<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 June 30, 1999

                                       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 August 11, 1999, the registrant had 10,398,440 shares of common
stock and 1,930,000 redeemable warrants outstanding, of which 1,495,000 are
publicly traded.


<PAGE>   2


                            VISUAL EDGE SYSTEMS INC.

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                 <C>
PART I   FINANCIAL INFORMATION

ITEM 1.  Financial Statements:

         Balance Sheets                                                              3
           June 30, 1999 (unaudited) and December 31, 1998

         Statements of Operations                                                    4
           Three and Six Months Ended June 30, 1999 and 1998 (unaudited)

         Statements of Cash Flows                                                    5
           Six Months Ended June 30, 1999 and 1998 (unaudited)

         Statements of Stockholders' Equity for the Six Months                       6
           Ended June 30, 1999 (unaudited) and the Year Ended December 31, 1998

         Notes to Financial Statements                                               7

ITEM 2.  Management's Discussion and Analysis of Financial Condition and            9-13
           Results of Operations

PART II  OTHER INFORMATION

ITEM 1.  Legal Proceedings                                                          14

ITEM 2.  Changes in Securities                                                      14

ITEM 3.  Defaults Upon Senior Securities                                            14

ITEM 4.  Submission to Matters to a Vote of Security Holders                        14

ITEM 5.  Other Information                                                          14

ITEM 6.  Exhibits and Reports on Form 8-K                                          15-17

         Signatures                                                                 18


</TABLE>


                                       2
<PAGE>   3



                            VISUAL EDGE SYSTEMS INC.
                                 BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                               December 31, 1998    June 30, 1999
                                                                               -----------------    ------------
                                                                                                      (unaudited)
<S>                                                                               <C>               <C>
                                   Assets
Current Assets:
  Cash and Cash Equivalents                                                       $    244,346      $     20,890
  Certificates of Deposit                                                            1,750,000           825,000
  Investments-Restricted                                                                    --           396,431
  Accounts Receivable                                                                   26,893            66,381
  Inventory                                                                            103,142           108,433
  Prepaid Expenses - Advance Royalties                                                 220,577           224,142
  Other Current Assets                                                                 107,345           125,976
                                                                                  ------------      ------------
          Total Current Assets                                                       2,452,303         1,767,253

Fixed Assets, net                                                                    2,248,514         1,828,508
Intangible Assets, net                                                                 167,777           111,851
Investments-Restricted                                                                 587,108            39,540
Prepaid Expenses - Advance Royalties                                                   680,157           621,407
                                                                                  ------------      ------------
          Total Assets                                                            $  6,135,859      $  4,368,559
                                                                                  ============      ============

                     Liabilities and Stockholders' Equity

Current Liabilities:
  Accounts Payable                                                                $    201,617      $    122,696
  Accrued Expenses                                                                     167,795            99,121
  Other Current Liabilities                                                            218,259           308,339
  Current Maturities of Equipment Loans                                                595,084           485,651
                                                                                  ------------      ------------
          Total Current Liabilities                                                  1,182,755         1,015,807
Equipment Loans                                                                        149,951                --
Convertible Debt                                                                     1,253,273         1,329,322
                                                                                  ------------      ------------
          Total Liabilities                                                          2,585,979         2,345,129
                                                                                  ------------      ------------

                      Commitments and Contingencies (Note 3)

Stockholders' Equity:
Preferred Stock, $.01 par value, 5,000,000 shares authorized: Series A-2
convertible, 6,000 shares issued and outstanding at December 31, 1998
and June 30, 1999                                                                    6,000,000         6,000,000
Common Stock, $.01 par value, 20,000,000 shares authorized, 10,378,440 shares
issued and outstanding at December 31, 1998 and 10,398,440 issued and
outstanding at June 30, 1999 (unaudited)                                               103,784           103,984
Additional Paid in Capital                                                          17,748,379        17,765,679
Accumulated Deficit                                                                (20,302,283)      (21,846,233)
                                                                                  ------------      ------------
          Total Stockholders' Equity                                                 3,549,880         2,023,430
                                                                                  ------------      ------------
               Total Liabilities & Stockholders' Equity                           $  6,135,859      $  4,368,559
                                                                                  ============      ============

</TABLE>


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



                                       3
<PAGE>   4

                            Visual Edge Systems Inc.
                            Statements of Operations
                                   (unaudited)

