<PAGE>
 
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

    
                                   FORM 10-K-A
     

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

     For the fiscal year ended June 30, 1996

                                       or

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

For the transition period from             to   
                               -----------    ----------------------------

Commission file number   0-18114
                         -------           
                         LASERMASTER TECHNOLOGIES, INC.
                         ------------------------------
             (Exact name of registrant as specified in its charter)

     MINNESOTA                                           41-1612861
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(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                        Identification No.)
 
     7090 Shady Oak Road
     Eden Prairie, Minnesota                                55344
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(Address of principal executive offices)                  (Zip Code)
 
Registrant's telephone number, including area code        (612) 941-8687
                                                   -----------------------
Securities registered pursuant to Section 12(b) of the Act:
     Title of each class      Name of each exchange on which registered
         None
------------------------      --------------------------------------------
 
------------------------      --------------------------------------------

Securities registered pursuant to Section 12(g) of the Act:
 
Common Stock, par value $.01 per share
--------------------------------------------------------------------------
                                (Title of Class)

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. [X] Yes [_] No

                              [COVER PAGE 1 OF 2]

                                       1
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of August 31, 1996 was $37,407,400 based on the last sale price
for the common stock as recorded by the National Association of Securities
Dealers on that date.

As of August 31, 1996, there were 11,458,634 shares of the registrant's common
stock outstanding.


DOCUMENTS INCORPORATED BY REFERENCE:

LaserMaster Technologies, Inc. 1996 Stock Incentive Plan filed on Form S-8 on
August 30, 1996



                              [COVER PAGE 2 OF 2]

                                       2
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                                    PART I
                                    ------

ITEM 1.  BUSINESS.

GENERAL

    
LaserMaster Technologies, Inc. (the "Company")/1/ designs, manufactures and
markets wide-format (up to 54" wide prints) digital high resolution color
printers and chemical-free film imagers ("filmsetters"): and related image
processing equipment for professional printing applications. In addition, the
Company sells related consumable products ("consumables") for its installed base
of printing products, consisting primarily of ink, media, (such as specialty
papers, canvas, vinyl, etc., film, toner (ink-like powder) and process units
(which facilitate transfer of toner to the media surface). The Company's
products combine advanced computer technology with the Company's own
sophisticated software, hardware and proprietary printers ("engines") to produce
professional-quality printed output at an affordable cost. DisplayMaker /(R)/
Professional , Design Winder/TM/ & DisplayMaker Express Big Color /(R)/ wide-
format, digital inkjet color printers are designed to be cost-effective
solutions for the short-run digital computer printing of photo-realistic, wide-
format color output. The Company's Halon/(TM)/ product allows users to transfer
digital data from the image processing computer and software (the print server)
to various color laser copiers including those produced by Canon, Kodak and
Xerox. The PressMate/(R)/-FS, a proprietary desktop chemical-free
Filmsetter/(TM)/, is capable of film output generated without the use of
chemicals (dry film) typically associated with developing film, with effective
resolution of 2400 dots per inch. The ColorMark/(R)/ Pro 1600 Print Server is a
raster image processor which is capable of supporting a combination of
DisplayMaker Professional, DesignWinder and DisplayMaker Express printers,
PressMate-FS Personal FilmSetters/(TM)/ and Halon32 color laser copier
interfaces simultaneously, as well as offering time saving features specifically
designed for high-volume, production environments.
     

    
The RIPStation/(TM)/ is an entry-level print server (raster image processor)
which is capable of supporting a combination of products including DisplayMaker
Professional, DesignWinder or PressMate-FS.
     

    
Until 1993, the Company's principal products were monochrome laser printers that
were based on printer hardware or "engines" manufactured by others but included 
proprietary software (including "TurboRes") and hardware designed to generate 
significantly higher effective resolution.
     

    
This resolution, commonly expressed in terms of "dots per inch" (the number of 
digitally placed dots on a line), approached the resolution used in professional
typesetting previously dominated by photographic processes and was described as 
"plain-paper typesetting." Although the Company believes that it was a market 
leader in very high resolution laser printing and continued to enhance its 
products, from 1991 though 1996, many of the Company's competitors, 
significantly including Hewlett Packard, increased the performance of their 
printer offerings, impacting the volume and margins achieved on sales in the 
high resolution laser printer marketplace. The Company focused its research and
development efforts on other sectors of the printing market during this period 
(and on the development of proprietary printing hardware) and ceased activity 
promoting its plain-paper typesetting products entirely in the fourth quarter of
fiscal 1996, which resulted in a decline in sales of plain-paper typesetting 
products.
     

    
The bulk of the decline in sales from plain-paper typesetting products during 
this period was replaced by sales of new, large-format color ink-jet printers 
developed by the Company. The Company introduced its large-format (36 inch), 
photo-realistic color printer, the DisplayMaker Professional, in 1993. Although 
still based on a printer "engine" developed by others, the DisplayMaker 
Professional integrates a high performance computer print server and the 
Company's own software with a proprietary ink delivery system ("Big Ink/(TM)/") 
to enhance speed, functionality and the quality of output to generate 
photo-realistic, poster-sized prints. As the market grew and demand increased, 
competitors have licensed the printer "engines" from the Company's supplier and 
have introduced their own competing product, again impacting margins.
     

    
As part of its longer term strategy to reduce its susceptibility to new market 
entrants, the Company began development of several proprietary printer "engines"
in 1994. The first of these products addresses a niche in the long-run, laser 
typesetting market by eliminating the need for the use of photographic processes
and chemicals in creating an image on a photographic film used to create a metal
printing plate. In 1994, the Company introduced a proprietary printer engine and
associated software, PressMate, that uses heat-sensitive film rather than 
photosensitive film that allows dry process imaging on the desk-top rather than 
chemical development in the darkroom. The Company enhanced this printer and 
introduced a reconfigured version as the "PressMate-FS" in August, 1995. During 
the past three years, the Company has also developed two new products using 
proprietary printer engines to address the wide-format printing market. The 
first of these products, the DisplayMaker Express, is a 54 inch wide, 
photo-realistic roll fed color printer that uses phase-change inks (solid inks 
that are melted during the printing process), which was introduced in 1995. The
second product with a proprietary printer engine, the DesignWinder, was
introduced in September 1996. The DesignWinder is a drum-based, 8 head, sheet
fed, high speed printer that produces wide format (36 inch by 44 inches) prints
in approximately 6 minutes. Since 1994, the Company has also introduced the
ColorMark Pro Print Servers, RIPStations (raster image processing stations), and
the Halon copier interface to enhance and expand the utility, functionality and
applications for the color products.
     

    
The primary users of the Company's products are commercial printers, 
reprographic service bureaus, photo labs, quick printers, exhibit builders, 
in-house print shops, printers, publishers, government and educational 
facilities, and corporate marketing departments. Applications include point of 
purchase signs, trade show exhibit graphics, banners, billboards, courtroom 
graphics, pre-press positional proofing (proofs or other quick output to 
demonstrate concepts for advertising or graphics layouts), digital photo imaging
and backlit signage.
     

    
The Company's products are primarily sold through the Company's direct
telemarketing sales force, supplemented by a network of dealers and value-added
resellers in certain geographic markets throughout the world. The Company's
sales efforts are supported by a direct mail marketing program designed to
achieve frequent contact with its potential customers. The Company complements
its direct mail efforts by advertising in trade journals and by exhibiting
regularly at industry trade shows.
     

    
The Company's domestic offices are in Eden Prairie, Minnesota. The Company's
European sales subsidiary is headquartered in Hoofdoorp, The Netherlands.
     

MARKET

    
According to a market survey conducted by IT Strategies, a firm which
specializes in research regarding emerging color printing markets with emphasis
in wide-format color graphics, color labels and packaging, textiles and next-
generation digital color presses/print systems, the Large-Format Digital
Printing market for hardware and consumables is projected to grow from annual
sales of approximately $319 million in 1995 to approximately $1.9 billion in
1998. The rapid growth in this market is being driven primarily by the
     

-------------------

/1/ LaserMaster Technologies, Inc. (the "Company") was incorporated under the
laws of Minnesota as Acquerre Corporation in April 1988. LaserMaster Corporation
("LaserMaster"), the Company's primary operating subsidiary, was incorporated
under the laws of the State of Minnesota in February 1986. European operations
are carried on by LaserMaster Europe Ltd., a Delaware corporation, that is a
wholly-owned subsidiary of LaserMaster. Asian and Pacific operations are carried
on by LaserMaster Asia/Pacific, Ltd., a Minnesota corporation that is a wholly-
owned subsidiary of LaserMaster. LaserMaster Export Corporation, a Virgin Island
corporation, is used by LaserMaster as a Foreign Sales Corporation ("FSC").
Unless the context otherwise indicates, all references to the "Company" refer to
LaserMaster Technologies, Inc. and its subsidiaries.

                                       3
<PAGE>

     
increasing desire and need for customized, large-format color graphics, as well
as significant advances in short-run printing and desktop publishing
technologies. Traditional graphics printing methods, consisting of photographic,
screen and offset printing, do not meet the requirements for production of
short-run print jobs due to the time consuming, multi-step processes and set-up
costs involved. As a result, digital printing has developed to fulfill the unmet
demand of short-run users by allowing graphics to be printed directly from
desktop publishing systems with dynamic interchange of data to print onto
a variety of media.
    

    
There are a number of digital printing technologies, including inkjet, pen,
electrostatic and thermal, that allow users to produce large-format output. Each
of these technologies has specific qualities that can be critical to any given
application, including resolution, speed, accuracy, color fill capability, the
ability to render a three-dimensional appearance of an image, reliability and
cost.
     

    
A combination of characteristics has made inkjet the fastest growing technology
in the large-format printer market. The characteristics of large-format inkjet
printers include relatively low cost, higher resolution, faster speed and the
ability to print high-quality color. Inkjet printers typically form images,
lines and other characters by placing very small dots of ink as the print head
moves horizontally, called a raster scan, while the media is typically scrolled
vertically. Because inkjet print heads move above the media and do not actually
make contact with the media, there is less mechanical wear and tear than
experienced with other types of devices. Most inkjet printers can print on a
variety of media or other materials used for signage or display.
     

    
Electrostatic printers generally are more expensive to purchase than inkjet
printers or thermal printers and require the use of special paper. They offer
certain advantages to users requiring low cost per square foot and high speed
printing characteristics. Thermal printer/plotters are similar to electrostatic
printers in that they require special paper, but also require ink ribbons to
take advantage of the thermal print head. Thermal printers are typically more
costly than comparable-format inkjet printers.
     

    
Other technologies that can be adapted to wide-format use include photographic
output, electrophotographic output and dot matrix printers. These printers have
disadvantages including high costs, when compared to inkjet technology.
     

STRATEGY

The key elements of LaserMaster's strategy are:

    
To maintain and enhance its position as a leading provider of affordable, high
quality, proprietary products and consumables supplies to the professional
printing market. A growing portion of LaserMaster products are proprietary
printer architectures (the printer engine including ink and media delivery
systems) designed, manufactured, and marketed by the Company. PressMate-FS,
DisplayMaker Express and the Company's third proprietary designed and
manufactured printer, DesignWinder, introduced in September 1996, are the first
of many proprietary architectures which the Company expects to develop. The
Company's family of products is expected to grow with the changing marketplace
while meeting the needs of professional printing applications.
     

To develop and produce value-added software which distinguish its printer
solutions. LaserMaster has consistently taken market standards to a higher level
of performance. The Company has been committed to continually enhancing its
products by adding features and options to its current family of devices through
software enhancements. These enhancements continually evolve with products over
their lives through increasing print speeds, allowing use of additional media
and inks for various applications, improving color matching and print quality
and continuing compatibility with other vendor's software and operating systems.

To continue to emphasize telemarketing as a direct sales approach. LaserMaster
has been very successful developing its targeted markets through direct mail and
telemarketing efforts. The Company intends

                                       4
<PAGE>

    
to continue to enhance its global third party distribution channels
simultaneously while continuing to focus on its core direct marketing approach
in the U.S. and Canada.
     

