<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                 UNITED STATES

                                  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, 1998

                                       OR

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

Commission File Number:  0-20995

For the transition period from _________________ to ______________________

                            VISUAL EDGE SYSTEMS INC.

            DELAWARE                                     13-3778895

(State or other jurisdiction of               (IRS Employer Identification No.)
incorporation or organization)

        2424 NORTH FEDERAL HIGHWAY, SUITE 100, BOCA RATON, FLORIDA 33431
                    (Address of principal executive offices)

                                 (561) 750-7559
              (Registrant's telephone number, including area code)

                                      N/A

              (Former name, former address and former fiscal year,
                         if changed since last report)

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

                Yes  X                              No
                    ---                                ---

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

         As of November 12, 1998, the registrant had 9,835,852 shares of common
stock and 2,230,000 redeemable warrants outstanding, of which 1,495,000 are
publicly traded.


<PAGE>   2


                            VISUAL EDGE SYSTEMS INC.

                               TABLE OF CONTENTS

PART I   FINANCIAL INFORMATION

ITEM 1.  Financial Statements:

         Balance Sheets                                                       
              September 30, 1998 (unaudited) and December 31, 1997            3 
         Statements of Operations                                             
              Three and Nine Months Ended September 30, 1998 and 1997 
              (unaudited)                                                     4 
         Statements of Cash Flows                                             
              Nine Months Ended September 30, 1998 and 1997 (unaudited)       5
         Statements of  Stockholders' Equity for the Nine Months              
              Ended September 30, 1998 (unaudited) and the Year Ended
              December 31, 1997                                               6
         Notes to Financial Statements                                     7-12

ITEM 2.  Management's Discussion and Analysis of Financial Condition      
              and Results of Operations                                   13-16

PART II  OTHER INFORMATION

ITEM 1.  Legal Proceedings                                                   17

ITEM 2.  Changes in Securities                                               17

ITEM 3.  Defaults Upon Senior Securities                                     17

ITEM 4.  Submission to Matters to a Vote of Security Holders                 17

ITEM 5.  Other Information                                                   17

ITEM 6.  Exhibits and Reports on Form 8-K                                 18-21

         Signatures                                                          22




                                       2
<PAGE>   3


                            VISUAL EDGE SYSTEMS INC.
                                 BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                          SEPTEMBER 30, 1998
                                                               DECEMBER 31, 1997              (UNAUDITED)  
                                                               -----------------          ------------------
<S>                                                               <C>                       <C>
                       ASSETS
Current Assets:
  Cash and Cash Equivalents                                       $    224,429               $     48,460
  Certificates of Deposit                                            1,080,000                  2,800,000
  Accounts Receivable                                                   23,917                    100,107
  Inventory                                                             72,771                    141,278
  Prepaid Expenses-Advance Royalties                                   350,000                    871,600
  Other Current Assets                                                 217,225                    109,542
                                                                  ------------               ------------
            Total Current Assets                                     1,968,342                  4,070,987 

Fixed Assets, net                                                    2,632,826                  2,368,584
Intangible Assets, net                                                 286,986                    195,740
Other Assets                                                               449                        734
Investments-Restricted (Note 3(c))                                     812,719                    823,012
                                                                  ------------               ------------
            Total Assets                                          $  5,701,322               $  7,459,057
                                                                  ============               ============

       LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
  Accounts Payable                                                $    344,884               $    230,587
  Accrued Expenses                                                     173,605                     51,500
  Other Current Liabilities                                            121,266                    275,359
  Current Maturities of Equipment Loans                                540,264                    540,264
                                                                  ------------               ------------
            Total Current Liabilities                                1,180,019                  1,097,710
Equipment Loans                                                        661,939                    308,211
Convertible Debt                                                     4,997,026                  1,121,523
                                                                  ------------               ------------
            Total Liabilities                                        6,838,984                  2,527,444
                                                                  ------------               ------------
            Commitments and Contingencies (Notes 4 and 5)

             STOCKHOLDERS' EQUITY (DEFICIT):
Preferred Stock, $.01 par value, 5,000,000 shares authorized,
  none issued and outstanding at December 31, 1997 and
  6,000 shares issued and outstanding at September 30, 1998                 --                  5,631,666
Common Stock, $.01 par value, 20,000,000 shares authorized,
  5,316,696 shares issued and outstanding at December 31,
  1997 and 9,826,852 issued and outstanding at September
  30, 1998                                                              53,167                     98,268
Additional Paid in Capital                                          12,427,394                 17,157,056
Accumulated Deficit                                                (13,618,223)               (17,955,377)
                                                                  ------------               ------------
           Total Stockholders' Equity (Deficit)                     (1,137,662)                 4,931,613
                                                                  ------------               ------------
          Total Liabilities & Stockholders' Equity (Deficit)      $  5,701,322               $  7,459,057
                                                                  ============               ============
</TABLE>
 


   The accompanying notes are an integral part of these financial statements.





                                       3
<PAGE>   4
                            VISUAL EDGE SYSTEMS INC.
                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                  UNAUDITED                           UNAUDITED      
                                                         -----------------------------      ----------------------------
                                                              THREE MONTHS ENDED                NINE MONTHS ENDED
                                                                  SEPTEMBER 30,                    SEPTEMBER 30,
                                                         -----------------------------      ----------------------------
                                                            1997              1998             1997             1998
                                                         -----------       -----------      -----------      -----------      
<S>                                                      <C>               <C>              <C>              <C> 
Sales                                                    $   518,365       $   921,114      $ 1,115,116      $ 2,202,264

Cost of sales                                                465,456           612,180          918,316        1,644,189
                                                         -----------       -----------      -----------      -----------

Gross Profit                                                  52,909           308,934          196,800          558,075
                                                         -----------       -----------      -----------      -----------
Operating Expenses:
  General and Administrative                               1,685,966           810,702        3,607,014        2,313,060
  Selling and Marketing                                      772,420           268,524        1,669,091          848,611
  Financing Fees                                                  --            50,000          150,125           75,117
  Non-cash Stock Compensation Expense                             --                --           53,132               --
                                                         -----------       -----------      -----------      -----------
           Total Operating Expenses                        2,458,386         1,129,226        5,479,362        3,236,788
                                                         -----------       -----------      -----------      -----------
           Operating Loss                                 (2,405,477)         (820,292)      (5,282,562)      (2,678,713)
                                                         -----------       -----------      -----------      -----------

Other (Income) Expenses:
  Interest Income                                             11,744            11,185           47,378           69,131
  Interest Expense                                          (204,573)          (63,723)        (313,838)        (199,311)
  Amortization of Deferred Financing Fees                   (273,879)         (109,726)      (1,022,431)        (159,452)
                                                         -----------       -----------      -----------      -----------
           Total Other Income (Expenses)                    (466,708)         (162,264)      (1,288,891)        (289,632)
                                                         -----------       -----------      -----------      -----------
           Net Loss before Extraordinary Item             (2,872,185)         (982,556)      (6,571,453)      (2,968,345)

Extraordinary item - write off of financing fees in
 connection with extinguishment of debt                           --                --         (750,000)              --
                                                         -----------       -----------      -----------      -----------

           Net Loss                                       (2,872,185)         (982,556)      (7,321,453)      (2,968,345)

Preferred Stock dividend                                          --          (493,458)              --       (1,368,809)
                                                         -----------       -----------      -----------      -----------
Net Loss available to common stockholders                $(2,872,185)      $(1,476,014)     $(7,321,453)     $(4,337,154)
                                                         ===========       ===========      ===========      ===========
 
  Net Loss per Share, basic and diluted:                 $     (0.59)      $     (0.15)     $     (1.54)     $     (0.56)
                                                         ===========       ===========      ===========      ===========
Weighted average common shares outstanding                 4,848,227         9,743,065        4,755,400        7,699,841
                                                         ===========       ===========      ===========      ===========
</TABLE>



   The accompanying notes are an integral part of these financial statements.