<TABLE>
<CAPTION>
                                                       For the three months ended         For the six months ended
                                                                June 30,                          June 30,
                                                     -----------------------------      -----------------------------
                                                         1998              1999             1998             1999
                                                     -----------      ------------      -----------      ------------
<S>                                                  <C>              <C>               <C>              <C>
Sales                                                $ 1,047,145      $    916,904      $ 1,281,150      $  1,237,301

Cost of Sales                                            615,435           612,420        1,032,009         1,091,797
                                                     -----------      ------------      -----------      ------------

Gross Profit                                             431,710           304,484          249,141           145,504
                                                     -----------      ------------      -----------      ------------

Operating Expenses:
  General and Administrative                             729,773           638,541        1,527,475         1,250,016
  Selling and Marketing                                  287,166            94,288          580,087           274,739
                                                     -----------      ------------      -----------      ------------
                    Total Operating Expenses           1,016,939           732,829        2,107,562         1,524,755
                                                     -----------      ------------      -----------      ------------
                    Operating Loss                      (585,229)         (428,345)      (1,858,421)       (1,379,251)
                                                     -----------      ------------      -----------      ------------


Other Income (Expenses):
  Interest Income                                         11,561             6,945           57,946            42,394
  Interest Expense                                       (71,275)          (48,585)        (135,588)         (101,224)
  Amortization of Deferred Financing Fees                (25,638)          (53,630)         (49,726)         (105,869)
                                                     -----------      ------------      -----------      ------------
                    Total Other Income (Expenses)        (85,352)          (95,270)        (127,368)         (164,699)
                                                     -----------      ------------      -----------      ------------
                    Net Loss                            (670,581)         (523,615)      (1,985,789)       (1,543,950)

Preferred Stock dividend                                (623,957)               --         (875,351)               --
                                                     -----------      ------------      -----------      ------------
Net Loss to common stockholders                      $(1,294,538)     $   (523,615)     $(2,861,140)     $ (1,543,950)
                                                     ===========      ============      ===========      ============

Net Loss per Share, basic and diluted:               $     (0.16)     $      (0.05)     $     (0.43)     $      (0.15)
                                                     ===========      ============      ===========      ============

Weighted average common shares outstanding             7,881,229        10,398,440        6,661,296        10,396,893
                                                     ===========      ============      ===========      ============

</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 six months ended
                                                                                           June 30,
                                                                                ----------------------------
                                                                                   1998               1999
                                                                                -----------      -----------
<S>                                                                             <C>              <C>
Operating activities:
Net loss                                                                        $(1,985,789)     $(1,543,950)
                                                                                -----------      -----------
Adjustments to reconcile net loss to net cash used in operating activities:
       Non-cash stock compensation expense                                               --           17,500
       Non-cash stock financing fees                                                 25,117               --
       Non-cash interest expenses                                                    62,219               --
       Depreciation and amortization                                                477,112          445,192
       Amortization of deferred financing expenses                                   49,726          105,869
       Changes in assets and liabilities:
            Increase in accounts receivable                                        (169,877)         (39,488)
            (Increase) decrease in other current assets                              19,310          (18,631)
            (Increase) decrease in prepaid expense - advance royalties             (176,600)          55,185
            Increase in inventory                                                   (70,853)          (5,291)
            (Increase) decrease in restricted investments                           (10,439)         151,137
            Decrease in accounts payable                                           (107,074)         (78,921)
            Decrease in accrued expenses                                           (138,222)         (68,674)
            Increase in other current liabilities                                   365,209           90,080
                                                                                -----------      -----------
                 Net cash used in operating activities                           (1,660,161)        (889,992)
                                                                                -----------      -----------

Investing activities:
       Capital expenditures                                                        (243,942)         (20,405)
       Purchases of short-term investments                                       (1,750,000)              --
       Proceeds from the sale of assets                                                  --           51,145
       Proceeds from the sale of short-term investments                           1,080,000          925,000
                                                                                -----------      -----------
                 Net cash provided by (used in) investing activities               (913,942)         955,740
                                                                                -----------      -----------