    
To develop additional media, ink and film for use with the Company's proprietary
print engines to enhance printing applications and market expansion. Fiscal 1996
was a successful year for LaserMaster-branded consumables sales expansion. The
release of larger capacity ink delivery systems, pigmented outdoor inks, new
phase change inks (solid ink blocks which are melted for application), and the
announcement of plans for the sale of 3M Matched Component System (MCS/(TM)/)
outdoor inks and media which carry a written, one-year guarantee backed by 3M,
opened doors to additional markets for inkjet users by expanding the uses and
potential applications for their DisplayMaker printers. In addition,
introductions of media such as WaterFast/(TM)/ Vinyl, Tyvek/(R)/ (a DuPont
product) and canvas should add enhanced profit potential for the outdoor sector
of the inkjet market. In September 1996, the Company entered into a strategic
alliance with Sihl-Zurich Paper Mill on Sihl AG, a leading European manufacturer
of specialty paper and related media, to enhance the development of unique and
high-quality media for use with the Company's print engines.
     

To increase international sales. International sales has been a growing
percentage of LaserMaster's core business. The Company is committed to
increasing its market share in Europe, Asia, Africa, Central and South America
through its physical presence in Europe as well as by building ongoing
relationships with resellers and dealers throughout the world. The Company may
also choose to increase its global presence by working more closely with one or
more of its international trading partners based in Japan.

To develop original equipment manufacturing (OEM) customers for the Company's
proprietary products. The Company is actively exploring relationships which
would result in OEM customers for its various product offerings. Augmenting the
Company's existing distribution channels with high-quality OEM's could help gain
market acceptance of the Company's products and expand its customer base for
after-market consumables sales.

LASERMASTER PRODUCTS

LaserMaster's three wide-format color inkjet printers, the DisplayMaker
Professional (initial shipments in June 1993), DisplayMaker Express (initial
shipments in December 1995), and DesignWinder (introduced in September 1996),
provide wide-format photo-realistic digital color output. These products are
designed to be cost-effective solutions for short-run digital printing of photo-
realistic wide-format color output. The printers work with most commercially
available desktop digital color manipulation and composition software
applications. Using third-party graphics and page-layout software applications
that allow printed pages to be "tiled", the DisplayMaker products can be used to
create virtually unlimited image sizes. The Company's Big Color products
incorporate a number of proprietary software advances, including ColorMark and
SmoothTone/(TM)/ technologies. ColorMark is the Company's color management
system that ensures accurate and consistent color from print to print. This
technology allows the user to print multiple copies of the same file and achieve
near perfect matching of colors, even after changing ink and media. SmoothTone
is an image-enhancement technology that significantly boosts the apparent
resolution of the printing engine to provide output with near continuous-tone
quality.

The Company's ThermalRes/(R)/ technology, for which a United States patent has
issued with additional U.S. and foreign patents pending, accomplishes an even
higher degree of resolution enhancement for text and line art in monochrome and
four-color pre-press printing applications. ThermalRes technology is used in the
Company's chemical-free filmsetter product, PressMate-FS.

    
DisplayMaker Professional. The Company's first "Big Color" product is a 36-inch
wide, photo-realistic, roll-fed, color inkjet printer capable of printing 
poster-size images up to 36 inches wide and, depending on the software 
application, up to 50 feet long. The DisplayMaker Professional includes a 
third-party-supplied inkjet marking engine and the Company's patented Big 
Ink/(TM)/ Delivery System. The ColorMark color management system incorporated 
into the ColorMark print server ensures consistent color quality from print to 
print.
     

                                       5
<PAGE>

    
DisplayMaker Express. The Company's second proprietary printer is a 54-inch
wide, photo-realistic, high-speed, roll-fed, color inkjet printer which utilizes
phase-change inks together with printhead technologies for which the Company has
exclusive rights for certain wide-format applications. The DisplayMaker Express
prints over 100 square feet per hour, or an E-size (34 inches by 44 inches)
print in approximately six minutes. DisplayMaker Express is capable of producing
prints 54 inches wide and in excess of 150 feet in length. The DisplayMaker
Express uses specially formulated ColorMark solid pigmented ink pucks, rather
than dye-based aqueous inks used by other inkjet printers, which provides
improved UV stability and water resistance. The DisplayMaker Express requires
the use of ColorMark qualified or certified media, which ensures proper printer
functionality and print quality.
     

    
DesignWinder. LaserMaster's third proprietary printer is a 36-inch wide, drum-
based, wide-format, sheet-fed, color inkjet printer which utilizes a
revolutionary eight printhead station design to produce high-quality signs,
photos and digital art and sets a new five minute benchmark for producing E-size
prints. DesignWinder is capable of producing apparent 1200 dpi (dots per inch)
resolution prints up to 33.5 inches by 47.25 inches in size utilizing its 
patent-pending ColorSpan Wide Gamut(TM) printing technique which uses 
additional inks to address more discreet colors within the color gamut. The 
high-precision, spinning drum-based design provides superior dot placement 
accuracy and repeatability, setting a new standard in Big Color print quality, 
unattainable in traditional inkjet plotter devices (print engines that use a 
moving print head traveling perpendicular to a moving web of paper to attain 
print coverage).
     

PressMate-FS. In March 1995, the Company began shipping production quantities of
its PressMate desktop chemical-free filmsetter. PressMate, the Company's first
proprietary printer engine, is a desktop device that uses a dry process to
produce specially designed films necessary for making the printing plates used
in offset printing. Traditionally, these films were produced by photographic (or
wet process) type imagesetters or cameras, using chemicals to develop the image
to be reproduced. PressMate permits printing of text and line art in black and
white, and of cyan, magenta, yellow and black (CMYK) layers used for four-color
separations, at resolutions considered by the Company to be equivalent to 2400
dots per inch using a heat-sensitive, chemical-free film. This fidelity was
previously unavailable in a plain-paper or thermal printing device. PressMate
shipments were suspended in August 1995 to improve registration tolerance across
multiple layers of film required for the highest quality four-color separations
desired by the Company's customers. In December 1995, the Company began shipping
production quantities of PressMate-FS, which incorporated these technical
improvements. The PressMate-FS is a desktop unit that is easily integrated into
just about any office or computer network environment.

    
Halon32. The Halon32 Color Laser Copier interface provides users of the
ColorMark Pro 1600 color print server the option of printing their digital files
to any one of a variety of color laser copiers.
     

    
ColorMark Pro 1600. The DesignWinder printer, DisplayMaker printers, PressMate
filmsetter and Halon color laser copier interface are all driven by the
Company's ColorMark Pro 1600 print server, a raster image processor that is
based on a 166 MHz, 32-bit superscalar microprocessor. The ColorMark Pro 1600
features advanced file spooling (a queue method) for multiple users, "RIP
Saver(R)" (which stores processed files to avoid redundant rasterization), job
management and logging features that track ink and paper consumption for job-
costing, work-flow planning and other purposes. This device has connectivity
capacity to handle several devices simultaneously including one DesignWinder, up
to two DisplayMaker Professionals, one DisplayMaker Express, up to two 
PressMate-FS's or up to two color laser copiers with Halon32 interfaces.
     

    
RIPStation. The RIPStation is an entry-level color server alternative. It is
based on a 133 MHz, 32-bit microprocessor. It functions similarly to the
ColorMark Pro 1600 without the added advanced or multiple engine connectivity
features offered by the ColorMark Pro 1600.
     

    
Consumables. Color printing consumes significant quantities of inks and media.
LaserMaster products include a range of consumables, such as specialized dye-
based inks for indoor use and pigmented inks for outdoor use. In addition, the
Company has signed a supply agreement with 3M Commercial Graphics
Division to supply its Matched Component System (MCS) inks, media and laminates
that carry a written guarantee backed by 3M for one year outdoor use. The
Company performs qualification testing on these consumables before releasing
them for customer shipment. The specialized inks are created
     

                                       6
<PAGE>
 
specifically for LaserMaster products to optimize image quality and printer
performance. The Company currently offers a variety of media for its wide-format
inkjet printers that include recent introductions such as WaterFast(TM) vinyl
for outdoor use, canvas, paper and polyester-based substrates.

    
The Company sells the consumables (inks, media and film) required for optimum
use of the printing products it sells. The Company offers various ColorMark
consumables for its Big Color printers, including cyan, magenta, yellow and
black 500 ml Big Ink packs for use with the DisplayMaker Professional and
DesignWinder, and uniquely configured 150 ml ColorMark solid ink pucks required
for the DisplayMaker Express. The Company expects to sell ColorMark ColorSpan
Wide Gamut(TM) inks for use with DesignWinder. The Company currently sells
ColorMark Bond, ColorMark Vinyl and ColorMark WaterFast Removable Tyvek media
for use with the DisplayMaker Express and expects to add additional media in the
near future. The Company also offers a variety of print media such as Coated
Gloss paper, PolyGloss(TM), FineArt(TM) Canvas, matte, ClearFilm,/(TM)/ and
TransWhite(R) translucent backlit film (used on back-lighted signs) for use with
the DisplayMaker Professional. As part of the ColorMark system, the 500 ml Big
Ink packs, and 150 ml ColorMark ink pucks, or blocks, ship with ColorMark
profilers (recyclable circuit boards) that plug into the ColorMark Docking
Station, and provide information to ensure accurate, consistent color output
from print to print. The domestic price per dye-based Big Ink pack is $199 per
color. The domestic price per ColorMark ink puck is $175. The domestic prices of
the ColorMark paper and other media range from $65 to $439 per 100-to 150-foot,
36-inch wide rolls, and from $239 to $699 per 100- to 160-foot, 54-inch wide
rolls. Big Color consumables revenue for fiscal 1996 was $17.7 million, with
$5.6 million in the June 1996 quarter.
     

    
The Company's PressMate-FS Personal FilmSetter(R) requires specially
developed ThermalRes film rolls which are also supplied by the Company. This
unique specialty film is manufactured to the Company's specifications. The
domestic price is $295 for a 90-foot roll of ThermalRes film. ThermalRes
consumables revenue for fiscal 1996 was $1.6 million, with $.6 million in the
June 1996 quarter.
     

    
The Company's Unity(TM) line of plain-paper typesetters require toner and
process units for operation. The domestic price for toner is $69 per
unit, and process units list for $699 per unit. Plain-paper typesetting
consumables revenue for fiscal 1996 was $9.4 million, with $1.8 million in the
June 1996 quarter.
     

The Company's products, which have suggested US list prices of approximately
$6,995 to $74,000/(1)/, include:

<TABLE>
<CAPTION>
---------------------------------------------------------------
PRODUCT                 DISTINGUISHING FEATURES
---------------------------------------------------------------
<S>                     <C>
DisplayMaker            500 ml/color Big Ink Delivery System
 Professional           ColorMark Calibrator
                        36" wide roll-fed output
---------------------------------------------------------------
DisplayMaker            ColorMark calibrator
 Express                54" wide roll-fed output
                        150 ml ColorMark solid ink pucks
                        Print speed up to 6 inches per minute
---------------------------------------------------------------
DesignWinder            500 ml/color Big Ink Delivery System
                        ColorMark Calibrator
                        36" wide manual sheet-fed output
                        E-Size prints in as little as 5 minutes
                        Apparent resolution of 1200 dpi
---------------------------------------------------------------
</TABLE>

                                       7
<PAGE>
 
<TABLE>
<CAPTION> 
----------------------------------------------------------------
<S>                     <C>
PressMate-FS            Chemical-free film processing
Personal FilmSetter     12" x 26" ThermalRes film output
                        VideoNet connection to the RIPStation or
                        ColorMark Pro 1600
                        500 MB Internal Storage
----------------------------------------------------------------
Halon32 Color Laser     Direct digital support for the Canon,
Copier Interface        Kodak ColorEdge, Xerox MajestiK and
                        Xerox Regal color laser copiers.
----------------------------------------------------------------
ColorMark Pro 1600      166 MHz, 32-bit processor
Print Server            64 MB RAM
                        PostScript-language compatible Level 2
                        1 GB storage
----------------------------------------------------------------
RIPStation Print        133 MHz, 32-bit processor with floating
Server                  point unit
                        32 MB RAM
                        PostScript-language compatible Level 2
                        1 GB storage
----------------------------------------------------------------
</TABLE>

     /(1)/Effective September 1, 1996.


PRODUCT DEVELOPMENT

    
The Company's continued success depends on making ongoing investments in product
development to ensure the timely introduction of high-performance products in
response to changes in technology, market demands and customer requirements. For
certain important additional cautionary factors, risks and uncertainties, refer
to Exhibit 99 of this form 10-K-A. Accordingly, the Company is committed to
creating specialty printing products that yield performance superior to standard
marking engines, designing new engines and enhancing existing products to
achieve higher levels of performance. The Company is also committed to designing
and enhancing products to increase the Company's after-market consumables
business.
     

