1999. She earns a current
annual salary of $90,000. We may grant her financial bonuses as we may
determine. We granted her 100,000 five-year options to purchase 100,000 shares
of our common stock. These options vest only after we achieve certain corporate
levels of earnings. The options have an exercise price of $2.00 per share. She
may exercise 25,000 options following the first fiscal year that our earnings
before interest, taxes, depreciation and amortization exceeds each of $500,000,
$1,000,000, $1,500,000 and $2,000,000. Options to purchase 50,000 shares vested
due to the achievement of the first two vesting criteria in the 2000 fiscal
year. These options are cumulative and are subject to anti-dilution rights. If
we undergo a "change of control", the incentive based options shall vest
immediately.

Duncan Huyler

         Duncan Huyler serves as our Vice President of Technical Services
pursuant to a three year employment agreement that began on May 1, 1998 and was
amended on March 5, 1999. He earns a current annual salary of $95,000. We may
grant him financial bonuses as we may determine. We granted him 100,000
five-year options to purchase up to 100,000 shares of our common stock. These
options vest only after we achieve certain corporate levels of earnings. The
options have an exercise price of $2.00 per share. He may exercise 25,000
options following the first fiscal year that our earnings before interest,
taxes, depreciation and amortization exceeds each of $500,000, $1,000,000,
$1,500,000 and $2,000,000. Options to purchase 50,000 shares vested due to the
achievement of the first two vesting criteria in the 2000 fiscal year. These
options are cumulative and are subject to anti-dilution rights. If we undergo a
"change of control", the incentive based options shall vest immediately.

Duncan Yates

         Duncan Yates has served as our Vice President of Sales since July 15,
2000. Pursuant to an oral agreement effective as of July 15, 2000 and as amended
September 7, 2000, Mr. Yates earns a base annual salary of $95,000 and is
entitled to commissions of 10% of gross profit on his sales. He is entitled to a
bonus of $10,000 each quarter for meeting certain criteria established by the
Board of Directors. We granted him 100,000 five-year options to purchase up to
100,000 shares of our common stock. These options vest only after we achieve
certain corporate levels of earnings. The options have an exercise price of
$2.00 per share. He may exercise 25,000 options following the first fiscal year
that our earnings before interest, taxes, depreciation and amortization exceeds
each of $1,500,000 and $2,000,000. He may exercise up to 50,000 options
following the end of the 2001 fiscal year if certain sales targets established
by the Board of Directors is achieved. If we undergo a "change of control", the
incentive based options shall vest immediately.

Stock Option Plan

         Under our incentive stock option plan for employees, which was adopted
by our Board of Directors and approved by our shareholders, we reserved 500,000
shares of our common stock . Our incentive stock option plan for employees is
administered by our Chairman of the Board. An incentive stock option entitles
the holder to purchase a share of our common stock at a purchase price equal to
the fair market value of the common stock on the day of grant. We filed a Form
S-8 to register the 500,000 shares underlying the stock options. As of September
7, 2000, we have outstanding incentive stock options to purchase about 324,347
shares of common stock, exercisable for five or ten years from the date of grant
at prices of $1.25 to $4.00, including options to purchase 151,659 shares of
common stock to our officers and directors. If we undergo a "change of control",
the incentive based options shall vest immediately.

                                       43


<PAGE>

Employee Profit Sharing Plan

         We have a tax-qualified employee paired profit sharing plan sponsored
by Kemper Financial Services, Inc. This 401(k) plan covers all of our employees
that have been employed for at least six months and meet other age and
eligibility requirements. Under the 401(k) plan, employees may choose to reduce
their current compensation by up to 15% each year and have that amount
contributed to the 401(k) plan. We make matching contributions equal to 25% of
the employee's contribution. In our discretion, we may contribute unmatched
contributions. The 401(k) plan qualifies under Section 401 of the Internal
Revenue Code, so that we can deduct contributions by employees or by us.
Employee contributions to the 401(k) plan are fully vested at all times, and our
contributions, if any, vest at the rate of 25% after two years and after two
years at the rate of 25% a year until fully vested.

                                       44


<PAGE>

ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners

         The table below sets forth, as of September 22, 2000, the shares of our
common stock beneficially owned by each person known to us to be the beneficial
owner of more than five percent of our outstanding shares of common stock,
except that the security ownership of management is provided in a separate
table. This information was determined in accordance with Rule 13(d)-3 under the
Securities Exchange Act of 1934, and is based upon the information provided by
the persons listed below. All persons named in the table have the sole voting
and dispositive power with respect to common stock beneficially owned.