Financing activities:
       Proceeds from the issuance of common stock                                 4,750,000               --
       Repayment of borrowings                                                     (254,145)        (289,204)
       Payments of financing costs                                                  (31,221)              --
                                                                                -----------      -----------
                 Net cash provided by (used in) in financing activities           4,464,634         (289,204)
                                                                                -----------      -----------
                 Net change in cash and cash equivalents                          1,890,531         (223,456)
Cash and cash equivalents at beginning of period                                    224,429          244,346
                                                                                -----------      -----------
Cash and cash equivalents at end of period                                      $ 2,114,960      $    20,890
                                                                                ===========      ===========

Supplemental disclosure of cash flow information:
       Cash paid for interest                                                   $    73,369      $    48,585
                                                                                ===========      ===========


</TABLE>


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



                                       5
<PAGE>   6

                            VISUAL EDGE SYSTEMS INC.
                       STATEMENTS OF STOCKHOLDERS' EQUITY
                  For the Year Ended December 31, 1998 and the
                 Three Months Ended March 31, 1999 (unaudited)

<TABLE>
<CAPTION>

                                                                           Common Stock                             Additional
                                                                     ------------------------      Preferred         Paid-in
                                                                        Shares        Amount         Stock           Capital
                                                                     ----------      --------     -----------      ------------
<S>                                                                  <C>            <C>          <C>              <C>
Balance at December 31, 1997                                         5,316,696      $ 53,167     $        --      $ 12,427,394

Preferred stock Series A convertible issued in
  connection with the Infinity financing                                    --            --       6,000,000        (2,178,942)
Cancellation of Series A convertible Preferred stock issued in
  connection with the Infinity financing                                    --            --      (6,000,000)        6,000,000
Series A-2 convertible Preferred stock issued in connection
  with the Infinity financing                                               --            --       6,000,000        (6,000,000)
Preferred stock embedded dividend                                           --            --              --         1,350,000
Sale of preferred stock in connection with
  the Infinity financing                                                    --            --       1,550,000                --
Redemption of preferred stock in connection with the
  Infinity financing                                                        --            --      (1,550,000)               --
Issuance of common stock for payment of dividends on
  preferred stock                                                      302,755         3,028              --           484,240
Issuance of common stock for payment of interest
  on convertible debt                                                   80,989           809              --           123,972
Common stock and warrants issued in connection with the
  Infinity financing amendments                                        350,000         3,500              --           260,909
Common stock issued in connection with the Marion
  equity financing                                                   4,010,000        40,100              --         4,678,678
Common stock and warrants issued in connection with the
  Greg Norman agreement                                                272,000         2,720              --           290,088
Issuance of common stock for payment of prepaid royalties               30,000           300              --           299,700
Exercise of options                                                     16,000           160              --            12,340
Net loss                                                                    --            --              --                --
                                                                   -----------      --------     -----------      ------------
Balance at December 31, 1998                                        10,378,440       103,784       6,000,000        17,748,379


Common stock issued for services                                        20,000           200              --            17,300
Net loss for through June 30, 1999
                                                                   -----------      --------     -----------      ------------
Balance at June 30, 1999                                            10,398,440      $103,984     $ 6,000,000      $ 17,765,679
                                                                   ===========      ========     ===========      ============


</TABLE>

<TABLE>
<CAPTION>
                                                                    Accumulated
                                                                      Deficit           Total
                                                                    ------------      -----------
<S>                                                                <C>               <C>
Balance at December 31, 1997                                       $(13,618,223)     $(1,137,662)

Preferred stock Series A convertible issued in
  connection with the Infinity financing                                     --        3,821,058
Cancellation of Series A convertible Preferred stock issued in
  connection with the Infinity financing                                     --               --
Series A-2 convertible Preferred stock issued in connection
  with the Infinity financing                                                --               --
Preferred stock embedded dividend                                    (1,350,000)              --
Sale of preferred stock in connection with
  the Infinity financing                                                     --        1,550,000
Redemption of preferred stock in connection with the
  Infinity financing                                                         --       (1,550,000)
Issuance of common stock for payment of dividends on
  preferred stock                                                      (487,268)              --
Issuance of common stock for payment of interest
  on convertible debt                                                        --          124,781
Common stock and warrants issued in connection with the
  Infinity financing amendments                                              --          264,409
Common stock issued in connection with the Marion
  equity financing                                                           --        4,718,778
Common stock and warrants issued in connection with the
  Greg Norman agreement                                                      --          292,808
Issuance of common stock for payment of prepaid royalties                    --          300,000
Exercise of options                                                          --           12,500
Net loss                                                             (4,846,792)      (4,846,792)
                                                                   ------------      -----------
Balance at December 31, 1998                                        (20,302,283)       3,549,880