As of June 30, 1996, the Company employed approximately 67 people in product
development activities. The Company's product development organization consists
of multiple project teams. Staffing for these teams is flexible, allowing
individual engineers to handle multiple and sometimes overlapping development
objectives. The Company's software development group creates and enhances
software technologies which improve the usefulness, cost-effectiveness and
productivity of printers offered by the Company, and the quality of such
printers' output. The Company's hardware group works to enhance existing
hardware components and products and works with the software group to develop
printer products for specialized applications and markets.

SALES AND MARKETING

    
The Company sells its products primarily through direct telemarketing,
supplemented by dealers in U.S. and Canada and value-added resellers
Internationally. As of June 30, 1996, the Company employed a 73 person
telemarketing sales force including sales professionals focused in part on
developing relationships with major national printing accounts. The Company's
sales efforts are supported by a direct mail marketing program designed to
achieve frequent contact with its potential customers, including PostScript and
reprographic service bureaus, photo labs, quick printers, sign shops, exhibit
houses and corporate marketing departments. The Company complements its direct
mail efforts by advertising in trade journals and by exhibiting regularly at
industry trade shows.
     

                                       8
<PAGE>
 
The Company invests significant resources in developing and training its
telemarketing staff and has implemented computerized sales management and sales
communications systems. Sales representatives participate in continuous training
programs so that they understand product features and benefits as well as
customer applications and business requirements. Telemarketing sales
representatives are compensated on a salary plus bonus and commission basis.

    
Domestic and Canadian Sales. The Company's domestic and Canadian sales and
marketing operations are based at its headquarters in Eden Prairie, Minnesota.
For all of its products, the Company augments its direct sales activities by
using dealers who offer local product demonstrations and support. Although
dealers may serve as the local point of contact with the end-user, the Company's
factory sales professionals remain the primary sales advocates and work with
dealers to close sales in the U.S. and Canada.
     

    
For its Big Color products, the Company has also established relationships with
independent copy shops and local service printers that have purchased Big Color
products. These Big Color Digital Printing Centers are provided cooperative
marketing support to promote Big Color printing services and products in their
area. The Company's direct telemarketing sales professionals refer potential
customers to these local Big Color Digital Printing Centers or resellers to
observe the use of the Company's Big Color products. From time to time, the
Company pays a fee to the showcasing center or reseller following a sale.
The Company believes that this marketing approach permits the Company to price
its Big Color products at competitive levels.
     

OEM Sales. The Company is currently exploring relationships which would result
in OEM customers for its various product offerings. The Company desires to
expand the market acceptance of its proprietary products and widen its
distribution network for both hardware and after-market consumables.
Relationships with high-quality OEM partners would be a vital link in attaining
this goal, but no OEM agreements have been signed at this point.

    
International Sales. The Company currently sells its products in all of the
Western European nations and in the principal Eastern European, Latin American,
Pacific and Asian markets. The Company's European sales, support and warehouse
facility is located near Amsterdam, The Netherlands. The Company conducts sales
operations for Europe, the Middle East and Africa from its European
headquarters, while it manages other international sales from its headquarters
in the United States.
     

    
In International markets, the Company sells its products through a network of
non-exclusive resellers. Resellers are granted the right to purchase LaserMaster
products at discounted prices from list price and distribute those products
within a specified territory outside the United States. Reseller agreements
require the reseller to promote, market and support LaserMaster products and are
typically for a one year period with automatic one year renewals. Either party
may terminate the agreement with or without cause, with a 30 day written notice.
The Company may appoint other resellers and may sell directly to customers
inside these territories. For the year ended June 30, 1996, sales to customers
outside of the United States accounted for approximately 44% of the Company's
total revenues. See Note 13 of Notes to Consolidated Financial Statements for
additional information regarding International operations.
     
         

SERVICE AND SUPPORT

At June 30, 1996, the Company had 44 technical and customer support
representatives responding to telephone inquiries from customers and dealers.
The Company offers a limited warranty for all of the products it manufactures.
Under its limited warranty, the Company will repair or replace any defective
product on a factory-return or central depot basis for a period ranging from 90
days to one year following purchase. In addition to its factory warranty, the
Company offers its customers on-site installation, warranty and maintenance
services in some markets, through third-party support organizations.

MANUFACTURING

The Company performs final assembly, functional testing and quality assurance
for essentially all of its products and related components, parts and
subassemblies at its facilities in Eden Prairie, Minnesota.

                                       9
<PAGE>

     
For some of its products the Company currently purchases fully assembled printer
marking engines directly from manufacturers and other components, parts and
subassemblies from outside sources. For its PressMate-FS, DisplayMaker Express,
DesignWinder and ColorMark Pro products, the Company purchases components and
uses them to manufacture the printer engines and servers. The Company designs
controller boards and software for use with these print engines and components.
The Company utilizes a computerized material requirements planning and
monitoring system to integrate its purchasing, materials handling and inventory
control functions.
     

    
Certain components used in the Company's products, including printer marking
engines, printheads and custom fabricated components, are currently available
only from sole sources, and certain other components are available from only a
limited number of sources. The Company has in the past experienced delays as a
result of the failure of certain suppliers to meet requested delivery schedules.
In addition, the Company's sole source supplier for the 36-inch, wide-format,
color inkjet marking engine used in the Company's DisplayMaker Professional,
also sells wide-format color printers that compete with the DisplayMaker
Professional in certain markets.  In August 1996, the Company experienced a
severe shortfall in Piezo head components due to a yield problem with one of its
key vendors.  That shortfall will cause a material reduction in revenues for the
DisplayMaker Express product line in the September 1996 quarter.  The Company
hopes to assist the vendor in overcoming this obstacle during the December 1996
quarter.  The Company's potential inability to obtain sufficient sole or limited
source components, or to develop alternative sources, could result in delays in
product introductions, interruptions in product shipments or the need to
redesign products to accommodate substitute components, any of which could have
a material adverse effect on the Company's operating results.  For certain
important additional cautionary factors, risks and uncertainties, refer to
Exhibit 99 of this form 10-K-A.
     

In fiscal 1994, the Company made the strategic decision to migrate away from
products based on standard marking engines manufactured by unrelated third
parties and to focus on engine products designed and manufactured by the
Company.  In fiscal 1995, the Company began active production of its first
proprietary  print engine, PressMate, a chemical-free filmsetter.  A production
line was also established for DisplayMaker Express  which was released in
December 1995.  The Company introduced another proprietary printer engine,
DesignWinder, in September 1996.  Production of the proprietary engines has
required the Company to increase its inventory beyond historical levels,
requiring the use of additional working capital.  The Company has also
experienced increases in production and overhead costs which have had a
significant, negative impact on the overall gross margins of the Company.

A significant portion of the total manufacturing cost of the Company's
filmsetter and Big Color products is represented by certain components,
particularly dynamic random access memory chips ("DRAMs"), the prices of which
have fluctuated significantly in recent years. Significant fluctuations in price
or availability of DRAMs or other components could have a material adverse
effect on the Company's operating results.

Because the Company normally fills orders within a few days of receipt, it
usually carries less than one month's backlog.  In addition, customers may
generally cancel or reschedule orders without significant penalty.  For these
reasons, the Company believes that backlog is not a meaningful indicator of
future sales. Manufacturing plans and expenditure levels are based primarily on
sales forecasts.  The absence of a material backlog could contribute to
unexpected fluctuations in operating results.

COMPETITION

    
The computer printer industry is intensely competitive and rapidly changing.
Some of the Company's existing competitors, as well as a number of potential
competitors, have larger technical staffs, more established and larger marketing
and sales organizations and significantly greater financial resources than the
Company.  For certain important additional cautionary factors, risks and
uncertainties, refer to Exhibit 99 of this form 10-K-A.
     

                                      10
<PAGE>

     
The Company's Big Color inkjet printing products compete in the short-run, wide-
format, photo-realistic color printing market with photographic methods and
electrostatic or inkjet digital printers. Some of the competing manufacturers
and vendors in this market include Hewlett-Packard Co., ENCAD, Inc.,
RasterGraphics Inc., Versatec, Inc., Electronics for Imaging, Inc., Iris
Graphics, Inc., Calcomp, Inc., Roland, Mutoh, Epson, Summagraphics, and a
variety of competitors who purchase ENCAD's printer engines on an OEM or systems
integration basis. It is widely rumored that Tektronix, Inc. is about to launch
a wide-format device as well. The Company introduced a new, high-speed, high-
resolution Big Color product, DesignWinder, in September 1996. This product is
based on a drum and uses eight printheads to achieve a new level of quality for
a liquid inkjet printer output. The Company uses the eight printhead design to
offer customers the option of high speed output (E-size prints in 5 minutes) or
highest resolution (effective 1200 dpi) through the use of ColorSpan Wide Gamut
inks. The Company anticipates that the successful release of this product will
allow it to expand into markets that require large-format printing at a higher
quality than has been available with traditional, inkjet, reciprocating head,
plotter technology. Competition in this market is generally based on equipment
cost, printing quality, production and printing speed, operating costs and the
costs of maintenance and upkeep. The traditional photographic approach, employed
to produce photo-realistic output one page at a time, is expensive, time-
consuming and labor-intensive, especially when an image includes text. This
approach also requires skilled personnel and special production facilities and
creates chemical wastes. Digital printers, used with software that permits
manipulation of images and text, can create photo-realistic output without the
use of the photographic process, eliminating the need for chemical production
facilities.
     

The electrostatic printers that compete with the Company's Big Color products
are expensive, costing from $50,000 to over $200,000, and can involve
significant maintenance and operating costs. They can also require controlled
environments and sophisticated front-end processing systems. Although
electrostatic printers provide significantly faster printing speeds and lower
per-square-foot consumables costs than those of the Company's products, the
Company believes it competes favorably with such devices on the basis of lower
initial purchase price, easier operation, higher quality output and lower
ongoing maintenance and environmental requirements. High-speed, solid inkjet
printers capable of producing photo-realistic output are sold at prices
comparable to those of electrostatic systems. An additional limitation on inkjet
technology for use in production environments has been the relatively high cost
of consumables, especially ink. The Company believes it competes favorably with
solid inkjet systems on the basis of lower initial purchase price, easier
operation, greater reliability, reduced consumables cost and lower ongoing
maintenance and environmental requirements.

While other vendors have introduced wide-format printers based on engineering
plotter engines, at prices comparable to or below those of the Company's
DisplayMaker products, the Company believes that its software and hardware
technologies, including SmoothTone image enhancement and ColorMark color
management offer it a competitive advantage in terms of higher printing quality,
easier operation and lower ongoing operating costs. In particular, with issued
United States patents on its Big Ink Delivery System and other patents pending
in the US and elsewhere, the Company believes it has a competitive advantage in
high-capacity, wide-format, closed-loop color graphics printing using a unitary
system.

The Company's chemical-free filmsetter, PressMate, competes with
phototypesetting equipment produced by a variety of manufacturers such as
Varityper, Inc., Linotype-Hell, Inc. and AGFA. Many of the competitive
imagesetting systems require a darkroom, other dedicated facilities for storing
chemicals required for processing the film, hazardous materials, special
insurance and handling capabilities, and strict adherence to OSHA requirements.
The Company's PressMate is chemical-free and does not require a special
environment for operation. This reduces the cost of operation for users as well
as time required to produce documents by allowing the user to control the film
production process without the use of chemicals. PressMate competes on the basis
of price, operating cost, speed, creative control, convenience and environmental
concerns.

PROPRIETARY RIGHTS

The Company's ability to compete effectively depends, in part, on its ability to
maintain the proprietary nature of its technologies through patents, trademarks,
copyrights and trade secrets. Important features

                                      11
<PAGE>

     
of the Company's products are represented by proprietary software, some of which
is licensed from others and some of which is owned by the Company. The Company
attempts to protect its proprietary software with a combination of copyrights,
trademarks and trade secrets, employee and third-party nondisclosure agreements
and other methods of protection. Despite these precautions, it may be possible
for unauthorized third parties to copy certain portions of the Company's
products or to reverse-engineer or obtain and use information that the Company
regards as proprietary. In addition, there can be no assurance that others will
not independently develop software products similar or superior to those
developed or planned by the Company.  For certain important additional
cautionary factors, risks and uncertainties, refer to Exhibit 99 of this form
10-K-A.
     