         You should consider the following factors when reviewing the table:

              -   For each person listed, shares of common stock that can be
                  acquired upon the conversion of preferred stock and the
                  exercise of stock options or warrants within 60 days are
                  included in the calculation of percent of class.
              -   Berthel SBIC's beneficial ownership includes shares of common
                  stock which may be acquired upon the exercise of warrants to
                  acquire 323,000 shares of common stock and upon the conversion
                  of 100,000 series A preferred stock shares, at an assumed
                  conversion rate of one series A preferred stock share into 3.1
                  shares of common stock, into 310,000 shares of common stock.
              -   Berthel SBIC's beneficial ownership also includes options to
                  acquire 15,000 shares of common stock granted to Berthel SBIC
                  for the services of Henry Royer, President of Berthal SBIC, on
                  our Board of Directors. The beneficial owners of Berthel SBIC
                  are: Thomas J. Berthel, Chief Executive Officer and Chairman;
                  Ronald O Brendengen, Chief Financial Officer and Chief
                  Operation Officer; Henry Royer, President; Leslie D. Smith,
                  Secretary; and Julie K. Driscoll, Assistant Secretary.
              -   The beneficial owner of Brookstreet Securities Corporation is
                  Stanley Brooks.

<TABLE>
-------------------------------------------------- ------------------------- --------------------- -----------------
Name and Address                                      Amount and Nature       Acquirable Within        Percent
of Beneficial Owner                                  of Beneficial Owner           60 days             of Class
-------------------------------------------------- ------------------------- --------------------- -----------------
<S>                                                           <C>                  <C>                  <C>
Berthel SBIC, LLC                                             0                    648,000              16.8%
100 Second Street SE,
Cedar Rapids, Iowa 52407

Charles C. and Charles F. Bearoff                             0                    255,000               7.3%
P.O. Box 37
Bridgeport, PA 19405

Brookstreet Securities Corporation                            0                    255,900               7.4%
2361 Campus Drive #210
Irvine, CA 92612

General Conference Corp. of Seventh-Day                       0                    255,000               7.3%
Adventists
12501 Old Columbia Pike
Silver Springs, MD 20904
-------------------------------------------------- ------------------------- --------------------- -----------------
</TABLE>


Security Ownership of Management

         The table below sets forth, as of September 22, 2000, the shares of our
common stock beneficially owned by each of our officers and directors, and by
all of our officers and directors as a group. This information was determined in
accordance with Rule 13(d)-3 under the Securities Exchange Act of 1934, and is
based upon the information provided by the persons listed below. All persons
named in the table have the sole voting and dispositive power with respect to
common stock beneficially owned.

                                       45


<PAGE>

         You should consider the following factors when reviewing the table:

              -   For each person listed, shares of common stock that can be
                  acquired upon the exercise of stock options within 60 days are
                  included in the calculation of percent of class..
              -   Mr. Levin's reported shares of common stock excludes options,
                  subject to future vesting, to acquire 250,000 shares of common
                  stock.
              -   Ms. Blanco's reported shares of common stock excludes options,
                  subject to future vesting, to acquire 50,000 shares of common
                  stock.
              -   Mr. Huyler's reported shares of common stock excludes options,
                  subject to future vesting, to acquire 50,000 shares of common
                  stock.
              -   Mr. Yates' reported shares of common stock excludes options,
                  subject to future vesting, to acquire 106,000 shares of common
                  stock.
              -   Mr. Gunn's reported shares of common stock excludes options,
                  subject to future vesting, to acquire 50,001 shares of common
                  stock.
              -   Henry Royer's reported beneficial ownership includes 648,000
                  shares of common stock acquirable by Berthel SBIC.
              -   Stanley Brooks' reported beneficial ownership includes 255,900
                  shares of common stock acquirable by Brookstreet Securities
                  Corporation.

         The address of each of the persons named in the table is Cadapult
Graphic Systems, Inc., 110 Commerce Drive, Allendale, New Jersey 07401, except
for Henry Royer whose address is 100 Second Street SE, Cedar Rapids, Iowa 52407.

