|UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-QSB

(Amendment No. 1)
|-----------------------------------------------------------------------------------------------------



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



|For the quarterly period ended September 30,
 2003

OR
|------------------------------------------------------



|[   ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|----- |  | ----------------------------------------------------------------------------------------



|Commission File Number: 0-28351
|-------------------------------
|                               



| | KOLORFUSION INTERNATIONAL, INC.                       
| | ------------------------------------------------------
| | (Exact name of registrant as specified in its charter)



|COLORADO                        | 84-1317836                          
|------------------------------- | ------------------------------------
|(State or other jurisdiction of | (IRS Employer Identification Number)
|incorporation or organization)  |                                     



| | 7347 S. Revere Parkway, Centennial, CO 80112         
| | -----------------------------------------------------
| | (Address and zip code of principal executive offices)
| | (303) 690-2910                                       
| | (Registrants telephone number, including area code) 



|Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section
 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, (or for such shorter
 period that the registrant was required to file such reports), and (2) has been subject of the filing
 requirements for at least the past 90 days.Yes _X_  No
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                               



|23,240,144Common Shares were outstanding as of November 13,
 2003
|-----------------------------------------------------------------
|                                                                 

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Purpose of Amendment No. 1



The filing is made to restate, per the SECs request in January 2004, the Companys financial statements
 and related Managements Discussions and Analysis for the quarter ended September 30, 2003 and 2002
 and the balance sheets as of September 30, 2003 and June 30, 2003 to reflect license revenue being recognized
 on a straight line basis over the life of the agreement.  The change relates to a license and royalty
 agreement signed with a third party in August 2002. The Company had previously recognized the entire
 $750,000 fee related to this agreement into revenue in the quarter ending September 30, 2002.  The
 Company restated its financial statements to recognize revenue ratably over the maximum term (August
 2002 through June 2008) of the exclusivity agreement.  As reflected in t he statement of operations,
 revenue and net income increased (decreased) by $31,690 and ($728,874), for the quarters ended September
 30, 2003 and 2002, as a result of this adjustment.  In addition, earnings per share increased (declined)
 $.01 and ($.04)  for the quarters ended September 30, 2003 and 2002. As reflected in the balance
 sheet, deferred revenues increased $602,112 and $633,802 on the September 30, 2003 and June 30, 2003
 balance sheets.  The restatement did not impact the Companys cash flow for the periods presented.





The amendment does not reflect the effect of any events subsequent to the original filing of the Form
 10-QSB for the quarter ended September 30, 2003, except for the aforementioned restatement as described
 above.

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|KOLORFUSION INTERNATIONAL, INC.

I N D E X
|------------------------------------------

|        |                                                                                                       | Page
|------- | ----------------------------------------------------------------------------------------------------- | ----
|PART I  | FINANCIAL INFORMATION                                                                                 |     
|Item 1. | Financial Statements (Unaudited)                                                                      |     
|        | Condensed Balance Sheets         September
 30, 2003 (Unaudited) and         June 30, 2003            | 1   
|        | Statements of Operations         Three
 months ended September 30, 2003 and 2002 (Unaudited           | 2   
|        | Condensed Statements of Cash Flows         Three
 months ended September 30, 2003 and 2002 (Unaudited | 3   
|        | Selected Notes to Condensed Financial Statements (Unaudited)                                          | 4-7 
|Item 2. | Management's Discussion and Analysis of Financial Condition and Results
 of Operations                | 8   
|PART II | OTHER INFORMATION                                                                                     | 9-11

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Part I. FINANCIAL INFORMATIONItem I. FINANCIAL STATEMENTS



KOLORFUSION INTERNATIONAL, INC.