Common stock issued for services                                             --           17,500
Net loss for through June 30, 1999                                   (1,543,950)      (1,543,950)
                                                                   ------------      -----------
Balance at June 30, 1999                                           $(21,846,233)     $ 2,023,430
                                                                   ============      ===========


</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 financial statements included herein have been prepared by
                  Visual Edge Systems Inc. (the "Company") without audit,
                  pursuant to the rules and regulations of the Securities and
                  Exchange Commission. Certain information and footnote
                  disclosures normally included in financial statements prepared
                  in accordance with generally accepted accounting principles
                  have been condensed or omitted pursuant to such rules and
                  regulations. In the opinion of management, the accompanying
                  unaudited financial statements include all necessary
                  adjustments (consisting only of normal recurring adjustments)
                  necessary to present fairly the financial position, results of
                  operations and cash flows of the Company. The results of
                  operations and cash flows for the three and six month periods
                  ended June 30, 1999, are not necessarily indicative of the
                  results of operations or cash flows that may be reported for
                  the year ended December 31, 1999. The unaudited financial
                  statements included herein should be read in conjunction with
                  the audited financial statements and the notes thereto
                  included in the Company's Form 10-KSB/A for the year ended
                  December 31, 1998.

(2)      RECLASSIFICATIONS

                  Certain 1998 balances have been reclassified to conform to the
                  1999 presentation.

(3)      COMMITMENTS AND CONTINGENCIES

         (a)      NASDAQ DELISTING

                  On March 1, 1999, the minimum bid price of the Company's
                  shares had been less than $1.00 per share for thirty
                  consecutive business days and in accordance with Nasdaq's
                  listing requirements, the Company received notice from Nasdaq
                  regarding the minimum bid price of the Company's shares. The
                  Company did not achieve compliance with Nasdaq's rules and was
                  delisted on July 16, 1999.

         (b)      NEED FOR ADDITIONAL FINANCING

                  As a result of the Company's continuing losses, the low market
                  price of its Common Stock, and its recent delisting, the
                  Company believes that it will be very difficult, if not
                  impossible, for it to raise additional capital in the future.
                  As of July 23, 1999, the Company had a total of cash and cash
                  equivalents and certificates of deposit of approximately
                  $911,000. Management believes that projected 1999 revenues,
                  when combined with planned cost savings and existing financial
                  resources should be sufficient to fund operations through the
                  end of 1999. If the Company is unable to become profitable in
                  the near future or raise new funds, it will exhaust its cash
                  resources and will be unable to continue in business.




                                       7
<PAGE>   8

         (c)      SUBSEQUENT EVENTS

                  DISPUTE WITH PREFERRED SHAREHOLDERS

                  On August 2, 1999, the Company's Preferred Shareholders
                  commenced an action against the Company and three of its
                  officers and directors. The action sought a temporary
                  restraining order and a permanent injunction in order to
                  prevent the three officers and directors from taking certain
                  actions that the Preferred Shareholders believed would be
                  damaging to the Company. On August 4, 1999, the parties
                  entered into a stipulation and agreement pursuant to which the
                  Company agreed not to take certain actions without obtaining
                  either court approval or, in certain cases, giving prior
                  notice to the Preferred Shareholders. Based on the Preferred
                  Shareholders' complaint, the Company understands that the
                  Preferred Shareholders believe that an Event of Default has
                  occurred under their securities purchase agreement with the
                  Company and that they intend to convert their outstanding
                  shares of Preferred Stock and convertible notes into shares of
                  the Company's Common stock, and following such conversion,
                  obtain control of the Board of Directors and management of the
                  Company. The Company does not believe that the Event of
                  Default is valid and intends to vigorously oppose the
                  conversion of the Preferred Shareholders' shares into Common
                  stock. If the Event of Default is valid, it would
                  significantly affect the conversion price at which the
                  Preferred Shareholders would be able to convert their stock
                  into Common stock and could result in the issuance of
                  approximately 37 million additional Common shares.

