As filed with the Securities and Exchange Commission on August 5, 1996
Registration No. 333-.
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

______________________

FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

__________________________

SPLASH TECHNOLOGY HOLDINGS, INC.
(Exact Name of Registrant as Specified in Its Charter)

_____________________________________

DELAWARE 3577 77-0418472
-----------------
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
Incorporation or Classification
Organization) Code Number)

______________________

555 DEL REY AVENUE
SUNNYVALE, CALIFORNIA 94086
(408) 328-6300
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)

___________________________________

KEVIN K. MACGILLIVRAY
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SPLASH TECHNOLOGY HOLDINGS, INC.
555 DEL REY AVENUE
SUNNYVALE, CALIFORNIA 94086
(408) 328-6300
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)

_________________________________

Copies to:

JEFFREY D. SAPER, ESQ. CARLA S. NEWELL, ESQ.
HOWARD S. ZEPRUN, ESQ. ANTHONY M. ALLEN, ESQ.
BRETT D. BYERS, ESQ. GUNDERSON DETTMER STOUGH
WILSON SONSINI GOODRICH & ROSATI, VILLENEUVE FRANKLIN & HACHIGIAN, LLP
PROFESSIONAL CORPORATION 600 HANSEN WAY, SECOND FLOOR
650 PAGE MILL ROAD PALO ALTO, CALIFORNIA 94304
PALO ALTO, CALIFORNIA 94304-1050 (415) 843-0500
(415) 493-9300

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If this Form is filed to register additional securities for an Offering
pursuant to rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same Offering.[_] ___________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same Offering.[_] ___________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. [_]

CALCULATION OF REGISTRATION FEE
============================================================================================================
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED (1) OFFERING PRICE AGGREGATE OFFERING REGISTRATION FEE
PER SHARE (2) PRICE (1) (2)
- ------------------------------------------------------------------------------------------------------------

Common Stock, $0.001 par value . shares $. $34,500,000 $11,896.64
============================================================================================================

============================================================================================================

(1) Includes up to . shares of Common Stock ($4,500,000 aggregate offering
price) which may be purchased by the Underwriters to cover over-allotments,
if any.

(2) Estimated pursuant to Rule 457(a) solely for the purpose of calculating the
registration fee.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

================================================================================

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to the registration or qualification under the securities laws of any such
State.

Subject to Completion
August 5, 1996

. Shares

[SPLASH LOGO]

Common Stock

________________

Of the . of Common Stock offered hereby, . shares are being sold
by Splash Technology Holdings, Inc. ("Splash" or the "Company") and . shares
are being sold by the Selling Stockholders. See "Principal and Selling
Stockholders." The Company will not receive any of the proceeds from the sale of
shares by the Selling Stockholders. Prior to the Offering, there has been no
public market for the Common Stock of the Company. It is currently estimated
that the initial public offering price will be between $ . and $ . per
share. See "Underwriting" for a discussion of factors to be considered in
determining the initial public offering price. The Company has applied to have
its Common Stock approved for quotation on the Nasdaq National Market under the
symbol "SPLH."

________________

THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 5.

________________

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

================================================================================
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) STOCKHOLDERS
================================================================================

Per Share $ $ $ $
- --------------------------------------------------------------------------------
Total(3) $ $ $ $
================================================================================

(1) See "Underwriting" for information relating to indemnification of the
Underwriters and other matters.

(2) Before deducting expenses payable by the Company estimated at $ 1,200,000.

(3) The Company has granted the Underwriters a 30-day option to purchase up to
. additional shares of Common Stock solely to cover over-allotments,
if any. To the extent that the option is exercised, the Underwriters will
offer additional shares at the Price to Public shown above. If the option
is exercised in full, the total Price to Public, total Underwriting
Discounts and Commissions and Proceeds to Company will be $ , $ and
$ , respectively. See "Underwriting."

________________

The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if delivered to and accepted by them, and subject to
the right of the Underwriters to reject any order in whole or in part. It is
expected that delivery of the shares of Common Stock will be made at the offices
of Alex. Brown & Sons Incorporated, Baltimore, Maryland, on or about , 1996.

ALEX, BROWN & SONS MONTGOMERY SECURITIES
INCORPORATED

THE DATE OF THIS PROSPECTUS IS , 1996.

IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

The Company intends to furnish to its stockholders annual reports audited
consolidated financial statements and quarterly reports for the first three
quarters of each fiscal year containing unaudited summary financial information.

-2-

________________________________________________________________________________

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information, including "Risk Factors" and consolidated financial statements and
notes thereto, appearing elsewhere in this Prospectus. This Prospectus contains
forward-looking statements that involve risks and uncertainties. The Company's
actual results may differ materially from the results discussed in such forward-
looking statements. Factors that may cause such a difference include, but are
not limited to, those discussed in "Risk Factors." Unless the contexts otherwise
specifies, references in this Prospectus to "Splash" and the "Company" refer to
Splash Technology Holdings, Inc. and its subsidiaries, including its principal
operating subsidiary, Splash Technology, Inc.

THE COMPANY

Splash develops, produces and markets color servers that provide an
integrated link between desktop computers and digital color laser copiers and
enable such copiers to provide high quality, high speed, networked color
printing. These hybrid systems, consisting of color servers and digital color
laser copiers (referred to as connected or multifunction copiers), support
multiple uses including image scanning, image manipulation, printing and
photocopying. The Company's products feature advanced color correction, color
calibration and separations support, ease of use, time-saving workflow
functionality, simulation of many color monitors and printing presses, and
automatic correction for certain printing workflow problems.

Commercial color printing customarily involves multiple iterations of
complex, labor-intensive and costly steps, including design and composition,
color retouching and other manipulation, color separation, image setting and
proofing, and, finally, preparation of printing plates and printing on a large,
expensive commercial press. The process involves high fixed costs and
considerable time, and historically has been justified only for printing in
large volumes. The broader use of desktop color displays, desktop software, and
desktop-based color scanners, as well as the increased availability of digital
color copiers and networked and desktop color printers, has enabled a greater
amount of color design and print preparation to be performed more rapidly and at
lower costs than previously possible. Although the quality of both color copiers
and desktop color displays has improved in recent years, users hoping to take
advantage of such improvements have faced considerable difficulties due to the
complexities inherent in color technology, thus creating a need for advanced,
integrated, high quality, easy-to-use, and cost-effective color printing
solutions.

Splash servers turn a color copier into an effective network-based system
solution for a variety of color printer applications from commercial and short
run printing to office and desktop publishing. The Company's products utilize
open systems that can be readily integrated with corporate networks, enabling
easy access by a broad range of end users. The use of open systems enables the
Company to concentrate its development resources on value-added solutions for
end users, and provides greater flexibility by allowing use of standard
peripheral products and software. The Company believes it was the first among
its direct competitors to commercially offer a number of significant features
for multifunction copiers, including features in the areas of color calibration,
color corrections, color separations and scanning.

Splash sells its Professional Color Imaging ("PCI") Series color server
products to two of the leading providers of color copiers, Xerox Corporation
("Xerox") and Fuji Xerox Company Ltd. ("Fuji Xerox"). These original equipment
manufacturers ("OEMs") integrate the Company's color servers with their digital
color copiers and sell the connected systems to end users through a worldwide
direct distribution network. Users of the Company's color servers include
magazine publishers, advertising firms, graphic arts firms, publishing services
providers, prepress and printing firms, and Fortune 500 companies with in-house
graphics, marketing and advertising and publishing needs.

Splash Technology Holdings, Inc. was incorporated in Delaware in December
1995. The Company's business operated as the Color Server Group ("CSG") division
of SuperMac Technology from late 1992 to August 1994, and after the merger of
SuperMac Technology, Inc. ("SuperMac") into Radius, Inc. ("Radius") and as the
CSG division of Radius from August 1994 until January 1996. In January 1996, the
Company was acquired by an investor group consisting of certain funds affiliated
with Summit Partners, L.P. and Sigma Partners, L.P. and certain members of
management of the Company. The Company's executive offices are located at 555
Del Rey Avenue, Sunnyvale, CA 94086, and its telephone number is (408) 328-6300.
See "Acquisition" and "Certain Transactions."
________________________________________________________________________________

-3-

________________________________________________________________________________
THE OFFERING

Common Stock offered hereby.......................... . shares
Common Stock to be outstanding after the Offering.... . shares(1)
Use of proceeds For repayment of
subordinated promissory
notes, redemption of
Series A Preferred Stock,
and general corporate
purposes including
working capital.
See "Use of Proceeds."
Proposed Nasdaq National Market symbol............... SPLH

SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
SPLASH
TECHNOLOGY
PREDECESSOR BUSINESS HOLDINGS, INC.
------------------------------------------ --------------------
YEAR ENDED SEPTEMBER 30, NINE MONTHS ENDED JUNE 30,
------------------------------ --------------------------------
1994 1995 1995 1996(2)
-------------- -------------- ------------ -----------------
(PROFORMA)

CONSOLIDATED STATEMENT OF OPERATIONS DATA: (UNAUDITED)
Net revenue................................. $ 16,354 $ 30,472 $ 20,343 $ 31,334
Cost of net revenue......................... 12,068 20,723 13,737 19,882
------- ------- ------- -------
Gross profit................................ 4,286 9,749 6,606 11,452
------- ------- ------- -------
Operating expenses: 1,999
Research and development................... 562 3,295 2,034 3,122
Sales and marketing........................ 377 2,076 1,505 1,494
General and administrative................. 891 667 955
Amortization of purchased technology and
write-off of in-process technology........ -- -- -- 22,729
------- ------- ------- -------
Total operating expenses.................. 2,938 6,262 4,206 28,300
------- ------- ------- -------
Income (loss) from operations............... 1,348 3,487 2,400 (16,848)
Interest expense, net....................... -- -- -- 406
------- ------- ------- -------
Income (loss) before provision for
income taxes................................ 1,348 3,487 2,400 (17,254)
Provision for (benefit from) income taxes... 99 1,395 960 (6,929)
------- ------- ------- --------
Net income (loss)........................... $ 1,249 $ 2,092 $ 1,440 $(10,325)
======= ======= ======= ========

SPLASH TECHNOLOGY HOLDINGS, INC.
--------------------------------------
JUNE 30, 1996
--------------------------------------
ACTUAL AS ADJUSTED(3)
----------------- -------------------
(IN THOUSANDS)

CONSOLIDATED BALANCE SHEET DATA:
Working capital................................................ $ 5,955 $ 9,229
Total assets................................................... 28,502 31,776
Long term debt................................................. 8,000 --
Total liabilities.............................................. 20,980 12,980
Stockholders' equity........................................... 7,522 18,796

(1) Based on shares outstanding as of June 30, 1996. Excludes an aggregate of
approximately 70,000 shares of Common Stock issuable on exercise of options
and warrants outstanding as of June 30, 1996 at a weighted average exercise
price of $1.63 per share; approximately 4,000 shares of Common Stock
issuable on exercise of options granted after June 30, 1996; approximately
670,000 shares of Common Stock reserved for future grants under the
Company's 1996 Stock Option Plan; and 50,000 shares of Common Stock
reserved for issuance under the Company's 1996 Employee Stock Purchase
Plan. Also excludes 15,426 shares of Series A Preferred Stock to be
redeemed upon the closing of the Offering. See "Use of Proceeds,"
"Management--Compensation Plans" and Note 8 of Notes to Consolidated
Financial Statements.