                                       4
<PAGE>   5
                            VISUAL EDGE SYSTEMS INC.
                            STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                          FOR THE NINE MONTHS ENDED
                                                                                                SEPTEMBER 30,
                                                                                        ------------------------------
                                                                                            1997              1998
                                                                                        -----------        -----------
<S>                                                                                     <C>                <C>
Operating activities:
Net loss                                                                                $(7,321,453)       $(2,968,345)
Adjustments to reconcile net loss to net cash used in operating activities:
  Non-cash stock compensation expense                                                       150,125             25,117
  Non-cash stock financing fees                                                              53,132                 --
  Non-cash interest expenses                                                                     --             93,500
  Depreciation and amortization                                                             989,521            676,716
  Amortization of deferred financing expenses                                             1,022,431            159,452
  Extraordinary item                                                                        750,000                 --
  Changes in assets and liabilities:
    Increase in accounts receivable                                                         (55,083)           (76,190)
    (Increase) decrease in other current assets                                                  --            107,683
    Increase in prepaid expense - advance royalties                                         (50,000)          (311,600)
    Increase in inventory                                                                   (44,407)           (68,507)
    Increase in other assets                                                                   (129)           (10,578)
    Increase (decrease) in accounts payable                                                 166,135           (114,297) 
    Decrease in accrued expenses                                                            (17,429)          (122,105)
    Increase in other current liabilities                                                    32,008            154,093
                                                                                        -----------        -----------
            Net cash used in operating activities                                        (4,325,149)        (2,455,061)
                                                                                        -----------        -----------
Investing activities:
  Capital expenditures                                                                   (1,689,634)          (321,228)    
  Purchases of short-term investments                                                    (3,500,000)        (3,750,000)
  Proceeds from the sale of short-term investments                                        6,154,908          2,030,000
                                                                                        -----------        -----------
           Net cash provided by (used in) investing activities                              965,274         (2,041,228)
                                                                                        -----------        -----------
Financing activities:
  Proceeds from the issuance of common stock                                                128,000          4,750,000
  Repurchase common stock                                                                  (128,945)                --
  Repayment of borrowings                                                                (3,131,340)          (398,458)
  Payments of financing costs                                                              (490,000)           (31,222)
  Proceeds from borrowings                                                                7,054,598                 --
                                                                                        -----------        -----------
           Net cash provided by financing activities                                      3,432,313          4,320,320
                                                                                        -----------        -----------
           Net change in cash and cash equivalents                                           72,438           (175,969)
Cash and cash equivalents at beginning of period                                            233,117            224,429
                                                                                        -----------        -----------
Cash and cash equivalents at end of period                                              $   305,555        $    48,460
                                                                                        ===========        ===========
Supplemental schedule of cash related activities:
  Cash paid for interest                                                                $   129,932        $   105,811
                                                                                        ===========        ===========
</TABLE>


Supplemental disclosure of non-cash related activities:
  - In February 1998, the Company, in connection with the June Financing, 
    recorded $1,350,000 as an imputed dividend on its Preferred Stock, of which 
    $981,666 has been amortized in the first nine months of 1998.

  - In the first quarter of 1998, $6,000,000 in principal amount of the 
    Company's convertible debt was converted to preferred stock net of finance 
    costs of $2,178,942.

  - In the first quarter of 1998, the Company issued 100,000 shares of common 
    stock in connection with the Marion Equity Financing to the holder of the 
    preferred stock. On July 31, 1998, the Company issued 200,000 shares of 
    common stock to the holder of the preferred stock in connection with the 
    Second Amendment to the June Financing.

  - In the first quarter of 1998, the Company sold 1,550 shares of preferred 
    stock for non-marketable securities with an aggregate fair market value of
    $1,550,000. In the second quarter of 1998, the Company redeemed the 1,550
    shares of preferred stock in exchange for the non-marketable securities.

  - In the second quarter of 1998, the Company issued 10,000 shares of common 
    stock in connection with the Marion Equity Financing.

  - In the first nine months of 1998, the Company issued 21,000 shares of 
    common stock for payment of advance royalties.

  - In the first nine months of 1998, the Company issued 144,085 shares of 
    common  stock for payment of dividends totaling $387,143 on its preferred 
    stock.


   The accompanying notes are an integral part of these financial statements.



                                       5
<PAGE>   6
                            VISUAL EDGE SYSTEMS INC.
                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                    FOR THE YEAR ENDED DECEMBER 31, 1997 AND
              THE NINE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED)

<TABLE>
<CAPTION>
                                                   Common Stock                       Additional  
                                               --------------------     Preferred       Paid-in      Accumulated  
                                                 Shares     Amount        Stock         Capital         Deficit          Total
                                               ---------    -------    -----------    -----------    ------------     ------------
<S>                                            <C>          <C>        <C>            <C>            <C>              <C>
Balance at December 31, 1996                   4,615,000    $46,150    $        --    $ 6,481,159    $ (2,862,653)    $  3,664,656

Common stock issued in connection
 with the March bridge financing                 100,000      1,000             --        999,000              --        1,000,000
Warrants issued in connection with
 the March bridge financing                           --         --             --        665,000              --          665,000
Common stock issued in connection with
 the June convertible financing                  288,025      2,880             --      1,755,619              --        1,758,499
Warrants issued in connection with
 the June convertible financing                       --         --             --        962,012              --          962,012
Common stock issued by shareholders
 for services                                    270,000      2,700             --        997,300              --        1,000,000
Options and warrants issued by
 shareholders for services                            --         --             --        458,237              --          458,237
Exercise of options                               25,000        250             --        127,750              --          128,000
Issuance of common stock for payment
 of interest on convertible debt                  65,671        657             --        333,101              --          333,758
Repurchase and cancellation of common
 stock                                           (47,000)      (470)            --       (351,784)             --         (352,254)
Net loss                                              --         --             --             --     (10,755,570)     (10,755,570)
                                               ---------    -------    -----------    -----------    ------------     ------------
Balance at December 31, 1997                   5,316,696     53,167             --     12,427,394     (13,618,223)      (1,137,662)