                  LITIGATION AGAINST GREG NORMAN

                  On August 11, 1999, the Company filed a Complaint and Demand
                  for a Jury Trial with the United States District Court,
                  Southern District, West Palm Beach Division, against Greg
                  Norman, Great White Shark Enterprises Inc., Greg Norman
                  Interactive LLC, and LibertyOne Limited for breach of
                  contract, unfair and deceptive trade practices, unjust
                  enrichment and trademark infringement. The action claims,
                  amongst other claims, that (a) Norman violated his implied
                  covenant of good faith and fair dealing by purposefully
                  attempting to obstruct the Company's business, (b) failed to
                  use his best efforts to perform the personal services required
                  by him, (c) failed to actively provide his endorsement of the
                  Company, and (d) purposely violated the Company's trademarks
                  by launching a confusingly similar Web site, SHARK.COM. Since
                  1996, the Company has paid Norman $1.3 million plus an equity
                  interest of approximately 6% of the Company's outstanding
                  Common stock. The Company's management believes that the
                  Company has suffered damages in excess of $10 million as a
                  result of the multiple breaches by Norman. As a result of the
                  breaches, the Company has not recently paid any new royalties
                  to Norman and as such has received a Notice of Default from
                  Great White Shark Enterprises Inc., which could result in
                  termination of the licensing agreement, if not cured within
                  the delays specified in the agreement with Greg Norman. The
                  Company is also seeking a temporary restraining order and
                  injunction preventing Norman from using the SHARK.COM Web site
                  domain name.




                                       8
<PAGE>   9

                            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's marketing strategy is to sell ONE-ON-ONE
                  videotapes 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 built 17 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. The vans travel to golf courses and corporate events
                  to film participants and produce the ONE-ON-ONE lessons
                  on-site. Additionally, in the first quarter of 1999, the
                  Company signed an agreement and launched the ONE-ON-ONE
                  concept in the United Kingdom,




                                       9
<PAGE>   10

                  which guarantees the Company royalty income over the next
                  three years. In the first six months of 1999, approximately
                  89% of the Company's revenue was derived from van service, 10%
                  was related to the United Kingdom and Canadian royalties, and
                  1% was related to the videotaping centers. An infomercial was
                  completed and tested in several markets where it was
                  unsuccessful.

         OPERATING MARGINS AND OVERHEAD STRUCTURE

                  Approximately 25% of the cost of sales are variable costs
                  related to making the sale. These costs include the cost of
                  the videotapes, royalties to Greg Norman and salesmen's
                  commissions. The remaining 75% of each sales dollar is
                  contributed to the Company's fixed operating costs which
                  includes operator salaries, vehicle storage and van
                  depreciation and the Company's fixed overhead expenses. As
                  soon as the Company achieves sales levels sufficient to offset
                  its fixed operating costs, the Company believes that 75% of
                  each sales dollar will result in income before taxes. The
                  Company believes that sales of $6,500,000 to $7,000,000 are
                  needed before it may be able to generate profits. Management
                  believes that the Company will not achieve these sales levels
                  in 1999 and no assurance can be given that the Company will
                  ever achieve such sales levels or that the variable costs will
                  remain constant as a percent of sales or that the Company will
                  not incur additional fixed costs.

         RESULTS OF OPERATIONS

         For the three months ended June 30, 1999 ("Q2-99") as compared to the
         three months ended June 30, 1998 ("Q2-98") and for the six months ended
         June 30, 1999 ("Y2-99") as compared to the six months ended June 30,
         1998 ("Y2-98").

                  Sales for Q2-99 decreased 12% to $916,904, as compared to
                  $1,047,145 for Q2-98 and sales for Y2-99 decreased 3% to
                  $1,237,301, as compared to $1,281,150 for Y2-98. The decrease
                  in sales in 1999, as compared to 1998 is primarily due to a
                  shift in the seasonality of the Company's sales, in the past,
                  the second quarter sales were the highest of all quarters but
                  in 1999, the Company's bookings for sales appear to be higher
                  for the third quarter. The cost of sales for Q2-99 as compared
                  to Q2-98 was unchanged and the cost of sales for Y2-99 as
                  compared to Y2-98 increased 6%. The increase in the cost of
                  sales is primarily attributable to the increase in
                  commissions. In accordance with the Company's cost reduction
                  strategy, the Company's sales force in Q2-99 was paid a higher
                  commission in lieu of salary, while in Q2-98 the commission
                  rates were lower but accompanied by a salary. In addition,
                  there was an increase in the royalties to Greg Norman as a
                  result of the new agreement. The increases in the expenses are
                  all directly related to sales. These increases were partially
                  offset by a reduction in operator salaries related to
                  videotape production.