<TABLE>

-------------------------------------------------- ------------------------- --------------------- -----------------
Name and Address                                      Amount and Nature       Acquirable Within        Percent
of Beneficial Owner                                  of Beneficial Owner           60 days             of Class
-------------------------------------------------- ------------------------- --------------------- -----------------
<S>                                                               <C>                     <C>           <C>
Michael W. Levin                                                  1,508,450               301,223       51.4%
Frances Blanco                                                       40,775                57,741        3.0%
Duncan Huyler                                                        40,775                59,265        3.1%
Duncan Yates                                                         20,300                19,430        1.2%
Paul Baker                                                           67,500                38,000        3.2%
Edwin Ruzinsky                                                            0                10,000        0.3%
Donald Gunn                                                          25,000                     0        0.8%
Henry Royer                                                               0               648,000       16.8%
Stanley Brooks                                                            0               265,900        7.6%
-------------------------------------------------- ------------------------- --------------------- -----------------
All present officers and directors as a group                     1,702,800             1,399,559       67.2%
(8 persons)
-------------------------------------------------- ------------------------- --------------------- -----------------
</TABLE>


Changes in Control

         We do not have any arrangements which may result in a change in
control.

                                       46


<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         We issued to Mr. Levin under an employment agreement stock options to
purchase up to 500,000 shares of common stock to vest upon us attaining certain
specified corporate milestones based upon corporate earnings, exercisable for
five years at $1.375. Options to purchase 250,000 shares vested due to the
achievement of the first two vesting criteria in the 2000 fiscal year.

         We issued to each of Ms. Blanco and Mr. Huyler under employment
agreements stock options to purchase up to 100,000 shares of common stock each
to vest upon us attaining certain specified corporate milestones based upon
corporate earnings, exercisable for five years at $2.00. For each of Ms. Blanco
and Mr. Huyler, options to purchase 50,000 shares vested due to the achievement
of the first two vesting criteria in the 2000 fiscal year.

         In August 1998, Paul and Brenda Levin, the parents of Michael W. Levin,
converted a $50,000 note payable by us to them for 40,000 shares of our common
stock at the rate of $1.25 per share. This transaction was part of a private
placement of common stock at $1.25 per share that we completed in August 1998.

         In August 1998, we filed a registration statement on Form S-8 for our
incentive stock option plan for employees under which we may issue options that
may be exercised for up to 500,000 shares of common stock. As of September 22,
2000, executive officers and directors have been granted the following options
pursuant to the incentive stock option plan:

              -   Michael W. Levin, options to purchase 51,223 shares at
                  $1.375 which expire on May 1, 2003;
              -   Frances Blanco, options to purchase 7,741 shares at $1.25
                  which expire on June 18, 2008;
              -   Duncan Huyler, options to purchase 9,265 shares at $1.25
                  which expire on June 18, 2008;
              -   Duncan Yates, options to purchase 8,430 shares at $1.25 which
                  expire on June 18, 2008, 9,000 shares at $2.00 which expire on
                  August 10, 2008, 5,000 shares at $2.00 which expire on August
                  13, 2008, and 3,000 shares at $2.00 which expire on September
                  30, 2009;
              -   Paul Baker, options to purchase 3,000 shares at $2.00 which
                  expire on August 11, 2008, 30,000 shares at $3.31 which expire
                  on April 6, 2009, and 5,000 shares at $2.19 which expire on
                  July 3, 2010;
              -   Edwin Ruzinsky, options to purchase 10,000 shares at $2.06
                  which expire on August 27, 2009 and 5,000 shares at $2.19
                  which expire on July 3, 2010;
              -   Berthel SBIC, options to purchase 10,000 shares at $3.13 which
                  expire on December 8, 2004 and options to purchase 5,000
                  shares at $2.19 which expire on July 3, 2010; and
              -   Stanley Brooks, options to purchase 10,000 shares at $2.94
                  which expire on September 7, 2005.

         On December 13, 1999, we completed, through our subsidiary Media
Sciences, the acquisition of certain assets and the assumption of certain
liabilities of ultraHue, Inc., a New Mexico corporation, pursuant to an asset
purchase agreement dated September 7, 1999. We acquired certain proprietary
information and intellectual property rights of ultraHue and other assets used
in its business operations, including:

              -   its trade secrets;
              -   its accounts receivable less allowances;
              -   its inventory;
              -   rights to the name ultraHue;
              -   its customer lists;
              -   its sales, service and vendor contracts; and
              -   its security deposits.

         We assumed the following liabilities of ultraHue:

              -   its accounts payable as of the closing date;
              -   its customer deposits as of the closing date; and
              -   its leases and contracts.

