<PAGE>

                       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 March 31, 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 May 11, 1998, the registrant had 7,979,648 shares of common stock and
2,230,000 redeemable warrants outstanding, of which 1,495,000 are publicly
traded.


<PAGE>


                            VISUAL EDGE SYSTEMS INC.

                                TABLE OF CONTENTS

<TABLE>

<S>                                                                               <C>
PART I  FINANCIAL INFORMATION

Item 1. Financial Statements:

        Balance Sheets                                                                 3
         March 31, 1998 and December 31, 1997
        Statements of Operations                                                       4
         Three Months Ended March 31, 1998 and 1997
        Statements of Cash Flows                                                       5
         Three Months Ended March 31, 1998 and 1997
        Statements of Changes in Stockholders' Equity for the Quarter Ended 
         March 31, 1998 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            13-15
         Results of  Operation

PART II OTHER INFORMATION

Item 1. Legal Proceedings                                                             16

Item 2. Changes in Securities                                                      16-17

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

</TABLE>


                                       2

<PAGE>




                            VISUAL EDGE SYSTEMS INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                             March 31, 1998
                                                     December 31, 1997         (unaudited)
                                                     -----------------      ---------------
<S>                                                   <C>                    <C>
Assets
Current Assets:
 Cash and Cash Equivalents                              $     224,429        $    318,171
 Short-Term Investments                                     1,080,000              30,000
 Accounts Receivable                                           23,917              61,228
 Inventory                                                     72,771              94,627
 Prepaid Expenses - Advance Royalties                         350,000             451,600
 Subscription Receivable (Note 3(b))                               --           3,000,000
 Other Current Assets                                         217,225             125,872
                                                        --------------       -------------
  Total Current Assets                                      1,968,342           4,081,498

Fixed Assets, net                                           2,632,826           2,540,201
Non-marketable Securites (Note 3(a))                               --           1,550,000
Intangible Assets, net                                        286,986             255,344
Other Assets                                                      449                 519
Investments-Restricted (Note 3(c))                            812,719             820,307
                                                        --------------       -------------
  Total Assets                                          $   5,701,322        $  9,247,869
                                                        --------------       -------------
                                                        --------------       -------------
Liabilities and Stockholders' Equity  (Deficit)
Current liabilities:
 Accounts Payable                                       $    344,884         $    392,678
 Accrued Expenses                                            173,605              436,493
 Other Current Liabilities                                   121,266              391,069
 Current Maturities of  Equipment Loans                      540,264              540,264
                                                        --------------       -------------
  Total Current Liabilities                                1,180,019            1,760,504
Equipment  Loans                                             661,939              563,067
Convertible Debt                                           4,997,026            1,200,056
                                                        --------------       -------------
  Total Liabilities                                        6,838,984            3,523,627
                                                        --------------       -------------

  Commitments and Contingencies (Notes 4 and 5)

Preferred Stock Pending Redemption 1,550 shares 
  issued and outstanding at March 31, 1998 (Note 3(a))             -            1,550,000
                                                        --------------       -------------

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 March 31, 1998                          $          -       $   4,895,000 

Common Stock, $.01 par value, 20,000,000 shares 
  authorized, 5,316,696 shares issued and outstanding 
  at December 31, 1997 and 7,865,792 issued and 
  outstanding at March 31, 1998                                53,167              78,658 

Additional Paid in Capital                                 12,427,394          14,379,015 
Accumulated Deficit                                       (13,618,223)        (15,178,431)
                                                        --------------       -------------
  Total Stockholders' Equity (Deficit)                     (1,137,662)          4,174,242
                                                        --------------       -------------
 Total Liabilities & Stockholders' Equity (Deficit)      $  5,701,322        $  9,247,869
                                                        --------------       -------------
                                                        --------------       -------------

</TABLE>

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


                                       3


<PAGE>


                               VISUAL EDGE SYSTEMS
                             STATEMENT OF OPERATIONS
                                   (unaudited)


<TABLE>
<CAPTION>


                                                          Three Months Ended
                                                              March 31,
                                                  -----------------------------
                                                        1997          1998
                                                  ------------    -------------
<S>                                               <C>             <C>
Sales                                             $    199,736    $     234,006