The Company has been granted three United States patents for inventions related
to its TurboRes(R) approach to enhancing the vertical resolution of
conventional laser printer engines,  three United States patents relating to the
Company's Big Ink Delivery System and one patent relating to its ThermalRes
approach to enhancing vertical resolution of printheads which use thermal
marking.  Additional patent applications are pending relating to the Company's
TurboRes, FastPort/TM/, VideoNet/TM/, Big Ink Delivery, and other imaging and
image enhancement and wide-format print engine technologies and techniques.
There can be no assurance that patents will issue from any of these pending
applications. In addition, with regard to current patents or patents that may
issue, there can be no assurance that the claims allowed will be sufficiently
broad to protect the Company's technology or that issued patents will not be
challenged or invalidated. Applications to patent the basic TurboRes, ThermalRes
and Big Ink Delivery System approaches and related technologies have been filed
in selected foreign countries. Patent applications filed in foreign countries
are subject to laws, rules and procedures which differ from those of the United
States and thus there can be no assurance that any foreign patents will issue as
a result of these applications. Furthermore, even if these patent applications
result in the issuance of foreign patents, some foreign countries provide
significantly less patent protection than the United States.
 
LICENSES

The Company licenses Microsoft Corporation's TrueImage/TM/ and Pipeline
Associates, Inc.'s PowerPage(R) printer-language software for enhancement and
use in its products to provide support for and compatibility with the PostScript
page description language. TrueImage is currently used in some typesetting
printing products, with PowerPage employed in the majority of typesetter and all
Big Color products. These license agreements provide for a per unit royalty on
printers shipped by the Company, subject to minimum quarterly requirements.

The Company has licensed operating software from Novell, Inc. and Microsoft
Corporation for use in its Unity typesetters and Big Color products. These
license agreements provide for a per unit royalty on printers shipped by the
Company.

Certain typefaces bundled with the Company's products and offered by the Company
to other customers are licensed from URW Unternehmensberatung ("URW") and others
and are edited by the Company for improved quality and utility. The URW license
agreement does not require additional payments, except with respect to the use
of the trademarked names of certain fonts. Licenses for the use of typeface
designs or trademark typeface names upon payment of royalties have also been
entered into with International Typeface Corporation, Inc., Treacyfaces, Inc.,
Linotype-Hell, Inc. and Fundicion Tipografic Neufville, S.A.

EMPLOYEES

At June 30, 1996 the Company had a total of 417 employees. None of the Company's
employees are represented by a labor organization and the Company has never
experienced a work stoppage or interruption due to a labor dispute.  Management
believes its relationship with employees is good.

                                      12
<PAGE>
 
ENVIRONMENTAL MATTERS

The Company believes that it is in compliance with all material aspects of
applicable federal, state and local laws regarding the discharge of materials
into the environment. The Company does not believe that it will be required to
spend any material amount in compliance.

ITEM 2.  PROPERTIES.

    
As of August 31, 1996  the Company leases an aggregate of 296,606 square feet of
office and warehouse space in Eden Prairie, Minnesota of which 168,034 square
feet is from a related party (see Item 13), pursuant to leases expiring at
various times through December 2010.  Of the total amount leased, approximately
46,022 square feet has been subleased until October 1, 1996.  The leases require
payments of property taxes, insurance and maintenance costs in addition to basic
rent and contain renewal options for periods ranging from one to three years. 
The Company is fully utilizing its current facilities and will likely need to 
acquire additional space when its new product, DesignWinder, reaches production
quantities expected in the Fall of 1996. Additional facilities are readily 
available within or near the current campus at rates comparable to what the 
Company is currently paying.
     

The Company also leases approximately 14,850 square feet of office and warehouse
for its European headquarters in Hoofddorp, outside of Amsterdam, The
Netherlands.

ITEM 3.  LEGAL PROCEEDINGS.

    
In October 1995, a shareholder of the Company (Becker) filed an action against
the Company and four of  its officers and directors alleging violations of the
Securities and Exchange Act of 1934.  In December 1995, two other similar suits
were filed by other shareholders and subsequently consolidated with the Becker
suit.  The Becker claims have been pled as a class action including all
purchasers of the Company's  stock during the period of December 3, 1993 through
December 8, 1994.  In February 1996, one of the directors named in the suit was
dismissed from the case without prejudice.  The suit alleges that the Company
and the named individual defendants knew of material, negative, non-public
information, withheld such information from the public so as to cause a fraud on
the market, and that the individual defendants personally benefitted by selling
shares of common stock with knowledge of such material adverse information.  The
individual defendants may have the right to indemnification from the Company for
their defense and liability.  The individual defendants, but not the Company,
may have coverage for certain claims under the Directors' and Officers'
insurance policies in effect at the relevant time.  The Company believes the
action is totally without merit and is vigorously defending the matter.  The
Company currently intends to press the case to trial so that the facts will be
heard.  In order to contain costs, preserve its ability to meet the demands of
litigation throughout the lengthy trial process and bolster its legal defense
team (which includes the resources of outside counsel), the Company has hired an
in-house litigator and support staff with experience in these types of suits.
The case is in the early stages of discovery and the plaintiffs' total damage
claim has not been articulated. If the matter is not resolved by settlement or a
final judgement within the limits and coverage of the applicable Directors' and
Officers' insurance, this litigation could have a material adverse effect on the
Company. See Exhibit 99 of this form 10-K-A for additional discussion of risk
factors.
     

In October 1995, LaserMaster Corporation (LMC) filed suit against Sentinel
Imaging, a division of Sentinel Business System, Inc.  The complaint alleges,
among other things, patent infringement, trademark infringement, Lanham Act
violations, misappropriation of trade secrets, and interference with contractual
relationships.  This action is related to LaserMaster's Big Color product line
generally and, in particular, LaserMaster's Big Ink delivery system and
ColorMark color management system.  Sentinel Imaging has counterclaimed for
false advertising, patent misuse, and unfair competition by LaserMaster. If LMC
does not prevail on its claims and Sentinel does prevail on the claims it has
alleged, the outcome of these proceedings could have a material adverse effect
on the Company.

                                      13
<PAGE>
 
    
The Company is currently involved in a dispute regarding liability for the value
of certain components lost by a carrier prior to delivery to the Company. At
this time the liability of the shipper, the carrier, or the insurers of the
shipped, the carrier and the Company has not been determined. 

The Company is involved in legal proceedings related to customers credit and
product warranty issues in the normal course of business. In certain
proceedings, the claimants have alleged claims for exemplary or punitive damages
which may not bear a direct relationship to the alleged actual incurred damages,
and therefore could have a material adverse effect on the Company. At this time
none of the proceedings is expected to have a material effect on the Company's
operations or financial condition.
     


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

The Annual Meeting of the shareholders of LaserMaster Technologies, Inc. was
held on May 23, 1996 pursuant to notice to all shareholders of record at the
close of business on April 5, 1996.  As of the notice of the meeting there were
11,395,634 common shares outstanding. The following matters were submitted to a
Vote of the shareholders of record at the annual meeting:

1.  The election of Melvin L. Masters and Ralph D. Rolen as directors of the
Company for continuing terms expiring in 1998.  The directors were elected by
the vote of 8,788,101 proxies in favor of the resolution to elect both
directors.  There were no abstentions or broker non-votes of record.

The terms of directors Lawrence J. Lukis, Jean-Louis Gassee, and Robert J.
Wenzel did not expire in 1996 and continued after the annual meeting.

2.  The approval of the adoption of the 1996 Stock Incentive Plan.  The
resolution passed by  the vote of 4,520,770 votes in favor of the resolution to
approve the plan.   There were no abstentions or broker non-votes of record.

3.  The approval of the issuance to TimeMasters, Inc. of warrants to purchase
277,952 shares of the Company's common stock and a right to convert $1 million
of a promissory note into the Company's common stock.  The resolution in favor
of approval passed by votes of 6,017,657 proxies.   There were no abstentions
or broker non-votes of records.

                                      14
<PAGE>
 
                                    PART II
                                    -------

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
         STOCKHOLDER MATTERS.

DIVIDENDS

The Company has never paid cash dividends on its Common Stock.  The Company
currently intends to retain any earnings for use in its business and,
accordingly, does not anticipate paying any cash dividends in the foreseeable
future.  Any payment of dividends in the future will depend upon the capital
requirements, earnings, and general business and financial condition of the
Company, as well as other factors which the Board of Directors may deem
relevant.

MARKET INFORMATION

Since July 17, 1990, the Company's Common Stock has traded on the Nasdaq
National Market System (Nasdaq symbol: LMTS).  The following table sets forth
the high and low sale prices reported in the Nasdaq National Market System:

    
<TABLE>
<CAPTION>
                                             Common Stock
                                            --------------
                                             High      Low
                                             ----      ---
<S>                                          <C>       <C>
Fiscal Year 1995
  First Quarter............................  $18.125   $7.50
  Second Quarter...........................   17.125    5.875
  Third Quarter............................    7.25     5.00
  Fourth Quarter...........................    8.00     4.625
 
Fiscal Year 1996
  First Quarter............................    7.625    5.125
  Second Quarter...........................    7.50     5.125
  Third Quarter............................    7.125    4.75
  Fourth Quarter...........................    6.875    3.625
 
Fiscal Year 1997
  First Quarter (through August 31, 1996)..    4.813    3.25
</TABLE> 
     

------------------

On August 31, 1996, the last reported sale price of the Common Stock was $4.375
per share.  As of such date, there were approximately 259 record holders and
3,640 beneficial holders of the Common Stock.

                                      15
<PAGE>
 
ITEM 6.  SELECTED FINANCIAL DATA.

The following selected consolidated financial information has been derived from
the consolidated financial statements of the Company, which have been audited by
Deloitte & Touche, LLP, independent certified public accountants, for the years
ended June 30, 1996, 1995, 1994, 1993, and 1992.  The following information
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Consolidated Financial
Statements of the Company and notes related thereto.

<TABLE>
<CAPTION>
 
                                                            Fiscal Years Ended June 30,
                                            --------------------------------------------------------
(In thousands, except per share amounts)      1996         1995        1994       1993        1992
                                            --------     --------    --------   --------    --------  
<S>                                         <C>           <C>        <C>        <C>         <C>       
Statement of Operations Data:
  Net sales..............................   $ 93,592       $119,438   $105,849   $ 68,227    $ 59,857
  Cost of goods sold.....................     64,379/(a)/    72,857     59,852     37,387      31,045
                                            --------       --------   --------   --------    --------
 
        Gross profit.....................     29,213         46,581     45,997     30,840      28,812
Operating expenses:
 Sales and marketing.....................     21,109         27,091     21,810     19,360      17,450
 Research and development................      6,149          6,210      3,335      1,890       2,034
 General and administrative..............     11,310         11,552      9,634      8,813       7,795
 Restructuring and other special charges.      4,431/(a)/
                                            --------       --------   --------   --------    --------
 
     Operating profit (loss).............    (13,786)         1,728     11,218        777       1,533
 Other expenses (primarily interest).....     (1,823)        (1,433)    (1,160)    (1,776)     (1,935)
                                            --------       --------   --------   --------    --------
 
Earnings (loss) before income taxes
  and cumulative effect of a change in
  accounting principle...................    (15,609)           295     10,058       (999)       (402)
Income tax benefit (provision)...........      5,147            (89)    (3,394)       289         245
                                            --------       --------   --------   --------    --------
Earnings (loss) before cumulative
  effect of a change in accounting
  principle..............................    (10,462)           206      6,664       (710)       (157)
Cumulative effect on prior years
  of a change in accounting principle....                                                         301
                                            --------       --------   --------   --------    --------       
 
  Net earnings (loss)....................   $(10,462)      $    206   $  6,664   $   (710)   $    144
                                            ========       ========   ========   ========    ========
 
Per common share:
 Earnings (loss) before cumulative
  effect of change in accounting
  principle..............................   $  (0.93)      $   0.02   $   0.57   $  (0.07)   $  (0.02)
 Cumulative effect on prior years
  of a change in accounting principle....                                                        0.04
                                            --------       --------   --------   --------    --------     
 Net earnings (loss).....................   $  (0.93)      $   0.02   $   0.57   $  (0.07)   $   0.02
                                            ========       ========   ========   ========    ========
 
 Weighted average common and dilutive
  common equivalent shares outstanding....    11,305         12,206     12,189      9,565       9,342
</TABLE>

/(a)/In May 1996, the Company incurred charges of $9.9 million, consisting of
restructuring and other special charges of $4.4 million and a special charge to
cost of sales of $5.5 million related to the Company's revised business plan and
technical problems in one of its products.