BALANCE SHEETS

|(Restated)
September 30,
2003                                       | (Restated)
June 30,
2003
|------------------------------------------------------------------- | ------------------------
|                                                                    |                         
|                                                                   
|CURRENT ASSETS:                                                     |                         
|Cash and cash equivalents                                           |                         
|Trade accounts receivable, no allowance for                         |                         
|doubtful accounts considered necessary                              |                         
|Inventories                                                         |                         
|                                                                    |                         
|Total current assets                                                |                         
|                                                                    |                         
|OTHER ASSETS:                                                       |                         
|Patents, less accumulated amortization                              |                         
|September $2,523,242; June $2,461,699                               |                         
|Other                                                               |                         
|                                                                    |                         
|                                                                    |                         
|LEASEHOLD IMPROVEMENTS AND EQUIPMENT, NET                           |                         
|                                                                    |                         
|                                                                    |                         
|                                                                    |                         
|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                      |                         
|CURRENT LIABILITIES:                                                |                         
|                                                                    |                         
|Accounts payable                                                    |                         
|Deferred revenue                                                    |                         
|Current portion of long-term debt                                   |                         
|Accrued expenses                                                    |                         
|Accrued expenses due stockholders                                   |                         
|                                                                    |                         
|Total current liabilities                                           |                         
|                                                                    |                         
|LONG-TERM DEBT, net of current portion                              |                         
|DEFERRED REVENUE                                                    |                         
|                                                                    |                         
|STOCKHOLDERS' EQUITY (DEFICIT):                                     |                         
|Preferred stock, $.001 par value, 10,000,000 shares authorized,     |                         
|none issued or outstanding                                          |                         
|Common stock, $.001 par value, 100,000,000 shares authorized,       |                         
|September 23,240,144; June 23,226,144 shares issued and outstanding |                         
|Additional paid-in capital                                          |                         
|Accumulated deficit                                                 |                         
|                                                                    |                         
|                                                                    |                         
|                                                                    |                         
|                                                                    |                         
|                                                                    |                         



| | See Notes to Condensed Financial Statements.
| | --------------------------------------------



1





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|KOLORFUSION INTERNATIONAL, INC.

CONDENSED STATEMENTS OF OPERATIONSThree Months Ended September 30, 2003 and 2002(Unaudited)
|----------------------------------------------------------------------------------------------------------------------------



|                                                        | (Restated)
2003 | (Restated)
2002
|------------------------------------------------------- | --------------- | ---------------
|                                                        |                 |                
|Revenues                                                |                 |                
|Expenses:                                               |                 |                
|Cost of sales                                           |                 |                
|Selling, general and administrative expenses            |                 |                
|                                                        |                 |                
|                                                        |                 |                
|Operating income (loss)                                 |                 |                
|                                                        |                 |                
|Other income (expense)                                  |                 |                
|                                                        |                 |                
|Income (loss) before income taxes                       |                 |                
|                                                       
|Income taxes                                            |                 |                
|                                                        |                 |                
|Net income (loss)                                       |                 |                
|                                                        |                 |                
|                                                        |                 |                
|Income (loss) per common share - basic and diluted      |                 |                
|                                                        |                 |                
|                                                        |                 |                
|Weighted average outstanding shares - basic and diluted |                 |                
|                                                        |                 |                



| | See Notes to Condensed Financial Statements
| | -------------------------------------------



2



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KOLORFUSION INTERNATIONAL, INC.

CONDENSED STATEMENTS OF CASH FLOWSThree Months Ended September 30, 2003 and 2002(Unaudited)

