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, 1999
                                            -------------

   [ ]      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
       -------------------      -----------------------------------------
       N/A                      N/A

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 [ ]

<PAGE>

      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:  $10,227,628
                                                                 ----------

      The aggregate market value of voting and non-voting stock of the issuer
held by non-affiliates on September 24, 1999 was $2,847,914, based on the
average closing bid and asked prices of the issuer's common stock on September
24, 1999 of $1.75 and $2.375, respectively.

      As of September 24, 1999, 3,068,307 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



                                                                         PAGE
PART I

Item 1.  Description of Business                                           4
Item 2.  Description of Property                                          22
Item 3.  Legal Proceedings                                                24
Item 4.  Submission of Matters to a Vote of Security Holders              24

PART II

Item 5.  Market for Common Equity and Related Stockholder Matters         25
Item 6.  Management's Discussion and Analysis or Plan of Operation        27
Item 7.  Financial Statements                                             30
Item 8.  Changes In and Disagreements With Accountants on Accounting      48
         and Financial Disclosure

Part III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;    49
         Compliance With Section 16(a) of the Exchange Act
Item 10. Executive Compensation                                           52
Item 11. Security Ownership of Certain Beneficial Owners and              59
         Management
Item 12. Certain Relationships and Related Transactions                   60
Item 13. Exhibits and Reports on Form 8-K                                 61























                                      -3-

<PAGE>

-------------------------------------------------------------------------------
                                    PART I
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
ITEM 1.  DESCRIPTION OF BUSINESS

-------------------------------------------------------------------------------

(a)   Business Development

      Cadapult Graphic Systems, Inc. ("Cadapult" or the "Company") is a
Delaware corporation which was originally incorporated under the laws of the
State of Utah on August 11, 1983 under the name Communitra Energy, Inc.  At the
Company's inception, the Board of Directors authorized the issuance of
1,275,000 unregistered and restricted shares of its common stock to directors,
executive officers and persons who may be deemed to have been promoters or
founders of the Company for the total consideration of $3,000.  Commencing in
November, 1983, and pursuant to an exemption provided in Section 3(a)(11) of
the Securities Act of 1933, as amended (the "1933 Act"), and Section 61-1-10
of the Utah Uniform Securities Act, the Company publicly offered and sold an
aggregate total of 3,000,000 shares of its common stock to public investors
who were residents of the State of Utah, at a price of one cent ($0.01) per
share.  The offering was subsequently completed, with the Company receiving
aggregate gross proceeds of $30,000, before payment of legal, accounting and
printing expenses.  On July 16, 1985, the Company filed with the Secretary of
State of the State of Utah Articles of Amendment to its Articles of
Incorporation, which changed the name of the Company to Seafoods Plus, Ltd.

      Pursuant to the provisions of Section 16-10a-1006 of the Utah Revised
Business Corporation Act, on September 18, 1995, the corporation adopted
Articles of Amendment to its Articles of Incorporation: (i) to effect a 1
share for 16.17 reverse split of the Company's 5,658,250 then-outstanding
shares of common stock, effective as of the close of business on September 5,
1995, retaining the authorized capital at 50,000,000 shares and the par value
at one mill ($0.001) per share, with appropriate adjustments being made in
the additional paid in capital and stated capital accounts of the Company and
with fractional shares to be rounded to the nearest whole share.  On
September 18, 1995, the Board of Directors, acting pursuant to Section
16-10a-821 of the Utah Revised Business Corporation Act, unanimously resolved
to issue 1,650,000 post-split unregistered and restricted shares of common
stock to Jenson Services, Inc., a consultant to the Company, in consideration
of the sum of $10,000, which funds were to be used to pay costs associated with
legal fees and accounting costs.  Immediately following the above-referenced
reverse split, 350,012 shares of the Company's common stock were issued and
outstanding.  Following the issuance of 1,650,000 "unregistered" and
"restricted" shares to Jenson Services, Inc., 2,000,012 shares of common
stock were currently issued and outstanding.  On May 15, 1996, acting without
a meeting pursuant to Section 16-10a-821 of the Utah Revised Business
Corporation Act, the Board of Directors of the Company unanimously resolved
to adopt new Bylaws.



                                      -4-

<PAGE>

      On June 4, 1998, the Board of Directors authorized a 1 share for 3.5
reverse split of the Company's 2,000,012 then-outstanding shares of common
stock, while retaining the present authorized capital, shares and par value,
with appropriate adjustments in the stated capital and capital surplus
accounts of the Company, resulting in there being approximately 571,450
shares of common stock outstanding after the reverse split.

      In June 1998, the Company filed a registration statement on Form S-8
for 66,068 shares of Common Stock.  The Company issued the shares to four
individuals, including its officers and directors, pursuant to written
compensation agreements, as follows:  Leonard W. Burningham, 63,068 shares;
Kathleen L. Morrison, 1,000 shares; Jason Osborn, 1,000 shares; and Terry
Hardman, 1,000 shares.

      The Company did not engage in any substantive business activity from
approximately 1988 to June 18, 1998.

      On June 18, 1998, the Company completed the acquisition of 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 the Company, CGSI, all of
the shareholders of CGSI, Jenson Services, Inc., a Utah corporation, Duane S.
Jenson and Jeffrey D. Jenson, the Company issued 1,650,000 shares of common
stock to the shareholders of CGSI in exchange for all of the outstanding
common stock of CSGI, resulting in there being approximately 2,287,518 shares
of common stock outstanding after the acquisition.  Pursuant to the
acquisition, the shareholders of CSGI became the controlling shareholders of
the Company, the officers and directors of the Company resigned and elected
the CSGI nominees in their places, and CSGI became a wholly-owned subsidiary
of the Company.

      Between June and August 1998, the Company conducted a private placement
through the sale of 524,000 shares of unregistered and restricted Common
Stock and raised gross proceeds of $655,000 in a transaction deemed to be
exempt under Rule 505 of Regulation D under the 1933 Act.  The Company
applied the net proceeds to working capital, including the acquisition of
other businesses.

      On August 14, 1998, the Company reincorporated under the laws of the
State of Delaware by merging with its wholly-owned Delaware subsidiary, a
corporation formed for the purpose of reincorporation.  On August 14, 1998,
the Company merged its New Jersey subsidiary.  The Company is now a single
entity operating under the laws of the State of Delaware as Cadapult Graphic
Systems, Inc.  Except where the context otherwise indicates, the Company and
its former subsidiaries are collectively referred to herein as "Cadapult" or
as the "Company".





                                      -5-

<PAGE>

      On August 11, 1999, the Company formed Media Sciences, Inc. as a
wholly-owned New Jersey subsidiary ("Media Sciences"), for the manufacture and
distribution of digital color printer supplies.  The Company intends to grow
this business through additional marketing, expansion of the existing channel
and distribution agreements, and potentially through joint ventures.  The
Company presently intends that Media Sciences, Inc. will acquire and operate
the assets of ultraHue, Inc.  The Company has entered into an asset purchase
agreement with ultraHue, Inc., which is expected to close on or about
December 1, 1999.

      In August 1999, the Company amended its Certificate of Incorporation
to change its 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 (the "Preferred Stock").

      Certain terms of the Preferred Stock, including, without limitation,
dividend, liquidation and conversion rights have not been designated, and may
be designated by the Board of Directors at its sole discretion.  The
amendment to the Certificate of Incorporation provides that the Company's
Board of Directors is expressly authorized to provide for the issue of all or
any shares of the Preferred Stock, in one or more series, and to fix for each
such series such voting powers, full or limited, and such designations,
preferences and relative, participating, optional or other special rights and
such qualifications, limitations or restrictions thereof as shall be stated
and expressed in the resolution or resolutions adopted by the Board of
Directors providing for the issue of such series (a "Preferred Stock
Designation") and as may be permitted by the Delaware General Corporation
Law.

      On September 13, 1999, the Company completed a private placement sale
of 127,750 shares (of which 50,000 shares are being held in escrow pending the
fulfillment of certain conditions subsequent) of unregistered and restricted
Common Stock and raised gross proceeds of approximately $255,500 in
transactions deemed to be exempt under Rules 505 and 506 of Regulation D under
the 1933 Act.  The Company applied the net proceeds to development of its
Internet-based services, working capital, and other general corporate purposes.

      As of September 24, 1999, 3,068,307 shares of the Company's common
stock were issued and outstanding, and an additional 239,040 shares of common
stock were reserved in escrow for potential issuance.

      To management's knowledge, the Company has not been subject to
bankruptcy, receivership or any similar proceedings.









                                      -6-

<PAGE>

(b)   Business of Issuer

      The Company is a provider of computer graphics systems, peripherals,
supplies and service to visual communicators and graphics professionals.  The
Company is comprised of three business units, Reseller Operations, eCadapult
and Media Sciences.  The Company has established itself as a leading supplier
of computer graphics solutions to the Northeast United States.  In 1991, 1992
and 1993, the Company was listed on the INC magazine 500 list of America's
Fastest Growing Privately Held Companies.  The Company has sought to increase
its margins through the refinement of its product lines and the addition of
services.

      Under its Reseller Operations, the Company is a systems integrator,
value added dealer or value added reseller of computer graphics equipment and
supplies.  Its products include animation and design software and
workstations, publishing software and workstations, file servers, networks,
color scanners and color printers and copiers.  Its markets include
advertising and marketing companies, printers, quick print shops, service
bureaus, animators, industrial designers as well as the broad corporate
market for color printers.

      The Company intends to expand its business operations through
eCadapult, a division of the Company recently established to provide value
added services to the creative graphics community over the Internet.  The
Company has launched one new service, SamplePrint.com, a one-stop evaluation
resource for buyers of color printing technology, and has proposed to offer
two new services, Cadapult Storefront and GraphicSmart.com, two e-commerce
websites through which customers can purchase computer graphics products and
supplies from the Company directly over the Internet.

      The Company recently formed Media Sciences, Inc., a wholly owned New
Jersey subsidiary ("Media Sciences"), for the purpose of acquiring and
operating companies or their assets.  The Company presently intends for Media
Sciences to acquire and operate the assets of ultraHue, Inc., a New Mexico
corporation.  On September 8, 1999, Media Sciences entered into an asset
purchase agreement with ultraHue, Inc., which is subject to closing on or
about December 7, 1999 pending the fulfillment of certain conditions
subsequent.  ultraHue, Inc. manufactures color solid ink and remanufactures
and refills color toner cartridges, all for use in Tektronix color printers.
ultraHue Inc. distributes these and other products to dealers and
distributors internationally.  Media Sciences will manufacture and
distribute, internationally, these digital color printer supplies.  The
Company intends to grow this business through expansion of the product line,
additional marketing, expansion of the existing channel and distribution
agreements and potentially through joint ventures.

Operating Strategy
------------------

      The computer industry is going through a consolidation that stems from
shrinking margins.  This consolidation is likely to occur in the vertical


                                      -7-

<PAGE>

markets in which the Company operates.  The Company has the strategic
objective of becoming a comprehensive computer graphics services provider
throughout the United States and to provide color printing supplies
internationally.  The Company believes it is ready to effect its plan to
expand its operations, leverage its infrastructure, acquire competitors and
consolidate the market.

      The Company currently provides computer graphics services to commercial
customers primarily in the Northeast United States.  The Company has taken
steps to grow substantially within the consolidating computer industry.  In
October 1996, the Company began its expansion plan by opening a sales
location in Boston.  In March 1998, the Company acquired the assets of BBG
Technologies, Inc., a computer products reseller in Boston, Massachusetts
with $2 million of annual revenues.  In January 1999, the Company acquired
the assets of Tartan Technical, Inc., a computer products reseller in
Massachusetts with $3.5 million of annual revenues.  In June 1999, the
Company acquired the assets of WEB Associates, Inc., a computer products
reseller in Pennsylvania with $2.7 million of annual revenues.  The Company
intends to acquire additional computer graphics businesses in areas
contiguous to the Company's existing operations as well as in other regions
of the United States.  Any acquisitions will be predicated upon available
cash flow or other sources of financing, of which there can be no assurance.
In addition, the Company intends to further implement its business strategy
by continuing its commitment to improving the efficiency of its existing
operations.  There can be no assurance that the Company will have sufficient
resources to make any additional acquisitions.

      The Company intends Media Sciences to become a leading supplier of
alternative supplies for digital color printers.  ultraHue, Inc. is currently
the only alternative to high cost ink produced by Tektronix for Tektronix
solid ink printers, and is the only third party provider of toner cartridges
for Tektronix Phaser 560 color laser printers.  Media Sciences is planning to
expand its product line to include remanufactured and refilled toner
cartridges for Tektronix color laser printers.  The Company believes it can
expand Media Sciences' business through a product line expansion, through
alternative applications for its solid ink technology, through an expansion
of its distribution channels and through joint ventures and other
partnerships.

      The Company anticipates that the relationship between its reseller
operations and Media Sciences will be synergistic.  The Company expects its
reseller operations to develop and implement marketing and service programs,
such as No-Cap Color, to strengthen Media Sciences market position.

Acquisitions
------------

      On March 13, 1998, the Company completed the acquisition of BBG
Technologies, Inc., a Massachusetts corporation ("BBG"), pursuant to an Asset
Purchase Agreement whereby the Company purchased all the assets and assumed
certain trade liabilities of BBG.  The assets acquired by the Company from


                                      -8-

<PAGE>

BBG pursuant to the agreement included, but were not limited to, accounts
receivable, inventory of supplies and printers, customer lists, use of the
name "BBG Technologies" for eighteen months, sales and service and vendor
contracts, and the liabilities assumed by the Company included BBG's
Tektronix account payable and certain other trade payables.  The Company
obtained covenants not to compete from BBG and its shareholders, Daniel
McCartney and Joseph Nicholson, who also agreed not to contact any customer
or disclose customer identity to third persons for five years and not to
engage in or compete with the business within 150 miles of Boston for two
years.  The Company obtained a two year covenant not to compete from Cathy
Rogers, a key employee of BBG.