Cost of Sales                                          229,117          416,575
                                                  ------------    -------------
Gross Loss                                             (29,381)        (182,569)
                                                  ------------    -------------
Operating Expenses:
 General and Administrative                            559,341          742,585
 Selling and Marketing                                 190,063          292,920
 Financing Fees                                        125,000           55,117
 Non-cash Stock Compensation Expense                   150,125             --
                                                  ------------     ------------
  Total Operating Expenses                           1,024,529        1,090,622
                                                  ------------    -------------
  Operating Loss                                    (1,053,910)      (1,273,191)
                                                  ------------    -------------
Other (Income) Expenses:
  Interest Income                                      (32,176)         (46,385)
  Interest Expense                                       3,705           64,314
  Amortization of Deferred Financing Fees                   --           24,088
                                                  ------------    -------------
   Total Other (Income) Expenses                       (28,471)          42,017
                                                  ------------    -------------
   Net Loss                                         (1,025,439)      (1,315,208)

  Preferred Stock embedded dividend                         --         (245,000)
                                                  ------------    -------------

  Net Loss available to common shareholders       $ (1,025,439)   $  (1,560,208)
                                                  ------------    -------------
                                                  ------------    -------------

  Net Loss per Share, basic and diluted:          $      (0.25)   $       (0.29)
                                                  ------------    -------------
                                                  ------------    -------------
Weighted average common shares outstanding           4,158,333        5,427,807
                                                  ------------    -------------
                                                  ------------    -------------

</TABLE>


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


                                       4

<PAGE>


                            VISUAL EDGE SYSTEMS INC.
                            STATEMENTS OF CASH FLOWS
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                               For the three months ended
                                                                                       March 31,
                                                                               --------------------------
                                                                                  1997            1998
                                                                               -----------    ------------
<S>                                                                            <C>            <C>
Operating activities:
Net loss                                                                       $(1,025,438)   $(1,315,208)
Adjustments to reconcile net loss to net cash used in operating acitivities:
 Extraordinary Item
 Non-cash stock compensation expense                                               150,125           --
 Non-cash financing expenses                                                       125,000         25,117
 Non-cash interest expenses                                                           --           30,937
 Depreciation and amortization                                                      48,615        219,732
 Amortization of deferred financing expenses                                          --           24,088
 Changes in assets and liabilities:
   Increase in accounts receivable                                                 (79,653)       (37,311)
   Increase in other current assets                                                (14,760)        91,353
   Increase in prepaid expense - advance royalties                                (150,000)      (101,600)
   Increase in inventory                                                              (200)       (21,856)
   Increase in other assets                                                           --           (7,658)
   Increase (decrease) in accounts payable                                        (255,138)        47,794
   Increase (decrease) in accrued expenses                                         199,217         12,888
   Increase in other current liabilities                                             9,098        269,803
                                                                               -----------    ------------
     Net cash used in operating activities                                        (993,134)      (761,921)
                                                                               -----------    ------------
Investing activities:
   Capital expenditures                                                           (674,783)       (95,465)
   Purchases of short-term investments                                            (350,000)          --
   Proceeds from the sale of short-term investments                              1,268,844      1,050,000
                                                                               -----------    ------------
     Net cash used in investing activities                                         244,061        954,535
                                                                               -----------    ------------
Financing activities:
   Repayment of borrowings                                                        (617,126)       (98,872)
   Payments of financing costs                                                  (1,250,000)          --
   Proceeds from borrowings                                                      3,346,125           --
                                                                               -----------    ------------
     Net cash provided by financing activities                                   1,478,998        (98,872)
                                                                               -----------    ------------
     Net increase in cash and cash equivalents                                     729,925         93,742
Cash and cash equivalents at beginning of period                                   233,117        224,429
                                                                               -----------    ------------
Cash and cash equivalents at end of period                                     $   963,042    $   318,171
                                                                               -----------    ------------
                                                                               -----------    ------------
Supplemental schedule of cash related activities:
     Cash paid for interest                                                    $     3,705    $    26,933
                                                                               -----------    ------------
                                                                               -----------    ------------

</TABLE>

Supplemental disclosure of non-cash related activities:

- In the first quarter of 1998, the Company, in connection with the Marion
Equity Financing, issued shares of common stock and received payment of
$3,000,000 after March 31, 1998, which payment was recorded as a subscription
receivable on March 31, 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 sold 1,550 shares of redeemable
preferred stock in exchange for non-marketable securities valued at $1,550,000.

- In the first quarter of 1998, the Company issued 39,666 shares of common stock
for payment of dividends on its preferred stock.