Preferred stock issued in connection
 with the June financing conversion                   --         --      6,000,000     (2,178,942)             --        3,821,058
Intrinsic value of conversion feature                 --         --     (1,350,000)     1,350,000              --               --
Preferred stock embedded dividend                     --         --        981,666             --        (981,666)              --
Sale of preferred stock in connection
 with the June convertible financing                  --         --      1,550,000             --              --        1,550,000
Common stock issued in connection with
 the Marion equity financing                   4,010,000     40,100             --      4,678,678              --        4,718,778
Common stock and warrants issued in
 connection with the June convertible
 financing amendment                             300,000      3,000             --        191,284              --          194,284
Redemption of preferred stock in connection
 with the June convertible financing                  --         --     (1,550,000)            --              --       (1,550,000)
Issuance of common stock for payment
 of dividends on preferred stock                 144,085      1,441             --        385,702        (387,143)              --
Issuance of common stock for payment
 of interest on convertible debt                  35,071        350             --         93,150              --           93,500
Issuance of common stock for payment
 of prepaid royalties                             21,000        210             --        209,790              --          210,000
Net loss through September 30, 1998                   --         --             --             --      (2,968,345)      (2,968,345)
                                               ---------    -------    -----------    -----------    ------------     ------------
Balance at September 30, 1998                  9,826,852    $98,268    $ 5,631,666    $17,157,056    $(17,955,377)    $  4,931,613
                                               =========    =======    ===========    ============   ============     ============
</TABLE>





   The accompanying notes are an integral part of these financial statements.






                                       6
<PAGE>   7

                            VISUAL EDGE SYSTEMS INC.
                         NOTES TO FINANCIAL STATEMENTS
                                   UNAUDITED

(1)  BASIS OF PRESENTATION

     The accompanying unaudited financial statements have been prepared in
     accordance with generally accepted accounting principles for interim
     financial information. Accordingly, they do not include all of the
     information and footnotes required by generally accepted accounting
     principles for complete financial statements. As such, they should be read
     in conjunction with the Company's audited financial statements on Form
     10-KSB for the year ended December 31, 1997. In the opinion of management,
     all adjustments (consisting of normal recurring adjustments) considered
     necessary for a fair presentation have been included. The results of
     operations for the interim periods are not necessarily indicative of the
     results that might be expected for the future interim periods or for the
     full year ending December 31, 1998.

     REVENUE RECOGNITION

     Revenue from the sale of personalized videotapes is recognized when the
     Company delivers the videotapes to the customer. Non-refundable deposits
     from customers received in advance of videotape delivery are recorded as
     customer deposits and are included in other current liabilities in the
     balance sheet. During the first three quarters of 1997, the Company
     recorded non-refundable deposits from customers as revenue. During the
     fourth quarter of 1997, the Company changed its method of accounting for
     non-refundable deposits from customers and deferred the revenue until the
     event occurred. The impact of this change in accounting principle was not
     material to the Company's financial position or results of operations.

     PREPAID EXPENSES-ADVANCE ROYALTIES

     As discussed in Note 5, the Company is required to pay a royalty payment
     of 8% of all net revenues. Guaranteed minimum royalty payments are
     recorded as a prepaid expense and are expensed as revenues are earned. The
     Company continually evaluates the expected realization of the carrying
     value of the prepaid royalty over the next twelve month period and, if
     necessary, reduces the carrying value by expensing the prepaid royalty to
     reflect management's best estimate of the amounts to be recovered in
     future periods. The Company is currently renegotiating the payment terms
     of its agreement with Greg Norman and Great White Shark Enterprises, Inc.
     and is preparing its forecasts for 1999. Both of these events have an
     impact on the appropriate carrying value of the prepaid royalty. The
     Company intends to make a final evaluation for fiscal 1998 when the
     renegotiations of the payment terms to Greg Norman and Great White Shark
     Enterprises and the 1999 forecasts are completed. This evaluation may
     result in a reduction of the carrying value of the prepaid royalty for
     fiscal 1998.

(2)  RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1997, the Financial Accounting Standards Board ("FASB") issued
     Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
     Comprehensive Income" which is required to be adopted in fiscal years
     beginning after December 15, 1997. This statement requires the reporting
     and display of comprehensive income and its components in a full set of


                                       7
<PAGE>   8


     general-purpose financial statements. Comprehensive income is defined as
     the change in equity during the financial reporting period of a business
     enterprise resulting from non-owner sources. The Company adopted SFAS No.
     130 on January 1, 1998. The adoption of SFAS No. 130 did not have a
     material impact on the Company's financial position or results of
     operations as comprehensive income is equal to net income for all periods
     presented.

     In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
     an Enterprise and Related Information". This statement establishes
     standards for reporting information about operating segments in annual
     financial statements and requires reporting of selected information about
     operating segments in interim financial reports issued to shareholders. It
     also establishes standards for related disclosures about products and
     services, geographical areas and major customers. The Company will adopt
     SFAS No. 131 effective December 31, 1998.

     SFAS No. 133 ,"Accounting for Derivative Instruments and Hedging
     Activities", is effective for fiscal years ending after June 15, 1999.
     This statement establishes accounting and reporting standards requiring
     that every derivative instrument be recorded in the balance sheet as
     either an asset or a liability at its fair value. The Company intends to
     adopt SFAS 133 in 1999 and expects that the adoption of this pronouncement
     will not have a material impact on the Company's financial position since
     the Company does not presently have any derivative or hedging-type
     investment as defined by SFAS 133.

(3)  FINANCINGS

     (a) JUNE FINANCING

     On June 13, 1997, the Company arranged a three-year $7.5 million debt and
     convertible equity facility (the "June Financing") with a group of
     investment funds (the "Funds"). The Company issued and sold to the Funds
     certain securities, including convertible notes (the "Notes") which are
     convertible into the Company's preferred stock (the "Preferred Stock"),
     pursuant to the Securities Purchase Agreement, dated as of June 13, 1997
     (the "Agreement"), among the Company and the Funds.

     Interest payments on the Notes are, at the option of the Company, payable
     in cash or in shares of common stock. During the nine months ended
     September 30, 1998 the Company issued an aggregate of 35,071 shares of the
     Company's common stock (the "Common Stock") in lieu of cash interest
     payments of $93,500.