      On January 7, 1999, the Company completed the acquisition of certain
assets of Tartan Technical, Inc., a Massachusetts corporation ("Tartan")
pursuant to an Asset Purchase Agreement.  Tartan was engaged in the sale and
servicing of computer graphics and of imaging equipment and supplies.  Under
the agreement, the Company acquired certain assets of Tartan, including, but
not limited to:  accounts receivable, less allowances; inventory at lower of
cost or fair market value; certain property and equipment; corporate name;
its customer lists and related files; sales, service and vendor contracts and
security deposits; telephone numbers; databases; rights to
www.tartantechnical.com URL; and, trade show deposits, health insurance
premiums and other prepaid commitments.  The Company issued 92,850 shares of
unregistered and restricted Common Stock to Tartan, reserved in escrow an
additional 92,850 shares of unregistered and restricted Common Stock for
possible future issuance to Tartan, and assumed the following liabilities of
Tartan:  certain trade payables as of the date of the closing; certain
customer deposits payable as of the date of the closing; and, certain bank
debt.  The consideration given was subject to post-closing adjustments,
dependent on the difference of the dollar value of the liabilities assumed in
relation to assets acquired.  The Company also has entered into employment
relationships with Thomas H. McLeod and Kathleen C. McLeod, who were officers
and the sole shareholders of Tartan.  The Company has employment agreements
with Thomas H. McLeod, Kathleen C. McLeod, and Susan M. Gardner to serve as
Business Development Manager, Account Manager, and Administrative Assistant,
respectively, each for a term of two years.  Susan M. Gardener is no longer
with the Company.

      On June 23, 1999, the Company completed the acquisition of certain
assets of WEB Associates, Inc., a Pennsylvania corporation ("WEB"), pursuant
to an Asset Purchase Agreement.  WEB was engaged in the sale and servicing of
computer graphics and of imaging equipment and supplies.  Under the
agreement, the Company acquired certain assets of WEB, which included, but
were not limited to:  accounts receivable, less allowances; inventory at
lower of cost or fair market value; certain property and equipment; use of
its corporate name; its customer lists and related files; sales, service and
vendor contracts and security deposits; telephone numbers; databases; and,
other prepaid commitments.  The Company paid consideration of $242,200,
issued 86,190 shares of unregistered and restricted common stock to WEB,
reserved in escrow an additional 86,190 shares of unregistered and restricted
common stock for possible future issuance to WEB, and assumed the following


                                      -9-

<PAGE>

liabilities of WEB:  certain trade payables as of the date of the closing,
and certain customer deposits payable as of the date of the closing.  The
consideration given is subject to post-closing adjustments, dependent upon
achieving certain defined gross profit targets.  The Company has also entered
into employment relationships with Wayne M. Breisch and Barbara O'Brien, who
were officers and shareholders of WEB.  Wayne M. Breisch serves as Account
Manager under a two year employment agreement, and Barbara O'Brien serves as
Account Manager under a one year employment agreement.  Elizabeth Breisch, an
officer and shareholder of WEB, entered into an agreement with the Company
that restricts her from competing with the Company, and from soliciting any of
WEB's customer for a term of three years.

      On September 8, 1999, Media Sciences, Inc., a wholly-owned subsidiary of
the Company, entered into an asset purchase agreement (the "Asset Purchase
Agreement"), dated September 7, 1999, with ultraHue, Inc., a New Mexico
corporation ("ultraHue"), and Donald Gunn and Randy Hooker, shareholders of
ultraHue, for the acquisition of certain assets and the assumption of certain
liabilities of ultraHue.  The closing of the Asset Purchase Agreement is
expected to occur on or about ninety days from the date of execution.

      Upon the closing of the Asset Purchase Agreement, Media Sciences is
expected to acquire certain proprietary information and intellectual property
rights of ultraHue and other assets owned and used by ultraHue in the
operation of its business, including:  any and all right, title and interest
in and to ultraHue's trade secrets; accounts receivable, less allowances;
inventory at lower of cost or fair market value; certain property and
equipment; all right, title and interest in and to the name ultraHue and any
other trademarks, service marks or any copyrights heretofore used and/or
owned by ultraHue; customer lists and all files relating thereto; sales,
service and vendor contracts and security deposits; existing telephone and
fax numbers; databases; and on-going business records.

      Under the Asset Purchase Agreement, Media Sciences is expected to
assume the following liabilities of ultraHue:  accounts payable as of the
date of closing; customer deposits as of the date of closing; warranties on
products sold prior to the date of closing; leases and contracts to the
extent they are to be performed after the date of closing.

      The consideration to be given by Media Sciences under the Asset
Purchase Agreement are:  payment of $2,340,000 at closing; delivery of a
promissory note, executed by Media Sciences and guaranteed by the Company, in
the principal sum of $1,160,000, with interest at the annual rate of 7%, with
the full principal and accrued interest due and payable in full on the first
anniversary of the closing; a sum equivalent to ultraHue's cost for
ultraHue's inventory that is delivered to Media Sciences at closing; the
difference between all accounts receivable collected by Media Sciences less
accounts payable, as collected and paid, respectively; for a period of one
year from the date of closing, payment of a sum equivalent to ten percent of
the quarterly net profits derived by Media Sciences from the first $1,500,000
dollars of gross profits plus thirty percent of the net profits attributable
to gross profits in excess of $1,500,000 dollars (in the event there is a net


                                      -10-

<PAGE>

loss in any quarter during this one year period, the amount of such loss
shall be set off against the net profits for any subsequent quarter, provided
that if there is no subsequent quarter in this one year period, then a refund
shall be due Media Sciences); and for a period of two years from the first
anniversary of the date of closing, after certain distributions shall have
terminated, payment of a sum equivalent to ten percent of the quarterly net
profits derived by Media Sciences from the first $1,000,000 of gross profits,
plus thirty percent of the net profits attributable to the gross profits in
excess of $1,000,000 dollars (in the event there is a net loss in any quarter
during this two year period, the amount of such loss shall be set off against
the net profits for any subsequent quarter, provided that if there is no
subsequent quarter in this two year period, then a refund shall be due Media
Sciences).  Upon execution of the Asset Purchase Agreement, Media Sciences
deposited $50,000 in escrow pending the closing.

      The consideration to be given was negotiated at "arms-length" between
the directors and executive officers of Media Sciences and the Company, and
the directors, executive officers and controlling shareholders of ultraHue.
The Board of Directors of Media Sciences and of Cadapult determined in good
faith that the consideration given under the Asset Purchase Agreement was
reasonable under the circumstances.

      The obligation of Media Sciences under the Asset Purchase Agreement is
conditioned upon Media Sciences obtaining financing of not less than $3,000,000
to fund the purchase.  If Media Sciences does not obtain the financing by
the closing, either party shall then have the option to terminate the Asset
Purchase Agreement, and all of the rights and obligations of the parties
under the Asset Purchase Agreement shall be deemed null, void and of no
further effect, except that ultraHue shall have the right to retain the
$50,000 deposit being held in escrow as liquidated damages.

      At closing, ultraHue is to deliver confidentiality agreements executed
by Donald Gunn and Randy Hooker agreeing not to disclose, and in all other
respects to maintain the secrecy of, ultraHue's trade secrets.  In addition,
ultraHue is to assign to Media Sciences all of its right, title and interest
in and to certain Non-Disclosure/Non-Compete Agreements between ultraHue and
certain of its employees who have knowledge of ultraHue's trade secrets and
proprietary information.  The Company has invited Donald Gunn, a shareholder
of ultraHue, to join the Company's Board of Directors after the closing.

           (1)  Principal Products and Services
           -------------------------------

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

      Systems
      -------

      Products sold by the Company's reseller operations business include
publishing software and workstations, file servers, networks, color scanners


                                      -11-

<PAGE>

and color printers and copiers.  The Company typically purchases directly
from the manufacturer of the equipment or through a distributor of those
products.

      Supplies
      --------

      Approximately one third of the Company's revenues are derived from the
sale of digital color printer and copier supplies.   The Company intends to
grow this reoccurring revenue stream through proactive sales and marketing
efforts, and by adding new supplies to its product line.

      Hardware and Software Service and Support
      -----------------------------------------

      This represents a growing opportunity for the Company, as is most
clearly shown by the conversion of its Tektronix client base from
manufacturer's service to its own.  This conversion is expected to continue
and to apply to any acquired business.  The opportunity to service other
products in the computer graphics market exists.  The Company is adding
service authorizations, but is limited by the saturation of its personnel.
Therefore, the Company plans to add service technicians as its customer base
and authorizations increase.  In addition, the Company plans to add dedicated
sales personnel to actively market these services.

      No-Cap Color
      ------------

      The Company has launched a new program called No-Cap Color.  Under this
program, a customer will be provided with one or more color printers, at no
charge, in return for a commitment to purchase certain supplies over a two
year period. The printer remains the property of the company.

      No-Cap Color is beneficial to all parties involved:  the Company, the
printer vendor and the customer.  The customer receives a quality workgroup
printer in exchange for a commitment to purchase supplies which they would
purchase anyway.  The printer vendors increase their installed base and
garner revenues from the printer sale and certain supplies and service
components.  Finally, the Company benefits from a profitable ongoing revenue
stream.  The Company plans to expand this program through aggressive
marketing, through the creation of an agent program and through the addition
of more printers eligible under the program.

eCadapult:  Internet Services
-----------------------------

      eCadapult is the new interactive division of the Company.  The mission
of the eCadapult division is to establish an Internet-based market within the
creative graphics industry for the Company's services and computer graphics
equipment and related merchandise.  The Company has developed and launched
one new interactive service, SamplePrint.com, and plans for the development


                                      -12-

<PAGE>

of two e-commerce sites, Cadapult Storefront and GraphicSmart.com, which are
expected to be introduced in fall 1999, as well as several other interactive
services.

      SamplePrint.com
      ---------------

      SamplePrint.com is a website dedicated to helping business buyers
evaluate color printer and copier products over the Internet.  The Company
expects 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. The Company expects that the cost of these samples will be
borne by the buyer if the manufacturer of that printer is not a sponsor, or
by the manufacturer if it is a sponsor.  The Company's 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.

      The Company plans for SamplePrint.com to support both buyers and
manufacturers of workgroup color printers.  With the market for color
printers and copiers growing, the need for generating samples for buyers is
about to explode.  International Data Corporation forecasts the market for
desktop color printers in unit shipments is expected to grow at an average
growth rate of 42.9% through the year 2001.  The Company anticipates that
SamplePrint.com will become a service to manufacturers by off loading their
sample printing support requirements while providing an objective resource
for the buyer.  The Company launched SamplePrint.com in June 1999, with
initial sponsorship from Hewlett-Packard and Okidata.  The Company is
currently in discussions with several other leading printer manufacturers to
sponsor this site.

      The Company expects that the cost of these samples will be borne by the
buyer if the manufacturer of that printer is not a sponsor, or by the
manufacture if it is a sponsor.  The Company's goal is to provide all samples
free to the buyer and have the manufacturers bear the costs.

      Buyers who visit the SamplePrint.com site may benefit by:

            - A single independent site that can provide them samples from a
              controlled environment.
            - Comparative information on printer features.
            - Sales brochures from the manufacturer will be provided with the
              sample.
            - Fast turnaround.  Targeted 24-48 hours with a return via
              overnight service.


                                      -13-

<PAGE>

      The manufacturers who sponsor the SamplePrint.com site may benefit by:

            - Being able to send potential buyers to an independent site for
              samples.
            - Having their printer samples provided at no charge even if not
              requested.  This is especially important if a potential buyer
              requests samples of a directly competitive product.
            - Monthly reports as to who requested and were sent samples.
            - Monthly reports will follow-up to sample requesters as to their
              purchasing decisions.

      The Company may benefit by:

            - Revenue stream from the sample prints.
            - Revenue stream from banner advertising on the site.
            - Qualified prospects for the sale of products, supplies and
              service.

      Cadapult Storefront
      -------------------

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

      GraphicSmart.com.
      -----------------

      The Company intends to launch 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.

      Internet Creative Search Engine.
      --------------------------------

      The Company is evaluating a plan that may result in the development of
an Internet site where consumers of creative services, such as an art
directors, could search for creative talent, such as photographers.  The
source of revenue of such a site could include placement fees for the
creative talent and advertising.





                                      -14-

<PAGE>

      GraphicAuction.com.
      -------------------

      The Company intends to offer an on-line auction site for computer
graphics equipment and related merchandise where buyers and sellers are
brought together in an efficient forum that is available 24 hours a day,
seven days a week to buy and sell computer graphics products.  The Company
plans to design GraphicAuctions.com to permit the Company, manufacturers and
the public to list items for sale, which may be browsed through in a fully
automated, topically arranged, and easy-to-use format, and allow buyers to
bid on and purchase items of interest.  The Company plans to offer buyers a
large selection of list new, refurbished, reconditioned, used, demonstration,
and discontinued items that can be costly to find and purchase through the
traditional marketplace.  The Company intends to charge the seller a nominal
fee for each completed transaction, but sellers and bidders will not be
charged for listing items or for making bids through GraphicAuction.com.  The
Company believes that this auction forum may attract more potential customers
and create more interest in the Company's products and services, as well as
permit the Company to better gauge market demand for certain products.