                                      16
<PAGE>
 
<TABLE>
<CAPTION>
                                                             June 30,
                                            -------------------------------------------
                                             1996     1995     1994     1993     1992
                                            -------  -------  -------  -------  -------
                                                           (In thousands)
<S>                                         <C>      <C>      <C>      <C>      <C>
Balance Sheet Data:
 Working capital..........................  $ 2,580  $13,708  $13,973  $ 5,869  $ 6,135
 Total assets.............................   46,545   59,161   47,401   29,008   31,476
 Current liabilities......................   30,087   30,933   21,042   12,898   14,578
 Long-term debt, less current maturities..      820    1,599    1,590    5,743    6,069
 Stockholders' equity.....................   15,638   25,293   23,139    9,817   10,413
</TABLE>

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS FROM OPERATIONS

(Tabular information: dollars in thousands, except per share and percentage
amounts)

CAUTIONARY STATEMENT

    
The statements in this Management's Discussion and Analysis that are forward
looking involve numerous risks and uncertainties and are based on current
expectations. Actual results may differ materially. Refer to exhibit 99 of this
form 10-K-A for certain important cautionary factors, risks and uncertainties
related to "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Act").
     

OVERVIEW

In fiscal 1994, the Company made the long-term decision to migrate away from
products based on standard marking engines manufactured by unrelated third
parties to relying on products designed and manufactured by the Company.  The
decision to progressively integrate the process of developing proprietary
engines in-house, was made in an effort to better distinguish its products.
Because these proprietary engines require the use of specially designed or
configured media or inks and achieve optimum performance when using complete,
LaserMaster-branded systems, the effect of this strategy has been to generate a
continuous after-market stream of revenue from the sale of LaserMaster-branded
consumables.  This consumables strategy is expected to build an increasing base
of revenues for the Company as well as enhance gross profit margins above those
expected from hardware and software sales alone.

The implementation of this engine design and manufacture process has taken
longer and has been more costly than the Company had originally anticipated.
The Company has experienced higher than expected production costs during this
period which were associated with the startup of its first two proprietary
printer engine manufacturing lines, PressMate and DisplayMaker Express.  The
start up costs of both new products required substantial resources and the
corresponding use of working capital.

During the fourth quarter of fiscal 1996, the Company incurred pre-tax charges
of $9.9 million consisting of a special charge to cost of sales of $5.5 million
and restructuring and other special charges of $4.4 million as a result of its
revised business plan which is intended to accelerate the Company's migration
away from total reliance on integration of third-party-supplied engines.

                                       17
<PAGE>
 
RESULTS OF OPERATIONS

The following table sets forth certain items from the Company's Consolidated
Statements of Operations expressed as a percentage of net sales:

<TABLE>
<CAPTION>
                                                                   Fiscal Years Ended June 30,
                                                                   ---------------------------
                                                                     1996       1995    1994
                                                                     ----       ----    ----
<S>                                                                  <C>        <C>     <C>

Net sales.........................................................  100.0%     100.0%  100.0%
Cost of goods sold................................................   68.8(a)    61.0    56.6
                                                                    -----      -----   -----
Gross margin......................................................   31.2       39.0    43.4
Expenses:
   Sales and marketing............................................   22.5       22.7    20.6
   Research and development.......................................    6.6        5.2     3.1
   General and administrative.....................................   12.1        9.7     9.1
   Restructuring and other special charges........................    4.7/(a)/   0.0     0.0
                                                                    -----       -----  -----
 
Total operating expenses..........................................   45.9       37.6    32.8
                                                                    -----      -----   -----
Operating profit (loss)...........................................  (14.7)       1.4    10.6
Other income (expense):
   Interest expense...............................................   (1.9)      (1.1)   (1.2)
   Other..........................................................   (0.1)      (0.1)    0.1
                                                                    -----      -----   -----
 
Earnings (loss) before income taxes...............................  (16.7)       0.2     9.5
 
Income tax benefit (provision)....................................    5.5        0.0    (3.2)
                                                                    -----      -----   -----
 
Net earnings (loss)...............................................  (11.2)%      0.2%    6.3%
                                                                    =====      =====   =====
</TABLE>

/(a)/In May 1996, the Company incurred charges of $9.9 million, consisting of
restructuring and other special charges of $4.4 million and a special charge to
cost of sales of $5.5 million related to the Company's revised business plan and
technical problems in one of its products.  The impact on cost of sales and
operating expenses was 5.9% and 4.7%, respectively.

NET SALES

Net sales were $93.6 million, $119.4 million and $105.8 million in fiscal 1996,
1995 and 1994, respectively.  The decrease in net sales of 21.6% in fiscal 1996
was attributable to decreases in plain-paper typesetting products and price
competition in the Big Color printer market.  These decreases were somewhat
offset by DisplayMaker Express (DME), which was introduced in fiscal 1996, and
increased consumables revenues.  Sales growth of 12.8% from fiscal 1994 to 1995
was primarily attributable to increases in the sales of Big Color products and
the introduction of PressMate, offset by a decrease in sales of plain-paper
typesetting and WinPrint(R)/OEM products.  Sales during the three-year period
were impacted by the decline in the plain-paper typesetting and
WinPrint/OEM/Imaging product lines as the Company has de-emphasized these
products in favor of more specialized, professional printing products and
proprietary printer products with complimentary consumables.  With the reduction
in research, development, sales and marketing expenditures related to the plain-
paper typesetting products, the Company expects the transition out of these
product lines to be complete sometime during fiscal 1997. The Company  believes
that plain-paper typesetting revenues will be replaced with revenues from
PressMate-FS, DME, DesignWinder and future product releases expected in fiscal
1997.

In December of 1995, the Company introduced a revised model PressMate product
named PressMate-FS which management believes addresses performance related
concerns experienced with the older model

                                       18
<PAGE>
 
PressMate. Over the last two fiscal quarters of 1996, the Company embarked on an
aggressive repositioning, repricing and exchange campaign to update or replace
older model PressMates in the field with the new PressMate-FS. PressMate-related
hardware sales increased to $1.7 million in the fourth fiscal quarter of 1996
from $570,000 in the third fiscal quarter. This rebound in PressMate sales can
be attributed to the introduction of 133 line-per-inch traditional halftone
capabilities accompanied by a rejuvenated marketing effort intended to
communicate the new level of reliability and performance achieved with the new
PressMate-FS. The Company believes that revenues from sales of PressMate-FS will
increase in fiscal 1997.

The Company released DisplayMaker Express, its second proprietary printer
engine, late in the second fiscal quarter of 1996, generating Big Color hardware
sales of $9.3 million and after-market ink and media sales of $1.7 million for
the fiscal year ended 1996. The anticipated growth in sales of DME has been
slowed by component quality issues as the Company's sole supplier of a key
component has been unable to provide sufficient production levels and maintain
acceptable quality standards. These quality issues with the supplier have
precluded expected productivity gains in the overall DME line. The Company is
actively working with its vendor to resolve the problems it is currently
experiencing and expects these issues to come under control in the near future.
However, if the vendor is unable to maintain sufficient quantities and product
quality to meet the Company's production needs, revenues from DME could be
significantly below management's expectations for fiscal 1997.

In fiscal 1996, the Company sold $37.2 million (40% of net sales) of higher
margin consumables consisting primarily of ink, media and film, along with
maintenance contracts and spare parts compared to $ 27.1 million (23% of net
sales) in the prior year. With the installed base of printers increasing and the
releases of PressMate, DisplayMaker Express and DesignWinder, the Company
believes that after-market consumables revenues in existing and new markets will
continue to increase in fiscal 1997. During the fourth quarter of 1996, the
Company announced several additions to its consumables product line which allow
the installed base of Big Color customers to capture the business opportunities
presented by both indoor and outdoor applications. Changes included increased
ink capacity from 400 ml to 500 ml, price reductions on its dye-based indoor
inks, and introduction of new pigmented outdoor inks and related media. In
addition, the Company announced a supply agreement with 3M Commercial Graphics
Division providing for a complete Matched Component System of inks, media and
laminate that carry a one-year exterior or five-year interior written warranty.
At this time the Company and 3M are uncertain about the timing of any shipments
for the 3M materials pending new negotiations related to additional
specifications now being requested by the Company.

The following table sets forth net sales by product line expressed in thousands
and as a percent of net sales:
<TABLE>
<CAPTION>
 
                                          Fiscal Years Ended June 30,
                           ---------------------------------------------------
NET SALES                        1996               1995             1994
                                 ----               ----             ---- 
<S>                        <C>      <C>     <C>       <C>     <C>       <C>
 
Consumables..............  $37,174   39.7%  $ 27,148   22.7%  $ 14,788   14.0%
Big Color................  $35,190   37.6%  $ 37,525   31.4%  $ 28,686   27.1%
Plain-paper Typesetting..  $13,834   14.8%  $ 41,123   34.4%  $ 51,269   48.4%
PressMate................  $ 6,028    6.4%  $  7,375    6.2%  $      0    0.0%
WinPrint/OEM/Imaging.....  $ 1,366    1.5%  $  6,268    5.3%  $ 11,106   10.5%
                           -------  -----   --------  -----   --------  -----
 
Total net sales..........  $93,592  100.0%  $119,439  100.0%  $105,849  100.0%
                           =======  =====   ========  =====   ========  =====
 </TABLE>
                                       19
<PAGE>
 
International Sales

Japan, Asia/Pacific sales increased both as a percentage of total net sales and
in dollars from fiscal 1994 to fiscal 1996 as a result of increased penetration
of the Asian markets. The release of DisplayMaker Express in fiscal 1996 and
DisplayMaker Professional in fiscal 1994 generated significant sales in Japan.
Decreased sales in the European market in fiscal 1996 are attributable to
increased competition in the plain-paper typesetting and Big Color product lines
as well as the Company's realignment of its European distribution channels.
These decreases in Europe were somewhat offset by sales of DME and consumables
increases. The following table sets forth international sales expressed as a
percent of total net sales and in thousands:

<TABLE>
<CAPTION>
                                  Fiscal Years Ended June 30,
                       ---------------------------------------------- 
INTERNATIONAL SALES          1996           1995             1994
                             ----           ----             ----
<S>                    <C>      <C>    <C>      <C>    <C>      <C>
 
Europe...............  $19,656  21.0%  $23,022  19.3%   $17,666  16.7%
Japan, Asia/Pacific..   13,235  14.1    12,235  10.2     10,887  10.3
Latin America........    5,146   5.5     5,118   4.3      3,878   3.7
Canada...............    2,892   3.1     2,496   2.1      3,088   2.9
                       -------  ----   -------  ----    -------  ----
 
Total net sales......  $40,929  43.7   $42,871  35.9%   $35,519  33.6   
                       =======  ====   =======  ====    =======  ====
</TABLE>

GROSS MARGIN

Gross margins, expressed as a percent of net sales, were 31.2% (37.1% excluding
special charges), 39.0% and 43.4% for fiscal 1996, 1995 and 1994, respectively.
Gross margin decreased in 1996 from 1995 primarily as a result of increased
production costs associated with the manufacture of proprietary engines. The
Company's gross margins during all three fiscal years were negatively affected
by aggressive pricing of its plain-paper typesetting products and, in fiscal
1996, aggressive pricing of some of its Big Color products developed as a
systems integrator, in an attempt to maintain market share against heavy
discounting generated by broad distribution from its third-party OEM supplier of
the platform used in the DisplayMaker Professional printer. In addition, gross
margins during all three fiscal years were negatively impacted by increased
production and overhead costs associated with the start-up of proprietary
printer engine manufacturing. In fiscal 1996, 1995 and 1994 the Company's gross
margins were favorably impacted by increasing sales of after-market consumables
which typically have higher gross margins than hardware/software sales alone.

    
Included in fiscal 1996 cost of sales is a special charge of $5.5 million
consisting of $4.2 million in inventory revaluation associated with the
transition from certain product lines developed as a systems integrator and $1.3
million to cover replacement costs, product returns, and inventory revaluation
related to the Company's older model PressMate product. These charges are based
on the Company's estimates of net realizable value of the related inventory and
for expected returns of older model PressMates as of the time the charges were
incurred through the release of the Company's first two proprietary printer 
products many issues were encountered which required new and innovative customer
service, technical support, and manufacturing process enhancements.
     

    
The Company responded to the needs of its installed base of DME customers with a
"Do Whatever It Takes Campaign." In addressing these issues the Company has
added experienced customer service staff, technical support staff, manufacturing
managers and engineers. Production quality and inspection standards have been
developed and implemented. In addition, key personnel of the Company have taken
an active role in assisting major suppliers with implementation of control
standards and processes to ensure component quality as it relates to the
Company's needs and requirements.
    