     On February 6, 1998, $6 million principal amount of outstanding Notes were
     converted into 6,000 shares of Preferred Stock. The Preferred Stock has a
     liquidation preference of $1,000 per share and is senior to the Common
     Stock with respect to dividends, liquidation and dissolution. Each share
     of Preferred Stock entitles the holder to an annual dividend of 8.25%,
     payable on a quarterly basis, which dividend increases to 18% in certain
     situations as specified in the Amended Certificate of Designation with
     respect to the Preferred Stock. During the first nine months of 1998 the
     Company issued an aggregate of 140,280 shares of Common Stock in lieu of
     cash dividends due on the Preferred Stock of $374,000. Holders of the
     shares of Preferred Stock do not have voting rights, except upon the
     occurrence of certain events that would affect the preferences and rights
     of the Preferred Stock. Each share of Preferred Stock is convertible


                                       8
<PAGE>   9


     into Common Stock at the lesser of: (i) $6.00 per share of Common Stock or
     (ii) a discount ranging from 15% to 22.5% of the market price of the
     Common Stock at the time of conversion; in certain circumstances, the
     conversion price may be as low as 50% of the market price of the Common
     Stock at the time of conversion. The Preferred Stock is redeemable by the
     Company at any time at its option. The intrinsic value of the above
     described beneficial conversion feature ($1,350,000) has been recognized
     as an increase in additional paid-in-capital and a decrease in Preferred
     Stock. This beneficial conversion factor is being amortized as an embedded
     Preferred Stock dividend through December 31, 1998 (the date the
     conversion feature resumes).

     The Board of Directors is authorized, without further approval of the
     stockholders, to fix the dividend rights and terms, conversion rights,
     voting rights, redemption rights and terms, liquidation preferences, and
     any other rights, preferences, privileges and restrictions applicable to
     each new series of Preferred Stock.

     The remaining $1.5 million of outstanding Notes (reflected in the
     accompanying balance sheet net of discount) held by the Funds are secured
     debt pursuant to a security agreement, dated February 6, 1998 (the
     "Security Agreement"), between the Company and H.W. Partners, L.P., as
     agent for and representative of the Funds. With respect to such $1.5
     million in outstanding Notes, the Funds have been granted a security
     interest in the collateral described in the Security Agreement, which
     includes all of the Company's unrestricted cash deposit accounts, accounts
     receivable, inventory and equipment and fixtures excluding the vans.

     On March 16, 1998, the Company sold an additional 1,550 shares of
     Preferred Stock to the Funds in exchange for non-marketable securities
     with an aggregate fair market value of $1,550,000. The securities consist
     of warrants to acquire common shares of various publicly traded companies
     and the fair value has been determined using the Black Scholes model.
     During the first nine months of 1998 the Company issued an aggregate of
     3,805 shares of Common Stock for payment of dividends due of $13,143. On
     April 20, 1998, the Company redeemed the 1,550 shares of Preferred Stock
     from the Funds in exchange for the non-marketable securities mentioned
     above.

     As a condition to the consummation of the Marion Equity Financing (see
     Note 3(b)), the Company entered into the Agreement and Second Amendment to
     Bridge Securities Purchase Agreement and Related Documents, dated March
     27, 1998 (the "Second Amendment"), among the Company and the Funds.
     Pursuant to the Second Amendment, the Funds agreed that they would not
     convert, prior to December 31, 1998, any shares of Preferred Stock or any
     principal amount of the Notes into shares of Common Stock, unless a
     "Material Transaction" (defined as a change of control of the Company, a
     transfer of all or substantially all of the Company's assets or a merger
     of the Company into another entity) has occurred. Further, the Funds
     agreed that they would not, prior to March 31, 1999, publicly sell any
     shares of Common Stock owned or acquired by the Funds, unless a Material
     Transaction has occurred; the Funds are permitted, after June 30, 1998 and
     subject to the Company's right of first refusal, to privately sell any
     shares of Common Stock that they own or acquire, provided the purchaser
     agrees in writing to be bound by the same resale restrictions.

     The Funds have granted to the Company an option to redeem the Preferred
     Stock and the Notes owned by the Funds. If the Company had redeemed such
     Preferred Stock and Notes on or before June 30, 1998, the redemption price
     would have been 80% of the principal amount


                                       9
<PAGE>   10


     outstanding of the Notes being redeemed, or 80% of the liquidation
     preference of the Preferred Stock being redeemed, plus accrued interest
     and dividends in the event that all of the Preferred Stock and Notes owned
     by the Funds were not redeemed by June 30, 1998. If the redemption of the
     Notes and Preferred Stock is after June 30, 1998 but on or before December
     31, 1998, the 80% referred to in the preceding sentence increases by 2%
     per month, up to 90% in December 1998. If the redemption of the Notes and
     Preferred Stock occurs after December 31, 1998, the redemption price shall
     be as provided in the Agreement between the Company and the Funds. The
     Company is required to redeem all of the Preferred Stock outstanding prior
     to redemption of any of the Notes. In addition, the Funds have granted to
     the Company and to Marion (see Note 3(b)) an option to acquire, on or
     before March 31, 1999, all of the shares of Common Stock owned by the
     Funds. As of September 30, 1998, the Company had not redeemed any of the
     Preferred Stock or Notes.

     In connection with the Second Amendment, the Funds received 100,000 shares
     of Common Stock, as well as the right to receive 200,000 additional shares
     of Common Stock in the event that all of the Preferred Stock and Notes
     owned by the Funds have not been redeemed by the Company by June 30, 1998.
     The 200,000 additional shares of Common Stock were issued on July 1, 1998.
     Further, the exercise price of the warrants issued in June 1997 pursuant
     to the Agreement has been reduced from $10.675 per share to $3.25 per
     share and the exercise price of the warrants issued in December 1997 has
     been reduced from $4.00 per share to $3.25 per share. The fair values of
     the issuances of Common Stock and the repricing of the warrants has been
     recorded as financing costs. The Company has registered all of such shares
     of Common Stock (including the shares underlying warrants) under the
     Securities Act of 1933, as amended, effective April 15, 1998.

     (b) MARION EQUITY FINANCING

     In March 1998, the Company entered into a Purchase Agreement (the "Marion
     Agreement") with Marion Interglobal, Ltd., an investment group ("Marion"),
     or its assigns. The Marion Agreement calls for the Company to receive up
     to $11,000,000 from Marion in exchange for shares of Common Stock as
     explained herein. Pursuant to the Marion Agreement, the purchase of Common
     Stock is to occur in three tranches as follows: (i) on March 27, 1998, the
     Company sold to Marion 1,200,000 shares of Common Stock for an aggregate
     consideration of $3,000,000 which was received on April 16, 1998; (ii) on
     June 30, 1998, the Company sold to Marion 800,000 shares of Common Stock
     for an aggregate consideration of $2,000,000; and (iii) on or prior to
     September 30, 1998 the Company may sell a number of shares of Common Stock
     (to be determined by when the closing occurs, which would range from
     2,666,667 shares to 3,200,000 shares) for an aggregate consideration of
     $6,000,000. The third tranche was contingent on Marion's satisfaction that
     the Company met or exceeded certain unspecified financial targets expected
     by Marion, in its sole discretion and Marion was under no firm obligation
     to complete this tranche. The third tranche of the Marion Agreement was
     not completed by Marion due to market conditions. Pursuant to the Marion
     Agreement the Company agreed to use the proceeds of the third tranche to
     redeem the Notes and Preferred stock issued in the June Financing. The
     Company paid transaction fees to Marion upon completion of each tranche as
     follows: (i) 1,200,000 shares of Common Stock for the first $3,000,000
     tranche; (ii) 800,000 shares of Common Stock for the second $2,000,000
     tranche; and (iii) no additional fee for the completion of the third
     tranche. The Company issued an additional 10,000 shares as a finders fee
     in connection with this financing. The issuance and


                                      10
<PAGE>   11


     sale of Common Stock in the first and second tranches issued to Marion,
     was approved by the Company's stockholders at the special shareholder
     meeting held on May 15, 1998.