                  The Company's gross profit decreased 29% to $304,484 for
                  Q2-99, as compared to $431,710 for Q2-98 and decreased 42% to
                  $145,504 for Y2-99, as compared to $249,141 for Y2-99. The
                  decrease in gross profit in 1999 as compared to 1998 is due to
                  the decrease in sales and the increase in cost of sales.

                  Operating expenses for Q2-99 decreased 28% to $732,829, as
                  compared to $1,016,939 for Q2-98 and operating expenses for
                  Y2-99 decreased 28% to $1,524,755, as compared to $2,107,562
                  for Y2-98. The decrease in operating expenses reflects
                  reductions in corporate overhead that were initiated in the
                  last quarter of 1998. The decrease in operating expenses is
                  attributable to a



                                       10
<PAGE>   11

                  decrease in General & Administrative salaries, Sales &
                  Marketing salaries, training and recruitment, advertising and
                  financing fees.

                  Operating loss for Q2-99 decreased 27% to $428,345, as
                  compared to $585,229 for Q2-98 and operating loss for Y2-99
                  decreased 26% to $1,379,251, as compared to $1,858,421 for
                  Y2-98.

                  The Company earned $6,945 in interest income for Q2-99, as
                  compared to $11,561 for Q2-98 and earned $42,394 in interest
                  income for Y2-99, as compared to $57,946 for Y2-98. Interest
                  expense for Q2-99 was $48,585, as compared to $71,275 for
                  Q2-98 and interest expense for Y2-99 was $101,224, as compared
                  to $135,588 for Y2-98. The decrease in interest expense is
                  primarily due to the conversion of financing notes to
                  Preferred Stock.

                  Net loss for Q2-99 decreased 22% to $523,615, as compared to
                  $670,581 for Q2-98 and net loss for Y2-99 decreased 22% to
                  $1,543,950, as compared to $1,985,789 for Y2-98. Net loss per
                  share for Q2-99 decreased 69% to $.05, as compared to $.16 for
                  Q2-98 and net loss per share for Y2-99 decreased 65% to $.15,
                  as compared to $.43 for Y2-98. The decreases in operating and
                  net loss in Q2-99 as compared to Q2-98 and in Y2-99 as
                  compared to Y2-98 resulted from decreased operating expenses
                  in Q2-99 and Y2-99 resulting from the cost reduction strategy
                  implemented in the fourth quarter of 1998. The decrease in net
                  loss per share in Q2-99 as compared to Q2-98 and in Y2-99 as
                  compared to Y2-98 are 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
                  Q2-98 and Y2-98.

         LIQUIDITY AND CAPITAL RESOURCES

                  On June 30, 1999, the Company had cash and cash equivalents of
                  $20,890, unrestricted short-term investments (certificates of
                  deposit) of $825,000 and working capital of $751,446, as
                  compared to cash and cash equivalents of $244,346,
                  unrestricted short-term investments (certificates of deposit)
                  of $1,750,000 and working capital of $1,269,548 at December
                  31, 1998. Net cash used in operating activities for Y2-99 was
                  $889,992, which was used to fund the Company's losses. Net
                  cash provided by investing activities was $955,740 and
                  $289,204 was used in financing activities for a total decrease
                  in cash and cash equivalents of $223,456. Net cash used in
                  operating activities for Y2-98 was $1,660,161. Net cash used
                  in investing activities in Y2-98 was $913,942 and $4,464,634
                  was provided by financing activities, for a total increase in
                  cash and cash equivalents in Y2-98 of $1,890,531.

                  On June 30, 1999, the Company had stockholders' equity of
                  $2,023,430, as compared to stockholders' equity of $3,549,880
                  at December 31, 1998.