 
                                       20
<PAGE>
 
SALES AND MARKETING

Sales and marketing expenses were $21.1 million, $27.1 million and $21.8 million
in fiscal 1996, 1995 and 1994, respectively. The decrease in expense of $6.0
million in 1996 from 1995 included decreased expenses related to sales of $3.6
million and marketing of $2.5 million, offset by increases in technical support
of $100,000. The decrease in sales and marketing expense in fiscal 1996 is
primarily related to reductions directly related to lower sales volumes. The
increase in expense of $5.3 million in 1995 from 1994 included $3.0 million in
sales expenses, $1.9 million in marketing expense and $400,000 in technical
support services.

RESEARCH AND DEVELOPMENT

The Company capitalized software development costs of $2.7 million, $3.5 million
and $3.3 million in fiscal 1996, 1995 and 1994, respectively, as required by
FASB No. 86 (see Note 1 of Notes to Consolidated Financial Statements). The
decrease in capitalized software development in 1996 from 1995 reflects the
Company's focus on developing its first two proprietary printer engines and less
on the systems integrator type of products. Research and development
expenditures, including amounts expensed and capitalized, were $8.8 million,
$9.7 million and $6.7 million in fiscal 1996, 1995 and 1994, respectively. As a
percent of overall sales, these expenditures represented 9.1%, 8.1% and 6.3% in
fiscal 1996, 1995, and 1994, respectively. The decrease in gross R&D
expenditures from fiscal 1995 to 1996 is attributable to increased efficiency in
the Company's development activities and reductions in man power allocated to
this area. In developing the first two proprietary engines, many process and
systems enhancements were implemented to assist in the research, design and
subsequent release of products to production. Cutting edge design software,
online vendor approval and engineering change order systems have greatly
enhanced the design process as well as the interdepartmental communication
between the design arm of the organization and the operations (continuation
engineering, purchasing and production) arm. Increased benefits and cost savings
are anticipated in future periods as these and other systems continue to
develop. The Company is striving to get the most benefit for its investment in
R&D. The future depends on continually developing new and better products for
the markets it serves. As a result, the Company intends to reinvest any cost
savings into developing new technology and does not anticipate a material change
in the rate it invests in this area. The increase in R&D expenditures from 1994
to 1995 is attributable to increased staffing levels and costs associated with
the development of the Company's first two proprietary printer engines. Software
development costs capitalized during these periods relate primarily to
DisplayMaker Professional, DisplayMaker Express, PressMate, Unity, and
DesignWinder.

GENERAL AND ADMINISTRATIVE

General and administrative expenses were $11.3 million, $11.6 million and $9.6
million in fiscal 1996, 1995 and 1994, respectively. Fiscal 1996 decreases are
the result of reductions in the infrastructure necessary to handle lower sales
volumes, offset in part by costs associated with the defense of the shareholder
lawsuit (see" Legal Proceedings" for further details) and higher than normal bad
debt expense as a percent of net sales which was in part, negatively impacted by
product reliability issues related to new engines. Increases during 1995 were
primarily attributable to increased staff and facilities required to support
higher sales levels.

RESTRUCTURING AND OTHER SPECIAL CHARGES

In May 1996, the Company incurred $4.4 million in restructuring and other
special charges as a result of its revised business plan which is intended to
accelerate the Company's migration from a systems integrator to a manufacturer
of proprietary printing engines. Included in the $4.4 million charge is $3.3
million for the revaluation of intellectual property tied to certain
technologies and contract rights and $282,000 for severance related to workforce
reductions. The charge also includes $443,000 for expected

                                      21
<PAGE>

     
losses on the disposal of property and equipment and $403,000 in commitments
under non-cancelable leases as a result of consolidating foreign sales offices
and certain domestic operations. As a result of these actions, operating 
expenses should be approximately $200,000 per month lower in fiscal 1997 than in
fiscal 1996. Some of these expenses may be incurred again as DesignWinder and 
other new products are introduced in the marketplace.
     

INTEREST EXPENSE

Interest expense was $1.8 million, $1.3 million and $1.3 million in fiscal 1996,
1995 and 1994, respectively. The increase in interest expense in 1996 is
attributable to an overall increase in average debt levels and costs associated
with obtaining new financing.

INCOME TAXES

    
The effective income tax rate was 33.0%, 30.1% and 33.7% in fiscal 1996, 1995
and 1994, respectively. The Company expects its effective tax rate to decrease
as it returns to profitability due to the benefits it can receive from the use
of its Foreign Sales Corporation. At June 30, 1996, the Company had
approximately $5.9 million in net deferred tax assets. Realization of
approximately $3.6 million in deferred tax assets related to federal net
operating loss carryforwards and federal research and development credits will
require the Company to generate future taxable income of approximately $11
million within the next 15 years to receive full taxable benefit. The remaining
$2.3 million in deferred tax assets can be recovered by future reversals of
existing taxable temporary differences. The Company expects to generate
sufficient taxable income within the next 15 years to recover the entire $5.9
million in net deferred tax assets. See Note 11 of Notes to Consolidated
Financial Statements for further disclosures relating to income taxes.
     

LIQUIDITY AND CAPITAL RESOURCES

During the three years ended June 30, 1996, liquidity needs have been satisfied
primarily by cash flow from operations and short and long-term borrowings.
Working capital was $2.6 million at June 30, 1996 compared to $13.7 million at
June 30, 1995. The decrease in working capital is primarily due to a net loss
from operations of $10.5 million in fiscal 1996.

Operating activities provided cash of $6.2 million, $4.4 million and $3.4
million in fiscal 1996, 1995 and 1994, respectively. The increase in cash
provided from operations in 1996 compared to 1995 is due principally to lower
levels of inventory resulting from increased efficiencies in forecasting and
planning. In addition, amounts owed to suppliers have increased in proportion to
inventory levels compared to prior years.

Cash used in investing activities was $6.3 million, $8.0 million and $7.3
million in fiscal 1996, 1995 and 1994, respectively, which includes expenditures
on property and equipment, capitalized software development, patents and other
intellectual property. The decrease in cash used in investing activities in 1996
compared to 1995 consists of decreased expenditures on property and equipment
and capitalized software offset somewhat by increases in intellectual property.
The increase in cash used in investing activities in 1995 compared to 1994 is
due primarily to increased expenditures on intellectual property. The Company
does not expect significant increases in expenditures for property and equipment
in fiscal 1997, despite its initial manufacturing ramp up, as its production
processes and equipment are not particularly capital intensive in this phase.

    
Financing activities consumed $365,000 of cash during fiscal 1996. LMC borrowed
$1,765,000 in the first quarter of fiscal 1996 from TimeMasters, Inc. ("TMI"), a
corporation controlled by the Company's Chief Executive Officer, to cover short-
term cash shortfall. In January 1996, LMC replaced the operating line of credit
that it maintained through a commercial bank with a new, three-year credit
agreement with a commercial financing company. The new agreement allows LMC to
borrow up to $10 million based on availability equal to 60% of net eligible
accounts receivable and 25% of net eligible inventory. The agreement expires
January 17, 1999 and requires the borrower to meet various financial covenants
involving capital expenditures, additions to capitalized software and
intellectual property, minimum debt service coverage ratio, and maintenance of a
minimum net worth. The agreement also requires LMC to meet various non-financial
covenants. As part of this agreement, the commercial finance company required
that the loan to TMI be subordinated to the rights and security interest of the
lender, and that a forbearance agreement restrict repayment of the TMI debt to
permit repayments of specified amounts only if certain financial conditions
were met, of upon the sale of common stock. In consideration for agreeing to
such subordination and forbearance, TMI was issued a warrant to purchase 277,953
shares of the Company's common stock at an exercise price of $6.35 per share and
received a right to convert up to $1 million of indebtedness into common stock
at the lower of $5.875 per share or the market price on the date of such
conversion. The warrant and note to TMI, which the Company believes were on
terms at least as favorable to the Company as could have been obtained from an
unaffiliated party, were approved by shareholders at the Company's annual
meeting in May 1996.
     

                                      22
<PAGE>
 
Credit availability under the line of credit with the commercial finance company
was exhausted during the first quarter of fiscal 1997. The Company's
relationship with trade creditors, including a number of suppliers of components
that were not available from alternative sources, became strained as the Company
deferred payment of trade payables. The Company worked with several of its trade
creditors to restructure their indebtedness and sought equity financing to meet
its cash needs. In September 1996, the Company entered into a series of
agreements with one of its largest trade creditors and their supplier,
converting approximately $1.7 million of trade payables and a promissory note of
$859,516 into $2.5 million in convertible subordinated debentures. The
debentures allow the trade creditor to convert as much of the debt as would
purchase 30,000 shares of the Company's common stock in any one week period,
provided that the market price for the Company's common stock exceeds $6.00 per
share. A related agreement requires the supplier to provide approximately $1.5
million in inventory to the Company in resolution of quality issues with the
product previously supplied by the trading partner.

    
Additionally, to meet the cash shortfall in September 1996, the Company
privately placed 2,285,715 shares of its common stock for a purchase price of
$4.375 per share, together with warrants to purchase an additional 2,285,715
shares with an exercise price of $7.00 per share, for an aggregate consideration
of $10 million. Of such shares, 1,371,429 shares were sold to Sihl-Zurich Paper
Mill on Sihl AG, a Swiss corporation ("Sihl"), for $6 million, $2.2 million of
which is represented by a promissory note that is due when a promissory note
from a group of entities affiliated with TMI is paid. Sihl conditioned its
investment on an investment of $4 million by the Company's Chief Executive
Officer or an entity with which he is affiliated. In satisfaction of such
condition, TMI and affiliates (the "TimeMasters Group") purchased 914,286 shares
for $4 million and received warrants to purchase an additional 914,286 shares at
$7.00 per share, all of which is represented by promissory notes that are due
October 15, 1996 or upon sale of real estate that such group is selling to
finance the investment. Both Sihl and the TimeMasters Group pledged the shares
and warrants they purchased to secure their promissory notes and the TimeMasters
Group also secured its notes by a mortgage on the real estate. The warrants
issued to TMI and Sihl have a term of eight years and may be exercised at any
time. The agreement pursuant to which such shares and warrants were purchased
provides for both incidental and demand registration rights for a period of ten
years from the closing date of the transaction. Additionally, it provides to
Sihl, but not to the TimeMasters Group, a right to first refusal to purchase a
pro-rata portion (based on the ratio of number of shares Sihl owns or has the
right to purchase to all shares of the Company that are outstanding or subject
to options, warrants or convertible securities), of any securities (subject to
certain exceptions) that the Company proposes to issue until Sihl's percentage
ownership declines below 10%. The agreement prohibits repayments of LMC's
previous indebtedness to TMI until TMI's promissory notes are paid in full or
simultaneously therewith. The Company anticipates applying a portion of the
proceeds from the private placement of common stock to repayment of LMC's
indebtedness to TMI under the note to TMI in the principal amount of $1.765 
million, as permitted by the subordination and forbearance agreement.
     

The Company simultaneously entered into a strategic alliance with Sihl, a
leading manufacturer of specialty papers and coatings. The Company and Sihl will
collaborate on research and development and marketing in order to develop new
media and specialty coatings which are intended to address the rapid growth of
the graphics and photo realistic segments of the inkjet printing industry.

In September 1996, the Company also privately placed 410,256 shares of its
common stock for a purchase price of $4.875 per share, together with warrants to
purchase an additional 471,286 shares with an exercise price of $6.79 per share,
for an aggregate consideration of $2 million. The shares and warrants were
issued to General Electric Capital Corporation ("GE"), the Company's senior
lender. Of the total purchase price, $1 million is represented by a full
recourse promissory note that is due the earlier of March 31, 1997 or when a
promissory note from a group of entities affiliated with TMI is paid. The note
also provides that upon default, GE may satisfy the note by trading one half of
the shares and warrants for cancellation. The Stock Purchase Agreement also
provides for both incidental and demand registration rights. The GE investment
does not carry with it the preemptive stock purchase rights granted to Sihl as
described above.

                                      23
<PAGE>
 
Each of the foregoing transactions was approved by a disinterested majority of
the Board of Directors of the Company, by shareholders, or by both. The Company
believes that each such transaction is on terms at least as favorable to the
Company as could have been obtained from an unaffiliated entity.