|                                                    | (Restated)
2003 | (Restated)
2002
|--------------------------------------------------- | --------------- | ---------------
|                                                    |                 |                
|CASH FLOWS FROM OPERATING ACTIVITIES:               |                 |                
|Net income (loss)                                   |                 |                
|Adjustments to reconcile net income (loss) to net   |                 |                
|cash provided by (used in) operating activities:    |                 |                
|Depreciation and amortization                       |                 |                
|Increase in trade accounts receivable               |                 |                
|                                                    |                 |                
|Decrease in inventories                             |                 |                
|Decrease in other assets                            |                 |                
|Increase (decrease) in accounts payable             |                 |                
|                                                    |                 |                
|(Decrease)  or increase  in deferred revenue        |                 |                
|Increase (decrease) in accrued expenses             |                 |                
|Increase in accrued expenses due stockholders       |                 |                
|                                                    |                 |                
|Net cash provided by (used in) operating activities |                 |                
|                                                    |                 |                
|                                                    |                 |                
|CASH FLOWS FROM INVESTING ACTIVITIES:               |                 |                
|Purchases of leasehold improvements and equipment   |                 |                
|                                                    |                 |                
|                                                    |                 |                
|CASH FLOWS FROM FINANCING ACTIVITIES:               |                 |                
|Payments on long-term debt                          |                 |                
|Net proceeds from issuance of common shares         |                 |                
|                                                    |                 |                
|Net cash (used in) financing activities             |                 |                
|                                                    |                 |                
|                                                    |                 |                
|Increase (decrease) in cash and cash equivalents    |                 |                
|                                                    |                 |                
|Cash and cash equivalents:                          |                 |                
|Beginning                                           |                 |                
|                                                    |                 |                
|                                                    |                 |                
|Ending                                              |                 |                
|                                                    |                 |                
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:  |                 |                
|Cash payments for interest                          |                 |                
|                                                    |                 |                



| | See Notes to Condensed Financial Statements.
| | --------------------------------------------



3

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KOLORFUSION INTERNATIONAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS(Unaudited)

|Note 1. | Condensed Financial Statements:
|------- | -------------------------------



| | The condensed balance sheet as of September 30, 2003, the statements of operations for the three-month
 periods ended September 30, 2003 and 2002, and the condensed statements of cash flows for the three-month
 periods then ended have been prepared by the Company, without audit. Operating results for the three
 months ended September 30, 2003 are not necessarily indicative of the results that may be expected for
 the fiscal year ending June 30, 2004. In the opinion of management, all adjustments (which include only
 normal recurring adjustments) necessary to present fairly the financial position, results of operations
 and changes in cash flows at September 30, 2003 and for all periods presented have been made.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Certain information and footnote disclosures normally included in financial statements prepared in accordance
 with accounting principles generally accepted in the United States of America have been condensed or
 omitted. It is suggested that these condensed financial statements be read in conjunction with the financial
 statements and notes thereto included in the Companys June 30, 2003 audited financial statements. The
 results of operations for the period ended September 30, 2003 are not necessarily indicative of the
 operating results for the full year.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Note 2. | Restatement:
|------- | ------------



| | The accompanying financial statements for the quarter ended September 30, 2003 and 2002 and the balance
 sheets as of September 30, 2003 and June 30, 2003 have been restated, per the SECs request in January
 2004, to reflect license revenue being recognized on a straight line basis over the life of the agreement.
  The change relates to a license and royalty agreement signed with a third party in August 2002.
 The Company had previously recognized the entire $750,000 fee related to this agreement into revenue
 in the quarter ending September 30, 2002.  The Company restated its financial statements to recognize
 revenue ratably over the maximum term (August 2002 through June 2008) of the exclusivity agreement.
  As reflected in the statement of operations, revenue and net income increased (decreased) by $31,690
 and ($728,874), for the quarters ended September 30, 2003 and 2002, as a result of this adjustment.
  In addition, earnings per share increased (declined) $.01 and ($.04) for the quarters ended September
 30, 2003 and 2002. As reflected in the balance sheet, deferred revenues increased $602,112 and $633,802
 on the September 30, 2003 and June 30, 2003 balance sheets.  The restatement did not impact the
 Companys cash flow for the periods presented.  The Company also amended its Form 10-KSB for the
 year ended June 30, 2003 to reflect this restatement.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | The following tables represent the impact of the restatement on balances as reported, adjusted and restated
 for all periods presented:
| | ---------------------------------------------------------------------------------------------------------------------------------------



4

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|Balance Sheets
|--------------