(2) Represents the results of operations of CSG for the four months ended
January 31, 1996 plus the results of operations of the Company for the five
months ended June 30, 1996. There were no significant pro forma
adjustments.

(3) Adjusted to reflect the sale of $30,000,000 of Common Stock by the Company
after deducting estimated underwriting discounts and commissions and
estimated offering expenses and application of the net proceeds therefrom.
See "Use of Proceeds" and "Capitalization."

_______________________

This Prospectus includes trademarks and trade names of the Company and other
corporations.

_______________________

Except for the Consolidated Financial Statements and as otherwise noted,
all information in this Prospectus has been adjusted to give effect to (i) the
conversion of each outstanding share of Series B Preferred Stock into Common
Stock upon the closing of the Offering, (ii) adoption of the Company's 1996
Stock Option Plan and 1996 Employee Stock Purchase Plan in July 1996, and (iii)
the filing of a Restated Certificate of Incorporation on or prior to the closing
of the Offering to increase the authorized number of shares of Common Stock and
Preferred Stock. See "Capitalization," Description of Capital Stock" and
"Underwriting."

________________________________________________________________________________

-4-

RISK FACTORS

In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the shares
of Common Stock offered hereby. This Prospectus contains forward-looking
statements that involve risks and uncertainties. The Company's actual results
may differ materially from the results discussed in such forward-looking
statements. Factors that may cause such a difference include, but are not
limited to, those discussed below.

Short Period of Independent Operations; No Assurance of Future
Profitability. Prior to the Acquisition in January 1996, the business of the
Company had been operated as a division of Radius and, prior to the merger of
SuperMac into Radius, as a division of SuperMac. Moreover, Splash was dependent
on Radius through May 1996 for certain financial and administrative services and
related support functions. Accordingly, the Company has had limited experience
operating as an independent entity, and there can be no assurance that the
Company will be able to operate effectively as an independent company. Moreover,
the Company only began implementing independent accounting systems, financial,
operational and management controls, and reporting systems and procedures in
February 1996. The Company believes that further improvements in management and
operational controls will continue to be needed to manage any expansion of the
Company's operations. The failure to implement such improvements could have a
material adverse effect upon the Company's business, operating results and
financial condition.

Although the Company's net revenue has increased each year since fiscal
1994, the Company's limited history of operations as an independent entity make
reliable predictions of future operating results difficult or impossible. In
particular, the Company's recent revenue growth should not be considered
indicative of future results. There can be no assurance that any of the
Company's business strategies will be successful or that the Company will be
able to sustain growth on a quarterly or annual basis. Although the Company was
profitable for the first nine months of fiscal 1996 (pro forma) and the first
five months of independent operations through June 30, 1996 (before purchase
accounting adjustments), there can be no assurance that the Company will
continue to be profitable on an annual or quarterly basis in the future. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

Fluctuations in Operating Results; Seasonal Purchasing Patterns. The
Company's operating results have fluctuated and will likely continue to
fluctuate in the future on a quarterly and annual basis as a result of a number
of factors, many of which are outside the Company's control. These fluctuations
are in part due to the purchasing patterns of the Company's two customers, Xerox
and Fuji Xerox. These customers have historically made, and are expected to
continue to make, a significant portion of their purchases of the Company's
products in the second half of the Company's fiscal year. As a result, the
Company's sales have historically been significantly lower, and are expected to
continue to be lower, in the first quarter of the Company's fiscal year than the
immediately preceding fourth quarter. In addition, any increases in inventories
by the Company's customers could also result in variations in the timing of
purchases by such customers. For example, in May 1996, as the Company
transitioned from its Power Series line of products to its PCI Series line of
products, Xerox informed Splash that it held in its inventory a substantial
quantity of Power Series products accumulated since January 1996. As a result of
the Company's product transition and Xerox's accumulation of inventory of these
products, sales of Power Series products shipped to Xerox between January 1996
and April 1996 are recorded as net revenue when Xerox sells these products to
end users. All other Power Series and PCI Series product sales are recorded upon
shipment to the OEM customer. There can be no assurance that the Company will
receive sufficient inventory information from its OEM customers over time or
that the Company will be able to prevent recurrence of a similar problem in the
future. In addition, announcements by the Company or its competitors of new
products and technologies could cause customers to defer purchases of the
Company's existing products. In the event that anticipated orders from end users
fail to materialize,

-5-

or delivery schedules are deferred or canceled as a result of the above factors
or other unanticipated factors, it would materially and adversely affect the
Company's business, operating results and financial condition.

Results in any period could also be affected by changes in market demand,
competitive market conditions, sales promotion activities by the Company, its
OEM customers or its competitors, market acceptance of new or existing products,
sales of color copiers with which the Company's products are compatible, the
cost and availability of components, the mix of the Company's customer base and
sales channels, the amount of any third party funding of development expenses,
the mix of products sold, the Company's ability to effectively expand its sales
and marketing organization, the Company's ability to attract and retain key
technical and managerial employees, and general economic conditions. As a
result, the Company believes that period-to-period comparisons of its results of
operations are not necessarily meaningful and should not be relied upon as
indicative of future performance. Due to all of the foregoing factors, the
Company's operating results in one or more future periods may be subject to
significant fluctuations. In the event this results in the Company's financial
performance being below the expectations of public market analysts and
investors, the price of the Company's Common Stock would be materially and
adversely affected.

The Company's gross margin is affected by a number of factors, including
product mix, product pricing, and manufacturing and component costs. The Company
may be required to reduce prices in response to competitive pressure or increase
spending to pursue new market opportunities. In this regard, in the event of
significant price competition in the market for color copier servers or
competitive systems, the Company could be at a significant disadvantage compared
to its competitors, many of which have substantially greater resources (and, in
the case of the Company's principal competitor, Electronics for Imaging, Inc.
("EFI"), lower product costs) than the Company and therefore could more readily
withstand an extended period of downward pricing pressure. Any decline in
average selling prices of a particular product which is not offset by a
reduction in production costs or by sales of other products with higher gross
margins would decrease the Company's overall gross margin and adversely affect
the Company's operating results. The Company establishes its expenditure levels
for product development and other operating expenses based on projected sales
levels and margins, and expenses are relatively fixed in the short term.
Moreover, the Company's overall expense level is expected to increase as the
Company builds corporate infrastructure to replace services previously provided
by Radius and to support expansion of operations. Accordingly, if sales are
below expectations in any given period, the adverse impact of the shortfall on
the Company's operating results may be increased by the Company's inability to
adjust spending in the short term to compensate for the shortfall. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

Emerging Color Server Market. The market for the Company's color server
products has only recently begun to develop. Because the markets for digital
color copiers and connected color servers are relatively new, and because
current and future competitors are likely to continue to introduce competing
solutions, it is difficult to predict the rate at which these markets will grow,
if at all. If the color server market fails to grow, or grows more slowly than
anticipated, the Company's business, operating results and financial condition
will be adversely affected. The Company intends to continue to spend resources
educating potential customers about color servers. However, there can be no
assurance that such expenditures will enable the Company's products to achieve
any additional degree of market acceptance. Moreover, the Company has
historically focused on certain segments of the market (the prepress and graphic
arts segments) and has had only limited penetration to date into the broader
office segment or other market segments. There can be no assurance the Company
will be able to maintain or increase its presence in its existing market
segments or to successfully penetrate such additional market segments. See
"Business--Industry Background" and "--Competition."

-6-

Dependence on Xerox and Fuji Xerox. The Company's products operate only
with certain color laser copiers offered by Xerox and Fuji Xerox, and the
Company currently sells its products solely to Xerox and Fuji Xerox. Sales to
Xerox in fiscal 1994 and 1995 and the nine months ended June 30, 1996 accounted
for approximately 40%, 41% and 49%, respectively, of the Company's net revenue,
and sales to Fuji Xerox in such periods accounted for approximately 60%, 59% and
51%, respectively, of net revenue. As a result, sales of the Company's products
have been and will continue to be heavily influenced by the market acceptance of
the Xerox and Fuji Xerox color copiers with which the Company's products operate
and the sales efforts of Xerox and Fuji Xerox with respect to Splash products.
Xerox and Fuji Xerox face substantial competition from other manufacturers of
color copiers, including Canon Inc., which the Company believes has the largest
share of the worldwide market for color copiers. If sales of the color copiers
of Xerox and Fuji Xerox with which Splash's products are compatible decrease,
the Company's business, operating results and financial condition would be
materially and adversely affected. Similarly, if Xerox or Fuji Xerox were to
introduce color copiers that are not compatible with the Company's products, or
if Xerox or Fuji Xerox were to introduce color copiers that already contain a
significant portion of the functionality of the Company's products so as to
render the Company's products unnecessary, the Company's business, operating
results and financial condition would be materially and adversely affected. In
addition, Fuji Xerox color copiers are produced in a single location in Japan,
and any disruption of production at such facility could materially and adversely
affect the Company's business, operating results and financial condition.

The Company has historically sold color servers only to Xerox and Fuji
Xerox, which resell the Company's products on an OEM basis to their color copier
end users. As a result, the Company currently has a very small sales and
marketing organization and has limited experience with direct sales efforts. Any
change in the sales and marketing efforts of Xerox or Fuji Xerox with respect to
Splash's products, including any reduction in the size or effectiveness of the
Xerox or Fuji Xerox sales and marketing forces, or changes in incentives for
Xerox or Fuji Xerox salespersons to sell Splash products or color servers
produced by competitors of Splash, could have a material adverse effect on the
Company's business, operating results and financial condition.

Xerox currently sells a substantial number of color servers made by
companies other than Splash, including those of the Company's principal
competitor, EFI, and Fuji Xerox has recently commenced sales of EFI color
servers. Either Xerox or Fuji Xerox may choose to promote the use of color
servers manufactured by competitors of the Company to the detriment of sales of
the Company's products, may choose to manufacture color servers themselves, may
choose to manufacture only color copiers that are not compatible with Splash
products, or may otherwise reduce or cease purchases and sales of Splash color
servers. The Company does not have contracts with Xerox and Fuji Xerox with
respect to its PCI Series products and is currently operating on a purchase
order basis with these customers. Although the Company is currently negotiating
an agreement with Xerox and Fuji Xerox for its PCI products, there can be no
assurance that any such agreement will be completed or that the Company will
continue to receive orders from Xerox or Fuji Xerox. Any change in the level of
sales to Xerox or Fuji Xerox would have a material adverse effect on the
Company's business, operating results and financial condition.