- 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.


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


                                       5

<PAGE>


                            VISUAL EDGE SYSTEMS INC.
                  STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
    For the Year Ended December 31, 1997 and the Quarter Ended March 31, 1998

<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                    --            --        245,000              --        (245,000)           --

Common stock issued in connection 
  with the Marion equity financing           2,400,000         24,000            --        2,726,000              --     2,750,000

Common stock issued in connection with 
  the June convertible financing amendment     100,000          1,000            --           (1,000)             --            --

Issuance of common stock for payment 
  of interest on preferred stock                39,666            397            --             (397)             --            (0)

Issuance of common stock for payment 
  of interest on convertible debt                9,430             94            --           30,843              --        30,937

Warrants issued in connection with 
  the June convertible financing amendment          --             --            --           25,117              --        25,117

Net loss 1st Qtr 1998                               --             --            --               --      (1,315,208)   (1,315,208)
                                             ----------       -------    -----------     -----------    ------------  ------------
Balance at March 31,1998                      7,865,792       $78,658    $ 4,895,000     $14,379,015    $(15,178,431) $  4,174,242
                                             ----------       -------    -----------     -----------    ------------  ------------
                                             ----------       -------    -----------     -----------    ------------  ------------

</TABLE>


                                       6
<PAGE>


                            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 accruals) 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 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.


(2) Recent Accounting Pronouncements

    In June 1997, the FASB issued 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 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.

    The Company adopted SFAS No. 128 "Earnings Per Share" during 1997. SFAS No.
    128 establishes standards for computing and presenting basic and diluted
    earnings per share. Basic earnings per share is calculated by dividing
    income(loss) available to Common Stockholders by the weighted average number
    of shares of Common Stock outstanding during each period. Diluted earnings
    per share includes the potential impact of dilutive common share equivalents
    using the treasury stock method. Convertible securities and common share
    equivalents have not been included in the computation of diluted loss per
    share in the accompanying statements of 


                                       7


<PAGE>


                            VISUAL EDGE SYSTEMS INC.

                          Notes to Financial Statements
                                    Unaudited
                                   (Continued)

    operations as their impact is antidilutive. As of March 31, 1998, the
    Company had 948,419 options and 2,230,000 warrants outstanding.

(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 first quarter of 1998 the
    Company issued an aggregate of 9,430 shares of the Company's common stock
    for payment of interest due of $30,937.

    On February 6, 1998, $6 million principal amount of outstanding Notes was
    converted into 6,000 shares of the Company's preferred stock (the "First
    Amendment"). The Preferred Stock has a liquidation preference of $1,000 per
    share and is senior to the Company's common stock (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 quarter of 1998 the Company issued an
    aggregate of 37,717 shares of the Common Stock for payment of dividends due
    on the Preferred Stock of $123,750. 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 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 feature 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 held by the Funds have
    become secured debt pursuant to a Security Agreement, dated as of 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.


                                       8


<PAGE>


                            VISUAL EDGE SYSTEMS INC.

                          Notes to Financial Statements
                                    Unaudited
                                   (Continued)


    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 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
    quarter of 1998 the Company issued an aggregate of 1,949 shares of Common
    Stock for payment of dividends due of $6,394. 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. The redeemed Preferred Stock
    is included on the March 31, 1998 balance sheet as Preferred Stock pending
    redemption.

    As a condition to the consummation of the Marion Equity Financing (see Note
    3(c)), 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 as follows: (i) up to $2,500,000
    principal amount may be redeemed on or before April 30, 1998; (ii) an
    additional $2,500,000 principal amount may be redeemed on or before May 31,
    1998; and (iii) an additional $2,500,000 principal amount may be redeemed
    from and after June 1, 1998. If the date that the Company redeems such
    Preferred Stock and Notes is on or before June 30, 1998, the redemption
    price will be 80% of the principal amount 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 are 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 shall increase 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.

    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.
    Further, the exercise price of the warrants issued in June 1997 with 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 Company recorded a non-cash
    financing fee of $25,117 in connection 


                                       9


<PAGE>


                            VISUAL EDGE SYSTEMS INC.