Marketing and Sales Plans
-------------------------

      The Company intends to increase its marketing and sales efforts.  The
goal of these efforts is to increase revenues through increased market
awareness about the Company, through the introduction of new products and
services to the customer base and through the increase in the number of
salespeople.

Industry and Market Overview
----------------------------

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

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

      Digital Pre-Press
      -----------------

      Over the last several years, there has been a dramatic shift in the
process printing industry from manual, analog production of printed materials
to the use of computers. Historically, the production of a printed brochure,
magazine or catalog involved numerous manual steps using photographic
materials to produce the final press-ready copy.


                                      -15-

<PAGE>

      With rapid advances in software and hardware, much of today's printed
materials are produced digitally. The print production process now allows a
printed piece to go from concept to imaged printing plate in a fully digital
environment. Copy writing, proofing and revisions all take place on a desktop
computer, increasing the speed and efficiency of the pre-press process, and
streamlining personnel requirements in the process. The Company believes this
market is in a period of rapid transition regarding the manner in which
electronics products are delivered to the traditional printing customer. When
digital pre-press systems sold for $200,000 per seat (user), most
manufacturers used a captive direct sales force to sell to the end-user.
Today, the typical seat sells for under $20,000, forcing manufacturers to
utilize a reseller channel to deliver their products.

      Display Graphics
      ----------------

      The most rapidly growing segment of the computer graphics output market
is display graphics.  Display graphics, or large format graphics, describes a
process that allows computer-generated or captured images to be printed in
sizes up to 60 inches wide.

      Historically, these images could only be printed on color electrostatic
printers costing over $120,000. However, over the last several years,
significant advances in ink-jet technology, software, specialty inks and
media have placed the cost of entry for display graphics systems starting at
under $10,000, and market acceptance has been rapid. End-users of this
technology include a wide range of industries and markets, such as:

            - Trade-show graphics - production of booth and arcade displays
            - Point of Sale graphics - floor displays
            - Sign Shops - traditional signage, fleet graphics
            - Print-for-Pay (e.g., Kinkos, Sir Speedy)
            - Package Design - package prototyping
            - Graphic Arts - imposition proofing

      Presentation Graphics
      ---------------------

      This segment of the computer graphics market consists of the creation
of visual communication materials such as slides, overhead transparencies,
multimedia presentations and associated hard copy materials.  Once a highly
specialized business, presentations can now be created by just about any
individual with a computer and presentation software.  The presentation
itself is displayed or printed on digital color printers, film recorders and
digital projectors.  These devices range in price from $3,000 to $30,000.

      Digital Imaging
      ---------------

      This segment of the computer graphics market consists of the capture,
manipulation, storage, databasing, transfer and output of digital images


                                      -16-

<PAGE>

(assets).  Examples include digital photo restorations and compositing of
images (combining several disparate images into one new image).  As more and
more digital content is created, different technology is required to address
each of the above facets of digital imaging.  These include scanners and
digital cameras that capture images, and specialized software that allows the
user to change, manipulate, combine and retouch images.  Digital images,
especially color images are inherently large and therefore have specialized
storage requirements such as RAID (Redundant Array of Inexpensive Disks)
technology, CD-ROM and tape storage.  A large volume of digital assets
dictates a database, or asset management solution, to manage, search and
retrieve these images.  High bandwidth networks are required to transfer
these images within a user environment and to external destinations.
Finally, a variety of digital output devices, as described above are used to
print these images.

      Digital Color Printing
      ----------------------

      This broad segment of the computer graphics market includes all
business color printers from desktop color printers to high speed connected
color copiers.  Desktop color printers are starting to replace black and
white printers in the office environment as quality and speed improve and
costs are reduced.  The market for desktop color printers is expected to grow
at an annual rate of 42.9% in units through the year 2001.  These products
range from $3,000 to $10,000.  For those who need more volume, higher speeds
or better quality, color copiers can be connected to a network and become
very fast, high quality digital color printers.  These solutions range from
$10,000 to $50,000.  Also including in the digital color printing market
segment are display graphics and presentation graphics products as discussed
above.

      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 by, and distributed by,
the printer manufacturer.  There exists little to no competition to these
sources of supplies.  As adoption of color printing technology continues, the
Company expects 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.  The Company believes that a
similar opportunity exists in the color market.

      (2)  Distribution Methods of the Products and Services
           -------------------------------------------------

      The Company sells directly to end users through telesales, outside
sales and Internet sales.






                                      -17-

<PAGE>

      (3)  Status of any Publicly Announced New Product or Service
           -------------------------------------------------------

      The Company plans for the development of two e-commerce sites, Cadapult
Storefront and GraphicSmart.com, which are expected to be introduced in fall
1999.

      (4)  Competition
           -----------

      All facets of the computer graphics business are competitive.  The color
printer business is becoming increasingly competitive as the products become
commoditized.  On the systems side of the 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 the Company.  On the
supplies front, the Company competes 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, the Company competes based upon local
delivery and better availability of product.

      The Company seeks to compete by servicing most of the products it sells
as opposed to some of its competitors who rely on manufacturer or third party
service.  The Company offers a seven day a week, 24 hours a day premium
service on many products, unlike many of its competitors.

      The Company's principal competitors are larger and better funded than
the Company, and include:  Globix Corporation, AOE Ricoh, MCS Canon, Minolta
Business Systems, Professional Graphics Systems and Services, Inc.,
Electronic Business Products, Inc., Charrette, NAPC, and Cambridge
Electronics, Inc.

      Media Sciences' primary competitor will be Tektronix, Inc.  Tektronix,
Inc. is the leading manufacturer of solid ink for use in digital color
printers, representing approximately ninety seven percent of the United States
market of solid ink.

      (5)  Principal Suppliers
           -------------------

      The Company typically purchases directly from the manufacturer of the
equipment or through a distributor of those products.  The Company currently
obtains certain equipment and supplies from a limited number of sources of
supply.  Vendors include Tektronix, Inc., Silicon Graphics, Inc., Mita
Corporation, Access Graphics, Ricoh, Alias, Merisel, Ingram, and Tekgraf.
The Company has been and will continue to be dependent on third party vendors
for the computer equipment and supplies it sells.  The loss of any particular
agreement may have a material affect on the operations of the Company.




                                      -18-

<PAGE>

      In October 1996, the Company entered into a non-exclusive dealer
agreement with Mita Copystar America, Inc. to market and service the
integrated document imaging equipment and related products on a year to year
basis.  The agreement sets forth certain minimum sales goals.  The Company's
areas of prime responsibilities under the agreement include five counties in
New Jersey and New York.

      The Company entered into an evergreen Value Added Dealer Agreement with
Tektronix, as supplemented in December 1996, for printers, service
installation and service extended warranty, accessories, supplies and
software.  The agreement contains a minimum sales volume expectation in order
to qualify for certain resale discounts.  Under the agreement, the Company is
to sell, market and promote Tektronix supplies for use with Tektronix
printers.

      In February 1999, the Company entered into an Indirect
Reseller/Indirect VAR Agreement with Silicon Graphics, Inc.  Under the
agreement, the Company is authorized to purchase and resell desktop and
workgroup products, enterprise and technical service products, and high-end
graphics products through its New Jersey, New York and Massachusetts offices.
The agreement expires on January 31, 2000, subject to one year renewal terms.

      The Company has a non-exclusive dealer agreement with Ricoh to market
and sell the Ricoh Aficio Color line of copiers, printers, supplies and
services.  The agreement expires on March 31, 2000, subject to automatic one
year renewals.

      (6)  Dependence on Major Customers
           -----------------------------

      The Company is not dependent on any customer, the loss of which would
have a material adverse affect on the Company.

      (7)  Intellectual Property
           ---------------------

      The Company's future success depends in part upon its ability to
protect its proprietary technology and information.  Giving effect to the
acquisition of ultraHue, Inc., the Company will own substantial trade secrets
regarding the formulation and manufacturing processes behind solid ink for
printers.  The Company seeks to protect intellectual property rights and to
limit access to proprietary information through a combination of patents,
trademarks, copyrights, trade secrets, and nondisclosure and licensing
arrangements, all of which, even if available, afford only limited
protection.  There can be no assurance that any  patent will issue from the
patent applications to be filed on the Company's products, or that any claims
allowed from such applications will be of sufficient scope or strength, or be
issued in all countries where the Company's products can be sold, to provide
meaningful protection or any commercial advantage to the Company.  Also,
competitors of the Company may be able to design around the licensed patent
applications, even if issued.  The laws of certain foreign countries in which


                                      -19-

<PAGE>

the Company's products are or may be developed, manufactured or sold,
including various countries in Asia, may not protect the Company's products
or intellectual property rights to the same extent as the laws of the United
States, and thus, may increase the likelihood of piracy of the Company's
technology and products.  There can be no assurance that the steps taken by
the Company to protect its intellectual property rights will be adequate to
prevent misappropriation of its technology or the many larger competitors
will not independently develop technologies substantially equivalent or
superior to the Company's technology.

      (8)  Need for Government Approval
           ----------------------------

      Not applicable.

      (9)  Government Regulation
           ---------------------

      The Company is not subject to government regulation in its business
operations.  There are currently few domestic or foreign laws or regulations
that apply directly to access or commerce on the Internet, but such laws and
regulations are becoming more prevalent.  Applicability to the Internet of
existing laws governing issues such as property ownership, copyrights,
encryption and other intellectual property issues, taxation, libel, export or
import matters, obscenity and personal privacy is uncertain.  The vast
majority of such laws were adopted prior to the advent of the Internet and
related technologies and, as a result, do not contemplate or address the
unique issues of the Internet and related technologies.  It may take years to
determine whether and how existing laws such as those governing intellectual
property, privacy, libel and taxation apply to the Internet.  Because of the
Internet's popularity and increasing use, new laws and regulations with
respect to the Internet have been or in the future may be adopted.  Such laws
and regulations may cover issues such as:  user privacy; pricing; taxation;
content; copyrights; distribution; and characteristics and quality of
products and services.  In addition, the growth of the Internet, coupled with
publicity regarding Internet fraud, may lead to the enactment of more
stringent consumer protection laws.  The Company could be materially
adversely affected by proposed regulation on voice transmission over the
Internet, encryption technology and access charges for Internet service
providers, as well as the continuing deregulation of the telecommunications
industry.  In addition, because the Company's services may be accessible
worldwide, other jurisdictions may claim that the Company is required to
qualify to do business as a foreign corporation in a particular state or
foreign country.  These legal uncertainties may impose additional burdens on
the Company's business and increase the cost of potential litigation.   The
enactment of any additional laws or regulations may impede the growth of the
Internet, decrease the demand for the Company's products and services,
increase the Company's costs of doing business, decrease the Company's
potential revenues, or in some manner adversely affect the Company's
business, financial condition and results of operations.



                                      -20-

<PAGE>

      The Company may become subject to legal claims relating to the content
in the website that the Company hosts.  The law relating to the liability of
online services companies for information carried on or disseminated through
their services is currently unsettled.  It is possible that claims could be
made against online services companies under both United States and foreign
law for defamation, libel, invasion of privacy, negligence, copyright or
trademark infringement, or other theories based on the nature and content of
the materials disseminated electronically and subsequently distributed to
others.  Providers of Internet products and services have been sued in the
past (sometimes successfully) based on the content of material.  If the
Company has to take costly measures to reduce the Company's exposure to these
risks, or if such measures are required to defend the Company against such
claims, the Company's business, financial condition and results of operations
may be materially and adversely affected.  The Company intends to obtain
general liability insurance, however, it may not be adequate to fully
compensate the Company and any costs or imposition of liability that is not
covered by insurance or in excess of insurance coverage could have a material
adverse effect on the Company's business, financial condition and results of
operations.

      (10) Research and Development
           ------------------------

      In the 1999 fiscal year, the Company spent approximately $150,000 on
research and development activity in connection with the development of the
Company's SamplePrint.com service.  The Company expects to allocate a
significant amount of the resources towards Media Sciences.  The Company
expects to conduct ongoing research and development through Media Sciences,
which activities involve the formulation of new and improved products
for new and existing applications, investment in tooling and manufacturing
equipment and facilities.

      (11) Compliance with Environmental Laws
           ----------------------------------

      Not applicable.

      (12) Employees
           ---------

      The Company currently has thirty-three full-time employees, including
six management employees.

      (13) Year 2000 Disclosure
           --------------------

      The Company has conducted a preliminary review of the Company's
internal programs and has determined that there are no significant Year 2000
issues within the Company's systems or services.  At this time, the Company
does not anticipate any significant expense in ensuring that the Company is
Year 2000 compliant.  The Company believes that the Company's systems are


                                      -21-

<PAGE>

Year 2000 compliant.  The Company utilizes third-party equipment and software
and the Company has been informed that such are or will be Year 2000
compliant.  The Company presently does not have a contingency plan related to
Year 2000 issues, and upon further assessment, the Company may create one.
The failure of the Company's contingency plan or the software applications or
internal systems of other companies on which the Company's systems rely or to
which they are connected or of other Internet-related companies, including
Internet web hosting companies, Internet access providers, or Internet root
server operators, none of which the Company controls, to be Year 2000
compliant upon January 1, 2000 could have a material adverse effect on the
operation of the Internet and/or a material adverse effect on the Company's
business, financial condition and results of operations.  Until the Company
completes a thorough evaluation of the Company's Year 2000 issues, the
Company is uncertain of the risks and the costs related to addressing such
issues.


-------------------------------------------------------------------------------
ITEM 2.  DESCRIPTION OF PROPERTY
-------------------------------------------------------------------------------

      The Company maintains its executive offices in approximately 7212
square feet, including 1200 square feet of warehouse space, at Allendale, New
Jersey, pursuant to a lease expiring on March 31, 2002.  The Company also
maintains four (4) sales offices in the eastern United States.

