|UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM 10-QSB
|-------------------------------------------------------------------------------------

|[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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|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)                                           | 4-5 
|Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations                  | 6   
|PART II | OTHER INFORMATION                                                                                      | 7-9 



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Part I. FINANCIAL
INFORMATIONItem I. FINANCIAL STATEMENTS

KOLORFUSION
INTERNATIONAL, INC.

BALANCE SHEETS

|ASSETS                                                              | September 30,
2003 | 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                              |                    |              
|                                                                    |                    |              
|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)
|-----------------------------------------------------------------------------------------------------------------------------

|                                              | 2003 | 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        |      |     
|                                              |      |     
|Income (loss) per common share - diluted      |      |     
|                                              |      |     
|                                              |      |     
|Weighted average outstanding shares - basic   |      |     
|                                              |      |     
|Weighted average outstanding shares - 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)

|                                                    | 2003 | 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 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. |  | 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 3. |  | 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 4. |  | 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 rights.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4

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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. It is at least
reasonably possible that a change in the estimate will occur in the near term.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 5. |  | Stockholders Deficit:
|------- |  | ----------------------

| | During
the three months ended September 30, 2003, stockholders deficit changed for net
loss of $142,843 and for issuance of 14,000 shares of common stock for $7,000.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 6: |  | Revenue:
|------- |  | --------

| | During
the three months ended September 30, 2002, the Company recognized license revenue of
$790,000 of which $780,000 was from one customer.
| | ---------------------------------------------------------------------------------------------------------------------------------------------

5

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KOLORFUSION
INTERNATIONAL, INC.

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

Revenues
decreased in the quarter ended September 30, 2003 to $577,168 from $1,108,647 in 2002.
One new customer accounted for a large part of the increase in 2002 by the purchase of a
license agreement, which contains certain exclusivity provisions. Without the new
customer in 2002 the revenues would have been $328,647.

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 $142,843 compared to a
net income of $558,158 in the same quarter in 2002. The net loss per share was $.01 in
2003, compared to a net income per share of $.02 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 $9,806,373
and current liabilities are in excess of current assets. It has been able to maintain a
positive cash position solely through financing activities.

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. 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

6

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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

7

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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.

8

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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:  November 13, 2003 | By: /s/ Stephen Nagel          
|                         | Director, President            

9

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