                  The Company anticipates that its current capital resources,
                  when combined with anticipated cash flows from operations
                  should be sufficient to satisfy the Company's contemplated
                  working capital requirements for the year ending December 31,
                  1999. However, there can be no guarantee that the Company's
                  anticipated cash flow from operations and sales will be
                  realized. If the Company is unable to realize the anticipated
                  cash flows, or raise additional equity, it may exhaust its
                  cash resources by the year-end and may be forced to curtail or
                  cease its operations.




                                       11
<PAGE>   12

         SEASONALITY

                  The Company's business is seasonal with higher sales 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.

                  The Company periodically issues press releases to update
                  shareholders on new developments. These releases may contain
                  certain statements of a forward-looking nature relating to
                  future events or the future financial performance of the
                  Company within the meaning of Section 27A of the Securities
                  Act of 1933, as amended, and Section 21E of the Securities
                  Exchange Act of 1934, as amended, and which are intended to be
                  covered by the safe harbors created thereby. Readers are
                  cautioned that such statements are only predictions and that
                  actual events or results may differ materially. In evaluating
                  such statements, readers should specifically consider the
                  various risk factors identified which could cause actual
                  results to differ materially from those indicated by such
                  forward-looking statements.

         YEAR 2000 COMPUTER ISSUE

                  The Company has completed its assessment of the impact of Year
                  2000 on its business including its readiness of internal
                  accounting and operating systems and communicated with key
                  suppliers regarding their exposure to Year 2000 issues. The
                  Company anticipates that its business operations will
                  electronically interact with third parties very minimally, if
                  at all. The Company's Year 2000 risks from third parties are
                  insignificant. Management believes that the Company's worst
                  case scenario would involve delays in receiving videotapes
                  from its supplier. The Company will stockpile videotapes used
                  in production before the 1999 year-end, so as not to run short
                  if its vendor cannot supply the Company. The majority of the
                  Company's systems consist of packaged software purchased from
                  vendors which are already Year 2000 compliant, based on
                  representations from the vendors. The Company has addressed
                  both Information Technology and Non-Information Technology
                  concerns; for instance, the network file servers have been
                  designed to handle Year 2000 issues, and the recently
                  installed telephone system is designed to handle Year 2000
                  issues. The Company is not presently aware of any significant
                  expenditures which will be necessitated in order to be ready
                  for the Year 2000, although there can be no assurances that
                  significant expenditures may not be required in the future.
                  The Company presently believes that the Year 2000 issue will
                  not have a material impact on the Company's business or
                  operations; however, there can be no guarantee that the
                  Company will be unaffected or in the level of timely
                  compliance by key suppliers or vendors which could impact the
                  Company's operations including, but not limited to,
                  disruptions to the Company's business.




                                       12
<PAGE>   13

         SUBSEQUENT EVENTS

                  CHANGE IN BOARD OF DIRECTORS

                  In July 1999, two members of the Company's Board of Directors
                  resigned. The Company filled one of the vacated seats with
                  Thomas Peters, an officer of the Company and the developer of
                  the patented software used in the Company's products.

                  DISPUTE WITH PREFERRED SHAREHOLDERS

                  On August 2, 1999, the Company's Preferred Shareholders
                  commenced an action against the Company and three of its
                  officers and directors. The action sought a temporary
                  restraining order and a permanent injunction in order to
                  prevent the three officers and directors from taking certain
                  actions that the Preferred Shareholders believed would be
                  damaging to the Company. On August 4, 1999, the parties
                  entered into a stipulation and agreement pursuant to which the
                  Company agreed not to take certain actions without obtaining
                  either court approval or, in certain cases, giving prior
                  notice to the Preferred Shareholders. Based on the Preferred
                  Shareholders' complaint, the Company understands that the
                  Preferred Shareholders believe that an Event of Default has
                  occurred under their securities purchase agreement with the
                  Company and that they intend to convert their outstanding
                  shares of Preferred Stock and convertible notes into shares of
                  the Company's Common stock, and following such conversion,
                  obtain control of the Board of Directors and management of the
                  Company. The Company does not believe that the Event of
                  Default is valid and intends to vigorously oppose the
                  conversion of the Preferred Shareholders' shares into Common
                  stock. If the Event of Default is valid, it would
                  significantly affect the conversion price at which the
                  Preferred Shareholders would be able to convert their stock
                  into Common stock and could result in the issuance of
                  approximately 37 million additional Common shares.