      The following table sets forth the location, approximate square
footage, approximate annual rent, use of each location and expiration date of
each lease:
























                                      -22-

<PAGE>

<TABLE>
<CAPTION>
                                   APPROX.
                        APPROX.    ANNUAL                        LEASE
LOCATION                SQ. FEET   RENT(1)    USE                EXPIRATION DATE
---------------------   --------   --------   ----------------   ------------------
<S>                     <C>        <C>        <C>                <C>
110 Commerce Drive         7,212   $101,993   Executive Office   Mar. 31, 2002(2)
Allendale, NY                                 Warehouse

137 Fifth Avenue           1,400   $ 39,690   Sales Office       July 14, 2000
New York, NY

125 Wolf Road                923   $ 14,306   Sales Office       Feb. 28, 2000(3)
Albany, NY

24 Westech Drive           4,000   $ 28,748   Sales Office       Jan. 31, 2002(4)
Tyngsboro, MA

2551 Industry Lane         2,500   $ 12,000   Sales Office       June 30, 2000
Norristown, PA

</TABLE>

(1)   Certain of these leases provide for moderate annual rental increases.
(2)   Lease provides for a five year renewal option.
(3)   Lease provides for a one year renewal option.
(4)   Lease provides for a renewal option for either a three year or five
      year term.

      The Company presently intends to seek corporate executive office,
warehousing and manufacturing facilities of 12,000-15,000 square feet to
accommodate increased warehouse requirements, expanded service facilities,
and to support the manufacturing requirements of Media Sciences, Inc.
Although the Company believes that its facilities are adequate for its
existing operations, the Company regularly evaluates the adequacy of these
facilities in light of its growth and expansion plans.  The Company may not
find suitable facilities at reasonable rates.  The Company intends to acquire
additional sales office space by virtue of its acquisition efforts, if
consummated.













                                      -23-

<PAGE>

-------------------------------------------------------------------------------
ITEM 3.  LEGAL PROCEEDINGS.
-------------------------------------------------------------------------------

      In August 1999, the Company 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.  The
Company's lawsuit seeks certain injunctive relief and an indeterminate amount
of damages, and alleges 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 its lawsuit, the Company alleges that, in August
1999, Tektronix, Inc. unilaterally, and without notice, illegally terminated
the Company's Tektronix Premier Plus Reseller franchise because the Company
is selling a non-Tektronix product, Cadapult solid ink supplied to the
Company by ultraHue.  The Company is informed that Tektronix controls 97% of
the U.S. solid ink market for digital printers (which essentially are only
Tektronix printers).  The results of the Company's pending lawsuit could have
material positive or material adverse consequences to the Company, or both
adverse and positive consequences.  The Company derived 45% of its fiscal
year 1999 revenues from sales and services of Tektronix products.  The
lawsuit has only recently commenced and may or may not be resolved in the
near future.  The loss of all or a part of this lawsuit could have a material
adverse affect on the Company.

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

      The Company, as authorized by the necessary approvals of the Board of
Directors and the holders of the majority of the Company's Common Stock,
including certain members of Management and the Board of Directors of the
Company (collectively "Majority Stockholders") has adopted resolutions
Regarding amending the Company's Certificate of Incorporation to decrease the
number of authorized capital stock and to authorize a class of preferred
stock by changing the authorized capital stock that the Company is authorized
to issue to twenty five million (25,000,000), consisting of twenty million
(20,000,000) shares of Common Stock with $.001 par value per share and five
million (5,000,000) shares of preferred stock with $.001 par value
("Preferred Stock").  The Board of Directors of the Company has approved, and
the Majority Stockholders have delivered written consents in lieu of a
meeting of stockholders approving the certificate amendment actions.











                                      -24-

<PAGE>

-------------------------------------------------------------------------------
                                    PART II
-------------------------------------------------------------------------------

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

      (a)   Market Information
            ------------------

      Beginning July 10, 1998, the Common Stock of the Company was quoted on
the OTC Bulletin Board under the symbol "GRFX".  The following table sets
forth for the periods indicated, the high and low closing bid prices for the
Common Stock as reported by the OTC Bulletin Board.

                            Fiscal Year 1999
                            ----------------
Quarter Ended               High       Low
-------------               ----       ---
September 30, 1998          $ 4.00     $ 2.00
December 31, 1999           $ 3.620    $ 2.125
March 31, 1999              $ 3.250    $ 1.75
June 30, 1999               $ 3.562    $ 2.50


      The foregoing quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission, and may not necessarily represent actual
transactions.

      (b)   Holders
            -------

      The approximate number of holders of record of the Company's Common
Stock as of September 24, 1999 was 386.  As of that date, there were
approximately 450 beneficial shareholders, including shareholders holding
stock under nominee security position listings.

      (c)   Dividends
            ---------

      No cash dividends have been declared by the Company on the Company's
Common Stock.  The Company may pay dividends on its Preferred Stock in the
near future, under such terms as may be set forth in a Preferred Stock
Designation.  Future cash dividends on the Company's Common Stock, if any,
will be at the discretion of the Company's Board of Directors and will depend
upon, among other things, the Company's future operations and earnings,
capital requirements and surplus, general financial condition, contractual
restrictions, and such other factors as the Board of Directors may deem
relevant.



                                      -25-



<PAGE>

      (d)   Sale of Unregistered Securities
            -------------------------------

      In August 1998, the Company granted Dan Brecher 5-year warrants to
purchase 50,000 shares of common stock at $4.00 per share, and Fischbein
Badillo Wagner Harding 5-year warrants to purchase 25,000 shares of common
stock at $4.00 per share.

      In February 1999, the Company granted Bruce Meisel 5-year warrants to
purchase 30,000 shares of common stock at $5.00 per share.

      On June 23, 1999, the Company completed the acquisition of certain
assets of WEB Associates, Inc., pursuant to an Asset Purchase Agreement.
Under the agreement, the Company issued 86,190 shares of unregistered and
restricted common stock to WEB Associates, Inc. and reserved in escrow an
additional 86,190 shares of unregistered and restricted for possible future
issuance to WEB Associates, Inc. in a transaction deemed to be exempt under
Section 4(2) of the 1933 Act.

      On September 13, 1999, the Company completed a private placement sale
of 127,750 shares (of which 50,000 shares are being held in escrow pending the
fulfillment of certain conditions subsequent) of unregistered and restricted
Common Stock and raised gross proceeds of approximately $255,500.  The Common
Stock issued in the private placement was not registered with the Securities
and Exchange Commission under the Securities Act and was offered and sold
primarily to "accredited investors" in reliance on exemptions from
registration provided in Sections 4(2) and 3(b) of the Securities Act and
Rules 505 and 506 of Regulation D under the Securities Act.  The private
placement was conducted by the Company's officers and directors and was not
underwritten.























                                      -26-

<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 the Company's expectations and
beliefs, including, but not limited to statements concerning the Company'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
the Company's 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, 1999.  On June 24, 1998 the Company elected to change its fiscal
year from April 30 to June 30.  For the purposes of this analysis, the
results of operations for the year ended June 30, 1999 are being compared to
the results of operations for the year ended April 30, 1998.


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.  The increase in sales can be attributed
to the Tartan and Web acquisitions and to 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 the Company and through the sale of private label
supplies.






                                      -27-

<PAGE>

Selling, General and Administrative.  Selling, General and Administrative
expenses for the year ended June 30, 1999 increased to $3,069,682  from
$2,138,915 for the year ended April 30, 1998.  The 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, accounting and consulting fees associated with the
merger with Seafoods Plus, Ltd. in June of 1998, with being a publicly held
company, the amortization of goodwill resulting from acquisitions, and to
increase in payroll attributable to the acquisitions and development of the
Company's infrastructure for future growth.   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 the Company's increased receivables and inventory due to the
acquisitions.

Income Taxes.  For the year ended June 30, 1999, the Company 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,
the Company 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, the Company 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.


Liquidity and Capital Resources

The Company has an agreement with a lender 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 2% over the lender's base rate, are
payable on demand and are collateralized by all assets of the Company.  As of
June 30, 1999 the Company had used $1,677,024 of this line.

In August 1998, the Company 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 the Company with net proceeds of $620,000.  The Company used
substantially all of the proceeds in the retirement of bank debt assumed in
the acquisition of Tartan in January 1999.









                                      -28-

<PAGE>

The Company 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.

In September 1999, the Company completed a private placement for $255,500
consisting of 127,750 shares of Common Stock (of which 50,000 shares are
being held in escrow pending the fulfillment of certain conditions
subsequent) at a purchase price of $2.00.  Expenses associated with the
private placement were approximately $15,000, providing the company with net
proceeds of $240,500 of which $100,000 is due to the Company pending the
fulfillment of certain conditions subsequent.   The Company used
substantially all of the proceeds to invest in its Internet initiatives
including SamplePrint.com and the upgrade of its accounting system in
preparation for the Cadapult storefront.

On August 19, 1999 the Company entered into a Letter of Intent with a placement
agent for a proposed private offering of up to $5,000,000.  The proposed
private offering is of 500,000 units of the Company's securities with a face
value of $10.00 per unit, each unit consisting of one share of convertible
adjustable preferred stock and one warrant to purchase two shares of common
stock at $4.50.  The preferred stock will originally be convertible at $3.25
per share.  In addition, the preferred stock will carry a dividend, paid
quarterly, of 11.5% per annum.  The offering is to be sold to accredited
investors only in states where permitted.  The use of proceeds will be
targeted at additional acquisitions, expansion of Cadapult's "No-Cap Color"
printer program and for working capital.  The offering is on a "best efforts"
basis, but could ultimately raise up to $11 million for the Company if fully
sold and if the included warrants are exercised.


















                                      -29-

<PAGE>

-------------------------------------------------------------------------------
ITEM 7.  FINANCIAL STATEMENTS.
-------------------------------------------------------------------------------

Financial Report - June 30, 1999

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









































                                      -30-

<PAGE>

                      [Letterhead of Wiss & Company, LLP]




                         INDEPENDENT AUDITORS' REPORT



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


We have audited the accompanying balance sheets of Cadapult Graphic Systems,
Inc. as of June 30, 1999 and June 30, 1998 and the related statements of
operations, changes in shareholders' equity and cash flows for the year ended
June 30, 1999, the two months ended June 30, 1998 and the year ended April
30, 1998.  These financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these financial
statements based on our 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 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 financial statements referred to above present fairly, in
all material respects, the financial position of Cadapult Graphic Systems,
Inc. at June 30, 1999 and 1998, and the results of its operations and its
cash flows for the periods indicated above in conformity with generally
accepted accounting principles.


                                                /s/ Wiss & Company
                                                WISS & COMPANY, LLP


Livingston, New Jersey
August 18, 1999









                                      -31-

<PAGE>

                        CADAPULT GRAPHIC SYSTEMS, INC.

                                BALANCE SHEETS

<TABLE>
                                                                 June 30,
                                                      ------------------------------
                       ASSETS                             1999              1998
                                                      ------------      ------------
<S>                                                   <C>               <C>
CURRENT ASSETS:
  Cash                                                $     33,157      $     22,821
  Accounts receivable, less allowance for doubtful
    accounts of $35,000 in 1999 and $22,500 in 1998      1,950,399         1,653,624
  Attorney escrow                                              -             320,000
  Inventories                                            1,276,621         1,016,381
  Prepaid and refundable income taxes                          -              46,295
  Prepaid expenses and other current assets                 77,471            38,591
                                                      ------------      ------------
      Total Current Assets                               3,337,648         3,097,712
                                                      ------------      ------------

PROPERTY AND EQUIPMENT, NET                                627,029           232,023
                                                      ------------      ------------

OTHER ASSETS:
  Goodwill and other intangible assets, net                835,889           410,195
  Deferred acquisition costs                                34,542               -
  Security deposits                                         33,523            31,343
                                                      ------------      ------------
                                                           903,954           441,538
                                                      ------------      ------------
                                                      $  4,868,631      $  3,771,273
                                                      ============      ============

      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Note payable to bank                                $  1,677,024      $    695,000
  Current maturities of long-term debt                      87,547            89,219
  Accounts payable                                       1,710,861         1,940,770
  Accrued expenses and other current liabilities           131,767           131,510
  Due to officer                                               -              20,000
  Deferred revenues                                        294,089           144,600
                                                      ------------      ------------
      Total Current Liabilities                          3,901,288         3,021,099
                                                      ------------      ------------

OTHER LIABILITIES:
  Long-term debt, less current maturities                   69,445           156,992
  Notes payable to affiliates                               20,832            20,832
                                                      ------------      ------------
                                                            90,277           177,824
                                                      ------------      ------------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
  Common stock, .001 par value,
    Authorized 20,000,000 shares; issued 3,058,308
    shares in 1999 and 2,583,518 in 1998                     3,058             2,583
  Additional paid-in capital                             1,171,782           423,167
  Retained earnings (deficit)                             (297,774)          146,600
                                                      ------------      ------------
      Total Shareholders' Equity                           877,066           572,350
                                                      ------------      ------------
                                                      $  4,868,631      $  3,771,273
                                                      ============      ============
</TABLE>
                See accompanying notes to financial statements.

                                     F-2
                                     -32-

<PAGE>

                        CADAPULT GRAPHIC SYSTEMS, INC.