As of September 30, 2003As Reported
     Adjustments
     RestatedTotal Assets
     
     
     $1,814,974
        
     $
        
     $1,814,974Deferred revenue - current
     $50,000
        
     $126,761
        
     $176,761Total current liabilities
     1,320,844
        
     126,761
        
     1,447,605Deferred revenue - LT
     
        
     475,351
        
     475,351Total Liabilities
     1,817,766
        
     602,112
        
     2,419,878Accumulated deficit
     (9,806,373
        )
     (602,112
        )
     (10,408,485
        )Total stockholders' equity
     (2,792
        )
     (602,112
        )
     (604,904
        )Total liabilities and stockholders' equity
     $1,814,974
        
     $
        
     $1,814,974  As of June 30, 2003As Reported
     Adjustments
     RestatedTotal Assets
     
     
     $1,941,844
        
     $
        
     $1,941,844Deferred revenue - current
     $87,500
        
     $126,761
        
     $214,261Total current liabilities
     1,306,156
        
     126,761
        
     1,432,917Deferred revenue - LT
     
        
     507,041
        
     507,041Total liabilities
     1,808,793
        
     633,802
        
     2,442,595Accumulated deficit
     (9,663,530
        )
     (633,802
        )
     (10,297,332
        )Total stockholders' equity
     133,051
        
     (633,802
        )
     (500,751
        )Total liabilities and stockholders' equity
     $1,941,844
        
     $
        
     $1,941,844  Statements of Operations For the quarter ended September 30, 2003As Reported
     Adjustments
     RestatedRevenues
     
     
     $577,168
        
     $31,690
        
     $608,858Cost of sales
     (307,346
        )
     
        
     (307,346
        )S, G, & A
     (406,766
        )
     
        
     (406,766
        )Other expense
     (5,899
        )
     
        
     (5,899
        )Net Income
     $(142,843
        )
     $31,690
        
     $(111,153
        )Net income (loss) per common share:Basic and diluted
     $(0.01
        )
     $0.01
        
     $  For the quarter ended September 30, 2002As Reported
     Adjustments
     RestatedRevenues
     
     
     $1,108,647
        
     $(728,874
        )
     $379,773Cost of sales
     (237,673
        )
     
        
     (237,673
        )S, G, & A
     (301,749
        )
     
        
     (301,749
        )Other expense
     (11,067
        )
     
        
     (11,067
        )Net income (loss)
     $558,158
        
     $(728,874
        )
     $(170,716
        )Net income (loss) per common share:Basic
     $0.03
        
     $(0.04
        )
     $(0.01
        )Diluted
     0.02
        
     (0.03
        )
     (0.01
        )




5

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|Note 3. | Stock Based Compensation:
|------- | -------------------------



| | The Company uses the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25,
 Accounting for Stock Issued to Employees, and related interpretations in accounting for employee stock
 options. Under the intrinsic value method, compensation expense is recorded only to the extent that
 the market price of the common stock exceeds the exercise price of the stock option on the date of grant.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | The Company has adopted the disclosure-only provisions of SFAS No. 123. During the quarters ended September
 30, 2003 and 2002 there were no stock options that vested. Therefore had compensation cost for stock
 options been determined based on the fair value methodology prescribed by SFAS 123, the Company would
 have recognized no additional compensation expense.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Note 4. | Patents:
|------- | --------



| | The Company purchased the patent rights for Canada and the United States. The cost of those rights are
 amortized using the straight-line method over nine years. Patent amortization expense amounted to $61,543
 for each of the quarters ended September 30, 2003 and 2002. Patent amortization expense will be $246,170
 for each of the next five years.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Note 5. | Debt:
|------- | -----



| | The Company, on October 17, 1995, purchased certain U.S. and Canadian patent rights from an individual
 as part of an assignment agreement granted at a total price of twenty-five million French francs. The
 agreement was collateralized by patent rights. The Company had not made the required payments on this
 agreement as of June 30, 2002 and, as a result, the entire amount due had been classified as a current
 liability. In June 2001, the Company entered an agreement in principle with the individual whereby the
 individual would receive 1,000,000 French francs, 1,000,000 shares of Company common stock, and a five
 year consulting agreement calling for monthly payments of 58,333 French francs in exchange for a settlement
 of the payable related to the October 1995 agreement and certain patent rights and other exclusive righ
 ts.  The Company believes the individual will not provide any bona fide services pursuant to the
 agreement.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | In fiscal 2003, the Company hired a French lawyer in order to enforce the agreement in principle that
 was signed in June 2001. Therefore, the Company recorded the debt restructuring during the year ended
 June 30, 2003.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