Inventory Risks. Xerox and Fuji Xerox may from time to time carry an
excess inventory of Splash color servers, inaccurately project future demand for
Splash products or fail to optimally manage their ordering of Splash products,
any of which could result in a significant decrease in orders from such
customers in subsequent periods. For example, in May 1996, as the Company
transitioned from its Power Series line of products to its PCI Series line of
products, Xerox informed Splash that it held in its inventory a substantial
quantity of Power Series products accumulated since January 1996. Xerox has
indicated to Splash that, to eliminate this inventory and to permit Xerox to
introduce the new PCI Series products, Xerox dramatically reduced the selling
prices of the Power Series products beginning in June 1996. Sales by Xerox of
the Power Series products at a discount may have resulted or could result in
reduced sales of the Company's PCI Series products. Further, the reduced margin
that Xerox will experience as a result of its efforts to sell off its inventory
of the Power Series products may impair Splash's relationship with

-7-

Xerox and thus could result in reduced future sales of Splash products by Xerox.
Xerox may have difficulty selling color server kits for the Power Series
products, which do not include a computer platform, because these units require
the use of an Apple Power Macintosh based upon the NuBus architecture no longer
used in Apple Power Macintosh computers. Thus, a purchaser of the earlier
generation color server kit must either already possess a NuBus based Apple
Power Macintosh or purchase one used. Xerox may not be able to continue to sell
Splash products at historic levels once it returns to a policy of not
discounting Splash products. Moreover, although Xerox has no commercial right of
return with respect to the Company's products, there can be no assurance that
the Company will not elect to make accommodations to Xerox in light of its
status as a significant customer. Reduced sales of Splash products by Xerox or
any financial accommodation made to Xerox could have a material adverse effect
on the business, operating results and financial condition of Splash. There can
be no assurance that the Company will receive sufficient inventory information
from Xerox or other customers over time or that the Company will in any event be
able to prevent recurrence of a similar problem in the future, which could have
a material adverse effect on the Company's business, operating results and
financial condition. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

Dependence on Adobe Systems Incorporated. The Company's products depend on
the PostScript page description language software developed by Adobe Systems
Incorporated ("Adobe") and licensed by the Company from Adobe on a non-exclusive
basis. Any delay in the release of future versions of PostScript by Adobe or in
the upgrade of the Company's products to be compatible with future versions of
PostScript, or any material defects in any future versions of PostScript
software, could have a material adverse effect on the Company's business,
operating results and financial condition. The Company is required to pay a
royalty for each copy of PostScript that is incorporated in Splash products,
which royalty constitutes a substantial portion of the total manufactured cost
of the Company's products. In addition, the Company is required to permit
testing by Adobe of the beta release version of the Company's products, and the
Company cannot begin shipping any version until such version meets Adobe's
quality standards. The Company's license agreement with Adobe expires in
September 1997, subject to renewal upon mutual consent. There can be no
assurance that Adobe will continue to enjoy its leadership position in the
market, renew the current license at the end of its term or license future
versions of PostScript to Splash on terms favorable to Splash or at all. If the
Adobe License Agreement is for any reason terminated or the Company's
relationship with Adobe is impaired, the Company could be required to change to
an alternative page description language which would require the expenditure of
significant resources and time and could significantly limit the marketability
of the Company's products. Any increase in royalties payable to Adobe also could
have a material adverse effect on the Company's operating results. In addition,
the Adobe PostScript software is incorporated in the products of certain of the
Company's competitors. The Company's business could be materially and adversely
affected if Adobe were to make available to the Company's competitors future
versions of Adobe PostScript software that include enhancements to the
PostScript software that were originally developed or implemented by Splash. See
"Business--Competition" and "-- Intellectual Property."

Dependence on Apple Computer, Inc. All of the Company's current products
require the use of an Apple Power Macintosh computer as a computer platform.
Apple has recently experienced significant financial difficulties and losses in
market acceptance, and its products have particularly low levels of market
acceptance in the office color printing market into which the Company is seeking
to expand. If Apple were to discontinue production of the Power Macintosh models
with which Splash products operate or were unable to provide or otherwise cease
to provide an acceptable level of end user customer support, the Company's
business, operating results and financial condition would be materially and
adversely affected. For example, Apple phased out the manufacture of Power
Macintosh products based on the NuBus architecture in the second half of
calendar 1995 in favor of Power Macintosh products based on the PCI bus
architecture. As a result, the Company had to expend significant resources and
faced substantial risk of technological failure or lack of market acceptance in
developing and introducing its PCI-based products. Any efforts of the Company to
migrate its products to a non-Apple computer platform would require a

-8-

substantial expenditure of resources and time, and there can be no
assurance that any such products can be successfully developed or introduced in
a timely fashion and at competitive cost or otherwise achieve widespread market
acceptance. See "Business--Manufacturing."

Dependence on Single Product Line. Substantially all of Splash's current
shipments consist, and are expected to continue to consist, of the Company's PCI
Series of color server products. Because of this product concentration, a
decline in demand or pricing of these products would have a material adverse
effect on the Company's business, operating results and financial condition,
whether as a result of a decline in sales of complementary Xerox and Fuji Xerox
copiers; a further decline in the market for Apple Power Macintosh computers;
increased sales by Xerox or Fuji Xerox of color servers offered by competitors
of the Company or developed internally by Xerox or Fuji Xerox; new product
introductions by competitors; price competition; and technological change. Any
decline in the market for this product line or any failure to timely produce new
and enhanced products would have a material adverse effect on the Company's
business, financial condition and results of operations. See "Business--Products
and Technology."

Rapid Technological Change; Dependence on New Product Introductions. The
graphics and color reproduction, color processing and personal computing markets
are characterized by rapid changes in customer requirements, frequent
introductions of new and enhanced products, and continuing and rapid
technological advancement. To compete successfully, the Company must continue to
design, develop, manufacture and sell new products that provide increasingly
higher levels of performance and reliability, take advantage of technological
advancements and changes and respond to new customer requirements. The Company's
success in designing, developing, manufacturing and selling new products will
depend on a variety of factors, including the identification of market demand
for new products, product selection, timely implementation of product design and
development, product performance, cost-effectiveness of current products and
products under development, effective manufacturing processes and the success of
promotional efforts.

The Company has recently transitioned its product offerings from its Power
Series products to its PCI Series products, and there can be no assurance that
the PCI Series or any future products will achieve widespread market acceptance.
In addition, the Company has in the past experienced delays in the development
of new products and the enhancement of existing products, and such delays may
occur in the future. If the Company is unable, due to resource constraints or
technological or other reasons, to develop and introduce new products or
versions in a timely manner, or if such new products or releases do not achieve
timely and widespread market acceptance, it would have a material adverse effect
on the Company's business, operating results and financial condition. See
"Business--Products and Technology" and "--Research and Development."

Competition. The markets for the Company's products are characterized by
intense competition and rapid change. The Company competes directly with other
independent manufacturers of color servers and with copier manufacturers, and
indirectly with printer manufacturers and others. The Company has a number of
direct competitors for color server products, the most significant of which is
EFI. Splash also faces competition from copier manufacturers that offer
internally developed color server products, such as a non-PostScript color
server offered by Fuji Xerox, or that incorporate color server features into
their copiers. In addition, the Company faces competition from desktop color
laser printers that offer increasing speed and color server capability. As
component prices decrease and the processing power and other functionality of
copiers, printers and computers increases, it becomes more likely that copier,
printer and computer manufacturers will continue to add color server
functionality to their systems, which could reduce the market for the Company's
existing line of products.

-9-

The Company also competes indirectly with manufacturers of electronic color
prepress systems, which offer similar functionality for the short-run and
commercial printing market as is provided by the Company's products. The
Company also competes indirectly with providers of color separation, color
editing and page layout software. While such software typically is
complementary to the Company's systems, such software can also be competitive
with the Company's systems and may become increasingly competitive to the extent
that the providers of such software extend the functionality of their products
in future releases.

Many of the Company's current and potential direct and indirect competitors
have longer operating histories, are substantially larger, and have
substantially greater financial, technical, manufacturing, marketing and other
resources than Splash. A number of these current and potential competitors also
have substantially greater name recognition and a significantly larger installed
base of products than the Company, which could provide leverage to such
companies in their competition with Splash. The Company expects competition to
increase to the extent the color server market grows, and such increased
competition may result in price reductions, reduced gross margins and loss of
market share, any of which could materially adversely affect the Company's
business, operating results and financial condition. As a result of their
greater resources, many of such competitors are in a better position than Splash
to withstand significant price competition or downturns in the economy. There
can be no assurance that Splash will be able to continue to compete effectively,
and any failure to do so would have a material adverse effect upon the Company's
business, operating results and financial condition. See "Management Discussion
and Analysis of Financial Condition and Results of Operations" and "Business --
Competition."

Management of Expanding Operations. The growth in the Company's business
has placed, and any further expansion would continue to place, a significant
strain on the Company's limited personnel, management and other resources. The
Company's ability to manage any future expansion effectively will require it to
attract, train, motivate and manage new employees successfully, to integrate new
management and employees into its overall operations and to continue to improve
its operational, financial and management systems. In this regard, the Company's
Chief Financial Officer and Vice President, Finance and Administration joined
the Company on March 29, 1996, and the Company currently does not have and has
been searching for a Vice President, Sales and Marketing. Moreover, the Company
expects to increase significantly the size of its domestic and international
sales support staff and the scope of its sales and marketing activities, and to
hire additional research and development personnel. The Company's failure to
manage any expansion effectively, including any failure to integrate new
management and employees or failure to continue to implement and improve
financial, operational and management controls, systems and procedures, could
have a material adverse effect on the Company's business, operating results and
financial condition.

Dependence on Third Party Manufacturers. The Company outsources the
manufacture of its products to third party subcontract manufacturers including
Manufacturing Services, Ltd. ("MSL"), located in Sunnyvale, California and
Logistix Incorporated ("Logistix") located in Fremont, California. MSL
purchases the components used in Splash boards from its component suppliers and
performs double-sided active surface mount assembly, in-circuit test, functional
test and system test of the printed circuit boards used in the Splash PCI Series
products, on a turnkey basis. MSL also performs in-warranty and out-of-warranty
repair of failed boards for the Splash PCI Series products. The Company
directly purchases Apple Power Macintosh computers, monitors and memory, and
furnishes these components, as well as the MSL-assembled boards, to Logistix for
final assembly. Logistix directly purchases a small portion of the components
used in Splash color servers and does all final assembly and system
configuration. Other subcontract manufacturers perform similar services with
respect to the Splash Power Series product line.