                           STATEMENTS OF OPERATIONS


<TABLE>
                                                                       Two Months      Year Ended
                                                      Year Ended     Ended June 30,     April 30,
                                                     June 30, 1999        1998            1998
                                                     -------------   --------------    ----------
<S>                                                   <C>              <C>             <C>
NET SALES                                             $10,227,628      $1,623,754      $7,103,906
                                                      -----------      ----------      ----------

COSTS AND EXPENSES:
  Cost of sales                                         7,442,239       1,282,495       5,174,402
  Selling, general and administrative expenses          3,069,682         472,766       2,138,915
                                                      -----------      ----------      ----------
                                                       10,511,921       1,755,261       7,313,317
                                                      -----------      ----------      ----------

LOSS FROM OPERATIONS                                     (284,293)       (131,507)       (209,411)
                                                      -----------      ----------      ----------

OTHER EXPENSE (INCOME):
  Interest expense, net                                   160,081          21,894          90,829
  Gain on sale of equipment                                   -               -           (18,500)
                                                      -----------      ----------      ----------
                                                          160,081          21,894          72,329
                                                      -----------      ----------      ----------

LOSS BEFORE INCOME TAXES (CREDITS)                       (444,374)       (153,401)       (281,740)
                                                      -----------      ----------      ----------

INCOME TAXES (CREDITS):
  Current                                                     -               -           (39,698)
  Deferred                                                    -               -           (22,800)
                                                      -----------      ----------      ----------
                                                              -               -           (62,498)
                                                      -----------      ----------      ----------


NET LOSS                                              $  (444,374)     $ (153,401)     $ (219,242)
                                                      ===========      ==========      ==========

WEIGHTED AVERAGE COMMON SHARES
    OUTSTANDING                                         2,844,819       2,019,677       1,622,682
                                                      ===========      ==========      ==========

NET LOSS PER COMMON SHARE -
  BASIC AND DILUTED                                   $      (.16)     $     (.08)     $     (.14)
                                                      ===========      ==========      ==========
</TABLE>

                See accompanying notes to financial statements.

                                     F-3
                                     -33-

<PAGE>

                        CADAPULT GRAPHIC SYSTEMS, INC.

                 STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
                                                              Additional     Retained         Total
                                         Common Stock           Paid-in      Earnings     Shareholders'
                                    ----------------------
                                      Shares       Amount       Capital      (Deficit)        Equity
                                    ----------    --------    -----------    ---------      ---------
<S>                                 <C>           <C>         <C>            <C>            <C>
BALANCES, APRIL 30, 1997             1,548,450    $    300    $       -      $ 519,243      $ 519,543

YEAR ENDED APRIL 30, 1998:
  Sale of common stock to
    employees                          101,550         102         44,898          -           45,000
  Change in par value                      -         1,248         (1,248)         -              -
  Net loss                                 -           -              -       (219,242)      (219,242)
                                    ----------    --------    -----------    ---------      ---------

BALANCES, APRIL 30, 1998             1,650,000    $  1,650    $    43,650    $ 300,001      $ 345,301

TWO MONTHS ENDED JUNE 30, 1998:
  Sale of common stock through
    private placement                  256,000         256        319,744          -          320,000
  Issuance of common stock upon
    conversion of note payable          40,000          40         49,960          -           50,000
  Issuance of common stock in
    connection with merger             571,450         571           (571)         -              -
  Issuance of common stock for
    services                            66,068          66         10,384          -           10,450
  Net loss                                 -           -              -       (153,401)      (153,401)
                                    ----------    --------    -----------    ---------      ---------

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
                                    ==========    ========    ===========    =========      =========
</TABLE>
                See accompanying notes to financial statements.

                                     F-4
                                     -34-

<PAGE>

                        CADAPULT GRAPHIC SYSTEMS, INC.

                           STATEMENTS OF CASH FLOWS

<TABLE>
                                                             Year Ended       Two Months        Year Ended
                                                              June 30,      Ended June 30,       April 30,
                                                                1999             1998               1998
                                                            -----------       -----------       -----------
<S>                                                         <C>               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                  $  (444,374)      $  (153,401)      $  (219,242)
  Adjustments to reconcile net loss to  net cash
    flows from operating activities:
      Depreciation and amortization                             180,494            19,063            73,525
      Gain on sale of equipment                                     -                 -             (18,500)
      Deferred income taxes                                         -             (10,000)          (22,800)
      Common stock and warrants for services                     20,510            10,450               -
      Provision for bad debts                                     6,000               -                 -
      Changes in operating assets and liabilities:
        Accounts receivable                                      89,130          (538,646)          394,474
        Inventories                                             170,259          (236,454)           (7,528)
        Prepaid and refundable income taxes                      46,295               -             (46,295)
        Prepaid expenses and other current assets                35,710            11,855           (91,318)
        Security deposits                                        (2,180)              -              (4,852)
        Accounts payable                                       (473,241)          914,997             9,523
        Accrued expenses and other current liabilities              255           (41,971)          137,596
        Deferred revenues                                       149,489           (11,748)           26,322
                                                            -----------       -----------       -----------
          Net cash flows from operating activities             (221,653)          (35,855)          230,905
                                                            -----------       -----------       -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                          (303,271)           (4,069)         (105,703)
  Proceeds from sale of equipment                                   -                 -              18,500
  Purchase of intangible assets                                (102,350)              -                 -
  Cost of net assets of acquired business                      (242,200)              -            (546,431)
  Deferred acquisition costs                                    (34,542)              -                 -
                                                            -----------       -----------       -----------
          Net cash flows from investing activities             (682,363)           (4,069)         (633,634)
                                                            -----------       -----------       -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Note payable to bank, net                                     333,071          (305,000)          450,000
  Proceeds of long-term debt                                        -                 -             250,000
  Payments on long-term debt                                    (89,219)          (14,823)          (10,147)
  Attorney escrow account                                       320,000          (320,000)              -
  Advances from officer                                         (20,000)              -              20,000
  Sale of common stock                                          370,500           320,000            45,000
                                                            -----------       -----------       -----------
          Net cash flows from financing activities              914,352          (319,823)          754,853
                                                            -----------       -----------       -----------

NET CHANGE IN CASH                                               10,336          (359,747)         (352,124)

CASH, BEGINNING OF PERIOD                                        22,821           382,568            30,444
                                                            -----------       -----------       -----------

CASH, END OF PERIOD                                         $    33,157       $    22,821       $   382,568
                                                            ===========       ===========       ===========
</TABLE>

                See accompanying notes to financial statements.

                                     F-5
                                     -35-

<PAGE>

                        CADAPULT GRAPHIC SYSTEMS, INC.

                           STATEMENTS OF CASH FLOWS
                                  (Continued)

<TABLE>
                                                             Year Ended       Two Months        Year Ended
                                                              June 30,      Ended June 30,       April 30,
                                                                1999             1998               1998
                                                            -----------      ------------       -----------
<S>                                                         <C>               <C>               <C>
SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid                                             $   155,846       $    21,894       $    94,377
                                                            ===========       ===========       ===========
  Income taxes paid                                         $       -         $       -         $     5,032
                                                            ===========       ===========       ===========
  Issuance of common stock upon conversion of
    Note payable to related party                           $       -         $    50,000       $       -
                                                            ===========       ===========       ===========

Non cash investing activity -
  Acquisition of business:
    Fair value of assets acquired                           $ 1,459,457       $       -         $   865,115
    Fair value of liabilities assumed                           859,177               -             318,684
    Fair value of common stock issued                           358,080               -                 -
                                                            -----------       -----------       -----------
      Net cash payment                                      $   242,200       $       -         $   546,431
                                                            ===========       ===========       ===========
</TABLE>

                See accompanying notes to financial statements.

                                     F-6
                                     -36-

<PAGE>

                        CADAPULT GRAPHIC SYSTEMS, INC.

                        NOTES TO FINANCIAL STATEMENTS


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

      Nature of the Business - Cadapult Graphic Systems, Inc. (the "Company")
provides 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 has its corporate
headquarters in New Jersey and has offices in Massachusetts, Albany and New
York City, New York and Pennsylvania.

      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.

      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, 1999, the Company has
uninsured balances totalling approximately $150,000.

      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, 1999 is limited.

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







                                     F-7
                                     -37-

<PAGE>

                        CADAPULT GRAPHIC SYSTEMS, INC.

                        NOTES TO FINANCIAL STATEMENTS


      Property and Equipment - Property and equipment are stated at cost.
The Company provides for depreciation using the straight-line and accelerated
methods by charges to income at rates based upon the recovery periods of 5 to
7 years for furniture and equipment and over the useful lives or the lease
term, if shorter, for leasehold improvements.

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

                                                            Life (Years)
                                                            ------------
                 Goodwill                       $781,670          15
                 Covenants-not-to-compete         51,000         3-5
                 Financing costs                  74,880         1-3
                                                --------
                                                 907,550
                 Accumulated amortization         71,661
                                                --------
                                                $835,889
                                                ========

      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, 1999.

      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 on a pro-rata basis. Contributions
made by the Company for the year ended June 30, 1999, the two months ended
June 30, 1998 and the year ended April 30, 1998, were $14,502, $1,401 and
$10,461, respectively.

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

      Net Loss Per Share - Basic and diluted loss per share are based upon
the weighted average number of common shares outstanding during the period.
The computation of diluted earnings per share does not assume the conversion,
exercise or contingent issuance of securities that would have a dilutive
effect on loss per share.

                                     F-8
                                     -38-

<PAGE>

                        CADAPULT GRAPHIC SYSTEMS, INC.

                        NOTES TO FINANCIAL STATEMENTS


      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 was recognized in 1999 and 1998
for stock option grants.

      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
loss and net loss per share would have been $1,018,000 and $.36 in 1999 and
$288,000 and $.14 for the two months ended June 30, 1998 using the Black-
Scholes option pricing model.  The proforma net loss and net loss per share
for the year ended April 30, 1998 would not have been materially different.

      The fair value of options granted in 1999 and 1998 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 108% 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.

      Recently Issued Accounting Standards - In June 1998, the Financial
Accounting Standards Board (FASB) issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities."  This statement establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities and will be adopted in the year ended June 30, 2000.  The Company
does not engage in, nor does it expect to engage in derivative or hedging
activities, and therefore, the Company anticipates that the adoption of this
statement will have no impact on its financial statements.

      Change in Fiscal Year - On June 24, 1998, the Company elected to change
from an April 30 to June 30 fiscal year.  Therefore, the accompanying
financial statements include transitional financial statements for the two
months ended June 30, 1998.  It is not practicable and cannot be cost
justified to furnish financial statements for the corresponding period of the
prior year; accordingly, unaudited financial data for the two months ended
June 30, 1997 follow which is the corresponding period of the preceding
fiscal year.  There were no seasonal factors that affect the comparability of
information or trends reflected.

                                     F-9
                                     -39-

<PAGE>

                        CADAPULT GRAPHIC SYSTEMS, INC.

                        NOTES TO FINANCIAL STATEMENTS


                  Net sales                           $ 821,623
                                                      =========
                  Gross profit                        $ 207,051
                                                      =========
                  Income tax credit                   $ (47,800)
                                                      =========
                  Net loss                            $(128,992)
                                                      =========
                  Net loss per share                    $  (.08)
                                                        =======

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 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.  Currently, 92,850 of the shares are held in
escrow pursuant to the resolution of a contingency based on Tartan achieving
certain gross profit levels over the next two years.  When the contingency is
resolved, some or all of the 92,850 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
($1,000) 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 over the next two years.  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.

      The following unaudited pro forma consolidated results of operations
for the years ended June 30, 1999 and April 30, 1998, assumes the Tartan and
WEB acquisition had occurred on May 1, 1997 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.

                                     F-10
                                     -40-

<PAGE>

                        CADAPULT GRAPHIC SYSTEMS, INC.

                        NOTES TO FINANCIAL STATEMENTS


<TABLE>
                                                     Two Months
                                    Year Ended          Ended        Year Ended
                                     June 30,         June 30,        April 30,
                                       1999             1998            1998
                                    -----------      ----------      -----------
      <S>                           <C>              <C>             <C>
      Net sales                     $14,250,322      $2,521,860      $15,980,206
                                    ===========      ==========      ===========
      Net loss                      $  (556,819)     $ (195,215)     $   (36,617)
                                    ===========      ==========      ===========
      Basic and diluted loss
      per share                            (.19)           (.08)            (.02)
                                    ===========      ==========      ===========
</TABLE>


NOTE 3  -  PROPERTY AND EQUIPMENT:

      Property and equipment are summarized as follows:

<TABLE>
                                                                      June 30,
                                                            ----------------------------
                                                                1999             1998
                                                            -----------      -----------
            <S>                                             <C>              <C>
            Office equipment                                $   997,359      $   598,931
            Furniture and fixtures                              165,213          129,109
            Automobiles                                          65,379           65,379
            Leasehold improvements                               98,568           18,624
                                                            -----------      -----------
                                                              1,326,519          812,043
            Less: Accumulated depreciation and
                   amortization                                 699,490          580,020
                                                            -----------      -----------
                                                            $   627,029      $   232,023
                                                            ===========      ===========
</TABLE>


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 2% over the bank's base rate, are
payable on demand and are collateralized by all assets of the Company.

      Advances under the note payable to bank become immediately due
and payable if certain financial covenants, as defined in the loan
agreements, are not met.

                                     F-11
                                     -41-

<PAGE>

                        CADAPULT GRAPHIC SYSTEMS, INC.