                          Notes to Financial Statements
                                    Unaudited
                                  (Continued)


    with the repricing of the warrants issued in December 1997. 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").
    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 and is recorded as a
    subscription receivable in the accompanying March 31, 1998 balance sheet;
    (ii) on or prior to June 14, 1998, the Company will sell 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 shall 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 is contingent on Marion's
    satisfaction that the Company has met or exceeded the financial targets
    expected by Marion, in its sole discretion. The Company has agreed to use
    the $6,000,000 in proceeds from the third tranche to redeem the Notes and
    Preferred Stock issued in the June Financing. The Company will pay
    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 issuance and
    sale of 1,400,000 shares of Common Stock in the first tranche and all of the
    shares to be issued in the second tranche to Marion, is subject to approval
    by the Company's stockholders.

    Further, upon the consummation of the second tranche of the Marion
    Agreement, Mr. Alan Lubell, Chairman of the Board of the Company, has agreed
    to transfer to Marion 250,000 shares of Common Stock, which shares were
    registered under the Securities Act of 1933, as amended effective April 15,
    1998.

    In addition, if the third tranche of the aforementioned financing is
    completed, then until March 30, 2001, the Company is required to obtain the
    prior written consent of Marion before the consummation of any additional
    financing transaction except for any credit facilities or lines of credit
    with lenders or equipment financing arrangements. Further, the Company may
    not redeem the warrants issued in the initial public offering (the "IPO
    Warrants") 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 by
    September 1998. The facility provides the Company with equipment financing
    of $100,000 for 25 vans, each of 

                                       10


<PAGE>



                            VISUAL EDGE SYSTEMS INC.

                          Notes to Financial Statements
                                    Unaudited
                                   (Continued)


    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 March 31, 1998 balance sheet.

    The Company acquired certain fixed assets under leases totaling $913,170,
    which are accounted for as capital leases. 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 $620,307 as security,
    which is included in "Investments-Restricted" in the accompanying March 31,
    1998 balance sheet.

(4) Employment Agreements

    The Company currently has employment agreements with three executive
    employees which expire on December 31, 2000 which provide for aggregate
    minimum annual compensation of approximately $463,750 in 1998, $540,000 in
    1999, and $600,000 in 2000. 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 the Company's 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 the Company's 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
    June 30, 1997 $300,000 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.


                                       11


<PAGE>



                            VISUAL EDGE SYSTEMS INC.

                          Notes to Financial Statements
                                    Unaudited
                                   (Continued)



    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.

(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 three months ended March
    31, 1997 and 1998 would have increased to $1,480,463 and $.36 and $1,366,696
    and $.25, respectively.


                                       12


<PAGE>


                            VISUAL EDGE SYSTEMS INC.


Item 2. Management's Discussion and Analysis or Plan of Operations

    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 on a
    prearranged basis to 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. To implement its marketing and
    business strategy, the Company has already developed 15 mobile One-on-One
    vans equipped with video and personal computer equipment to market, promote
    and produce the Company's products. The Company intends to position its
    One-on-One vans in selected geographic areas that will service golf courses
    and driving ranges throughout the United States, and has initially placed
    its first 15 vans in Arizona, California, Florida, Georgia, Illinois,
    Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, Ohio,
    Pennsylvania and Texas, and is in the process of developing additional vans.
    In addition, to further implement its marketing and sales efforts, the
    Company has enlisted independent sales representatives who cater to the
    premium and incentive industries across the country to present the Company's
    products to their clients who seek incentives and premiums. These premium
    sales representatives will be positioning the Company's products as premiums
    or incentives similar to the Cadillac Agreement, which is described below.

    The Company entered into an agreement with Cadillac Motor Car Division of
    General Motors on August 5, 1997 (the "Cadillac Agreement"). The Cadillac
    Agreement granted Cadillac the exclusive U.S. dealership showroom rights to
    the Company's One-on-One with Greg Norman concept and allowed Cadillac to
    exclusively offer its customers a free video golf lesson personally analyzed
    by Greg Norman if they test drive a Cadillac. Pursuant to the Cadillac


                                       13


<PAGE>


    Agreement the Company provides each participating Cadillac dealership with
    all marketing materials related to this promotion, including creative pieces
    for print and radio advertisements, banners, posters and direct mail
    invitations. In December 1997, the Company and Cadillac amended the Cadillac
    Agreement and extended the dealership showroom rights granted exclusively to
    Cadillac to other dealers of General Motors.

Results of Operations For the three months ended March 31, 1998 ("Q1-98") as
compared to the three months ended March 31, 1997 ("Q1-97").