     Further, upon the consummation of the second tranche of the Marion
     Agreement, Mr. Alan Lubell, a former director of the Company, transferred
     250,000 shares of Common Stock to Marion, which shares were registered
     under the Securities Act of 1933, as amended, effective April 15, 1998.

     Pursuant to the Marion Agreement, Marion was the representative of a group
     of investors and was entitled to assign its rights to receive shares of
     Common Stock from the Company and Mr. Lubell. Marion exercised this right
     and allocated the shares of Common Stock from the Company and Mr. Lubell
     to various unrelated investors and retained 876,000 shares for its own
     account. Marion is controlled by Ronald Seale who became Chairman of the
     Board of the Company on June 3, 1998 and presently holds 976,000 shares of
     Common Stock.

     Further, the Company may not redeem the warrants issued in the initial
     public offering without the prior written consent of Marion.

     As a condition to the consummation of this equity financing, the Company
     renegotiated the terms of its outstanding Notes and Preferred Stock with
     the Funds (see Note 3(a) for details).

     (c) EQUIPMENT FINANCING

     In August 1997, the Company entered into an equipment financing facility
     whereby the Company will be provided with up to $2.5 million in financing.
     The facility provides the Company with equipment financing of $100,000 per
     van for 25 vans, each of which is anticipated to cost approximately
     $150,000. The Company has drawn on $800,000 of the facility to finance
     eight vans purchased in May 1997. The outstanding balance bears interest
     at the rate of 11.62% and is payable in 36 consecutive monthly payments of
     $25,328 which commenced in August 1997, followed by one balloon payment of
     $47,040. The Company has pledged to the lender a certificate of deposit in
     the aggregate amount of $200,000 in connection with the financing of the
     first eight vans which is included in "Investments-Restricted" in the
     accompanying September 30, 1998 balance sheet.

     The Company acquired certain fixed assets under capital leases totaling
     $913,170. As a condition of the leases the Company is required, throughout
     the term of the leases, to post letters of credit in the aggregate amount
     of $538,902 for collateral on the leases. The letters of credit were
     issued from the Company's bank and the Company pledged one of its
     investment funds with a balance of $623,012 as security, which is included
     in "Investments-Restricted" in the accompanying September 30, 1998 balance
     sheet.

(4)  EMPLOYMENT AGREEMENTS

     The Company currently has employment agreements with three executive
     employees which expire on December 31, 2000. The agreements provide for
     aggregate minimum annual compensation of approximately $463,750 in 1998,
     $540,000 in 1999 and $600,000 in 2000.


                                      11
<PAGE>   12


     The agreements are automatically renewed thereafter for additional
     one-year periods unless the Company or the employees provide timely notice
     of termination. The agreements also provide for potential performance
     bonuses and severance payments ranging from three to twelve months.

(5)  COMMITMENTS AND CONTINGENCIES

     Effective March 1, 1995 the Company entered into a license agreement (the
     "Agreement") with Greg Norman ("Norman"), a professional golfer, and Great
     White Shark Enterprises, Inc. ("Great White Shark"), pursuant to which the
     Company was granted a worldwide license to use Norman's name, likeness and
     endorsement in connection with the production and promotion of the
     Company's products. Norman will receive royalties of 8% of all net
     revenues, as defined, derived from the sale of ONE-ON-ONE videotapes.

     As of June 3, 1997, the Company, Norman and Great White Shark executed an
     amendment (the "Amendment") to the Agreement. Norman, Great White Shark
     and the Company agreed to restructure the terms of the payments due to
     Norman under the Agreement by: (i) altering the payments such that Norman
     will receive 102,000 in shares of Common Stock; (ii) changing the schedule
     of the payments such that they will be paid to Norman over a period of
     time from January 1998 through April 2000; and (iii) granting to Norman
     options to purchase 25,000 shares of Common Stock. Such options are
     exercisable at a price of $10.00 per share, vest immediately and are
     exercisable at Norman's discretion at any time prior to their expiration
     on June 30, 2000.

     The Amendment restructures the payments to Norman as follows: 1997 - as of
     December 31, 1997 $600,000 was paid; 1998 - $700,000 to be paid in
     addition to 30,000 shares of Common Stock to be issued during the year;
     1999 - $1,200,000 to be paid in addition to 48,000 shares of Common Stock
     to be issued during the year; and 2000 - $480,000 to be paid in addition
     to 24,000 shares of Common Stock to be issued during the first three
     months of the year.

     After the initial term, which ends on June 30, 2000, the Company has the
     option to renew the Agreement for two additional five-year periods (each
     five-year period, a "Renewal Term"). The guaranteed fee to Norman in the
     first year of the first Renewal Term will be $1,300,000, increasing by
     $100,000 each successive year thereafter; all such fees will be payable in
     cash in equal quarterly installments.

     The Company is currently negotiating to restructure the terms of the
     payments due to Norman under the Amendment (see Note 1 Prepaid
     Expenses-Advanced Royalties). Failure to successfully restructure the
     payments to Norman may adversely affect the Company's ability to fund
     future operations.

(6)  STOCK OPTION PLAN

     The Company applies APB Opinion No. 25 in accounting for its 1996 Stock
     Option Plan. Had the Company determined compensation cost based on fair
     value at the grant date for its stock options under SFAS No. 123, the
     Company's net loss and net loss per share for the nine months ended
     September 30, 1997 and 1998 would have increased to $7,936,525 and $1.83
     and $3,122,809 and $.58, respectively.


                                      12
<PAGE>   13


                            VISUAL EDGE SYSTEMS INC.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The following discussion contains, in addition to historical information,
"forward-looking statements" with respect to Visual Edge Systems Inc. (the
"Company") which represents the Company's expectations or beliefs, including,
but not limited to, statements concerning industry performance, the Company's
operations, performance, financial condition, growth strategies, margins, and
growth in sales of the Company's products. For this purpose, any statements
contained in this report that are not statements of historical fact may be
deemed to be forward-looking statements. Without limiting the generality of the
foregoing, words such as "may," "will," "expect," "believe," "anticipate,"
"intend," "could," "estimate," or "continue" or the negative or other
variations thereof or comparable terminology are intended to identify
forward-looking statements. 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. Such factors include, but are not limited to, the Company's
limited availability of cash and working capital; operating losses and
accumulated deficit; limited operating history; risks related to operations;
competition; risk related to trademarks and proprietary rights; dependence on
management; and other factors discussed in the Company's filings with the
Securities and Exchange Commission.