                        NOTES TO FINANCIAL STATEMENTS


NOTE 5  -  LONG-TERM DEBT:

      A summary of long-term debt follows:

<TABLE>
                                                            Interest                June 30,
                                                                           --------------------------
                       Description                            Rate            1999            1998
            ---------------------------------------         --------       ----------     -----------
            <S>                                             <C>            <C>            <C>
            Loan payable in monthly installments of
              $6,944 plus interest through April
              2001, collateralized by all assets of         1% over
              the Company                                    prime         $  152,778     $  236,111

            Loan payable in monthly installments of
              principal and interest of $543 through
              February 2000, collateralized by an
              automobile                                     8.49%              4,214          10,100
                                                                           ----------     -----------
                                                                              156,992         246,211
            Less:  Current maturities                                          87,547          89,219
                                                                           ----------     -----------
                                                                           $   69,445     $   156,992
                                                                           ==========     ===========
</TABLE>

      Long-term debt at June 30, 1999 matures as follows:

<TABLE>
                  Year Ending June 30,
                  --------------------
                          <S>                                               <C>
                          2000                                              $ 87,547
                                                                            --------
                          2001                                                69,445
                                                                            $156,992
                                                                            ========
</TABLE>


NOTE 6  -  INCOME TAXES:


      The components of income taxes are summarized as follows:

<TABLE>
                                    Year Ended    Two Months Ended   Year Ended
                                     June 30,         June 30,        April 30,
                                       1999             1998            1998
                                    -----------      ----------      -----------
            <S>                     <C>              <C>             <C>
            Current:
               Federal              $       -        $      -        $   (45,390)
               State and local              -               -              5,692
                                    -----------      ----------      -----------
                                            -               -            (39,698)
                                    -----------      ----------      -----------

            Deferred:
               Federal                      -               -            (15,100)
               State and local              -               -             (7,700)
                                    -----------      ----------      -----------
                                            -               -            (22,800)
                                    -----------      ----------      -----------
                                    $       -        $      -        $   (62,498)
                                    ===========      ==========      ===========
</TABLE>
                                     F-12
                                     -42-

<PAGE>

                        CADAPULT GRAPHIC SYSTEMS, INC.

                        NOTES TO FINANCIAL STATEMENTS


      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, 1999, the Company
believes that the "more likely than not" criteria have not been met, and
accordingly, a valuation allowance has been recognized.

      The Company has available net operating loss carryforwards of
approximately $480,000 which expire through 2019.  The Company's  utilization
of it 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.

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

<TABLE>
                                          Year Ended   Two Months Ended    Year Ended
                                           June 30,         June 30,        April 30,
                                             1999             1998            1998
                                          -----------      ----------      -----------
      <S>                                 <C>              <C>             <C>
      Income tax benefit computed at
        federal statuary rate             $  (151,087)     $  (52,156)     $   (95,792)
          Permanent and other items           (17,913)         17,156           20,294
          Change in valuation allowance       169,000          35,000           13,000
                                          -----------      ----------      -----------
                                          $       -        $      -        $   (62,498)
                                          ===========      ==========      ===========
</TABLE>

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

<TABLE>
                                                             June 30,
                                                      ---------------------
                                                        1999         1998
                                                      --------     --------
      <S>                                             <C>           <C>
      Deferred tax assets
        Net operating loss carryforwards              $193,000     $ 33,000
        Accruals and reserves                           24,000       15,000
                                                      --------     --------
                                                       217,000       48,000
          Less: valuation allowance                    217,000       48,000
                                                      --------     --------
            Total deferred tax assets                 $    -       $    -
                                                      ========     ========
</TABLE>

                                     F-13
                                     -43-

<PAGE>

                        CADAPULT GRAPHIC SYSTEMS, INC.

                        NOTES TO FINANCIAL STATEMENTS


NOTE 7  -   SHAREHOLDERS' EQUITY:

      a)    Merger:

            Pursuant to an Agreement and Plan of Reorganization dated June 5,
1998, the stockholders of the Company exchanged all their shares of stock
owned for 1,650,000 shares (72%) of $.001 par value common stock of Seafoods
Plus, Ltd. ("SPL"), an inactive public company with nominal assets.  Under
the agreement, the Company became a wholly-owned subsidiary of SPL, and then
merged with SPL in 1998.  The merger was recorded as a recapitalization of
the Company and an issuance of shares to SPL's shareholders on June 5, 1998.
The Company will continue operating as Cadapult Graphic Systems, Inc.

            All references to the Company's common stock in the 1998 balance
sheet, the 1998 statements of operations and notes to the financial
statements retroactively reflect Cadapult's operations and the
recapitalization.

      b)    Stock Compensation Plan:

            The Company has an incentive stock option (the "1998 Plan"),
pursuant to which 500,000 of the Company's authorized but unissued shares of
common stock have been reserved for issuance of stock options.  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.  Pursuant to the Plan, certain key employees, members of the Board of
Directors and the President were granted five and ten year incentive stock
options to purchase an aggregate total of 317,893 shares, net of forfeitures,
at a weighted average exercise price of $1.93 per share.  A total of 174,443
shares with a weighted average exercise price of $1.69 are exercisable at
June 30, 1999.

            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 and are exercisable at $1.375 per share and expire in
June 2003.

            The Company granted two employee's 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.

                                     F-14
                                     -44-

<PAGE>

                        CADAPULT GRAPHIC SYSTEMS, INC.

                        NOTES TO FINANCIAL STATEMENTS


      c)    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.

      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.  The warrants, which had a value of $20,510,
using the Black-Scholes pricing model, expire through February 15, 2004.

      e)    Amendments to Certificate of Incorporation:

            In August 1999, the Company's Board of Directors amended the
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.

NOTE 8  -   COMMITMENTS AND CONTINGENCIES:

      Leases - The Company leases its premises under lease agreements which
expire through 2002 and an automobile and equipment under operating leases
that expire in 2002.  Future minimum lease payments are as follows:

                  Year Ending June 30,
                  --------------------
                          2000                        $152,175
                          2001                         108,639
                          2002                          73,370
                                                      --------
                                                      $334,184
                                                      ========

      Rent expense amounted to $198,199, $31,755 and $176,463 for the year
ended June 30, 1999, the two months ended June 30, 1998 and the year ended
April 30, 1998, 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 $255,000 per
annum.  In 1999, the Company entered into two year employment agreements with
three employees providing for aggregate compensation of $142,000 per annum.

                                     F-15
                                     -45-

<PAGE>

                        CADAPULT GRAPHIC SYSTEMS, INC.

                        NOTES TO FINANCIAL STATEMENTS


      Litigation - In August 1999, the Company's attorneys filed a civil
action in the Superior Court of New Jersey on behalf of the Company which
alleges that the supplier referred to in Note 9 improperly cancelled the
Company's participation in certain programs which provided the Company with
preferential pricing, business leads and various additional rebates and
incentives.  In part, the action charges the supplier with alleged violation
of the New Jersey Antitrust Act, breach of contract and unfair competition.

NOTE 9  -  MAJOR SUPPLIER:

      Direct purchases from one supplier accounted for approximately 34% of
total purchases in 1999 and 50% in 1998.  At June 30, 1999, this supplier
accounted for approximately 22% of the Company's accounts payable.  If the
supplier fails to provide the required inventories, it may have a negative
impact on the Company.  (See Note 8).

NOTE 10  -  SUBSEQUENT EVENTS (Unaudited):

      Private Offering - On August 19, 1999, the Company entered into a
letter of intent with a placement agent wherein the placement agent will, on a
best efforts basis, offer up to $5,000,000 of the Company's convertible
adjustable preferred stock to accredited investors.  Each unit will be priced
at $10.00 and include one share of Series A Preferred Stock ("Series A") and
two warrants to purchase a total of two shares of common stock for $4.50.
Dividends on Series A stock will accrue at the rate of 11.50% per annum and
are payable quarterly.  Each Series A share is convertible at the option of
the holder beginning 30 days after closing (no later than December 31, 1999)
at a rate of 3.077 shares of common stock for one share of Series A.  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 Series A stock will be callable by the Company at $15.00 per share
at any time Holders have the right to convert upon receipt of the call
notice.

      The Company has agreed to register all of the shares of common stock
necessary for the conversion of the Series A stock and all shares of common
stock underlying warrants within 90 days of the closing of the offering.


                                     F-16
                                     -46-

<PAGE>

                        CADAPULT GRAPHIC SYSTEMS, INC.

                        NOTES TO FINANCIAL STATEMENTS


      The placement agent's fee will include a commission and a nonaccountable
expense allowance equal to 13% of the proceeds of the offering, five year
warrants to purchase up to 215,000 shares of the Company's common stock at
$1.65 per share and up to 500,000 shares of the Company's common stock at
$3.75 per share.  The value of the warrants will be recognized as a cost of
issuance of the Series A shares.

      Purchase of Business - On September 7, 1999 Media Sciences, Inc., a
newly formed wholly-owned subsidiary of the Company, entered into an Asset
Purchase Agreement ("Agreement") with ultraHue, Inc., a New Mexico
corporation.  The Company has agreed to purchase certain assets and assume
certain liabilities of ultraHue for $3,500,000.  The obligation of the
company to purchase the assets is contingent upon the Company obtaining
financing not less than $3,000,000 to fund the purchase.  In the event the
Company does not obtain such financing by December 7, 1999, either party
shall have the option to terminate the Agreement.


                                     F-17





























                                     -47-

<PAGE>

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

      (a)(1)  As previously reported on Form 8-K, on July 6, 1998, the
Company informed Mantyla, McReynolds & Associates that it has been dismissed
as the Company's principal accountants.  The former principal accountants'
report on the financial statements for either of the past two years neither
contained an adverse opinion or disclaimer of opinion, nor was modified as to
uncertainty, audit scope, or accounting principles.  The Company's decision
to change its principal accountant was recommended and approved by the
Company's 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.  The Company has
authorized the former accountants to respond fully to all inquires of the
successor accountant concerning any matter.

      (a)(2)  On July 6, 1998, the Company engaged Wiss & Company, LLP as its
principal accountants.  Wiss & Company, LLP had been the principal
accountants for the Company's former New Jersey subsidiary, CGSI, since April
23, 1998.  Pursuant to a reverse acquisition which was completed on June 18,
1998, CGSI became a wholly-owned subsidiary of the Company.  The Board of
Directors of the Company had selected Wiss & Company to serve as the
Company's principal accountants.  There were no disagreements with the
accountants on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure.


























                                      -48-

<PAGE>

-------------------------------------------------------------------------------
                                   PART III
-------------------------------------------------------------------------------

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

Directors and Executive Officers
--------------------------------

      The following persons are the present directors and executive officers
of the Company.

Name                    Age         Position
----                    ---         --------

Michael W. Levin        34          Chief Executive Officer, President and
                                      Chairman of the Board
Frances Blanco          38          Vice President Marketing and Investor
                                      Relations, Treasurer, Secretary and
                                      Director
Duncan Huyler           38          Vice President Technical Services
Paul C. Baker           62          Director
Edwin Ruzinsky(1)       66          Director

(1)   Became a director on August 27, 1999.

     All directors of the Company 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.  The officers of the Company are
elected by the Board of Directors at the first meeting after each annual
meeting of the Company's 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 Chief Executive Officer, President and Chairman of
the Board of the Company since June 18, 1998.  Before June 1998, he had
served as President, Treasurer, Secretary and Chairman of Cadapult Graphic
Systems Inc., a New Jersey corporation ("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.



                                      -49-

<PAGE>

Frances Blanco, Vice President of Marketing and Investor Relations, Treasurer,
------------------------------------------------------------------------------
Secretary and Director:
----------------------
Ms. Blanco has served as Vice President of Marketing and Investor Relations,
Treasurer, Secretary and a Director of the Company since June 18, 1998.
Before June 18, 1998, she had served as Vice President of Marketing and
Investor Relations, Treasurer, Secretary and a director of CGSI.  Ms. Blanco
joined CGSI in 1993.  Ms. Blanco manages all aspects of marketing, including
brand identity, demand creation and vendor relationships for the Company 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 Vice President of Technical Services for the Company
since June 18, 1998.  Prior to June 18, 1998, he served as Vice President of
Technical Services for CGSI, which he joined in 1993.  Mr. Huyler manages all
the technical aspects of the Company, 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.

Paul C. Baker, Director:
-----------------------
Mr. Baker has served as a Director of the Company since June 18, 1998.  He is
the founder and President of Sherwood Partners, Inc., a venture capital and
management consulting company 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. ("Cyanamid").  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.




                                      -50-

<PAGE>

Edwin Ruzinsky, Director:
------------------------
Mr. Ruzinsky has served as a Director of the Company since August 27, 1999.
He is a Certified Public Accountant and a Certified Management Consultant.
Prior to his retirement as a Partner in Deloitte Consulting LLC, a wholly-
owned subsidiary of Deloitte & Touche LLP on June 1, 1996, he served for many
years as the firm's National Director-Media Industry Services.  He previously
served Times Mirror Company (NYSE-TMC) as Vice President-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.


Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------

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






















                                      -51-

<PAGE>

-------------------------------------------------------------------------------
ITEM 10.  EXECUTIVE COMPENSATION.
-------------------------------------------------------------------------------

Executive Compensation
----------------------

      The following table sets forth information concerning the annual and
long-term compensation during the Company's last three fiscal years of the
Company's Chief Executive Officer and other most highly compensated employees
and all other officers and directors of the Company:

<TABLE>
                                           SUMMARY COMPENSATION TABLE

                                                                                  Long Term
                                                                                  Compensation
                                                                                  ------------
                                       Annual Compensation                        Awards
                              -----------------------------------------------     ------
Name and                                                        Other             Securities
Principal                                                       Annual            Underlying      All Other
Position                      Year(1)   Salary       Bonus      Compensation      Options/SARS    Compensation(2)
--------------------------    ----------------------------------------------      ------------    ---------------
<S>                           <C>       <C>          <C>        <C>               <C>             <C>
Michael W. Levin(3)           1999      $ 130,000    $       0  $       0         500,000         $  2,379
  Chief Executive Officer,    1998      $ 141,583    $       0  $       0          51,223         $  2,727
  President and Chairman
  Of the Board
Frances Blanco(3)             1999      $  80,000    $  10,000  $       0         100,000         $  2,021
  Vice President Marketing    1998      $  75,000    $  25,000  $       0           7,714         $  2,158
  and Investor Relations,
  Treasurer, Secretary and
  Director
Duncan Huyler(3)              1999      $  95,000    $       0  $       0         100,000         $  4,630
  Vice President Technical    1998      $  91,000    $  25,000  $       0           9,265         $  3,867
  Services
Paul C. Baker                 1999      $       0    $       0  $       0          33,000         $     0
  Director                    1998      $       0    $       0  $       0               0         $     0
Kathleen L. Morrison          1998(4)   $       0    $       0  $   1,250(5)            0         $      0
  Former President and        1997      $       0    $       0  $       0               0         $      0
  Director
Jason Osborn                  1998(4)   $       0    $       0  $   1,250(5)            0         $      0
  Former Vice President and   1997      $       0    $       0  $       0               0         $      0
  Director
Terry Hardman                 1998(5)   $       0    $       0  $   1,250(6)            0        $       0
  Former Secretary,           1997      $       0    $       0  $       0               0        $       0
  Treasurer and Director
</TABLE>




                                      -52-

<PAGE>

(1)   In June 1998, each of Company and CGSI changed their fiscal year ends
      from December 31 and April 30, respectively, to June 30, 1998.  The
      1998 fiscal year compensation includes the operations of CGSI, a
      privately-held company at the time, for the period May 1, 1997 through
      April 30, 1998.
(2)   Includes the Company's matching contribution to the Company's 401(k)
      profit sharing plan.
(3)   Became officer and/or director on June 18, 1998.
(4)   Resigned effective June 18, 1998 pursuant to the acquisition of CGSI.
(5)   Received 1,000 shares of common stock pursuant to a Registration
      Statement on Form S-8 filed on or about June 5, 1998, for which the
      fair market value cannot be adequately determined.  For purposes of
      this calculation, the fair market value is arbitrarily determined to be
      $1.25 per share, based upon the offering price of the Company's Common
      Stock sold in a private placement conducted in June through August
      1998.


      The following table sets forth information concerning options granted
during the fiscal year ended June 30, 1999 to those persons named in the
preceding Summary Compensation Table:

<TABLE>
                    Option/SAR Grants in Last Fiscal Year
                            (Individual Grants)

                        Number of
                        Securities        Percent of total
                        Underlying        options/SARS granted     Exercise or
                        Options/SARs      to employees in          base price        Expiration
Name                    Granted (#)       fiscal year(1)           ($/Sh)            Date
------------------------------------------------------------------------------------------------
<S>                     <C>               <C>                      <C>               <C>
Michael W. Levin        500,000(2)              47.7%              $1.375            6-18-03
Michael W. Levin         51,223(3)               4.8%              $1.375            6-18-03
Frances Blanco          100,000(2)               9.3%              $2.00             3-05-04
Frances Blanco            7,714(3)               0.7%              $1.25             6-18-08
Duncan Huyler           100,000(2)               9.3%              $2.00             3-05-04
Duncan Huyler             9,265(3)               0.9%              $1.25             6-18-08
Paul Baker                3,000(2)               0.3%              $2.00             6-11-08
Paul Baker               30,000(2)               2.8%              $3.31             4-06-09
</TABLE>

(1)   Based on the aggregate total of options granted to officers, directors,
      and employees, including options granted during the two month fiscal
      year transition period from May 1 through June 30, 1998.  As of June
      30, 1999, a total of 1,069,632 options were granted, of which 51,739
      options have expired.
(2)   Options were granted pursuant to employment agreements and become
      exercisable after the Company achieves certain defined corporate goals
      based on earnings, as further described in the Long-Term Incentive Plan
      table.  No options have vested.
(3)   Options were granted pursuant to the 1998 Stock Option Plan and are
      presently exercisable.  No options have been exercised.


                                      -53-

<PAGE>

      None of the options held by those individuals listed in the Summary
Compensation Table were exercised in fiscal year 1998.  The following table
sets forth information concerning the value of unexercised stock options at
June 30, 1999 for those individuals named in the Summary Compensation Table.

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

                                                    Number of securities
                         Shares                    underlying unexercised        Value of unexercised
                        Acquired       Value           Options/SARs            in-the-money options/SARs
                          on         realized          at FY-end (#)                 at FY-end ($)(a)
Name                  Exercise (#)      ($)     Exercisable   Unexercisable   Exercisable   Unexercisable
----                  ------------   --------   -----------   -------------   -----------   -------------
<S>                   <C>            <C>        <C>           <C>             <C>           <C>
Michael W. Levin          --            --         51,223        500,000      $   134,460   $ 1,312,500
Frances Blanco            --            --          7,714        100,000      $    20,249   $   262,500
Duncan Huyler             --            --          9,265        100,000      $    24,321   $   262,500
Paul Baker                --            --         33,000              0      $    86,625            --
</TABLE>

(a)   The dollar values were calculated by determining the difference between
      the fair market value at fiscal year-end of the Common Stock underlying
      the options and the exercise price of the options.  The last sale price
      of a share of the Company's Common Stock on June 30, 1999 as reported
      by the OTC Bulletin Board was $2.625.


      The following table sets forth information concerning long-term options
granted during the fiscal year ended June 30, 1999 to those persons named in
the preceding Summary Compensation Table.  The Company has not adopted a
formal long-term incentive option plan.  The options presented in the
following table were granted pursuant to employment agreements, as amended,
with the Company.
















                                      -54-

<PAGE>

<TABLE>

              Long-Term Incentive Plans-Awards in Last Fiscal Year

                       Number          Performance
                       of shares,      or other units or
                       units or        period until
                       other           maturation or       Estimated Future Payouts under
Name                   rights (#)(1)   payout (2)          Non-Stock Price-Based Plans(3)
------------------------------------------------------------------------------------------
                                                           Threshold    Target    Maximum
                                                               (#)        (#)       (#)
------------------------------------------------------------------------------------------
<S>                    <C>             <C>                 <C>          <C>       <C>
Michael W. Levin       500,000         5/98 - 4/01         125,000      125,000   500,000
Frances Blanco         100,000         5/99 - 4/01          25,000       25,000   100,000
Duncan Huyler          100,000         5/99 - 4/01          25,000       25,000   100,000

</TABLE>

(1)   For purpose of this table, includes options granted during the two
      month fiscal year transition period from May 1 through June 30, 1998.
(2)   The 5-year options, exercisable into common stock at the fair market
      value on the date of grant, were granted pursuant to employment
      agreements, as amended.  The performance period refers to the term of
      the individual's employment term during which the options must vest.
(3)   The long-term incentive options are contingent upon attainment of
      certain corporate earnings milestones.  These options will vest in
      equal twenty five percent installments upon each of the following
      events:  (a) the first fiscal year end in which the Company's earnings
      before interest, taxes, depreciation and amortization ("EBITDA")
      exceeds $500,000; (b) the first fiscal year end in which the Company's
      EBITDA exceeds $1,000,000; (c) the first fiscal year end in which the
      Company's EBITDA exceeds $1,500,000; and (d) the first fiscal year end
      in which the Company's EBITDA exceeds $2,000,000.  These options are
      cumulative and are subject to anti-dilution rights.  The threshold
      refers to the minimum number of options that may vest during the
      performance period.  The target refers to the number of options that
      may vest in the 2000 fiscal year.














                                      -55-

<PAGE>

Director Compensation
---------------------

      The Company has recently established a compensation plan for its
independent directors.  Outside directors will be paid $500 for attendance at
regular meeting and $1,000 for attendance at the annual meeting and will
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 the Company.  Outside
directors will be 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.

      Previously, the Company did not have a defined compensation plan for
members of its Board of Directors.  In fiscal year 1999, the Company granted
its sole non-employee director a total of 33,000 non-qualified options under
the Company's 1998 Incentive Plan to purchase the Common Stock of the
Company, exercisable at a price equal to the fair market value of the Common
Stock on the dates of grant.

Employment Agreements with Named Executive Officers
---------------------------------------------------

      Michael W. Levin serves as Chief Executive Officer and President
pursuant to a five year employment agreement, commenced on May 1, 1998, as
amended, at an annual salary of $130,000, with cost-of-living adjustments
tied to the Consumer Price Index, or such greater annual salary as may be
established by the Company's Board of Directors.  Commencing in the third
year of the employment agreement, Mr. Levin's base annual salary shall be
increased by an amount such that such increase shall be equal to at least one
percent of the Company's earnings before interest, taxes, depreciation and
amortization ("EBITDA") in the most recent fiscal year.  Mr. Levin has been
granted 5-year options to purchase up to 500,000 shares, proportioned to vest
only after the Company's achievement of certain corporate milestones,
exercisable at $1.375 per share.  Mr. Levin may purchase 125,000 shares
following the first fiscal year that the Company's EBITDA exceeds each of
$500,000, $1,000,000, $1,500,000 and $2,000,000, respectively.  These options
are cumulative and are subject to anti-dilution rights.  Mr. Levin is also
entitled to death benefits of $100,000, a fifteen year (15-year) term life
insurance policy with a face amount of benefit of $1,000,000, a luxury
automobile, reimbursement for reasonable travel and other business related
expenses, and other bonuses to be determined by the Board of Directors.  In
the event of a "change of control" of the Company, Mr. Levin is entitled to
receive a golden parachute payment equal to two hundred and ninety percent
(290%) of his "base amount", as defined in Section 280G(3) of the Internal
Revenue Code of 1986, as amended, and has the right to terminate the agreement.
"Change of control" is defined to be any of the following:  (i) a change in
the ownership or management of the Company that would be required to be
reported in response to certain provisions of the Securities Exchange Act of
1934; (ii) an acquisition (other than directly from the Company) by a person



                                      -56-

<PAGE>

or entity (excluding the Company) of 25% or more of the Company's common
stock or the Company's then outstanding voting securities; (iii) a change in
a majority of the current Board of Directors (the "Incumbent Board")
(excluding any persons approved by a vote of at least a majority of the
Incumbent Board other than in connection with an actual or threatened proxy
contest); (iv) consummation of a reorganization, merger, consolidation or
sale of all or substantially all of the Company's assets (collectively, a
"Transaction") other than a Transaction in which all or substantially all of
the shareholders of the Company prior to such transaction own, in the same
proportion, more than 50% of the voting power of the entity resulting from
the Transaction, at least a majority of the board of directors of the
resulting entity were members of the Incumbent Board, and after which no
person (other than the resulting entity and certain affiliates) beneficially
owns 25% or more of the voting power of the resulting entity, except to the
extent such ownership existed prior to the Transaction; or (v) the approval
by the Company's stockholders of a complete liquidation or dissolution of the
Company.

      Frances Blanco serves as Vice President of Marketing and Investor
Relations, Treasurer and Secretary pursuant to a three year employment
agreement, commenced on May 1, 1998 and as amended on March 5, 1999, at an
annual salary of $80,000, plus financial bonuses to be determined by the
Board of Directors.  Ms. Blanco has been granted 5-year options to purchase
up to 100,000 shares, proportioned to vest only after the Company's
achievement of certain corporate milestones, exercisable at $2.00 per share.
Ms. Blanco may purchase 25,000 shares following the first fiscal year that
the Company's EBITDA exceeds each of $500,000, $1,000,000, $1,500,000 and
$2,000,000, respectively.  These options are cumulative and are subject to
anti-dilution rights.

      Duncan Huyler serves as Vice President of Technical Services pursuant
to a three year employment agreement, commenced on May 1, 1998 and as amended
on March 5, 1999, at an annual salary of $95,000, plus financial bonuses to
be determined by the Board of Directors.  Mr. Huyler has been granted 5-year
options to purchase up to 100,000 shares, proportioned to vest only after the
Company's achievement of certain corporate milestones, exercisable at $2.00
per share.  Mr. Huyler may purchase 25,000 shares following the first fiscal
year that the Company's EBITDA exceeds each of $500,000, $1,000,000,
$1,500,000 and $2,000,000, respectively.  These options are cumulative and
are subject to anti-dilution rights.













                                      -57-

<PAGE>

Stock Option Plan
-----------------

      Pursuant to the Company's Incentive Stock Option Plan (the "1998 Stock
Option Plan"), which has been adopted the Board of Directors and approved by
its shareholders, 500,000 shares of the Company's authorized but unissued
Common Stock has been reserved for issuance pursuant to the 1998 Stock Option
Plan.  The 1998 Stock Option Plan is administered by a person designated by
the Board of Directors (the "Administrator"), presently the Chairman of the
Board.  Stock option (which may be "incentive stock options" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code")) entitles the holder to purchase shares of Common Stock during a
specified period at a purchase price of not less than the fair market value
of the Common Stock on the day the option is granted.  The Company has filed
a Form S-8 to register the 500,000 shares underlying the stock options.  The
Company granted certain employees 5-year and 10-year options to purchase up
to 295,381 shares of Common Stock, of which 88,229 options are presently
exercisable, at prices of $1.25 to $4.00 per share pursuant to the 1998 Stock
Option Plan, including its officers and directors, as follows:  Michael W.
Levin, 5-year options to purchase 51,223 shares at $1.375; Frances Blanco,
10-year options to purchase 7,741 shares at $1.25; Duncan Huyler, 10-year
options to purchase 9,265 shares at $1.25; and Paul Baker, 10-year options to
purchase 3,000 shares at $2.00.