    Sales for Q1-98 increased 17% to $234,006, as compared to $199,736 for
    Q1-97. During the quarter ended December 31, 1997, the Company changed its
    method of accounting for non-refundable deposits from customers. For
    quarters prior to the fourth quarter of 1997, the Company recorded advance
    deposits from customers as revenue. Beginning in the fourth quarter of 1997,
    advance deposits from customers were deferred 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. The Company, in Q1-97
    recorded non-refundable deposits from customers as sales. In Q1-98 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 Q1-98 are $234,006, as compared to $90,237 in
    Q1-97, a 159% increase.

    For Q1-98 the Company had a gross loss of $182,569, as compared to a gross
    loss of $29,381 for Q1-97. The increase in the Company's gross loss is
    attributable to the increased number of vans. The Company had 15 vans in
    service in the first quarter of 1998, as compared to 7 for a portion of the
    first quarter of 1997. In Q1-98 cost of sales include a depreciation expense
    for the vans of $120,533. There was no van depreciation recorded in Q1-97.
    In addition, the Company incurred significant training costs in Q1-98
    associated with the hiring of additional personnel for the anticipated
    increase in sales in the second and third quarter of 1998. Under the new
    sales policy regarding non-refundable deposits from customers, gross loss in
    Q1-97 would have been $138,880, as compared to $182,569, in Q1-98.

    Operating expenses for Q1-98 increased 6% to $1,090,622, as compared to
    $1,024,529 for Q1-97. The increase in operating expenses for Q1-98, as
    compared to Q1-97, is attributable to depreciation expense, which totaled
    $67,557 for Q1-98, as compared to $30,615 for Q1-97, and amortization
    expense of $46,551 for Q1-98, as compared to $18,000 for Q1-97.
    Additionally, in Q1-98, in compliance with SFAS 123 "Accounting for
    Stock-Based Compensation," the Company recorded a non-cash financing fee
    expense of $25,117 related to the repricing of the warrants issued to the
    Preferred Stockholder in December 1997.

    The Company earned $46,385 in interest income for the three month period
    ending March 31, 1998, as compared to $32,176 for the three month period
    ending March 31, 1997. Interest expense for the three month period ending
    March 31, 1998 was $64,314, as compared to $3,705 for the three month period
    ending March 31, 1997. The increase in interest expense is primarily due to
    the equipment financings.

Liquidity and Capital Resources

    On March 31, 1998, the Company had cash and cash equivalents of $318,171,
    unrestricted short-term investments of $30,000 and working capital of
    $2,320,994, as compared to cash and 


                                       14


<PAGE>


    cash equivalents of $224.429, unrestricted short-term investments of
    $1,080,000 and working capital of $788,323 at December 31, 1997. Net cash
    used in operating activities for Q1-98 was $761,921, which was used to fund
    the Company's losses. Net cash provided by investing activities was $954,535
    and $98,872 was used in financing activities for a total increase in cash
    and cash equivalents of $93,742. Net cash used in operating activities for
    Q1-97 was $993,134. Net cash provided by investing and financing activities
    in Q1-97 was $244,061 and $1,478,998, respectively, for a total increase in
    cash and cash equivalents in Q1-97 of $729,925.

    On March 31, 1998, the Company had stockholders' equity of $4,174,242, as
    compared to a stockholders' deficit of $1,137,662 at December 31, 1997. If
    the second and third tranches of the Marion Equity Financing had occurred
    prior to March 31, 1998, the Company's stockholders' equity, on a pro forma
    basis, would have increased by approximately $2,239,955 for a total
    stockholders' equity of $6,414,197.

    Based on the recently completed securities purchase agreement for additional
    financing as detailed more fully in Note 3(b), the Company anticipates that
    its current capital resources, when combined with anticipated cash flows
    from operations, will be sufficient to satisfy the Company's contemplated
    working capital requirements until the end of the fiscal year.

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.


                                       15


<PAGE>


                            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

    The following is a description of all sales of unregistered securities by
    the Company during the quarterly period ended March 31, 1998. All of such
    sales were private placements made in reliance upon the exemption provided
    by Section 4(2) of the Securities Act of 1933, as amended, and no
    underwriters were involved in such placements.