6

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KOLORFUSION INTERNATIONAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS(Unaudited)

| | As of September 30, 2003, this agreement continues to be in process of being enforced by the Company
 and represents a significant estimate made by management. There is a remote chance that a change in
 the estimate will occur in the near term.  Management feels that any changes to the agreement would
 not be material to the financial statements.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Note 6. | Stockholders Deficit:
|------- | ----------------------



| | During the three months ended September 30, 2003, stockholders deficit changed for net loss of $111,153
and for issuance of 14,000 shares of common stock for $7,000.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Note 7: | Revenue:
|------- | --------



| | During the three months ended September 30, 2002, the Company signed a license agreement that allowed
 a third party the exclusive right to use the Companys patents on certain applications through June
 2007, with the potential to extend through June 2008, if the third party ships in excess of the units
 states in the agreement.  The Company, in return, received $750,000 from this third party that
 is being recognized into revenue ratable over the maximum term of exclusivity ending June 2008.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



7

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KOLORFUSION INTERNATIONAL, INC.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Revenues increased in the quarter ended September 30, 2003 to $608,858 from $379,773 in 2002.

Cost of sales increased in the quarter ended September 30, 2003 to $307,346 from $237,673 in 2002. The Company expects the profit margin to increase as it acquires new customers and lowers the cost of processing and materials. Selling, general and administrative expenses increased in 2003 to $406,766 from $301,749 in 2002. This is due to increased rent and employees in 2003.

The result was a net loss in the quarter ended September 30, 2003 of $111,153 compared to a net loss of $170,716 in the same quarter in 2002. The net loss per share was $.00 in 2003, compared to a net loss per share of $.01 in 2002.

LIQUIDITY AND CAPITAL RESOURCES

Kolorfusion International, Inc. has historically had more expenses than income in each year of its operations. The accumulated deficit from inception to September 30, 2003 was $10,408,485 and current liabilities are in excess of current assets. It has been able to maintain a positive cash position solely through financing activities.

The Company entered into an agreement in June of 2001 with the holder of the patent where the holder would receive 1,000,000 French Francs, 1,000,000 shares of the common stock of the Company, and a 5 year consulting agreement for 58,333 French Francs per month, in exchange for the debt.  The Company believes the individual will not provide any bona fide services pursuant to the agreement. The Company retained a French attorney to enforce the agreement.  In the event that there is a restructuring of the agreement, which the Company feels is remote, it would not have a significant impact on the liquidity of the Company.

There are no known trends, events or uncertainties that are likely to have a material impact on the short or long term liquidity, except perhaps declining sales. The primary source of liquidity in the future will be increased sales accounts in many categories, including outdoor product manufacturers, household and building products.  Additionally, existing accounts continue to expand the use of the Companys process resulting in higher revenues. In the event that sales do not increase the Company may have to seek additional funds through equity sales or debt. Additional equity sales could have a dilutive effect. The debt financing, if any, would most likely be convertible to common stock, which would also have a dilutive effect. There can be no assurance that additional capital will be available on terms
acceptable to the Company or on any terms whatsoever. There are no material commitments for capital expenditures. There are no known trends, events or uncertainties reasonably expected to have a material impact on the net sales or revenues or income from continuing operations. There are no significant elements of income or loss that do not arise from continuing operations. There are no seasonal aspects to the business of Kolorfusion International, Inc.



SIGNIFICANT ACCOUNTING POLICIES

Financial Reporting Release No. 60, which was recently released by the Securities and Exchange commission, requires all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements. Note 1 (of Form 10KSB for the year ended June 30, 2003) of the Notes to the Financial Statements includes a summary of the significant accounting policies and methods used in the preparation of our Financial Statements. The following is a brief discussion of the more significant accounting policies and methods used by the company. In addition, Financial Reporting Release No. 61 was recently released by the SEC to require all companies to include a discussion to address, among other things, liquidity, off-balance sheet arrangements, contractual obligations and commercial
commitments.