Employee Profit Sharing Plan
----------------------------

      On January 1, 1994, the Company adopted a tax-qualified employee paired
profit sharing plan (the "401(k) Plan"), sponsored by Kemper Financial
Services, Inc., which covers all of the Company's employees that have been
employed for at least six months and meet other age and eligibility
requirements.  Pursuant to the 401(k) Plan, employees may elect to reduce
their current compensation by up to 15% for the plan year and have the amount
of such reduction contributed to the 401(k) Plan.  Under the 401(k) Plan, the
Company makes matching contributions, using a discretionary formula,
currently equal to twenty five percent of the employee's contribution.  The
Company, in its sole discretion, may contribute an amount which it designates
as a qualified nonelective contribution to designated participants.  The
401(k) Plan is intended to qualify under Section 401 of the Code, so that
contributions by employees or by the Company to the 401(k) Plan, and so that
contributions by the Company, if any, will be deductible by the Company.  The
Trustee under the 401(k) Plan, at the direction of each participant, invests
the assets of the 401(k) Plan in any of a number of investment options.  All
employee contributions to the 401(k) Plan are fully vested at all times, and
the Company's contributions, if any, vest 25% after two years and at the rate
of 25% a year thereafter until fully vested.







                                      -58-

<PAGE>

-------------------------------------------------------------------------------
ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
-------------------------------------------------------------------------------

      (a)   Security Ownership
            ------------------

      The following table sets forth, as of June 30, 1999, the shares of
Common Stock of the Company beneficially owned by each person known to
management to be the beneficial owner of more than five percent (5%) of the
outstanding shares of Common Stock, by each officer and director, and by all
officers and directors of the Company as a group.  All persons named in the
table have the sole voting and dispositive power with respect to Common Stock
beneficially owned.

Name and Address                    Amount and Nature       Percent of
of Beneficial Owner(1)              of Beneficial Owner     Class(2)
----------------------              -------------------     ----------
Michael W. Levin                    1,589,673 (3)              51.1%
Frances Blanco                         48,516 (4)               1.6%
Duncan Huyler                          50,040 (5)               1.6%
Paul Baker                            100,500 (6)               3.3%
All officers and directors          1,788,729 (3)-(6)          56.6%
   as a group (4 persons)

(1)   Unless otherwise indicated, the address of each of these persons is
      Cadapult Graphic Systems, Inc., 110 Commerce Drive, Allendale, New
      Jersey 07401.
(2)   Based upon 3,058,307 shares of common stock outstanding on June 30,
      1999, and with respect to each holder of options exercisable within 60
      days, the shares represented by such options.
(3)   Includes 52,000 shares owned by Mr. Levin's minor children and
      exercisable 5-year options to acquire 51,223 shares of Common Stock.
      Excludes 5-year options, subject to future vesting, to acquire 500,000
      shares of Common Stock.
(4)   Includes exercisable 10-year options to acquire 7,741 shares of Common
      Stock.  Excludes 5-year options, subject to future vesting, to acquire
      100,000 shares of Common Stock.
(5)   Includes exercisable 10-year options to acquire 9,265 shares of Common
      Stock.  Excludes 5-year options, subject to future vesting, to acquire
      100,000 shares of Common Stock.
(6)   Includes exercisable 10-year options to acquire 33,000 shares of Common
      Stock.

      (b)   Changes in Control
            ------------------

      There are no arrangements which may result in a change in control of
the Company.




                                      -59-

<PAGE>

-------------------------------------------------------------------------------
ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
-------------------------------------------------------------------------------

      In June 1998, the Company filed a registration statement on Form S-8
for 66,068 shares of Common Stock.  The Company issued the shares to four
individuals, including its officers and directors, pursuant to written
compensation agreements as follows:  Leonard W. Burningham, 63,068 shares;
Kathleen L. Morrison, 1,000 shares; Jason Osborn, 1,000 shares; and Terry
Hardman, 1,000 shares.  Kathleen L. Morrison, Jason Osborn, and Terry Hardman
resigned as directors and officers of the Company effectively as of June 18,
1998.

      On June 18, 1998, the Company completed the acquisition of Cadapult
Graphic Systems Inc., a privately-held New Jersey corporation formed on or
about May 1, 1987 ("CGSI"), in a transactions viewed as a reverse
acquisition.  Pursuant to an Agreement and Plan or Reorganization dated June
5, 1998, between the Company, CGSI, all of the shareholders of CGSI, Jenson
Services, Inc., a Utah corporation, Duane S. Jenson and Jeffrey D. Jenson,
the Company 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 reorganization, the shareholders of CSGI became the controlling
shareholders of the Company, the officers and directors of the Company
resigned and elected the CSGI nominees in their places, and CSGI became a
wholly-owned subsidiary of the Company.  Michael W. Levin acquired 300
shares, no par value, of CGSI on May 1, 1987 for $300.  Frances Blanco acquired
7.90 shares, no par value, of CSGI on June 3, 1997 for $15,000, paid
by a promissory note due in June 1998.  Duncan Huyler acquired 7.90 shares,
no par value, of CSGI on June 3, 1997 for $15,000, paid by a promissory note
due in June 1998.  Duncan Yates acquired 3.8748 shares, no par value, of CGSI
on April 20, 1998 for $15,000, paid by a promissory note due in June 1998.
In May 1998, Mr. Levin made a gift of 3.1 shares to each of their two minor
children.  Pursuant to the reorganization, Mr. Levin and his children, Ms.
Blanco, Mr. Huyler and Mr. Yates, representing all the issued and outstanding
shares of CGSI, exchanged their shares of CGSI proportionally for 1,650,000
shares of the Company pursuant to the Company's acquisition of CGSI.  Michael
W. Levin currently serves as the Company's Chief Executive Officer, President
and Chairman of the Board.  Frances Blanco currently serves as the Company's
Vice President, Secretary, Treasurer and a Director.  Duncan Huyler currently
serves as the Company's Vice President and a Director.

      The Company granted Mr. Levin 5-year stock options to purchase up to
500,000 shares of Common Stock (no options are presently exercisable) to vest
upon the Company attaining certain specified corporate milestones based upon
corporate earnings, exercisable at $1.375.  The Company granted to each of
Ms. Blanco and Mr. Huyler 5-year stock options to purchase up to 100,000
shares of Common Stock each (no options are presently exercisable) to vest
upon the Company attaining certain specified corporate milestones based upon
corporate earnings, exercisable at $2.00.




                                      -60-

<PAGE>

      In August 1998, the Company filed a registration statement on Form S-8
for its 1998 Stock Option Plan.  The Company has granted certain employees,
5-year and 10-year incentive stock options to purchase 295,381 shares, of
which 88,229 options are presently exercisable, at prices of $1.25 to $4.00
per share.  Executive officers and directors have been granted the following
options pursuant to the 1998 Stock Option Plan:  Michael W. Levin, 5-year
options to purchase 51,223 shares at $1.375; Frances Blanco, 10-year options
to purchase 7,741 shares at $1.25; Duncan Huyler, 10-year options to purchase
9,265 shares at $1.25; and Paul Baker, 10-year options to purchase 3,000
shares at $2.00 and 30,000 shares at $3.31.  Pursuant to the 1998 Stock
Option Plan, the Company has reserved 500,000 authorized and unissued shares
of Common Stock for issuance upon the exercise of the incentive stock
options.


-------------------------------------------------------------------------------
ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.
-------------------------------------------------------------------------------

      (a)   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.
2.2         Agreement and Plan of Merger between Cadapult Graphic Systems, Inc.
            and Seafoods Plus, Ltd.(1)
2.3         Agreement and Plan of Merger Cadapult Graphic Systems Inc., a New
            Jersey corporation, and Cadapult Graphic Systems, Inc., a Delaware
            corporation(2)
2.4         Asset Purchase Agreement between Cadapult Graphic Systems, Inc. and
            BBG Technologies, Inc.
2.5         Asset Purchase Agreement between Cadapult Graphic Systems, Inc. and
            Tartan Technical, Inc. dated December 17, 1998(3)
2.6         Asset Purchase Agreement between Cadapult Graphic Systems, Inc. and
            WEB Associates, Inc. dated June 7, 1999(4)
3(i)(1)     Certificate of Incorporation of Cadapult Graphic Systems, Inc., a
            Delaware corporation(5)
3(i)(2)     Certificate of Merger of Seafoods Plus, Ltd. into Cadapult
            Graphic Systems, Inc.. a Delaware corporation(6)
3(i)(3)     Certificate of Merger of Domestic and Foreign Corporations into
            Cadapult Graphic Systems, Inc.(7)
3(i)(4)     Certificate of Ownership and Merger Merging Cadapult Graphic
            Systems Inc. into Cadapult Graphic Systems, Inc.(8)
3(i)(5)     Certificate of Amendment of Certificate of Incorporation of
            Cadapult Graphic Systems, Inc.



                                      -61-

<PAGE>

3(i)(6)     Certificate of Incorporation of Media Sciences, Inc.
3(ii)       By-Laws(9)
4.1         1998 Incentive Plan (Stock Option Plan)
4.2         Form of Option Agreement for Management
4.3         Form of Option Agreement for Employees
4.4         Form of Warrant Certificate
10.1        Form of Employment Agreement of Michael W. Levin dated May 1, 1998
10.2        Employment Agreement of Frances Blanco dated May 1, 1998

10.3        Employment Agreement of Duncan Huyler dated May 1, 1998
10.4        Amended Employment Agreement of Michael W. Levin dated as of
            September 1, 1998
10.5        Amended Employment Agreement of Duncan Huyler(10)
10.6        Amended Employment Agreement of Frances Blanco(11)
10.7        Credit and Security Agreement(12)
10.8        Lease
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

______

(1)   Incorporated by reference to Exhibit 2.1 of Quarterly Report on Form
      10QSB/A filed on or about September 1, 1998
(2)   Incorporated by reference to Exhibit 2.2 of Quarterly Report on Form
      10QSB/A filed on or about September 1, 1998
(3)   List of schedules to Asset Purchase Agreement omitted herein   Exhibit
      A-Property and Equipment; Exhibit B-Bank Debt; Exhibit C-Gross Profit
      Definition; Exhibit D-Incentive Gross Profit Schedule; Exhibit E-
      Allocation of Purchase Price; Exhibit F-Form of Employment Agreement;
      Exhibit G-Lease; Exhibit H-Promissory Note; Exhibit I-Restrictive
      Covenant; Exhibit J-Adjustments; Escrow Agreement; and Indemnification
      Agreement.  Exhibits B, E and I, although referenced in the Asset
      Purchase Agreement, were not made incorporated as schedules into the
      definitive Asset Purchase Agreement.  Exhibit B relates to two loans of
      Tartan totaling $648,953.43 that were assumed and paid in full by the
      Company.  Exhibit I became moot upon the execution of employment
      agreements by key personnel of Tartan.
(4)   List of schedules to Asset Purchase Agreement omitted herein:  Exhibit
      A-Property and Equipment; Exhibit B-NOT USED; Exhibit C-Gross Profit
      Definition; Exhibit D-Incentive Gross Profit Schedule; Exhibit E-
      Allocation of Purchase Price; Exhibit F-Form of Employment Agreement;
      Exhibit G-Lease; Exhibit H-NOT USED; Exhibit I-Restrictive Covenant;
      Exhibit J-Adjustments; and Exhibit K-Restrictive Legend.  The Asset
      Purchase Agreement does not refer to and does not include Exhibits B
      and H.
(5)   Incorporated by reference to Exhibit 3.1 of Quarterly Report on Form
      10QSB/A filed on or about September 1, 1998



                                      -62-

<PAGE>

(6)   Incorporated by reference to Exhibit 3.1 of Quarterly Report on Form
      10QSB filed on or about November 9, 1998.
(7)   Incorporated by reference to Exhibit 3.2 of Quarterly Report on Form
      10QSB filed on or about November 9, 1998.
(8)   Incorporated by reference to Exhibit 3.3 of Quarterly Report on Form
      10QSB filed on or about November 9, 1998.
(9)   Incorporated by reference to Exhibit 3.2 of Quarterly Report on Form
      10QSB/A filed on or about September 1, 1998
(10)  Incorporated by reference to Exhibit 3.2 of Quarterly Report on Form
      10QSB filed on or about May 4, 1999
(11)  Incorporated by reference to Exhibit 3.3 of Quarterly Report on Form
      10QSB filed on or about May 4, 1999
(12)  Incorporated by reference to Exhibit 3.1 of Quarterly Report on Form
      10QSB filed on or about May 4, 1999

The Company will furnish supplementally a copy of any omitted or summarized
schedule of the Asset Purchase Agreement to the Commission upon request.


      (b)   Report on Form 8-K
            ------------------

      On June 8, 1999, the Company filed a report on Form 8-K dated June 8,
1999 reporting under Item 5 Other Events:  (a) Asset purchase agreement for
the acquisition of certain assets and liabilities of WEB Associates, Inc.;
and (b) Non-binding letter of intent for the purchase of certain assets and
liabilities of ultraHue, Inc.

      On September 22, 1999, the Company filed a report on Form 8-K reporting
under Item 2 that Media Sciences entered into an asset purchase agreement
with ultraHue, Inc., and under Item 5 that the Company commenced a legal
proceeding against Tektronix, Inc.





















                                      -63-

<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 27, 1999


      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:

<TABLE>
SIGNATURES                 TITLE                               DATE
----------                 -----                               ----
<S>                        <C>                                 <C>
/s/ Michael W. Levin       Chairman of the Board, President    September 27, 1999
----------------------     and Chief Executive Officer
Michael W. Levin


/s/ Frances Blanco         Vice President, Secretary,          September 27, 1999
----------------------     Treasurer and Director
Frances Blanco


/s/ Duncan Huyler          Vice President                      September 27, 1999
----------------------
Duncan Huyler


/s/ Paul C. Baker          Director                            September 27, 1999
----------------------
Paul C. Baker
</TABLE>









                                      -64-