-10-

no assurance that quality problems will not occur again in the future or that
any such problem would not have a material adverse effect on the Company's
business, operating results and financial condition.

If the Logistix, MSL or other third party manufacturing facilities utilized
by the Company become unavailable to the Company, or if the manufacturing
operations at these facilities are slowed, interrupted or terminated, the
Company's business, operating results and financial condition could be adversely
affected. Although the Company believes that there are a variety of companies
available with the capability to provide the Company with such services, there
can be no assurance that the Company would be able to enter into alternative
third party manufacturing arrangements on terms satisfactory to the Company, in
a timely fashion, or at all. See "Business--Manufacturing."

Dependence on Component Availability and Cost. The Company purchases
components comprising a significant portion of the total cost of its color
servers. The balance of the inventory required to manufacture the Company's
products is purchased by Logistix. The Company currently sources most of its
Power Macintosh computers that serve as the platforms for its color servers
exclusively from Apple. The Company is currently operating on a purchase order
basis with Apple.

Certain components necessary for the manufacture of the Company's products
are obtained from a sole supplier or a limited group of suppliers. These include
Apple Power Macintosh computers, certain ASICs and other semiconductor
components. The Company does not maintain any long-term agreements with any of
its suppliers of components. Because the purchase of certain key components
involves long lead times, in the event of unanticipated increases in demand for
the Company's products, the Company could be unable to manufacture certain
products in a quantity sufficient to meet end user demand. The Company also
purchases memory modules from a single supplier. Although other sources are
available, a change in memory supplier could require time to effect and could
impact production. This risk would be exacerbated in times of short memory
supply. Any inability to obtain adequate deliveries of any of the components or
any other circumstance that would require the Company to seek alternative
sources of supply could affect the Company's ability to ship its products on a
timely basis, which could damage relationships with current and prospective
customers and could therefore have a material adverse effect on the Company's
business, financial condition and operating results. Moreover, there can be no
assurance that alternative sources of supply would be available on reasonably
acceptable terms, on a timely basis, or at all. The Company has from time to
time experienced shortages in deliveries of ASICs from Toshiba Corporation,
which shortages have impacted production volume capabilities. In order to
attempt to mitigate the risk of such shortages in the future, the Company
intends to increase its inventory of components for which the Company is
dependent upon sole or limited source suppliers. As a result, the Company may be
subject to an increasing risk of inventory obsolescence in the future, which
could materially and adversely affect the operating results and financial
condition.

The market prices and availability of certain components, particularly
memory and other semiconductor components and, to a lesser extent, Apple Power
Macintosh computers, which collectively represent a substantial portion of the
total manufactured cost of the Company's products, have fluctuated significantly
in the past. Significant fluctuations in the future could have a material
adverse effect on the Company's operating results and financial condition. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business--Manufacturing."

Dependence on Proprietary Technology. The Company relies in part on
trademark, copyright and trade secret law to protect its intellectual property
in the United States and abroad. The Company seeks to protect its software,
documentation and other written materials under trade secret and copyright laws,
which afford only limited protection. The Splash software included as a part of
the Company's products is sold pursuant to "shrink wrap" licenses that are not
signed by the end user and, therefore, may be unenforceable under the laws of
certain

-11-

jurisdictions. The Company does not own any issued patent. There can be no
assurance that any trademark or copyright owned by the Company will not be
invalidated, circumvented or challenged, that the rights granted thereunder will
provide competitive advantages to the Company or that any of the Company's
pending or future patent applications will be issued with the scope of the
claims sought by the Company, if at all. Further, there can be no assurance that
others will not develop technologies that are similar or superior to the
Company's technology, duplicate the Company's technology or design around any
patent of the Company. Moreover, effective intellectual property protection may
be unavailable or limited in certain foreign countries. There can be no
assurance that the steps taken by the Company will prevent misappropriation of
its technology. In addition, the laws of some foreign countries do not protect
the Company's proprietary rights as fully as do the laws of the United States.
There can be no assurance that the Company's means of protecting its proprietary
rights in the United States or abroad will be adequate or that competition will
not independently develop similar technology. Moreover, litigation may be
necessary in the future to enforce the Company's intellectual property rights,
to determine the validity and scope of the proprietary rights of others or to
defend against claims of infringement or invalidity. Such litigation could
result in substantial costs and diversion of management time and resources and
could have a material adverse effect on the Company's business, operating
results and financial condition.

There have been substantial amounts of litigation in the computer and
related industries regarding intellectual property rights, and there can be no
assurance that third parties will not claim infringement by the Company of their
intellectual property rights. In particular, EFI filed suit against Radius in
November 1995, alleging infringement of an EFI patent by Splash's predecessor,
CSG. The technology which is the subject of the patent claim was acquired by
Splash in the Acquisition, and EFI could add Splash as a defendant to this suit
at any time. Although a portion of the purchase price in the Acquisition was
placed in escrow pending resolution of the EFI litigation, there can be no
assurance that any such litigation against Splash would not have a material
adverse effect on the Company's business, operating results and financial
condition. Any claims that the Company is infringing on proprietary rights of
EFI or others, with or without merit, could be time consuming to defend, result
in costly litigation, divert management's attention and resources, and cause
product shipment delays. If the Company were found to be infringing on the
intellectual property rights of any third party, the Company could be subject to
liabilities for such infringement, which could be material, and could be
required to seek licenses from other companies or to refrain from using,
manufacturing or selling certain products or using certain processes. Although
holders of patents and other intellectual property rights often offer licenses
to their patent or other intellectual property rights, no assurance can be given
that licenses would be offered or that the terms of any offered license would be
acceptable to the Company. Any need to redesign the products or enter into any
royalty or licensing agreement could have a material adverse effect on the
Company's business, operating results and financial condition.

The Company relies upon certain software licensed from third parties. There
can be no assurance that the software licensed by the Company will continue to
provide competitive features and functionality or that licenses for software
currently utilized by the Company or other software which the Company may seek
to license in the future will be available to the Company on commercially
reasonable terms. The loss of, or inability to maintain, existing licenses could
result in shipment delays or reductions until equivalent software or suitable
alternative products could be developed, identified, licensed and integrated,
and the inability to license key new software that may be developed, on
commercially reasonable terms, would have a material adverse effect on the
Company's competitive position. Any such event would materially adversely affect
the Company's business, operating results and financial condition. See
"Acquisition," "Business--Intellectual Property" and "Certain Transactions."

Need for Additional Capital. The Company believes that in order to remain
competitive it may require additional financial resources over the next several
years for working capital, research and development, expansion of sales and
marketing resources, and capital expenditures. The Company believes that it
will be able to fund planned expenditures for at least the next twelve months
from a combination of the proceeds of the Offering, cash

-12-

flow from operations and existing cash balances. Assuming completion of the
Offering and the application of $23.4 million the net proceeds therefrom for
repayment of the subordinated notes and redemption of the Series A Preferred
Stock, as of June 30, 1996 the Company would have had approximately $9.2 million
in working capital, including approximately $9.9 million in cash and cash
equivalents. In addition, the Company's operations generated cash flow of $6.8
million during the nine months ended June 30, 1996. Accordingly, upon completion
of the Offering, the Company will continue to have limited capital resources and
expects that it will require additional capital to support future growth, if
any. The Company may not be able to obtain additional financing as needed on
acceptable terms or at all. See "Use of Proceeds," "Capitalization,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" and "Certain Transactions."

Risk of Product Defects. The Company's products consist of hardware and
software developed by Splash and others. Products such as those of the Company
may contain undetected errors when first introduced or when new versions are
released, and the Company has in the past discovered software and hardware
errors in certain of its new products after their introduction. Although the
Company has not experienced material adverse effects resulting from any errors
to date, there can be no assurance that errors would not be found in new
versions of Splash products after commencement of commercial shipments, or that
any such errors would not result in a loss of or delay in market acceptance and
have a material adverse effect upon the Company's business, operating results
and financial condition. In addition, errors in the Company's products
(including errors in licensed third party software) detected prior to new
product release could result in delay in the introduction of new products and
incurring of additional expense, which also could have a material adverse effect
upon the Company's business, operating results and financial condition. See
"Business--Products and Technology."

International Sales. All sales to Fuji Xerox are international sales. As a
result, international sales accounted for approximately 60%, 59% and 51% of net
revenue in fiscal 1994 and 1995 and in the nine months ended June 30, 1996,
respectively. In addition, although all sales to Xerox are U.S. sales, Xerox has
a significant international customer base, and the Company believes that a
significant portion of Splash products purchased by Xerox are resold outside the
United States. The Company expects that direct and indirect international sales
will continue to represent a substantial portion of its net revenue for the
foreseeable future. While the Company's international sales are presently
denominated in U.S. dollars, fluctuations in currency exchange rates could cause
the Company's products to become relatively more expensive to end users in a
particular country, leading to pressure to reduce the U.S. dollar denominated
price to the Company's OEM customers, which could in turn result in a reduction
in net revenue and profitability. The Company's business, operating results and
financial condition would be materially adversely affected if foreign markets do
not continue to develop. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

Financial Difficulties of a Major Shareholder; Potential Sales of Common
Stock. Radius, which will beneficially own approximately .% of the outstanding
shares of the Common Stock immediately following the Offering, has faced
significant financial difficulties in recent periods, including the period
before the Acquisition and continues to face such difficulties. Radius has
certain rights to demand that the Company register Radius' shares of Common
Stock under the Securities Act of 1933, as amended (the "Securities Act"), which
registration would permit the sale by Radius of the shares registered in the
public market. If Radius were to enter bankruptcy, Radius would have the
ability to sell a substantial portion of its holdings of Common Stock in the
public market without regard to requirements for registration of such shares
under the Securities Act and for the requirements of Rule 144 promulgated under
the Securities Act. A sale of substantial amounts of the shares of Common Stock
held by Radius in the public market or the prospect of such a sale could
adversely affect the market price of the Company's Common Stock.

-13-

Dependence on Key Personnel. Because of the nature of the Company's
business, the Company is highly dependent on the continued service of, and on
its ability to attract and retain, qualified technical, marketing, sales and
managerial personnel, including senior members of management. The competition
for such personnel is intense, and the loss of any of such persons, as well as
the failure to recruit additional key technical and sales personnel in a timely
manner, would have a material adverse effect on the Company's business and
operating results. There can be no assurance that the Company will be able to
continue to attract and retain the qualified personnel necessary for the
development of its business. The Company currently does not have employment
contracts with any of its employees and does not maintain key person life
insurance policies on any of its employees. See "Business--Employees" and
"Management."