     GENERAL

     Visual Edge Systems Inc. (the "Company") was organized to develop and
     market personalized videotape golf lessons featuring ONE-ON-ONE
     instruction by leading professional golfer Greg Norman. The Company has
     developed video production technology which digitally combines actual
     video footage of a golfer's swing with a synchronized "split-screen"
     comparison to Greg Norman's golf swing to produce a 45-minute ONE-ON-ONE
     videotape golf lesson. The Company's ONE-ON-ONE personalized videotape
     golf lesson analyzes a golfer's swing by comparing it to Greg Norman's
     swing at several different club positions from two camera angles using
     Greg Norman's pre-recorded instructional commentary and analysis and
     computer graphics to highlight important golf fundamentals intended to
     improve a golfer's performance. The Company sells its products under the
     name "ONE-ON-ONE WITH GREG NORMAN".

     The Company was incorporated in July 1994 and commenced developmental
     operations in January 1995. From the Company's inception through the end
     of 1996, it was primarily engaged in product development, market
     development, testing technology, recruitment of key personnel, raising
     capital and preparing the software, hardware and videotape coaching
     instructions used in the production of its products.

     The Company's primary focus is concentrated on marketing and sales
     efforts. The Company's marketing strategy is to sell ONE-ON-ONE videotapes
     to (a) various organizers of amateur corporate, charity and member golf
     tournaments (who typically offer gifts to tournament participants), golf
     professionals at private and daily fee golf courses and driving ranges and
     indoor event planners who organize trade shows, conventions, sales
     meetings, retail store openings and promotions and automobile dealer
     showroom promotions, (b) corporations who will give the ONE-ON-ONE WITH
     GREG NORMAN lesson as customer and employee appreciation gifts instead of
     gifts such as golf balls with logos, fruit baskets or chocolates, (c)
     individual golfers or persons who wish to give a gift to a golfer via the
     Internet and (d) corporations who


                                      13
<PAGE>   14


     will use the ONE-ON-ONE product as an incentive to entice individuals to
     purchase or use their product or service. To implement its marketing and
     business strategy, the Company has built 16 mobile ONE-ON-ONE production
     facilities ("vans") equipped with video and personal computer equipment to
     market, promote and produce the Company's products. The Company locates
     its ONE-ON-ONE vans in selected geographic areas that service golf courses
     and driving ranges throughout the United States, and has placed its first
     16 vans in Arizona, California, Florida, Georgia, Illinois, Maryland,
     Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania, Texas
     and Ontario, Canada, and is in the process of developing additional vans.
     The Company has also opened authorized ONE-ON-ONE videotaping centers in
     key cities throughout the country including Atlanta, Boca Raton, Boston,
     Chicago, Cleveland, Dallas, Detroit, Long Island, Los Angeles, Miami, New
     York, Philadelphia, Phoenix, San Diego, San Francisco, San Jose, Secaucus,
     Toronto, and Washington DC/Baltimore, which centers will allow recipients
     of ONE-ON-ONE gift certificates to redeem their certificates and receive
     their personalized ONE-ON-ONE video golf lesson. These centers are
     permanent, part time locations which the Company has developed in
     partnership with existing retail establishments such as driving ranges,
     golf courses, retailers and automobile dealerships. The Company is
     marketing the gift certificate program as corporate incentives and
     promotional products and is selling direct to golfers via the Company's
     web site, CBS-Sportsline, and advertisements placed in golf magazines and
     other industry periodicals. Sales to corporations are handled by the
     Company's sales force and independent sales representatives. The Company
     also plans to launch an infomercial in the first quarter of 1999.

RESULTS OF OPERATIONS

For the three months ended September 30, 1998 ("Q3-98") as compared to the
three months ended September 30, 1997 ("Q3-97") and for the nine months ended
September 30, 1998 ("Y3-98") as compared to the nine months ended September 30,
1997 ("Y3-97").

     Sales for Q3-98 increased 78% to $921,114, as compared to $518,365 for
     Q3-97 and sales for Y3-98 increased 97% to $2,202,264, as compared to
     $1,115,116 for Y3-97. During the quarter ended December 31, 1997, the
     Company changed its method of accounting for non-refundable event deposits
     from customers. For quarters prior to the fourth quarter of 1997, the
     Company recorded advance non-refundable deposits from customers as
     revenue. Beginning in the fourth quarter of 1997, advance non-refundable
     deposits from customers were deferred until the event occurred. The impact
     of this change in accounting method was not material to the Company's
     financial position or results of operations. In Y3-98 the Company recorded
     only revenue that was earned, with non-refundable deposits from customers
     reflected on the balance sheet as current liabilities. Under the new
     policy, sales in Q3-97 increased 126% from $407,877, as compared to
     $921,114 in Q3-98, and sales for Y3-97 increased 184% from $776,446, as
     compared to $2,202,264 in Y3-98. The increase in sales in 1998 as compared
     to 1997 is primarily due to the Company's marketing efforts. In addition,
     the Company had additional vans in use for the first nine months of 1998
     as compared to the first nine months of 1997.

     For Q3-98 the Company had a gross profit of $308,934, as compared to a
     gross profit of $52,909 for Q3-97 and for Y3-98 had a gross profit of
     $558,075, as compared to a gross profit of $196,800 for Y3-97. Under the
     new accounting method regarding non-refundable deposits from customers,
     gross loss in Q3-97 would have been $57,579 or a gross margin of -14%, as
     compared to a gross profit of $308,934 or a gross margin of 34% in Q3-98.
     Gross loss for Y3-97 would have been $141,870, as compared to a gross
     profit of $558,075 for Y3-98. The


                                      14
<PAGE>   15


     increase in gross profit in 1998 as compared to 1997 is primarily due to
     significant training costs for van operators that were incurred in 1997
     and were significantly decreased in 1998, as well as low initial sales
     during the Company's start-up phase in 1997.

     Operating expenses for Q3-98 decreased 54% to $1,129,226, as compared to
     $2,458,386 for Q3-97 and operating expenses for Y3-98 decreased 41% to
     $3,236,788, as compared to $5,479,362 for Y3-97. The decrease in operating
     expenses reflects reductions in corporate overhead and start-up expenses
     that were incurred in 1997.

     The Company earned $69,131 in interest income for the nine month period
     ending September 30, 1998, as compared to $47,378 for the nine month
     period ending September 30, 1997. Interest expense for the nine month
     period ending September 30, 1998 was $199,311, as compared to $313,838 for
     the nine month period ending September 30, 1997. The decrease in interest
     expense is primarily due to the conversion of the June Financing Notes to
     Preferred Stock (see Note 3(a)).