General

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the

8



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financial statements and reported amounts of revenues and expenses during the reporting periods. The most significant estimates and assumptions relate to the valuation of inventory and the liability for the stock bonus plan. Actual amounts could differ from these estimates.

Inventory Valuation

As noted in Note 1 (of Form 10KSB for the year ended June 30, 2003) of the Notes to the Financial Statements, inventories consist of raw materials, and are valued at the lower of cost or market (first-in, first-out method).

Revenue Recognition

As noted in Note 1 (of Form 10KSB for the year ended June 30, 2003) to the Financial Statements, license and royalty revenue is recognized upon completion of the earnings process. The Company recognizes sales when products are shipped, collectibility is probable and the fee is fixed or determined.

Estimate

As noted in Note 4 to the financial statements, the debt restructuring represents a significant estimate made by management. It is at least reasonably possible that a change in the estimate may occur in the near term.

Patent Rights

At noted in Note 1 (of Form 10KSB for the year ended June 30, 2003) to the Financial Statements, the cost of the patent rights is being amortized using the straight-line method over nine years. In accordance with SFAS No. 144, the Company evaluates whether changes have occurred that would require revision of the remaining estimated lives of recorded long-lived assets, or render those assets not recoverable. If such circumstances arise, recoverability is determined by comparing the undiscounted cash flows of long-lived assets to their respective carrying values. The amount of impairment, if any, is measured on the projected cash flows using an appropriate discount rate.

FORWARD-LOOKING STATEMENTS

Certain statements in this report constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and the Securities Exchange Act of 1934. These statements may appear in a number of places in this report and can be identified by the use of terminology such as anticipate, believe, estimate, intend, may, could, possible, plan, will, forecast, and similar words or expressions. The Companys forward-looking statements generally relate to, among other things: (i) the Companys financing plans; (ii) trends affecting the Companys financial condition or results of operations; (iii) the Companys growth strategy and operating strategy; and (iv) the
declaration of any payment of dividends. Investors must carefully consider forward-looking statements and understand that such statements involve a variety of risks and uncertainties, known and unknown, and may be affected by inaccurate assumptions. Consequently, no forward-looking statement can be guaranteed and actual results may vary materially. The Company undertakes no obligation to update any forward-looking statement.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company is aware of no legal proceeding which is pending or threatened to which the Company is a party or of which its property is subject.

The Company is currently in arbitration against George Industries of Los Angeles, a former licensee of the Companys process for aluminum anodized products. The Companys management believes it will either prevail on its claims, or will come to a satisfactory commercial settlement of its claims.

Item 3. Controls and Procedures

Management of the Company has evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, the effectiveness of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the

9



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Exchange Act)) as of the end of the fiscal quarter covered by this Quarterly Report on Form 10-QSB.  Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of the Company have concluded that the Companys disclosure controls and procedures as of the end of the fiscal quarter covered by this Quarterly Report on Form 10-QSB are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.  Management of the Company has also evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, any change in the Companys
internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-QSB.  There was no change in the Companys internal control over financial reporting identified in that evaluation that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-QSB that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.

Item 6. Exhibits and Reports on Form 8-K

| | (a) |  | Exhibits: |  | 
| | --- |  | --------- |  | 



| |  |  | 31 |  | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
| |  |  | -- |  | -------------------------------------------------------------------------



| |  |  | 32 |  | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
| |  |  | -- |  | -------------------------------------------------------------------------



| | (b) |  | No reports on Form 8-K were filed during the three months ended September 30, 2003.
| | --- |  | -----------------------------------------------------------------------------------



* Filed herewith.



10





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|SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                     | KOLORFUSION INTERNATIONAL, INC.
|-------------------- | -------------------------------
|Date: April 23, 2004 | By: /s/ Stephen Nagel          
|                     | Director, President            



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