Control By Principal Stockholders, Officers and Directors; Anti-Takeover
Effects of Certificate of Incorporation and Delaware Law. Immediately following
the Offering, the Company's principal stockholders, officers, directors and
their affiliates will beneficially own approximately .% of the outstanding
shares of the Common Stock. As a result, such persons, acting together, would
have the ability to control all matters requiring stockholder approval,
including the election of directors and approval of significant corporate
transactions. In addition, effective upon the closing of the Offering, the Board
of Directors will have the authority to issue up to 5,000,000 shares of
undesignated Preferred Stock, to determine the powers, preferences and rights
and the qualifications, limitations or restrictions granted to or imposed upon
any unissued series of undesignated Preferred Stock, and to fix the number of
shares constituting any series and the designation of such series, without any
further vote or action by the Company's stockholders. The Company's Certificate
of Incorporation also provides for a classified board of directors such that
only approximately one-third of the board is selected at each annual meeting of
stockholders. A classified board may have the effect of deferring or
discouraging a charge in control of the Company. The Preferred Stock could be
issued with voting, liquidation, dividend and other rights superior to the
rights of the Common Stock. The Company's Certificate of Incorporation also
eliminates cumulative voting in the election of directors. The concentration of
ownership and the issuance of Preferred Stock under certain circumstances could
have the effect of delaying or preventing a change in control of the Company.
See "Principal and Selling Stockholders" and "Description of Capital Stock."

Benefit of Transaction to Existing Stockholders. The Offering will provide
substantial benefits to existing stockholders of the Company, particularly
certain affiliates of Summit Partners, L.P. and Sigma Partners, L.P. The Company
will use approximately $15.4 million of the proceeds of the Offering to redeem
all outstanding shares of the Company's Series A Preferred Stock, which are held
by funds affiliated with Summit Partners, L.P. and Sigma Partners, L.P., and
approximately $8.0 million of the proceeds to repay all outstanding subordinated
notes, which are held by funds affiliated with Summit Partners. See "Use of
Proceeds" and "Principal and Selling Stockholders."

Shares Eligible for Future Sale. Sale of substantial amounts of shares in
the public market or the prospect of such sales could adversely affect the
market price of the Company's Common Stock. Upon completion of the Offering, the
Company will have outstanding . shares of Common Stock. Of these shares, with
the exception of the . shares offered hereby, all shares of Common Stock held by
current stockholders are subject to lock-up agreements under which the holders
of such shares have agreed not to sell or otherwise dispose of any of their
shares for a period of 180 days after the date of this Prospectus without the
prior written consent of the Representatives of the Underwriters. After the 180-
day period, approximately 320,000 shares will be eligible for sale under Rules
144 and 701 promulgated pursuant to the Securities Act. The remaining
approximately 2,350,000 shares held by existing stockholders will become
eligible for sale from time to time in the future under Rule 144. In addition,
the Company intends to file a registration statement under the Securities Act,
upon the effectiveness of the Offering or shortly thereafter, covering the sale
of shares of Common Stock reserved for issuance under the Company's 1996 Stock
Option Plan and 1996 Employee Stock Purchase Plan. As of June 30, 1996, there
were options outstanding to purchase a total of approximately 70,000 shares of
the Company's Common Stock, all of which are subject to 180-

-14-

day lock-up agreements and approximately 670,000 additional shares reserved for
future option grants. Approximately 70,000 shares issuable upon exercise of such
options will be eligible for purchase and resale into the public market 180 days
after the date of this Prospectus in reliance upon Rule 701. Upon completion of
the offering, the 4,282 shares of Series B Preferred Stock owned by Radius will
automatically convert into 497,465 shares of the Company's Common Stock, which
are subject to a 180-day lockup agreement. If Radius were to enter bankruptcy
and were allowed to sell its shares of the Company's Common Stock without regard
to the Lock-up agreement or the restrictions of Rule 144 under the Securities
Act, such additional shares of Common Stock would become eligible for resale
into the public market at an indeterminate date after the date of this
Prospectus. See "Management--Compensation Plans," "Shares Eligible for Future
Sale" and "Underwriting." Certain existing stockholders holding approximately
2,450,000 shares of Common Stock are also entitled to registration rights with
respect to their shares of Common Stock. See "Description of Capital Stock--
Registration Rights."

No Prior Trading Market for Common Stock; Potential Volatility of Stock
Price. Prior to the Offering, there has been no public market for the Common
Stock, and there can be no assurance that an active trading market will develop
or be sustained after the Offering. The initial public offering price will be
determined through negotiations between the Company and the representatives of
the Underwriters based on several factors and may not be indicative of the
market price of the Common Stock after the Offering. The market price of the
shares of Common Stock may be highly volatile and may be significantly affected
by factors such as actual or anticipated fluctuations in the Company's operating
results, change in estimates or recommendations by securities analysts,
litigation by or against the Company, announcements of technical innovations,
new products or new contracts by the Company, its competitors or their end
users, developments with respect to patents or proprietary rights, general
market conditions and other factors, certain of which could be unrelated to, or
outside the control of, the Company. The stock market has from time to time
experienced significant price and volume fluctuations that have particularly
affected the market prices for the common stocks of technology companies and
that have often been unrelated to the operating performance of particular
companies. These broad market fluctuations may adversely affect the market price
of the Common Stock. In the past, following periods of volatility in the market
price of a company's securities, securities class action litigation has been
initiated against the issuing company. There can be no assurance that such
litigation will not occur in the future with respect to the Company. Such
litigation could result in substantial costs and a diversion of management's
attention and resources, which could have a material adverse effect on the
Company's business and operating results. Any settlement or adverse
determination in such litigation could also subject the Company to significant
liability, which could have a material adverse effect on the Company's financial
condition. See "Underwriting."

Dilution. The initial public offering price is substantially higher than
the net tangible book value per share of Common Stock. Investors purchasing
shares of Common Stock in the Offering will therefore incur immediate and
substantial dilution in net tangible book value per share. To the extent that
outstanding options and warrants to purchase the Company's Common Stock are
exercised, there will be further dilution. See "Dilution."

-15-

USE OF PROCEEDS

The net proceeds to the Company from the sale of the . shares of Common
Stock offered by the Company hereby at an assumed initial public offering price
of $. per share, after deducting underwriting discounts and commissions and
estimated offering expenses, are estimated to be $26.7 million ($30.9 million if
the Underwriters' over-allotment option is exercised in full). The Company will
use approximately $15.4 million of the proceeds of the Offering to redeem all
outstanding shares of the Company's Series A Preferred Stock, which are held by
funds affiliated with Summit Partners, L.P. and Sigma Partners, L.P., and
approximately $8.0 million to repay all outstanding subordinated promissory
notes, which are held by funds affiliated with Summit Partners. The subordinated
notes bear interest at a rate of 12% and require principal repayments beginning
January 30, 2001. The Series A Preferred Stock and the subordinated notes were
issued in connection with the Acquisition. The remaining net proceeds will be
used for working capital and general corporate purposes. A portion of the net
proceeds may also be used for investments in or acquisitions of complementary
businesses, products or technologies, although no such transactions are
currently under negotiation. Pending such uses, the Company expects to invest
the net proceeds in short-term, interest-bearing securities.

The Company will not receive any proceeds from the sale of shares of Common
Stock by the Selling Stockholders. See "Certain Transactions" and "Principal and
Selling Stockholders."

DIVIDEND POLICY

The Company has never declared or paid cash dividends on its Common Stock.
The Company currently intends to retain any earnings for use in its business and
does not anticipate paying any cash dividends on its Common Stock in the
foreseeable future. In addition, the Company's borrowing arrangements, including
the Company's line of credit and outstanding subordinated promissory notes
(which notes will be repaid out of the proceeds of the Offering) prohibit the
payment of cash dividends without the lender's prior written consent.

ACQUISITION

On January 30, 1996, the Company effected the Acquisition and related
transactions. The Acquisition consisted of: (i) the formation and initial
capitalization of Splash Technology Holdings, Inc.; (ii) the formation and
initial capitalization by Splash Technology Holdings, Inc. of a new wholly-owned
subsidiary, Splash Merger Company, Inc., a Delaware Corporation; (iii) the
formation and initial capitalization of a new corporation, Splash Technology,
Inc., a Delaware corporation, into which Radius placed certain assets and
liabilities of its Color Server Group in exchange for all of the capital stock
of Splash Technology, Inc.; and (iv) the merger of Splash Merger Company, Inc.
with and into Splash Technology, Inc. in a reverse triangular merger. As a
result of the merger, Splash Technology, Inc. was the surviving corporation and
Radius received in exchange for its interest in Splash Technology, Inc. (i)
$21.9 million in cash, (ii) an aggregate of 4,282 shares of Series B Preferred
Stock of the Company, which are convertible into a total of 497,465 shares of
Common Stock of the Company (representing approximately 19% of the outstanding
Common Stock of the Company on an as-converted basis prior to the Offering), and
(iii) a payment of approximately $1.5 million in cash on June 9, 1996.

The Acquisition was funded by the purchase of approximately $15.4 million
of Series A Preferred Stock by entities associated with Summit Partners, L.P.
and entities associated with Sigma Partners, L.P. and the purchase of $8.0
million of subordinated promissory notes by entities associated with Summer
Partners, L.P. As a result of an independent third party valuation, the Series A
Preferred Stock was valued at $14,700,000 and the subordinated promissory notes
were valued at $8,600,000.

-16-

In connection with the Acquisition, the parties entered into an escrow
agreement providing for an escrow of $4.7 million for satisfaction of possible
claims for indemnification by Splash Technology, Inc., Splash Technology
Holdings, Inc. and its stockholders against Radius. An amount equal to
approximately $2.35 million remains in escrow pending (i) a final, non-
appealable order dismissing with prejudice the EFI litigation, (ii) the
attainment by Radius of certain financial tests, or (iii) or the discretionary
decision by Splash Technology Holdings, Inc. and its stockholders to release the
amount in escrow. See "Risk Factors--Dependence on Proprietary Technology" and
"Business--Intellectual Property."

In connection with the Acquisition and related transactions, funds
affiliated with Summit Partners, L.P. and Sigma Partners, L.P. acquired an
aggregate of 1,682,500 shares of Common Stock and 167,500 shares of Common
Stock, respectively, representing 63.2% and 6.3% of the Company's outstanding
Common Stock immediately prior to the Offering. In addition, funds affiliated
with Summit Partners, L.P. and Sigma Partners, L.P. acquired an aggregate of
13,933 shares and 1,493 shares, respectively, of Series A Preferred Stock of the
Company and funds affiliated with Summit Partners, L.P. acquired promissory
notes of the Company in the aggregate principal amount of $8.0 million. The
promissory notes are required to be repaid at face value plus accrued and unpaid
interest, and the Series A Preferred Stock is required to be redeemed at a price
of $1,000 per share plus accrued and unpaid dividends, upon certain events
including an initial public offering at a price of at least $12.00 per share and
aggregate gross proceeds to the Company of at least $35.0 million. It is
anticipated that the promissory notes will be repaid and the Series A Preferred
Stock will be redeemed out of the proceeds of the Offering even at a lesser
amount of aggregate gross proceeds to the Company. See "Use of Proceeds,"
"Certain Transactions," "Principal and Selling Stockholders" and "Description of
Capital Stock."