     Operating loss for Q3-98 decreased 54% to $820,292, as compared to
     $2,405,477 for Q3-97 and for Y3-98 decreased 49% to $2,678,713, as
     compared to $5,282,562 for Y3-97. Net loss before extraordinary item for
     Q3-98 decreased 66% to $982,556, as compared to $2,872,185 for Q3-97 and
     for Y3-98 decreased 55% to $2,968,345, as compared to $6,571,453 for
     Y3-97. Net loss per share for Q3-98 decreased 74% to $.15, as compared to
     $.59 for Q3-97 and for Y3-98 decreased 63% to $.56 as compared to $1.54
     for Y3-97. Under the new accounting method regarding non-refundable
     deposits from customers, operating loss in Q3-97 would have been
     $2,515,965, as compared to $820,292 for Q3-98, a 67% decrease and for
     Y3-97 would have been $5,621,232, as compared to $2,678,713 for Y3-98, a
     52% decrease. Net loss for Q3-97 would have been $2,982,673, as compared
     to $982,556 for Q3-98, a 67% decrease and for Y3-97 would have been
     $6,910,123, as compared to $2,968,345 for Y3-98, a 57% decrease. Net loss
     per share for Q3-97 would have been $.62, as compared to $.15 for Q3-98, a
     75% decrease and for Y3-97 would have been $1.61, as compared to $.56 for
     Y3-98, a 65% decrease. The decreases in operating and net loss in 1998 as
     compared to 1997 resulted from increased gross profit and decreased
     operating expenses in 1998. The decrease in net loss per share in 1998 as
     compared to 1997 is attributable to both a decrease in net loss and an
     increase in the number of shares outstanding which is partially offset by
     Preferred Stock dividends recorded in 1998.

LIQUIDITY AND CAPITAL RESOURCES

     On September 30, 1998, the Company had cash and cash equivalents of
     $48,460, unrestricted short-term investments (certificates of deposit) of
     $2,800,000 and working capital of $2,973,277, as compared to cash and cash
     equivalents of $224,429, unrestricted short-term investments (certificates
     of deposit) of $1,080,000 and working capital of $788,323 at December 31,
     1997. Net cash used in operating activities for Y3-98 was $2,455,061,
     which was used to fund the Company's losses. Net cash used in investing
     activities was $2,041,228 and $4,320,320 was provided by financing
     activities for a total decrease in cash and cash equivalents of $175,969.
     Net cash used in operating activities for Y3-97 was $4,325,149. Net cash
     provided by investing and financing activities in Y2-97 was $965,274 and
     $3,432,313, respectively, for a total increase in cash and cash
     equivalents in Y3-97 of $72,438.

     On September 30, 1998, the Company had stockholders' equity of $4,931,613,
     as compared to a stockholders' deficit of $1,137,662 at December 31, 1997.


                                      15
<PAGE>   16


     The Company anticipates that its current capital resources, when combined
     with anticipated cash flows from operations and based on the successful
     completion of the renegotiations of the payment terms of its agreement
     with Norman and Great White Shark, will be sufficient to satisfy the
     Company's contemplated working capital requirements for approximately the
     next twelve months. There can be no guarantee that the Company's
     anticipated cash flow from operations and sales will be realized or the
     renegotiations of the payments terms with Norman and Great White Shark
     will be successful. Failure to achieve one or both of these may adversely
     affect the Company's ability to fund future operations.

SEASONALITY

     The Company considers its business to be seasonal and expects sales to be
     generally higher in the second and third quarters of each fiscal year.

THIRD PARTY REPORTS

     The Company does not make financial forecasts or projections nor endorse
     the financial forecasts or projections of third parties nor does it
     comment on the accuracy of third party reports. The Company does not
     participate in the preparation of the reports or the estimates given by
     the analysts. Analysts who issue financial reports are not privy to
     non-public financial information. Any purchase of the Company's securities
     based on financial estimates provided by analysts or third parties is done
     entirely at the risk of the purchaser.

YEAR 2000 COMPUTER ISSUE

     The SEC has issued guidance stating that public operating companies should
     consider whether there will be any anticipated costs, problems and
     uncertainties associated with the Year 2000 issue, which affects many
     existing computer programs that use only two digits to identify a year in
     the date field. The Company anticipates that its business operations will
     electronically interact with third parties very minimally, if at all. The
     Company has assessed the Year 2000 readiness of internal accounting and
     operating systems and communicated with key customers and suppliers
     regarding their exposure to Year 2000 issues. Based on the results of
     these actions, the Company believes the Year 2000 issue will not have a
     material impact on the Company's business or operations.


                                      16
<PAGE>   17


                            VISUAL EDGE SYSTEMS INC.

                          PART II - OTHER INFORMATION

ITEM 1.      LEGAL PROCEEDINGS

             The Company is not presently a party to any material litigation.

ITEM 2.      CHANGES IN SECURITIES

             None

ITEM 3.      DEFAULTS UPON SENIOR SECURITIES

             None

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

             None

ITEM 5.      OTHER INFORMATION

             None


                                      17
<PAGE>   18


EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

     3.1  Certificate of Incorporation of the Company, as amended (Incorporated
          by reference to Exhibit 3.1 to Amendment No. 2 to the Registrant's
          Registration Statement on Form SB-2 (Registration No. 333-5193)
          effective July 24, 1996).

     3.2  Amended and Restated By-Laws of the Company (Incorporated by
          reference to Exhibit 3.2 to Amendment No. 1 to the Registrant's
          Registration Statement on Form SB-2 (Registration No. 333-5193)
          effective July 24, 1996).

     4.1  Form of Specimen Common Stock Certificate (Incorporated by reference
          to Exhibit 4.1 to Amendment No. 1 to the Registrant's Registration
          Statement on Form SB-2 (Registration No. 333-5193) effective July 24,
          1996).

     4.2  Form of Specimen Redeemable Warrant Certificate (Incorporated by
          reference to Exhibit 4.2 to Amendment No. 1 to the Registrant's
          Registration Statement on Form SB-2 (Registration No. 333-5193)
          effective July 24, 1996).

     4.3  Form of Warrant Agreement between the Company and Whale Securities
          Co., L.P. (Incorporated by reference to Exhibit 4.3 to the
          Registrant's Registration Statement on Form SB-2 (Registration No.
          333-5193) effective July 24, 1996).

     4.4  Form of Warrant among American Stock Transfer & Trust Company, the
          Company and Whale Securities Co., L.P. (Incorporated by reference to
          Exhibit 4.4 to the Registrant's Registration Statement on Form SB-2
          (Registration No. 333-5193) effective July 24, 1996).

     4.5  Form of Warrant Certificate issued to investors in the March 1997
          Bridge Financing (Incorporated by reference to Exhibit 4.5 to the
          Registrant's Registration Statement on Form SB-2 (Registration No.
          333-24675) filed April 7, 1997).

     4.6  Form of Common Stock Purchase Warrant issued to investors in the June
          1997 Bridge Financing (Incorporated by reference to Exhibit 99.4 to
          the Registrant's Current Report on Form 8-K filed June 23, 1997).