    
The Company does not have any significant commitments for capital expenditures,
but is devoting significant cash resources to defense costs associated with the
class action litigation brought against the Company and certain officers 
Additionally, the Company has plans to expend significant capital to promote the
introduction of its new DesignWinder product series and to expand sales and
marketing efforts related to after-market consumables. The Company may also be
required to lease additional space when DesignWinder reaches production levels.
Management expects that the proceeds from the private placements will allow the
Company to carry out its business plan for fiscal 1997. This plan includes the
introduction of new proprietary print engine, DesignWinder, and new consumable
offerings in late calendar 1996 along with at least one additional print engine
and consumables into the next fiscal year. Management believes this plan is
achievable and will result in sufficient cash flow to fund operations. If sales
are less than expected or reasonably priced sources of financing are not
available, the Company may be required to revise its business plan or further
restructure its capitalization. Substantially all of the Company's assets have
been pledged to secure outstanding borrowings and there can be no assurances
that the Company would be able to protect existing equity holders in the event
of such a restructuring.
     

FOREIGN CURRENCIES

In general, the impact of foreign currency gains/losses are immaterial to the
Company as a whole. LME extends credit in the normal course of business in five
relatively stable European currencies. In addition, LME's financing agreement
allows it to factor those receivables and receive Dutch Guilders in which it
pays its expenses. The impact of this is to effectively hedge the Company's
exposure to foreign currency risk. Essentially all other transactions are in
U.S. dollars.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 
See Financial Statements and Supplementary Data attached.


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

None

                                      24
<PAGE>
 
                                    PART III
                                    --------

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

THE FOLLOWING TABLE SETS FORTH INFORMATION, AS OF AUGUST 31, 1996, CONCERNING
THE DIRECTORS OF THE COMPANY:


<TABLE> 
<CAPTION> 
                                                                            Year
                                                                          Became
Name, Age, Positions, Principal Occupations, Directorships              Director
--------------------------------------------------------------------------------
<S>                                                                        <C> 
                      Directors whose terms expire in 1996

MR. WENZEL; age 45; has been Chief Operating Officer of the Company since   1996
1996 October 1991 and President of LaserMaster Corporation, the Company's
principal operating subsidiary, since October 1989.  He joined LaserMaster
as General Manager of the PC Division in May 1989 and became Executive
Vice President shortly thereafter.  Prior to joining LaserMaster, Mr. Wenzel
was employed by CPT Corporation, a company specializing in the manufacture
and sale of word processing systems, where he served as General Manager of a
computer products division from January 1988 through April 1989, and in other
capacities before that time.

                      Directors whose terms expire in 1997

LAWRENCE J. LUKIS; age 48; Mr. Lukis co-founded LaserMaster in February,    1989
1986 and has been Chief Technical Officer of the Company since May 1989.

JEAN-LOUIS GASSEE; age 52; Since 1990, Mr. Gassee has been Chairman         1990
and Chief Executive Officer of Be, Inc. of Menlo Park, California.
That company is involved in personal computer technology.  From August
of 1988 until September, 1990, Mr. Gassee was President of the Apple
Products Division of Apple Computer, Inc.  Prior to that time he held the
offices of Senior Vice President of Research and Development (1987 to
August, 1988) and Vice President of Product Development of Apple
Computer, Inc. from 1985 to 1987.  Mr. Gassee is also a director of
Electronics for Imaging of San Bruno, California and 3COM, Sunnyvale,
California.

                      Directors whose terms expire in 1998

MELVIN L. MASTERS; age 42; Mr. Masters co-founded LaserMaster               1989
in February, 1986 and has been Chairman, Chief Executive Officer and
President of the Company since May 1989.  Mr. Masters also owns TimeMasters,
Inc., a company established for the purpose of property management
which also has investments in the fields of wireless voice and data
communications and in personal motorsports products.

RALPH D. ROLEN; age 42; Mr. Rolen is Senior Vice President and              1989
Manager of the Retail Credit Division of First Tennessee National Bank
of Memphis, Tennessee, a position he has held since January, 1989.
</TABLE> 

The Board of Directors met two times during the fiscal year ended June 30, 1996.
All directors attended each meeting. The Board of Directors has: (i) an Audit
Committee composed of Mr. Masters, Mr. Gassee and Mr. Rolen, ii) a Stock Option
Committee composed of Mr. Gassee and Mr. Rolen, and (iii) a

                                       25
<PAGE>

Compensation Committee composed of Mr. Masters, Mr. Gassee and Mr. Rolen.  The
Board of Directors has no standing nominating committee.



THE FOLLOWING TABLE SETS FORTH INFORMATION, AS OF AUGUST 31, 1996, REGARDING THE
EXECUTIVE OFFICERS OF THE COMPANY:

    
<TABLE>
<CAPTION>
Name                        Age                            Positions
-----------------------------------------------------------------------------------------------
<S>                         <C>  <C>
Melvin L. Masters            42  Chief Executive Officer, President and Chairman of the Board
Lawrence J. Lukis            48  Chief Technical Officer
Robert J. Wenzel             45  Chief Operating Officer and President, LaserMaster Corporation
James E. Retterath           35  Secretary and Vice President Research & Development
Timothy N. Thurn             40  Treasurer
Thomas D. Ryan               38  Executive Vice President, LaserMaster Technologies, Inc
                                  and LaserMaster Corporation
</TABLE> 
     

MR. RETTERATH has been Secretary of the Company since March 1994.  He joined the
Company in June 1990 and has held a variety of management positions in Research
and Development most recently serving as Vice President which position he has
held since December 1992.  From July 1986 to June 1990, Mr. Retterath was a
Senior Design Engineer for Printware, Inc. of Mendota Heights, Minnesota.

MR. THURN has been Treasurer of the Company since June 1989 and of LaserMaster
Corporation since March 1987.  Mr. Thurn has experience as both a public and
private accountant.  Mr. Thurn is a Certified Public Accountant (CPA) and
Certified Management Accountant (CMA).

MR. RYAN has been Managing Director of LME since January, 1995 and assumed the
Executive Vice President position for the Company and LaserMaster Corporation in
May 1996.  Prior to working for the Company, Mr. Ryan worked for Mentor
Corporation as Vice President and General Manager of its Minnesota operations.

Officers of the Company are elected annually by the Board of Directors.  All of
the current officers are expected to be re-elected to serve in the same
positions for the coming year.

                                       26
<PAGE>
 
Item 11.  EXECUTIVE COMPENSATION.

Summary Compensation Table

The following table sets forth the cash and noncash compensation for each of the
last three fiscal years awarded to or earned by the Chief Executive Officer of
the Company and the four executive officers of the Company whose salary and
bonus earned in the fiscal year ended June 30, 1996 exceeded $100,000 for
services rendered.

    
<TABLE>
<CAPTION>
====================================================================================================================== 
                                     Annual compensation                 Long term compensation
                             ---------------------------------------------------------------------------
                                                                           Awards
                                                                   ----------------------
                                                        Other                                                All other
                                                        annual     Restricted                 Payouts/       compen-
Name and principal    Year   Salary ($)      Bonus      compen-    stock         Options/     LTIP           sation
 position                                     ($)       sation     award(s)      SARs (#)     payouts        ($)
                                                        ($)        ($)                        ($)
----------------------------------------------------------------------------------------------------------------------
<S>                   <C>    <C>            <C>         <C>        <C>           <C>          <C>            <C>
Melvin Masters        1996     $246,875                                                                      $ 6,736/1/
Chief Executive       1995      250,000                                                                      $ 6,016/1/
Officer               1994      250,000                                                                      $ 5,096/1/ 
----------------------------------------------------------------------------------------------------------------------
Robert Wenzel         1996     $203,125                                           220,000
Chief Operating       1995      165,625     $35,000
Officer               1994      150,000       1,000
----------------------------------------------------------------------------------------------------------------------
James E. Retterath    1996     $203,125                                           240,000                    
Secretary             1995      161,667      34,100/2/
                      1994      127,500      35,000
----------------------------------------------------------------------------------------------------------------------
Larry Lukis           1996     $150,000                                                                      $10,908/1/
Chief Technical       1995      250,000                                                                      $ 9,898/1/
Officer               1994      250,000                                                                      $ 7,923/1/
----------------------------------------------------------------------------------------------------------------------
Thomas D. Ryan        1996     $131,458     $16,500                                40,000
Executive Vice        1995            *
President             1994            *
======================================================================================================================
</TABLE>
     

*Became executive officer during fiscal 1996.
/1/Premiums for life insurance where the Company is not the beneficiary.
/2/Expenses paid by the Company on behalf of the employee.

Stock Options

The Company maintains a Stock Option Plan pursuant to which executive officers,
other employees and certain non-employees providing services to the Company may
receive options to purchase the Company's common stock.

The following table summarizes grants of stock options during fiscal 1996 to the
Chief Executive Officer and the Executive Officers named in the Summary
Compensation Table.

                                      27
<PAGE>
 
<TABLE>
<CAPTION>
                                       OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
===================================================================================================================
                                                                                             Potential Realizable
                                                                                            Value at Assumed Annual                 
                                  Individual Grants                                           Rates of Stock Price
                                                                                            Appreciation for Option
                                                                                                      Term
=================================================================================================================== 
                                               % of Total
                                                Options/
                                 Options/         SARs        Exercise or
                                   SARs        Granted to     Base Price    Expiration       5% ($)         10% ($)
Name                             Granted       Employees      ($/Share)        Date
                                   (#)         in Fiscal      
                                                  Year
-------------------------------------------------------------------------------------------------------------------
<S>                             <C>            <C>            <C>           <C>             <C>            <C>        
Robert J. Wenzel                100,000/1/        7.6%           $4.00      April 2006      $251,560       $637,480
                                120,000/2/        9.1%           $4.00      April 2006      $301,872       $764,976
-------------------------------------------------------------------------------------------------------------------
James E. Retterath              120,000/1/        9.1%           $4.00      April 2006      $301,872       $764,976
                                120,000/2/        9.1%           $4.00      April 2006      $301,872       $764,976
-------------------------------------------------------------------------------------------------------------------
 Thomas D. Ryan                  40,000           3.0%           $4.00      April 2006      $100,624       $254,992
===================================================================================================================
</TABLE> 
/1/Options vest ratably over eight years. 
/2/Options vest ratably over nine years with accelerated vesting contingent upon
meeting performance goals as established by the Chief Executive Officer.


The following table summarizes exercises of stock options during fiscal 1996 by
the Chief Executive Officer and the Executive Officers named in the Summary
Compensation Table.

<TABLE> 
<CAPTION> 
                  AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
===================================================================================================================
                                                                              Number of        Value of unexercised
                                                                              unexercised           in-the-money
                                                                            options/SARs at    options/SARs at FY-
                                      Shares acquired     Value Realized      FY-end (#)       end ($) exercisable/
Name                                  on exercise (#)           ($)          exercisable/       unexercisable (1)
                                             ($)                             unexercisable
------------------------------------------------------------------------------------------------------------------- 
<S>                                   <C>                 <C>               <C>                <C>
Melvin L. Masters                           -0-                 -0-              -0-                   -0-
-------------------------------------------------------------------------------------------------------------------
Robert J. Wenzel                            -0-                 -0-         41,250/243,750        $117,200/$189,000
-------------------------------------------------------------------------------------------------------------------
James E. Retterath                          -0-                 -0-         28,750/301,250        $ 66,500/$276,600
-------------------------------------------------------------------------------------------------------------------
Lawrence J. Lukis                           -0-                 -0-              -0-                   -0-
-------------------------------------------------------------------------------------------------------------------
Thomas D. Ryan                              -0-                 -0-         10,000/110,000        $   5,600/$61,900
===================================================================================================================
</TABLE>
(1) Represents the difference between the closing price of the Company's common
stock on June 30, 1996 and the exercise price of the options.

Long-Term Incentive Plan Awards

Other than the Stock Option Plan reported on above, the Company does not
maintain any long-term incentive plans.

                                      28
<PAGE>
 

DIRECTOR COMPENSATION

    
For fiscal year 1996, there was no plan for compensation to non-employee
directors. All directors were reimbursed for their expenses incurred in
attending meetings. Jean-Louis Gassee, John Meyer and Scott Parr also acted as
consultants to the Company. An additional $30,000 of consulting fees was
incurred for services provided by Mr. Gassee during fiscal 1996. Jean-Louis 
Gassee has significant expertise in the personal computer industry and in the 
management of research and development of hardware and software products. His 
expertise in the trends and issues in this industry was not available within the
Company and could only be obtained through a relationship with a specialized 
consultant or highly compensated employee, if one could be identified and 
retained. Mr. Gassee consulted with the Company on a number of issues including
industry trends, and product development issues. An additional $15,000 of
consulting fees was incurred for services provided by Mr. Meyer during fiscal
1996. John Meyer is an independent consultant whose background is in desktop
publishing software and hardware. Mr. Meyer consulted with the Company on
technology management matters. Mr. Parr was paid $8,000 in consulting fees for
services provided during fiscal 1996. Mr. Parr is the former General Counsel of
the Company and has expertise not found within the company in the area of 
corporate finance. Mr. Parr provided consultation services regarding financing 
matters. The consulting fees paid to Messrs. Gassee, Meyer and Parr were 
determined and set based on anticipated consulting services and the market costs
therefor. The Company believes that the consulting fees paid to Messrs. Gassee, 
Meyer and Parr represent the approximate market value for the consulting 
services performed and that which might be obtained from similar arrangements 
with non-affiliates.
     