The Acquisition constituted a leveraged transaction. As of January 30,
1996, the Company had approximately $12.6 million in assets and approximately
$9.6 million of liabilities. Immediately following the Acquisition, the Company
had $34.6 million in assets and $19.1 million of liabilities. The proceeds from
the Offering will be used primarily to repay the $8.0 million in subordinated
notes and redeem the $15.4 million of outstanding Series A Preferred Stock
issued in connection with the Acquisition. See "Use of Proceeds,"
"Capitalization," "Management's Discussion and Analysis of Financial Condition
and Results of Operations," "Certain Transactions" and "Principal and Selling
Stockholders."

-17-

CAPITALIZATION

The following table sets forth as of June 30, 1996: (i) the actual
capitalization of the Company, (ii) the capitalization of the Company on a pro
forma basis to give effect to the conversion into Common Stock of all
outstanding shares of Series B Preferred Stock upon the closing of the Offering,
and (iii) the pro forma capitalization of the Company as adjusted to give effect
to the receipt of the estimated net proceeds from the initial public offering of
$26.7 million at an assumed public offering of $. per share, and the application
of the net proceeds therefrom and the amendment to the Company's Amended and
Restated Certificate of Incorporation. See "Use of Proceeds".

JUNE 30, 1996
---------------------------------------
ACTUAL PRO FORMA AS ADJUSTED
----------- ------------- -------------
(IN THOUSANDS)

Long-term debt (1)................................................. $ 8,000 $ 8,000 $ --
-------- -------- --------
Stockholders' equity
Preferred Stock:
Authorized: 19,708,000 shares, actual and pro forma;
5,000,000 shares as adjusted
Series A Preferred Stock, par value $.001 per share:
Authorized: 15,426 shares, actual and pro forma; issued and
outstanding: 15,426 shares, actual; no shares pro forma; and
no shares as adjusted.......................................... $ 1 $ 1 $ --
Series B Preferred Stock, par value $.001 per share:
Authorized, issued and outstanding: 4,282 shares actual;
no shares pro forma and no shares as adjusted.................. 1 -- --
Common Stock, par value $.001 per share:
Authorized: 50,000,000 shares; issued and outstanding:
2,165,575 shares actual, 2,663,040 shares pro forma, . shares
as adjusted (2).................................................. 2 3 3
Additional paid-in capital......................................... 19,462 19,462 30,428
Accumulated deficit................................................ (11,944) (11,944) (11,635)
-------- -------- --------
Total stockholders' equity....................................... 7,522 7,522 18,796
-------- -------- --------
Total capitalization........................................... $ 15,522 $ 15,522 $ 18,796
======== ======== ========

__________________

(1) See Note 5 of Notes to Consolidated Financial Statements.
(2) Excludes an aggregate of approximately 70,000 shares of Common Stock
issuable on exercise of options and warrants outstanding as of June 30,
1996; approximately 4,000 shares of Common Stock issuable on exercise of
options granted after June 30, 1996; approximately 670,000 shares of Common
Stock reserved for future grants under the Company's 1996 Stock Option
Plan; and 50,000 shares of Common Stock reserved for issuance under the
Company's 1996 Employee Stock Purchase Plan. See "Use of Proceeds,"
"Management--Compensation Plans" and Note 8 of Notes to Consolidated
Financial Statements.

-18-

DILUTION

The pro forma net tangible book value of the Company at June 30, 1996,
giving effect to the conversion of all outstanding shares of Preferred Stock
into Common Stock upon or prior to the closing of the Offering, was
approximately $. million, or $. per share of Common Stock. "Pro forma net
tangible book value" per share represents the amount of total tangible assets of
the Company less total liabilities, divided by the number of shares of Common
Stock outstanding. After giving effect to the sale by the Company of . shares of
Common Stock offered hereby (after deducting the underwriting discounts and
commissions and estimated Offering expenses) at an assumed initial public
offering price of $. per share, the pro forma net tangible book value of the
Company at June 30, 1996 would have been $. million, or $. per share. This
represents an immediate increase in net tangible book value of $. per share to
existing stockholders and an immediate dilution of $. per share to new
investors. The following table illustrates this per share dilution:

Assumed initial public offering price................................. $
Pro forma net tangible book value before the Offering............... $
Increase attributable to new investors..............................
Pro forma net tangible book value after the Offering..................

Net tangible book value dilution to new investors..................... $
=======

The following table summarizes, on a pro forma basis as of June 30,
1996, the differences in the total consideration paid and the average price per
share paid by the Company's existing stockholders and the new investors with
respect to the . shares of Common Stock to be sold by the Company. The
calculations in this table with respect to shares of Common Stock to be
purchased by new investors in the Offering reflect an assumed initial public
offering price of $. per share:

AVERAGE
SHARES PURCHASED TOTAL CONSIDERATION PRICE
---------------------------- ----------------------------
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------------- ------------ -------------- ------------- ------------

Existing stockholders............................
New investors....................................
Total...........................................

The foregoing computations exclude, as of June 30, 1996, an aggregate of
approximately 70,000 shares of Common Stock issuable on exercise of outstanding
options and warrants at a weighted average exercise of $1.63 per share. To the
extent outstanding options and warrants are exercised, there will be further
dilution to new investors. See "Risk Factors--Dilution," "Management--
Compensation Plans" and "Description of Capital Stock."

-19-

SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated statement of operations data presented below for
the years ended September 30, 1994 and 1995, the four months ended January 31,
1996 and the five months ended June 30, 1996, and the selected consolidated
balance sheet data as of September 30, 1994 and 1995 and June 30, 1996 are
derived from, and are qualified by reference to, the audited consolidated
financial statements and notes thereto included elsewhere in this Prospectus.
The selected consolidated statement of operations data for the nine months ended
June 30, 1995 are derived from unaudited consolidated financial statements
included elsewhere in this Prospectus, have been prepared on the same basis as
the annual consolidated financial statements and, in the opinion of management,
contain all adjustments, consisting only of normal recurring adjustments
necessary for a fair presentation of the operating results and financial
position for such periods and as of such dates. The consolidated operating
results for the four months ended January 31, 1996 and five months ended June
30, 1996 are not necessarily indicative of the results to be expected for the
full year or any other future period.

The financial statements for the periods prior to January 31, 1996 reflect
the operations of the CSG division of Radius and SuperMac, adjusted to reflect
operations as a separate corporation. The financial statements after January 31,
1996 reflect the consolidated operations of the Company after accounting for the
Acquisition using the purchase method of accounting. Operating results
subsequent to January 31, 1996 reflect (i) interest on the debt incurred in
connection with the Acquisition, (ii) non-recurring, non-cash charges relating
to the write-off of in-process research and development projects and the
amortization of purchased technology, and (iii) an income tax benefit from the
net operating loss associated with the Acquisition.

The data set forth below are qualified in their entirety by, and should be
read in conjunction with, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the consolidated financial statements,
notes thereto and other financial and statistical information appearing
elsewhere in this Prospectus.

SPLASH
TECHNOLOGY
PREDECESSOR BUSINESS HOLDINGS, INC.
----------------------------------------------------------------- -----------------
FISCAL YEAR NINE MONTHS FOUR MONTHS FIVE MONTHS
ENDED ENDED ENDED ENDED
SEPTEMBER 30, JUNE 30, JANUARY 31, JUNE 30,
------------------------------- ---------------- ---------------- -----------------
1994 1995 1995 1996 1996
(UNAUDITED)
-------------- ---------------- ---------------- ---------------- -----------------
(IN THOUSANDS EXCEPT PER SHARE DATA)

CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Net revenue..................................... $ 16,354 $ 30,472 $ 20,343 $ 13,008 $ 18,326
Cost of net revenue............................. 12,068 20,723 13,737 8,427 11,455
------- -------- -------- -------- --------
Gross profit.................................... 4,286 9,749 6,606 4,581 6,871
------- -------- -------- -------- --------
Operating expenses:
Research and development...................... 1,999 3,295 2,034 1,498 1,624
Sales and marketing........................... 562 2,076 1,505 688 806
General and administrative.................... 377 891 667 287 668
Amortization of purchased technology and
write-off of in-process technology.......... - - - - 22,729
------- -------- -------- -------- --------
Total operating expenses.................... 2,938 6,262 4,206 2,473 25,827
------- -------- -------- -------- --------
Income (loss) from operations.................... 1,348 3,487 2,400 2,108 (18,956)
Interest expense, net............................ -- -- -- 18 388
------- -------- -------- -------- --------
Income (loss) before provision for income taxes.. 1,348 3,487 2,400 2,090 (19,344)
Provision for (benefit from) income taxes........ 99 1,395 960 836 (7,765)
------- -------- -------- -------- --------
Net income (loss)................................ $ 1,249 $ 2,092 $ 1,440 $ 1,254 $ (11,579)
======= ======== ======== ======== ========
Net income (loss) per share (1).................. $ (4.38)
========
Shares used in computing per share amounts (1)... 2,726
========

-20-

SPLASH TECHNOLOGY
PREDECESSOR BUSINESS HOLDINGS, INC
---------------------------- -------------------
SEPTEMBER 30, JUNE 30,
----------------------------
1994 1995 1996
------------ ------------- -------------------
(IN THOUSANDS)

CONSOLIDATED BALANCE SHEET DATA:
Working capital..................................... $ 4,126 $ 2,318 $ 5,955
Total assets........................................ 7,383 9,688 28,502
Long term debt...................................... -- -- 8,000
Total liabilities................................... 3,057 6,985 20,980
Equity.............................................. 4,326 2,703 7,522

___________________________
(1) See Note 2 of Notes to Consolidated Financial Statements for an explanation
of the method used to determine the number of shares used to compute per
share amounts.

-21-

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and
Results of Operations and other parts of this Prospectus contain forward-looking
statements that involve risks and uncertainties. The Company's actual results
may differ materially from the results discussed in such forward-looking
statements. Factors that may cause such a difference include, but are not
limited to, those discussed in "Risk Factors."

OVERVIEW

The Company operated as the Color Server Group ("CSG") division of SuperMac
from late 1992 to August 1994 and, after the merger of SuperMac into Radius, as
the CSG division of Radius from August 1994 until January 1996. In January 1996,
Splash was acquired by an investor group in a leveraged transaction. See
"Acquisition" and "Certain Transactions." References below to the results of
operations for the nine months ended June 30, 1996 refer to the results of
operations of CSG for the four months ended January 31, 1996 plus the results of
operations of the Company for the five months ended June 30, 1996.