                  LITIGATION AGAINST GREG NORMAN

                  On August 11, 1999, the Company filed a Complaint and Demand
                  for a Jury Trial with the United States District Court,
                  Southern District, West Palm Beach Division, against Greg
                  Norman, Great White Shark Enterprises Inc., Greg Norman
                  Interactive LLC, and LibertyOne Limited for breach of
                  contract, unfair and deceptive trade practices, unjust
                  enrichment and trademark infringement. The action claims,
                  amongst other claims, that (a) Norman violated his implied
                  covenant of good faith and fair dealing by purposefully
                  attempting to obstruct the Company's business, (b) failed to
                  use his best efforts to perform the personal services required
                  by him, (c) failed to actively provide his endorsement of the
                  Company, and (d) purposely violated the Company's trademarks
                  by launching a confusingly similar Web site, SHARK.COM. Since
                  1996, the Company has paid Norman $1.3 million plus an equity
                  interest of approximately 6% of the Company's outstanding
                  Common stock. The Company's management believes that the
                  Company has suffered damages in excess of $10 million as a
                  result of the multiple breaches by Norman. As a result of the
                  breaches, the Company has not recently paid any new royalties
                  to Norman and as such has received a Notice of Default from
                  Great White Shark Enterprises Inc., which could result in
                  termination of the licensing agreement, if not cured within
                  the delays specified in the agreement with Greg Norman. The
                  Company is also seeking a temporary restraining order and
                  injunction preventing Norman from using the SHARK.COM Web site
                  domain name.




                                       13
<PAGE>   14

                            VISUAL EDGE SYSTEMS INC.

                           PART II - OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

           Incorporated by reference to the information contained under the
           subheadings "Subsequent Events; Dispute with Preferred Shareholders"
           and "Subsequent Events; Litigation Against Greg Norman" in Part I,
           Item 2 hereof.

ITEM 2.    CHANGES IN SECURITIES

           None

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

           Incorporated by reference to the information contained under the
           subheadings "Subsequent Events; Dispute with Preferred Shareholders"
           in Part I, Item 2 hereof.

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

           None

ITEM 5.    OTHER INFORMATION

           None







                                       14
<PAGE>   15

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 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
         Infinity 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 Infinity 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
         Infinity 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)

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)




                                       15
<PAGE>   16

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 (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 (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     Amended and Restated 1996 Stock Option Plan (Incorporated by reference
         to the Company's 1996 definitive Proxy Statement)

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

10.7     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)

10.8     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)

10.9     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 with their transferees, the "Funds")
         (Incorporated by reference to Exhibit 99.1 to the Registrant's Current
         Report on Form 8-K filed June 23, 1997)

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

10.11    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).

10.12    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).

10.13    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).




                                       16
<PAGE>   17

10.14    First Amendment to Bridge Securities Purchase Agreement and Related
         Documents, dated as of December 31, 1997, among the Company and the
         Funds (Incorporated by reference to Exhibit 99.1 to the Registrant's
         Current Report on Form 8-K filed February 9, 1998)

10.15    Second Amendment 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).

10.16    Third Amendment to Bridge Securities Purchase Agreement and Related
         Documents, dated as of December 29, 1998, among the Company, Infinity
         Investors Limited, IEO Holdings Limited (as the transferee from
         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 January 8, 1999).

10.17    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).

10.18    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).

10.19    Amendment, dated as of December 31, 1998, to License Agreement dated as
         of March 1, 1995, by and between Greg Norman and Great White Shark
         Enterprises, Inc. and the Company, as amended on April 19, 1996,
         October 18, 1996 and June 3, 1997 (Incorporated by reference to Exhibit
         10.19 to the Registrant's Annual Report on Form 10-KSB filed March 31,
         1999).

16       Letter, dated November 14, 1997, from KPMG Peat Marwick LLP to the
         Securities and Exchange (Incorporated by reference to Exhibit 1 to the
         Registrant's Current Report on Form 8-K/A filed November 19, 1997)

27*      Financial Data Schedule

                                                               * Filed herewith.

         (b) Reports on Form 8-K

         None




                                       17
<PAGE>   18

                                   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
August 11, 1999                                      Chief Executive Officer



                                                     /s/ Melissa Forzly Adler
                                                     --------------------------
                                                     Melissa Forzly Adler
August 11, 1999                                      Chief Financial Officer





                                       18