     4.7  Form of Convertible Note issued to investors in the June 1997 Bridge
          Financing (Incorporated by reference to Exhibit 99.5 to the
          Registrant's Current Report on Form 8-K filed June 23, 1997).

     4.8  Form of Common Stock Purchase Warrant issued to Vision Financial
          Group, Inc. (Incorporated by reference to Exhibit 4.8 to the
          Registrant's Quarterly Report on Form 10-QSB filed November 14,
          1997).

     4.9  Form of Common Stock Purchase Warrant issued to investors in the June
          1997 Bridge Financing in connection with the amendment to such
          financing (Incorporated by reference to Exhibit 99.3 to the
          Registrant's Current Report on Form 8-K filed February 9, 1998).


                                      18
<PAGE>   19


     10.1 License Agreement, dated March 1, 1995, between Great White Shark
          Enterprises, Inc. and the Company, as supplemented (Incorporated by
          reference to Exhibit 10.1 to the Registrant's Registration Statement
          on Form SB-2 (Registration No. 333-5193) effective July 24, 1996).

     10.2 Amendment to License Agreement, dated as of June 3, 1997, by and
          among, the Company, Greg Norman and Great White Shark Enterprises,
          Inc. (Incorporated by reference to Exhibit 99.1 to the Registrant's
          Current Report on Form 8-K/A filed June 27, 1997).

     10.3 Employment Agreement, dated as of January 1, 1996, between Earl
          Takefman and the Company, as amended (Filed herewith and Incorporated
          by reference to Exhibit 10.3 to the Registrant's Registration
          Statement on Form SB-2 (Registration No. 333-5193) effective July 24,
          1996).

     10.4 Employment Agreement, dated as of May 1, 1996, between Thomas S.
          Peters and the Company, as amended (Filed herewith and Incorporated
          by reference to Exhibit 10.5 to the Registrant's Registration
          Statement on Form SB-2 (Registration No. 333-5193) effective July 24,
          1996).

     10.5 License Agreement, dated as of November 1, 1996, between the Company
          and Visual Edge Systems (Australia) Pty. Ltd. (Incorporated by
          reference to Exhibit 10.6 to the Registrant's Registration Statement
          on Form SB-2 (Registration No. 333-5193) effective July 24, 1996).

     10.6 Form of Consulting Agreement between the Company and Whale Securities
          Co., L.P. (Incorporated by reference to Exhibit 10.7 to the
          Registrant's Registration Statement on Form SB-2 (Registration No.
          333-5193) effective July 24, 1996).

     10.7 Amended and Restated 1996 Stock Option Plan (Incorporated by
          reference to Exhibit 10.8 to the Registrant's Registration Statement
          on Form SB-2 (Registration No. 333-23519) filed April 7, 1997).

     10.8 Employment Agreement, dated as of June 1, 1996, between Richard
          Parker and the Company, as amended (Filed herewith and Incorporated
          by reference to Exhibit 10.9 to Amendment No. 1 to the Registrant's
          Registration Statement on Form SB-2 (Registration No. 333-5193)
          effective July 24, 1996).

     10.9 Assignment, dated April 19, 1996, from Thomas S. Peters to the
          Company (Incorporated by reference to Exhibit 10.11 to the
          Registrant's Registration Statement on Form SB-2 (Registration No.
          333-5193) effective July 24, 1996).

    10.10 Share and Warrant Purchase Agreement, dated as of February 27, 1997,
          between the Company and Status-One Investments Inc. (Incorporated by
          reference to Exhibit 10.11 to the Registrant's Registration Statement
          on Form SB-2 (Registration No. 333-24675) filed April 7, 1997).

    10.11 Bridge Securities Purchase Agreement, dated as of June 13, 1997,
          among the Company and Infinity Investors Limited, Infinity Emerging
          Opportunities Limited, Sandera Partners, L.P. and Lion Capital
          Partners, L.P. (collectively, the "Funds") (Incorporated by reference
          to Exhibit 99.1 to the Company's Current Report on Form 8-K filed
          June 23, 1997).


                                      19
<PAGE>   20


    10.12 Registration Rights Agreement, dated as of June 13, 1997, between
          the Company and the Funds (Incorporated by reference to Exhibit 99.2
          to the Company's Current Report on Form 8-K filed June 23, 1997).

    10.13 Transfer Agent Agreement, dated as of June 13, 1997, among the
          Company, the Funds and American Stock Transfer & Trust Company
          (Incorporated by reference to Exhibit 99.3 to the Company's Report on
          Form 8-K filed June 23, 1997).

    10.14 Purchase Agreement, dated as of March 27, 1998, among the Company
          and Marion Interglobal, Ltd. (Incorporated by reference to Exhibit
          10.16 to the Registrant's Annual Report on Form 10-K for the fiscal
          year ended December 31, 1997).

    10.15 Registration Rights Agreement, dated as of March 27, 1998, among the
          Company and Marion Interglobal, Ltd. (Incorporated by reference to
          Exhibit 10.17 to the Registrant's Annual Report on Form 10-K for the
          fiscal year ended December 31, 1997).

    10.16 Second Agreement to Bridge Securities Purchase Agreement and Related
          Documents, dated as of March 27, 1998, among the Company, Infinity
          Investors Limited, Infinity Emerging Opportunities Limited, Summit
          Capital Limited (as the transferee of Sandera Partners, L.P.) and
          Glacier Capital Limited (as the transferee of Lion Capital Partners,
          L.P.) (Incorporated by reference to Exhibit 10.18 to the Registrant's
          Annual Report on Form 10-K for the fiscal year ended December 31,
          1997).

    10.17 First Amendment to Bridge Securities Purchase Agreement and Related
          Documents, dated as of December 31, 1997, among the Company, Infinity
          Investors Limited, Infinity Emerging Opportunities Limited, Summit
          Capital Limited (as the transferee of Sandera Partners, L.P.) and
          Glacier Capital Limited (as the transferee of Lion Capital Partners,
          L.P.). (Incorporated by reference to Exhibit 99.1 to the Registrant's
          Current Report on Form 8-K filed February 6, 1998).

    10.18 Security Agreement, dated February 6, 1998, between the Company and
          HW Partners, L.P., as agent for and representative of the Funds.
          (Incorporated by reference to Exhibit 99.2 to the Registrant's
          Current Report on Form 8-K filed February 6, 1998).

    10.19 Form of Warrant Certificate. (Incorporated by reference to Exhibit
          99.3 to the Registrant's Current Report on Form 8-K filed February 6,
          1998).

     27   Financial Data Schedule *


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                                                            * Filed herewith

     (b)  Reports on Form 8-K

          The Company did not file any Form 8-Ks during this period.


                                      21
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                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                                     VISUAL EDGE SYSTEMS INC.




                                                     /s/ Earl T. Takefman
                                                     --------------------------
                                                     Earl T. Takefman
November 12, 1998                                    Chief Executive Officer




                                                     /s/ Melissa Forzly
                                                     --------------------------
                                                     Melissa Forzly
November 12, 1998                                    Chief Financial Officer





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