The Company sells pre-configured color server systems and board-level
server kits to two OEM customers, Xerox and Fuji Xerox, which integrate the
Company's color servers with their color copiers and sell such connected systems
on a worldwide basis. Sales to Xerox accounted for approximately 40%, 41% and
49% of net revenue in fiscal 1994, fiscal 1995 and the nine months ended June
30, 1996, respectively. Sales to Fuji Xerox accounted for approximately 60%, 59%
and 51% of net revenue in fiscal 1994, fiscal 1995 and the nine months ended
June 30, 1996, respectively. The Company expects that sales to Xerox and Fuji
Xerox will continue to account for all or a substantial portion of its net
revenue for the foreseeable future. As a result, sales of the Company's products
have been and will continue to be heavily influenced by the market acceptance of
the Xerox and Fuji Xerox color copiers with which the Company's products operate
and the sales efforts of Xerox and Fuji Xerox with respect to Splash products.
See "Risk Factors--Dependence on Xerox and Fuji Xerox."

Substantially all net revenue has been derived from the sale of systems and
color server kits. The Company's policy is to recognize revenue at the time of
shipment of its products to its OEM customers, which have no right to return
products. From inception to September 30, 1993, the Company was engaged
principally in research and development, and recorded approximately $1.3 million
of net revenue from product shipments and $1.6 million of research and
development costs. The Company began shipping board-level color server kits in
fiscal 1993 and pre-configured color server systems in fiscal 1995. In May 1996,
the Company made the transition from its Power Series products to its new PCI
Series products, and continues to offer Power Series products only as server
kits in limited quantities and as warranty and replacement parts. In May 1996,
Xerox informed Splash that it held in its inventory a substantial quantity of
Power Series products accumulated since January 1996. As a result of the
Company's product transition and Xerox's accumulation of inventory of these
products, sales of Power Series products shipped to Xerox between January and
April 1996 are recorded as net revenue when Xerox sells these products to end
users. All other Power Series and PCI Series product sales are recorded upon
shipment to the OEM customer.

The Company has achieved significant growth in net revenue and operating
income each year since fiscal 1994, before purchase accounting adjustments.
However, there can be no assurance that the Company will continue to grow at
similar rates in the future, if at all. In addition, the Company's overall
expense level is expected to increase as the Company builds corporate
infrastructure and expands its operations. Accordingly, the Company believes
that period-to-period comparisons of its financial results should not be relied
upon as an indication of future performance. Although the Company was profitable
for the first nine months of fiscal 1996 and the first five months of
independent operations through June 30, 1996 (before purchase accounting
adjustments), there can be no assurance that the Company will continue to be
profitable on an annual or quarterly basis in the future.

-22-

The Company establishes its expenditure levels for operating expenses based
on projected sales levels and margins, and expenses are relatively fixed in the
short term. Moreover, the Company expects to expand its sales and marketing,
technical and customer support, research and product development and
administrative activities. Accordingly, if sales are below expectations in any
given quarter, the adverse impact of the shortfall in revenues on operating
results may be increased by the Company's inability to adjust spending in the
short term to compensate for the shortfall.

RESULTS OF OPERATIONS

The following table sets forth consolidated statement of operations data as
a percentage of revenue for the periods indicated.

Splash
Technology
Predecessor Business Holdings, Inc.
--------------------------------------- ----------------
Year Ended September 30, Nine Months Ended June 30,
-------------------------- ----------------------------
1994 1995 1995 1996
------------ ------------ ------------ --------------
(unaudited) (pro forma)

Net revenue............................... 100% 100% 100% 100%
Cost of net revenue....................... 74 68 68 63
---- ---- ---- ----
Gross margin............................. 26 32 32 37
---- ---- ---- ----
Operating expenses:
Research and development................ 12 11 10 10
Sales and marketing..................... 3 7 7 5
General and administrative.............. 3 3 3 3
Amortization of purchased technology and -- -- -- 73
write-off of in-process technology..... ---- ---- ---- ----
Total operating expenses.............. 18 21 20 91
---- ---- ---- ----
Income (loss) from operations............. 8 11 11 (54)
Interest expense, net..................... -- -- -- 1
---- ---- ---- ----
Income (loss) before provision for
income taxes............................. 8 11 11 (55)
Provision for (benefit from) income
taxes.................................... -- 4 4 (22)
---- ---- ---- ----
Net income (loss)......................... 8% 7% 7% (33)%
==== ==== ==== ====

NET REVENUE. The Company's net revenue increased 86% to $30.5 million in
fiscal 1995 from $16.4 million in fiscal 1994, and increased 54% to $31.3
million in the nine months ended June 30, 1996 from $20.3 million in the nine
months ended June 30, 1995. These increases were primarily attributable to
higher unit sales of systems and color server kits. In addition, the Company has
experienced a shift toward higher priced, pre-configured color server systems
from lower priced color server kits, particularly in the third quarter of fiscal
1995 with the introduction of the Company's Power Series product line and in the
third quarter of fiscal 1996 with the introduction of the Company's PCI Series
product line. For example, since the Company's introduction of the PCI Series
product line, Fuji Xerox has shifted its product purchases from substantially
all kits to substantially all pre-configured systems. There can be no assurance
that Fuji Xerox or Xerox will not change its mix of product purchases again in
the future. Any sales mix shift toward kits would result in lower average
selling prices and impact net revenue. Net revenue has also been and may
continue to be impacted by the Company's sales mix of systems and kits in
greater or lesser memory configurations.

Through April 1996, the Company derived substantially all of its revenue
from color server products designed for NuBus-based Apple Macintosh computers,
including the Power Series product line originally introduced in fiscal 1995 and
the Company's original Splash color server kit products introduced in fiscal
1993. Beginning in mid-calendar 1995, Apple began to transition from a NuBus
architecture in its high end Power Macintosh products to a PCI bus architecture.
Accordingly, Splash developed its initial PCI bus-based product line, the PCI
Series, and commenced shipment of such product line in May 1996. The Company
does not expect

-23-

that sales of Power Series products will represent any material portion of net
revenue in the future other than any net revenue recognized from the sale to end
users of the remaining Power Series products held by Xerox. See "--Overview" and
"Risk Factors--Dependence on Xerox and Fuji Xerox."

All sales to Fuji Xerox are international sales. As a result, international
sales accounted for 60% and 59% of net revenues in fiscal 1994 and 1995,
respectively, and accounted for approximately 59% and 51% of net revenue in the
nine months ended June 30, 1995 and 1996, respectively. In addition, although
all sales to Xerox are U.S. sales, Xerox has a significant international
customer base and the Company believes that a significant portion of Splash
products purchased by Xerox are resold outside the United States. The Company
expects that direct and indirect international sales will continue to represent
a substantial portion of its net revenue for the foreseeable future. While the
Company's international sales are presently denominated in U.S. dollars,
fluctuations in currency exchange rates could cause the Company's products to
become relatively more expensive to end users in a particular country, leading
to pressure to reduce the U.S. dollar denominated price to the Company's OEM
customers, which could in turn result in a reduction in net revenue and
profitability. See "Risk Factors--International Sales."

GROSS MARGIN. Cost of net revenue consists primarily of the costs of Apple
Power Macintosh computers (in the case of pre-configured systems), memory, and
royalties for Adobe PostScript software, plus, to a lesser extent, the cost of
other components, additional third party software license fees and royalties,
and manufacturing services. Gross margins increased to 32% in fiscal 1995 from
26% in fiscal 1994, and increased to 37% in the nine months ended June 30, 1996
from 32% in the nine months ended June 30, 1995. The increases in gross margin
were primarily due to economies in scale derived from higher sales volumes and
increases in pricing due to product improvements from additional software
features, partially offset by a sales shift toward certain lower margin pre-
configured server models. The gross margin for the nine months ended June 30,
1996 as compared to the nine months ended June 30, 1995 also increased due to
reductions in component costs achieved through new product designs and favorable
component pricing. The Company expects that gross margins will fluctuate from
period to period and may decrease in future periods. Gross margin is affected by
a number of factors, including product mix, product pricing and manufacturing
and component costs. The Company may also be required to reduce prices in
response to competitive pressure. Any decline in average selling prices of a
particular product which is not offset by a reduction in production costs or by
sales of other products with higher gross margins would decrease the Company's
overall gross margin and adversely affect the Company's operating results. See
"Risk Factors--Fluctuations in Operating Results; Seasonal Purchasing Patterns."

RESEARCH AND DEVELOPMENT. Research and development expenses consist
primarily of compensation and related costs, consulting fees and depreciation of
equipment. Research and development expenses increased 65% to $3.3 million in
fiscal 1995 from $2.0 million in fiscal 1994, and increased 53% to $3.1 million
in the nine months ended June 30, 1996 from $2.0 million in the nine months
ended June 30, 1995. As a percentage of net revenue, however, research and
development decreased to 11% in fiscal 1995 from 12% in fiscal 1994, and was 10%
of net revenue in each of the nine months ended June 30, 1995 and 1996. These
increases in the absolute dollar amount of these expenses were primarily
attributable to increased staffing and associated support required to enhance
the Company's product line and, in fiscal 1995 and 1996, to introduce the
Company's Power Series and PCI Series product lines, respectively. Except for
charges related to the Acquisition, all research and development costs to date
have been expensed as incurred. In view of current projects under development
and contemplated, research and development expenses are expected to increase in
absolute dollars in future periods, although they may vary as a percentage of
net revenue. See "Business--Research and Development."

SALES AND MARKETING. Sales and marketing expenses consist primarily of
salaries and related costs, consulting fees, trade show costs and marketing
materials. Sales and marketing expenses increased 269% to $2.1 million in fiscal
1995 from $562,000 in fiscal 1994 and remained relatively constant at $1.5
million in the nine months ended June 30, 1996 and the nine months ended June
30, 1995. Such expenses represented 7%, 3%, 5% and 7% of net revenue for such
respective periods. The increases in the absolute dollar amount of these
expenditures

-24-

were primarily related to expansion of the Company's sales support and marketing
staff and associated costs, primarily to increase the Company's level of support
for Xerox's sales organizations. The Company intends to continue to increase
sales and marketing expenses in order to enhance sales support capabilities and
to pursue promotional programs designed to improve name and product recognition
in the end user community. Accordingly, sales and marketing expenses are
expected to increase in absolute dollars in future periods, although they may
vary as a percentage of net revenue.