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<PAGE>

         The purchase price we paid at closing included:

              -   $2,340,000 at closing;
              -   a promissory note for $1,160,000, with 7% annual interest rate
                  payable in one year; and, - a sum equal to ultraHue's cost
                  for its inventory delivered to us at the closing date.

         The purchase price also includes:

              -   the sum of accounts receivables as of the closing date that
                  we collect;
              -   for the first year from closing, 10% of the net profits that
                  Media Sciences derives from the first $1,500,000 dollars of
                  Media Sciences' gross profits;
              -   for the first year from closing, 30% of the net profits of
                  Media Sciences that is attributable to its gross profits in
                  excess of $1,500,000;
              -   for the second and third years from closing, 10% of the
                  quarterly net profits derived by Media Sciences from the first
                  $1,000,000 of gross profits; and
              -   for the second and third years from closing, 30% of the net
                  profits of Media Sciences that is attributable to its gross
                  profits in excess of $1,000,000 dollars.

         On December 13, 1999, Donald Gunn, an officer, director and controlling
shareholder of ultraHue, became Vice President of Media Sciences. Under a three
year employment agreement, we issued him options to purchase 50,001 shares of
our common stock. The exercise price of the options is $3.125 per share.
One-third of the options vest on each of the three anniversary dates of
employment. On December 23, 1999, Mr. Gunn was elected to serve on our Board of
Directors.

         On December 13, 1999, Randy Hooker, an officer, director and
controlling shareholder of ultraHue, became an employee of Media Sciences. Under
a three year employment agreement, we issued him options to purchase 50,001
shares of our common stock. The exercise price of the options is $3.125 per
share. One-third of the options vest on each of the three anniversary dates of
employment.

         In December 1999, Berthel SBIC purchased 100,000 units of our
securities in a private placement at $10 per unit. Berthel SBIC beneficially
owns 407,692 shares of common stock which may be acquired upon the conversion of
100,000 shares of series A preferred stock, at the current conversion rate of
one preferred stock share into 3.077 common stock shares, and the exercise of
five-year warrants to acquire 200,000 shares of common stock at $4.50 per share
which underlie the 100,000 units. Berthel SBIC also owns five year warrants to
acquire another 90,000 shares of common stock.

         On January 14, 2000, Henry Royer purchased 10,000 shares of our common
stock in the public market at $3.25 per share.

         On March 10, 2000, Henry Royer purchased 10,000 units of our securities
in our private placement conducted from December 1999 through March 10, 2000.
Units sold in the private placement were offered at $10.00 per unit and
consisted of one share of series A preferred stock and warrants to purchase two
shares of common stock. The warrants are exercisable for five years at $4.50.
Henry Royer sold all of his shares and units of our securities in May 2000 to
attempt to comply with the internal policies of Berthel SBIC of which he is
President. He sold his 10,000 shares of common stock in the public market at a
loss, as follows:

              -   1,000 shares were sold at $3.00 on May 2, 2000;
              -   1,000 shares were sold at $3.00 on May 4, 2000;
              -   1,000 shares were sold at $2.50 on May 22, 2000;
              -   1,000 shares were sold at $2.53 on May 22, 2000;
              -   2,000 shares were sold at $2.1875 on May 23, 2000; and
              -   4,000 shares were sold at $2.125 on May 23, 2000.

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<PAGE>

Henry Royer also sold his 10,000 units of our securities at the same price of
$10.00 per unit he paid for the units in a private transaction to one individual
who represented that he was an accredited and sophisticated person with whom he
has had prior business relationships, and who accepted all of the same
conditions of purchase as had Mr. Royer when he purchased said securities.

         We issued to Mr. Yates under an oral employment agreement, effective
July 15, 2000, stock options to purchase up to 100,000 shares of common stock
each to vest upon us attaining certain specified corporate milestones,
exercisable for five years at $2.00.


ITEM 13.      EXHIBITS AND REPORTS ON FORM 8-K

Exhibits

         Exhibits required to be filed by Item 601 of Regulation SB are included
in Exhibits to this Report as follows:

Exhibit   Description
-------   -----------

2.1       Agreement and Plan or Reorganization between Seafoods Plus, Ltd. and
          Cadapult Graphic Systems, Inc., a New Jersey corporation, dated June
          5, 1998 (Incorporated by reference to Exhibit 2.1 of Annual Report on
          Form 10-KSB filed on September 28, 1999). 2.2 Agreement and Plan of
          Merger between Cadapult Graphic Systems, Inc. and Seafoods Plus, Ltd.
          (Incorporated by reference to Exhibit 2.1 of Quarterly Report on Form
          10QSB/A filed on September 1, 1998).
2.3       Agreement and Plan of Merger between Cadapult Graphic Systems Inc., a
          New Jersey corporation, and Cadapult Graphic Systems, Inc., a Delaware
          Corporation (Incorporated by reference to Exhibit 2.2 of Quarterly
          Report on Form 10QSB/A filed on September 1, 1998).
2.4       Asset Purchase Agreement between Cadapult Graphic Systems, Inc. and
          BBG Technologies, Inc. (Incorporated by reference to Exhibit 2.4 of
          Annual Report on Form 10-KSB filed on September 28, 1999).
2.5       Asset Purchase Agreement between Cadapult Graphic Systems, Inc. and
          Tartan Technical, Inc. dated December 17, 1998 (Incorporated by
          reference to Exhibit 2.5 of Annual Report on Form 10-KSB filed on
          September 28, 1999).
2.6       Asset Purchase Agreement between Cadapult Graphic Systems, Inc. and
          WEB Associates, Inc. dated June 7, 1999 (Incorporated by reference to
          Exhibit 2.6 of Annual Report on Form 10-KSB filed on September 28,
          1999).
2.7       Asset Purchase Agreement between Media Sciences, Inc. and ultraHue,
          Inc. dated September 7, 1999 (Incorporated by reference to Exhibit 2.7
          of Amendment No. 1 to Registration Statement on Form SB-2,
          Registration Number 333-91005, originally filed on November 15, 1999).
3(i)(1)   Certificate of Incorporation of Cadapult Graphic Systems, Inc., a
          Delaware corporation (Incorporated by reference to Exhibit 3.1 of
          Quarterly Report on Form 10QSB/A filed on September 1, 1998).
3(i)(2)   Certificate of Merger of Seafoods Plus, Ltd. into Cadapult Graphic
          Systems, Inc., a Delaware corporation (Incorporated by reference to
          Exhibit 3.1 of Quarterly Report on Form 10QSB filed on November 9,
          1998).
3(i)(3)   Certificate of Merger of Domestic and Foreign Corporations into
          Cadapult Graphic Systems, Inc.(Incorporated by reference to Exhibit
          3.2 of Quarterly Report on Form 10-QSB filed on November 9, 1998).
3(i)(4)   Certificate of Ownership and Merger Merging Cadapult Graphic Systems
          Inc. into Cadapult Graphic Systems, Inc. (Incorporated by reference to
          Exhibit 3.3 of Quarterly Report on Form 10-QSB filed on November 9,
          1998).