EMPLOYMENT AGREEMENTS

    
At June 30, 1996, the Company had employment agreements with Messrs. Masters,
Lukis, Wenzel, and Retterath. Those agreements renew automatically on an annual
basis unless terminated by either party by written notice 60 days before the
renewal date. The agreements provide for continuation payments equal to 36
months pay for Mr. Masters and Mr. Lukis and 12 months pay for Mr. Wenzel and
Mr. Retterath, upon termination of employment in certain circumstances,
including change of control. As of June 30, 1996 minimum salary levels of
$250,000 were set for each of Messrs. Masters, Lukis, Wenzel and Retterath. The
Company also has employment agreements with other members of its management.
     

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Chief Executive Officer of the Company, Melvin L. Masters, is a member of
the Compensation Committee. Mr. Masters' compensation is set by the Board of
Directors as a whole with Mr. Masters abstaining.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

    
The following table sets forth, as of September 30, 1996, certain information
with respect to beneficial share ownership by the directors, individually; by
all persons known to management to own more than 5% of the Company's outstanding
Common Stock, individually; and by all executive officers and directors as a
group. Except as otherwise indicated, the shareholde rs listed below have sole
investment and voting power with respect to their shares.
     

    
<TABLE>
<CAPTION>
                                  Number of
                              Beneficially Owned  Percent of  Shares
Name of Beneficial Owner            Shares            Outstanding
------------------------            ------            -----------     
<S>                           <C>                 <C>
Sihl-Zurich Paper Mill
 on Sihl AG (1)                    2,742,858             17.7%

Melvin L. Masters (2)              2,625,525             16.9%
6425 Beach Road
Eden Prairie, MN 55344
 
Lawrence J. Lukis (3)              2,199,531             14.2%
3250 Fox Street
Long Lake, MN 55356
 
General Electric
 Capital Corporation (4)             881,542              5.7%

Ralph D. Rolen (5)                   107,774               *
 
Jean-Louis Gassee (6)                 85,000               *
 
Robert J. Wenzel (7)                  53,050               *
 
James E. Retterath (8)                28,750               *
</TABLE>
     

                                      29
<PAGE>

    
<TABLE>
<CAPTION>
<S>                           <C>                 <C>
Thomas D. Ryan (9)                    12,000               *
 
All officers and directors
as a group (8 persons) (10)        5,165,779             33.3%
</TABLE>
     


    
*  Less than 1%

(1)  Includes warrants to purchase 1,371,429 shares.

(2)  Includes 411,428 shares and warrants to purchase 963,667 shares owned by
     TMI; 274,286 shares owned by GRAMPI; 228,572 shares and warrants to
     purchase 228,572 shares owned by GRAMPI #2.

(3)  Includes shares owned by Donna Lukis, Mr. Lukis' spouse. Includes 183,000
     shares held by the Lukis Foundation, of which Mr. Lukis is a director.  Mr.
     Lukis disclaims beneficial ownership both of Ms. Lukis' shares and those
     held by the Lukis Foundation.

(4)  Includes warrants to purchase 471,286 shares.

(5)  On June 6, 1996, effective August 6, 1996, Mr. Rolen resigned his
     previously held position as trustee of Masters Trust I and as a result, no
     longer controls shares held in that trust.

(6)  Includes 60,000 shares issuable to Mr. Gassee under options which are
     exercisable.

(7)  Includes 41,250 shares issuable to Mr. Wenzel under options which are
     exercisable or will become exercisable within 60 days.  Also includes
     shares held as trustee for four education trusts.

(8)  Includes 28,750 shares issuable to Mr. Retterath under options which are
     exercisable or will become exercisable within 60 days.

(9)  Includes 10,000 shares issuable to Mr. Ryan under options which are
     exercisable or will become exercisable within 60 days.

(10) Includes 151,483 shares issuable under options which are exercisable or
     will become exercisable  within 60 days and warrants to purchase 1,192,239 
     shares.
     

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The Company has the following arrangements with certain of its directors,
executive officers or five percent shareholders;

(1)  The Company leases space it currently occupies in Shady View I & II, with
     the owner of that space, Grandchildren's Realty Alternative Management
     Partnership I (GRAMPI), a Minnesota limited partnership. The general
     partner of GRAMPI is TimeMasters, Inc., a Minnesota corporation which is
     owned by Melvin L. Masters. One of the limited partners of GRAMPI is the
     Masters Trust I, of which Ralph Rolen, a director of the Company, was
     Trustee at the time of the negotiations. The Company retained the services
     of an outside law firm as well as an independent commercial real estate
     brokerage firm in negotiating the lease.

    
     The Company leases 168,034 square feet of space under this agreement which
     has a term of fifteen years and a monthly base rate as of December 1995, of
     $82,216. The base rate escalates periodically over the term of the lease.
     The Company is also required to pay its pro-rata share of property taxes,
     utilities and essentially all other operating expenses. There is no renewal
     option. Rent expense under this lease was $1,355,000 in fiscal 1996 of
     which $119,765 had not been paid as of June 30, 1996.
     

(2)  Under a Use Indemnification Agreement and certain related Board of
     Directors' actions, the Company has the right to sponsor business and
     business-related occasions at facilities owned by Masters Trust I and/or
     Melvin L. Masters and/or TimeMasters, Inc and/or GRAMPI and/or GRAMPI #2.
     For those occasions, the Company indemnifies the owners against loss or
     damage, reimburses out-of-pocket expenses and pays a facility charge based
     on market rates. In the fiscal year ended June 30, 1996 charges totalled
     $30,788.

(3)  The Company has currently installed a campus-wide TimeMasters, Inc.
     wireless voice system in its Eden Prairie facility. There are no monthly
     call operating charges for unlimited use of

                                      30
<PAGE>

     that system. The system hardware was acquired in fiscal 1995 for $211,000
     based on competitive proposals for two other comparable systems. Upgrades
     to the system amounted to $47,853 in fiscal 1996. TimeMasters, Inc. is a
     Minnesota corporation wholly-owned by Melvin L. Masters.

    
(4)  During September and October 1995, LaserMaster Corporation's (LMC's) cash
     needs exceeded available cash. To cover short-term cash needs, LMC borrowed
     $1,765,000 under a demand note from TimeMasters, Inc. (TMI), a corporation
     controlled by the Company's Chief Executive Officer. The note bears
     interest at prime rate plus 1.75%. Accrued interest on June 30, 1996
     totaled $14,507. The entire amount of the note remained outstanding at June
     30, 1996 as repayment was restricted by the terms of a subordination and
     forbearance agreement between LMC, TMI and LMC's senior lender, GE Capital
     Corporation. In consideration for providing financing to LMC and executing
     the subordination and forbearance agreement, TMI was issued a warrant for
     the purchase of 277,953 shares of the Company's common stock at an exercise
     price of $6.35 per share and the right to convert up to $1 million of
     indebtedness into shares of the Company's common stock upon the occurrence
     of certain events, at the lower of $5.875 per share or market price at the
     time of conversion in the event either LMC is unable to repay such
     indebtedness before January 17, 1998, or an event of default occurs. This
     transaction was submitted to and approved by the shareholders at the
     Company's annual meeting in May 1996.
     

    
(5)  In September 1996, the Company issued 914,286 shares of restricted common
     stock in a private placement to TimeMasters, Inc., GRAMPI and GRAMPI #2
     (together as a group known as the TimeMasters group), which is controlled
     by Melvin L. Masters, the Company's CEO. The shares were issued at the
     market price of $4.375 per share and were paid by promissory notes totaling
     $4 million from the TimeMasters group. The notes are due the earlier of
     October 15, 1996 or upon the closing of the sale of the Shady View
     properties, (see item (1) above). The Company anticipates applying one of
     the notes in the amount of $1.8 million, to repayment of LMC's indebtedness
     to TMI (see item (4) above) by offset. In addition, the TimeMasters group
     was issued a warrant for the purchase of an additional 914,286 shares at
     $7.00 per share with an expiration date of September 16, 2004. The
     TimeMasters group has the right to require the Company to effect up to five
     demand registrations under the Securities Act within ten years of the
     closing date of the transaction. The agreement also provides for incidental
     registration rights during this same period. In addition, shares acquired
     by TimeMasters upon the exercise of the warrant or conversion right,
     obtained pursuant to the $1,765,000 demand note discussed in item (4)
     above, have preferential incidental registration rights expiring
      September 2006.
     

Each of the foregoing transactions was approved by a disinterested majority of
the Board of Directors of the Company, by shareholders, or by both. The Company
believes that each such transaction is on terms at least as favorable to the
Company as could have been obtained from an unaffiliated entity.

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a) 1.  Financial Statements

        Consolidated Financial Statements of LaserMaster Technologies, Inc. and
        Subsidiaries:

        Independent Auditors' Report

        Consolidated Balance Sheets as of June 30, 1996 and 1995

        Consolidated Statements of Operations for the fiscal years ended 
        June 30, 1996, 1995 and 1994

                                      31
<PAGE>
 

        Consolidated Statements of Stockholders' Equity for the fiscal years
        ended June 30, 1996, 1995 and 1994

        Consolidated Statements of Cash Flows for the fiscal years ended June
        30, 1996, 1995 and 1994

        Notes to Consolidated Financial Statements

(a) 2.  Financial Statement Schedules

        LaserMaster Technologies, Inc. and Subsidiaries

        Schedule I  --  Condensed Financial Information of the Registrant
        Schedule II --  Valuation and Qualifying Accounts
 
        Schedules not listed above have been omitted because they are either not
        applicable or required information has been given in the consolidated
        financial statements or notes thereto.

(a) 3.  Listing of Exhibits

    
<TABLE> 
<CAPTION> 
Exhibit
Number    Description
-------   ------------
<C>       <S> 
10.1      Common Stock Purchase Agreement dated September 16, 1996 between
          LaserMaster Technologies, Inc. and Sihl-Zurich Paper Mill on Sihl AG,
          and a business group consisting of Melvin Masters, TimeMasters, Inc.,
          Grandchildren's Realty Alternative Management Program I Limited
          Partnership and Grandchildren's Realty Alternative Management Program
          I #2 Limited Partnership.

10.2      Common Stock Purchase Agreement dated September 25, 1996 between
          LaserMaster Technologies, Inc. and General Electric Capital
          Corporation.
          
10.3      Debenture Exchange and Trade Debt Settlement Agreement dated September
          12, 1996 between LaserMaster Technologies, Inc. and Marubeni
          International Electronics Corporation.
 
10.4      LaserMaster Technologies, Inc. Convertible Subordinated Debenture
          dated September 12, 1996 to Marubeni International Electronics
          Corporation.

10.5      First Amendment to Credit Agreement dated May 15, 1996 between
          LaserMaster Corporation and General Electric Capital Corporation.

11.1      Per share earnings calculation.

27.1      Financial Data Schedule

99.       Cautionary Factors Under Private Securities Litigation Reform Act of
          1995.
</TABLE> 
     

                                      32
<PAGE>
 

                                  SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

    
Date: September 10, 1997
     

                                       LASERMASTER TECHNOLOGIES, INC.

                                       By /s/ Melvin L. Masters
                                          -----------------------------------
                                          Melvin L. Masters, President, Chief 
                                          Executive Officer and Chairman of the
                                          Board


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.


                             
/s/ Melvin L. Masters        President, Chief Executive Officer
------------------------     and Chairman of the Board       
Melvin L. Masters            (Principal Executive Officer)


/s/ Lawrence J. Lukis        Chief Technical Officer and
------------------------     Director
Lawrence J. Lukis 


/s/ Ralph D. Rolen           Director
------------------------                                     
Ralph D. Rolen


/s/ Jean-Louis Gassee        Director
------------------------                                     
Jean-Louis Gassee


/s/ Robert Wenzel            Director
------------------------                                     
Robert Wenzel

    
/s/ Timothy Thurn            Treasurer and Principal Financial Officer
------------------------                                     
Timothy Thurn
     

    
/s/ Mark Pederson            Controller
------------------------
Mark Pederson
     

                                      33