    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 the
    following securities pursuant to the Securities Purchase Agreement, dated as
    of June 13, 1997 (the "Agreement"), among the Company and the Funds: (i)
    8.25% unsecured convertible notes (the "Notes") in the aggregate principal
    amount of $7,500,000 with a maturity date of three years from the date of
    issuance, subject to the mandatory automatic exchange of $5 million of the
    Notes for Preferred Stock, par value $.01 per share, which Notes are
    convertible into shares of Common Stock at any time and from time to time
    commencing January 1, 1998 at the option of the holder thereof subject to
    certain limitations on conversion set forth in the Agreement; (ii) 93,677
    shares of Common Stock subject to adjustment; and (iii) five-year warrants
    (the "June Warrants") to purchase 100,000 shares of Common Stock at an
    exercise price equal to $10.675.

    Interest payments on the Notes are, at the option of the Company, payable in
    cash or in shares of Common Stock. On March 31, 1998, 9,430 additional
    shares became issuable as interest for the quarter then ended.

    Dividends on the Preferred Stock are, at the option of the Company payable
    in cash or shares of the Company's Common Stock. On March 31, 1998, 37,717
    additional shares became issuable as dividends for the quarter then ended.

    The Company has issued to the Funds an aggregate of 200,000 warrants (the
    "New Warrants"), each to purchase one share of Common Stock at an exercise
    price equal to $4.00 per share. The New Warrants are exercisable through
    December 2002 and are redeemable at the option of the Company, commencing
    January 1, 2000, based on a 20-day minimum closing bid price of Common
    Stock, at a redemption price equal to $.10 per share.

    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 value of $1,550,000. In connection therewith, the Funds as
    the holders of the majority of the outstanding Preferred Stock obtained the


                                       16


<PAGE>


    right to appoint one director to the Company's Board of Directors, through
    they had not named such director as of April 8, 1998.

    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 (collectively, the "New Shares") 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. Further, the exercise price of the June
    Warrants has been reduced from $10.675 per share to $3.25 per share and the
    exercise price of the New Warrants has been reduced from $4.00 per share to
    $3.25 per share.

    In March 1998, the Company entered into a Purchase Agreement (the "Marion
    Agreement") with Marion Interglobal, Ltd., an investment group ("Marion").
    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; (ii) on or prior to June 14, 1998, the Company will sell 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 shall
    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 is
    contingent on Marion's satisfaction that the Company has met or exceeded the
    financial targets expected by Marion, in its sole discretion. The Company
    has agreed to use the $6,000,000 in proceeds from the third tranche to
    redeem the Notes and Preferred Stock issued in the June Financing. The
    Company will pay 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 issuance and sale of 1,400,000 shares of Common Stock in the
    first tranche and all of the shares to be issued in the second tranche to
    Marion, is subject to approval by the Company's stockholders.

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>


Exhibits and Reports on Form 8-K

<TABLE>
    <S>  <C>
    (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)

</TABLE>


                                       18


<PAGE>


<TABLE>
   <S>   <C>
   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 (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 January 1, 1996, between Alan Lubell
         and the Company (Incorporated by reference to Exhibit 10.4 to the
         Registrant's Registration Statement on Form SB-2 (Registration No.
         333-5193) effective July 24, 1996)

   10.5  Employment Agreement, dated as of May 1, 1996, between Thomas S. Peters
         and the Company (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)

   10.6  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)

   10.7  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)

   10.8  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)

   10.9  Employment Agreement, dated as of June 1, 1996, between the Company and
         Richard Parker (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)

  10.10  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)

  10.11  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)

</TABLE>


                                       19


<PAGE>


<TABLE>
  <S>    <C>
  10.12  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)

  10.13  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)

  10.14  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)

  10.15  Guarantee and Agreement, dated as of August 5, 1997, between the
         Company and Cadillac Motor Car Division of General Motors Corporation
         (Incorporated by reference to Exhibit 10.1 to amendment No. 1 to the
         Registrant's Registration Statement on Form S-3 (Registration No.
         333-32247) filed August 12, 1997)

  10.16  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).

  10.17  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).

  10.18  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).

  10.19  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).


                                       20


<PAGE>

  <S>    <C>
  10.20  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).

  10.21  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 *

         * Filed herewith

</TABLE>

    (b)  Reports on Form 8-K

         The Company filed a Form 8-K on February 9, 1998 under Item 5.


                                       21


<PAGE>


                                   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
May 12, 1997                Chief Executive Officer



                            /s/ Melissa Forzly
                            -----------------------
                            Melissa Forzly
May 12, 1997                Chief Financial Officer



                                       22