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<PAGE>

3(i)(5)   Certificate of Amendment of Certificate of Incorporation of Cadapult
          Graphic Systems, Inc. (Incorporated by reference to Exhibit 3(i)(5) of
          Annual Report on Form 10-KSB filed on September 28, 1999).
3(i)(6)   Certificate of Incorporation of Media Sciences, Inc. (Incorporated by
          reference to Exhibit 3(i)(6) of Annual Report on Form 10-KSB filed on
          September 28, 1999).
3(ii)     By-Laws (Incorporated by reference to Exhibit 3.2 of Quarterly Report
          on Form 10-QSB/A filed on September 1, 1998).
4.1       Specimen of common stock certificate (Incorporated by reference to
          Exhibit 4.7 of Form 8-A filed on August 8, 2000)
4.2       Specimen of preferred stock certificate (Incorporated by reference to
          Exhibit 4.8 of Form 8-A filed on August 8, 2000)
4.3       1998 Incentive Plan (Incentive Stock Option Plan) (Incorporated by
          reference to Exhibit 4.1 of Annual Report on Form 10-KSB filed on
          September 28, 1999).
4.4       Form of Option Agreement for Management (Incorporated by reference to
          Exhibit 4.2 of Annual Report on Form 10-KSB filed on September 28,
          1999).
4.5       Form of Option Agreement for Employees (Incorporated by reference to
          Exhibit 4.3 of Annual Report on Form 10-KSB filed on September 28,
          1999).
4.6       Form of Warrant Certificate (Incorporated by reference to Exhibit 4.4
          of Annual Report on Form 10-KSB filed on September 28, 1999).
4.7       Certificate of Designation (Incorporated by reference to Exhibit 4.5
          of Registration Statement on Form SB-2, Registration Number 333-91005,
          originally filed on November 15, 1999).
4.8       Form of Warrant Certificate for Purchasers of Units (Incorporated by
          reference to Exhibit 4.6 of Registration Statement on Form SB-2,
          Registration Number 333-91005, originally filed on November 15, 1999).
10.1      Amended Employment Agreement of Michael W. Levin dated as of September
          1, 1998 (Incorporated by reference to Exhibit 10.4 of Annual Report on
          Form 10-KSB filed on September 28, 1999).
10.2      Amended Employment Agreement of Duncan Huyler (Incorporated by
          reference to Exhibit 3.2 of Quarterly Report on Form 10-QSB filed on
          May 4, 1999).
10.3      Amended Employment Agreement of Frances Blanco (Incorporated by
          reference to Exhibit 3.3 of Quarterly Report on Form 10-QSB filed on
          May 4, 1999).
10.4      Lease (Incorporated by reference to Exhibit 10.8 of Annual Report on
          Form 10-KSB filed on September 28, 1999).
10.5      Tektronix, Inc. Value Added Dealer Agreement, August 1, 1991
          (Incorporated by reference to Exhibit 10.5 of Amendment No. 1 to
          Registration Statement on Form SB-2, Registration Number 333-91005,
          originally filed on November 15, 1999).
10.6      Tektronix, Inc. Value Added Dealer Agreement, Supplement A, September
          1, 1992 (Incorporated by reference to Exhibit 10.6 of Amendment No. 1
          to Registration Statement on Form SB-2, Registration Number 333-91005,
          originally filed on November 15, 1999).
10.7      Tektronix, Inc. Value Added Dealer Agreement, Amendment, July 1, 1993
          (Incorporated by reference to Exhibit 10.7 of Amendment No. 1 to
          Registration Statement on Form SB-2, Registration Number 333-91005,
          originally filed on November 15, 1999).
10.8      Tektronix, Inc. Value Added Dealer Agreement, Supplement A, July 1,
          1994 (Incorporated by reference to Exhibit 10.8 of Amendment No. 1 to
          Registration Statement on Form SB-2, Registration Number 333-91005,
          originally filed on November 15, 1999).
10.9      Tektronix, Inc. Dealer Agreement, 1995 Amendment (Incorporated by
          reference to Exhibit 10.9 of Amendment No. 1 to Registration Statement
          on Form SB-2, Registration Number 333-91005, originally filed on
          November 15, 1999).
10.10     Tektronix, Inc. Value Added Dealer Agreement, Premier Reseller
          Supplement A, July 29, 1996 (Incorporated by reference to Exhibit
          10.10 of Amendment No. 1 to Registration Statement on Form SB-2,
          Registration Number 333-91005, originally filed on November 15, 1999).

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<PAGE>

Exhibit   Description
-------   -----------

10.11     Tektronix, Inc. Reseller Agreement, Premier Reseller Supplement A,
          December 2, 1996 (Incorporated by reference to Exhibit 10.11 of
          Amendment No. 1 to Registration Statement on Form SB-2, Registration
          Number 333-91005, originally filed on November 15, 1999).
10.12     Credit and Security Agreement (Incorporated by reference to Exhibit
          3.1 of Quarterly Report on Form 10-QSB filed on or about May 4, 1999).
10.13*    Lease Agreement
11        Statement Concerning Computation of Per Share Earnings is hereby
          incorporated by reference to "Financial Statements" of Part II - Item
          7, contained in this Form 10-KSB.
16*       Letter on change in certifying accountant
21*       Subsidiaries of the Registrant
27*       Financial Data Schedule
------
*   Filed herewith.


Report on Form 8-K

         Cadapult did not file a report on Form 8-K during the last quarter of
the period covered by this report on Form 10-KSB.

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<PAGE>

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                 CADAPULT GRAPHIC SYSTEMS, INC

                                 By:      /s/ Michael W. Levin
                                          --------------------
                                          Michael W. Levin
                                          Chief Executive Officer and President

                                 Dated:  September 25, 2000


         In accordance with the Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities indicated:

SIGNATURES             TITLE                                 DATE
----------             -----                                 ----

/s/ Michael W. Levin   Chairman of the Board, President,     September 25, 2000
--------------------
Michael W. Levin       Chief Executive Officer, Principal
                       Financial Officer, and Principal
                       Accounting Officer

/s/ Frances Blanco     Director, Vice President, Secretary   September 25, 2000
------------------
Frances Blanco

/s/ Paul C. Baker      Director                              September 25, 2000
-----------------
Paul C. Baker

/s/ Donald Gunn        Director                              September 25, 2000
-----------------
Donald Gunn

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