GENERAL AND ADMINISTRATIVE. General and administrative expenses prior to
January 31, 1996 consisted primarily of an allocation of overhead expenses by
Radius based on headcount. Since February 1, 1996, general and administrative
expenses have consisted primarily of compensation and related costs, and
consulting and professional fees. General and administrative expenses increased
136% to $891,000 in fiscal 1995 from $377,000 in fiscal 1994, representing 3% of
net revenue for each respective period, and increased 43% to $955,000 in the
nine months ended June 30, 1996 from $667,000 in the nine months ended June 30,
1995, representing 3% of net revenue in each such period. The increase from 1994
to 1995 was primarily due to increased salary and related costs due to increased
headcount. The increase in the first nine months of 1996 was primarily related
to the Company's efforts to enhance its corporate infrastructure to replace
services provided by Radius prior to the Acquisition, and to support expansion
of the Company's operations. The Company believes that its general and
administrative expenses will increase in absolute dollars in the foreseeable
future as it continues to implement additional management and operational
systems, and expands its administrative staff and incurs additional costs
relating to being a public company.

ACQUISITION-RELATED AND NON-OPERATING EXPENSES. In the nine months ended
June 30, 1996, the Company recorded certain costs related to the Acquisition,
including a write-off of $19.3 million of in-process research and development,
and the amortization in full through May 1996 of $3.4 million of purchased
technology. Through June 30, 1996, the Company had incurred interest costs
pursuant to the subordinated notes and line of credit established in connection
with the Acquisition, offset in part by interest earned on short-term
investments.

PROVISION FOR INCOME TAXES. The Company accounts for income taxes in
accordance with the Financial Accounting Standards Board's Statement of
Financial Accounting Standard No. 109 "Accounting for Income Taxes." For fiscal
1994, 1995 and the nine month periods ended June 30, 1995 and 1996, the Company
estimated a provision for income taxes as if CSG had been operating as a
separate company. In addition, as a result of the Acquisition, the Company
recorded a deferred tax asset of approximately $9.1 million and realized a
corresponding credit to the provision for income taxes, arising from the
difference in treatment of acquired intangible assets for tax and financial
reporting purposes. The Company has not reduced the deferred tax asset by a
valuation allowance as it is more likely than not that all of the deferred tax
asset will be realized through future taxable income.

-25-

QUARTERLY RESULTS

The following tables set forth consolidated statements of operations data
for the seven quarters in the period ended June 30, 1996, both in dollar amounts
and as percentages of net revenue. This information has been derived from
unaudited financial statements that, in the Company's opinion, reflect all
normal recurring adjustments that the Company considers necessary to present a
fair statement of the results of operations in the quarterly periods. The data
set forth should be read in conjunction with the financial statements and notes
thereto appearing elsewhere in this Prospectus. The operating results for any
quarter are not necessarily indicative of results for future quarters.

QUARTER ENDED
---------------------------------------------------------------------------
DEC. 31, MAR. 31, JUNE 30, SEP. 30, DEC. 31, MAR. 31, JUNE 30,
1994 1995 1995 1995 1995 1996 1996
--------- --------- --------- --------- --------- --------- ---------
(IN THOUSANDS)

Net revenue............................. $ 4,559 $ 6,346 $ 9,438 $ 10,129 $ 7,206 $ 10,791 $ 13,337
Cost of net revenue..................... 3,042 4,171 6,524 6,986 4,847 6,871 8,164
------ ------ ------ ------ ------ ------ ------
Gross profit.......................... 1,517 2,175 2,914 3,143 2,359 3,920 5,173
------ ------ ------ ------ ------ ------ ------
Operating expenses
Research and development.............. 372 825 837 1,261 1,256 884 982
Sales and marketing................... 281 504 720 571 568 438 488
General and administrative............ 222 223 222 224 236 188 531
Amortization of purchased
technology and
write-off of in-process
technology..................... - - - - - 21,027 1,702
Total operating ------ ------ ------ ------ ------ ------ ------
expenses.......................... 875 1,552 1,779 2,056 2,060 22,537 3,703
------ ------ ------ ------ ------ ------ ------

Income (loss) from
operations........................ 642 623 1,135 1,087 299 (18,617) 1,470
Interest expense, net................... 197 209
------ ------ ------ ------ ------ ------ ------
Income (loss) before
income taxes........................ 642 623 1,135 1,087 299 (18,814) 1,261
Provision for (benefit from) income
taxes................................. 257 249 454 435 120 (7,550) 501
------ ------ ------ ------ ------ ------ ------
Net income............................ $ 385 $ 374 $ 681 $ 652 $ 179 $(11,264) $ 760
====== ====== ====== ====== ====== ====== ======

AS A PERCENTAGE OF NET REVENUE
-------------------------------------------------------------------------

Net revenue............................. 100% 100% 100% 100% 100% 100% 100%
Cost of net revenue..................... 67 66 69 69 67 64 61
----- ----- ----- ----- ----- ----- -----
Gross profit.......................... 33 34 31 31 33 36 39
----- ----- ----- ----- ----- ----- -----
Operating expenses
Research and development.............. 8 13 9 12 18 8 7
Sales and marketing................... 6 8 8 6 8 4 4
General and administrative 5 3 2 2 3 2 4
Amortization of purchased
technology and
write-off of in-process
technology........................ - - - - - 195 13
----- ----- ----- ----- ----- ----- -----
Total operating expenses.............. 19 24 19 20 29 209 28
----- ----- ----- ----- ----- ----- -----
Income (loss) from
operations.......................... 14 10 12 11 4 (173) 11
Interest expense, net................... 2 1
----- ----- ----- ----- ----- ----- -----
Income (loss) before
income taxes........................ 14 10 12 11 4 (175) 10
Provision for (benefit from) income
taxes................................. 6 4 5 5 2 (71) 4
----- ----- ----- ----- ----- ----- -----
Net income............................ 8% 6% 7% 6% 2% (104)% 6%
===== ===== ===== ===== ===== ===== =====

The Company's net revenue increased on a sequential quarterly basis from
the first quarter of fiscal 1995 to the fourth quarter of fiscal 1995, and the
same pattern was followed for the first three quarters of fiscal 1996. Increases
within each year reflected higher unit sales quarter to quarter due to
increasing market acceptance of the Company's products. In addition, the Company
has experienced shifts in sales to its higher-priced color server systems from
its lower-priced color server kits, particularly beginning in the third quarters
of fiscal 1995 and 1996 with the introductions of the Power Series and PCI
Series product lines, respectively. The gross margins decreased in the second
half of fiscal 1995 primarily due to a sales shift toward certain lower margin
pre-configured server

-26-

systems. The subsequent increases in gross margins for each of the first three
quarters in fiscal 1996 were primarily due to the reductions in component costs
achieved through redesigns of the Power Series boards, new product line designs,
continued economies of scales from higher sales volumes and favorable component
pricing, particularly computers and memory. Memory prices have experienced
significant fluctuations in the past and there can be no assurances that current
pricing trends will continue. The Company expects that gross margins will
fluctuate quarter to quarter and may decrease in the future. See "Risk
Factors--Fluctuations in Operating Results; Seasonal Purchasing Patterns."

Research and development expenses have fluctuated from quarter to quarter
due in part to periodic third party funding of development efforts, which
totaled approximately $337,000, $543,000 and $453,000 in fiscal 1994 and 1995,
and the nine months ended June 30, 1996 respectively, ranging from $0 to
approximately $300,000 per quarter in the periods presented. Third party funding
of development is included in net revenue and costs of net revenue for such
products. In addition, research and development spending generally increased
quarter to quarter in fiscal 1995 as the Company expanded its development
efforts, and decreased in the second and third quarters of fiscal 1996 due to
elimination of overhead charges by Radius following the Acquisition. There can
be no assurance that the Company will continue to receive third party funding of
any of its future development projects. Sales and marketing expenses increased
in the third quarter of fiscal 1995 and third quarter of fiscal 1996 due to
marketing efforts in connection with the introduction of Splash's Power Series
and PCI Series products, respectively . General and administrative expenses
decreased in the second quarter of fiscal 1996 as the Company discontinued use
of Radius' administrative services and increased in the third quarter of fiscal
1996 as the Company began adding its own administrative infrastructure.

The Company's operating results have fluctuated and will likely continue to
fluctuate in the future on a quarterly and annual basis as a result of a number
of factors, many of which are outside the Company's control. These fluctuations
are in part due to the purchasing patterns of the Company's two customers, Xerox
and Fuji Xerox. These customers have historically made, and are expected to
continue to make, a significant portion of their purchases of the Company's
products in the second half of the Company's fiscal year. As a result, the
Company's sales have historically been significantly lower, and are expected to
continue to be lower, in the first quarter of the Company's fiscal year than the
immediately preceding fourth quarter. In addition, any increases in inventories
by the Company's customers could also result in variations in the timing of
purchases by such customers. In addition, announcements by the Company or its
competitors of new products and technologies could cause customers to defer
purchases of the Company's existing products. In the event that anticipated
orders from end users fail to materialize, or delivery schedules are deferred or
canceled as a result of the above factors or other unanticipated factors, it
would materially and adversely affect the Company's business, operating results
and financial condition.

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LIQUIDITY AND CAPITAL RESOURCES

From fiscal 1994 until the Acquisition in January 1996, the Company
satisfied its liquidity requirements through cash flow generated from
operations. The Company had limited cash balances following the Acquisition and
satisfied its cash needs through a $4.0 million revolving line of credit and
cash flow from operations.

As of June 30, 1996, the Company had $6.6 million of cash and cash
equivalents and had repaid all borrowings under the bank line of credit.
Borrowings are available under the line of credit based on a percentage of
eligible accounts receivable, and at June 30, 1996, borrowings of $3.4 million
were available. Borrowings under the line of credit bear interest at a rate of
prime plus three-quarters of one percent. The line of credit expires on January
31, 1997. The Company has outstanding an aggregate of $8.0 million of
subordinated promissory notes issued to stockholders in connection with the
Acquisition. The subordinated promissory notes bear interest at a rate of 12%
per annum, payable quarterly. Such notes are payable in 2001 and 2002, or
earlier if certain events occur, including the Offering, and will be paid in
full out of the proceeds of the Offering. (The notes were valued at $8.6 million
by an independent third party valuation.) See Notes 4 and 5 of Notes to
Consolidated Financial Statements.

The Company's operating activities provided $4.2 million in cash in fiscal
1995, primarily due to increases in accounts payable, other accrued liabilities,
royalties payable and income taxes payable, offset in part by an increase in
inventories. For the nine months ended June 30, 1996, the Company generated $6.8
million in cash from operations, primarily due to decreases in accounts
receivable and increases in other accrued liabilities, deferred revenue and
income taxes payable, partially offset by decreases in royalties payable.

Investing activities used $444,000 in cash in fiscal 1995 and $22.9 million
in cash in the nine months ended June 30, 1996. These amounts represented
purchases of property and equipment and, in the nine months ended June 30, 1996,
$22.5 million in cash used in connection with the Acquisition. Financing
activities used $3.7 million in cash in fiscal 1995, consisting of cash
transfers to Radius and provided $23.6 million in cash in the nine months ended
June 30, 1996, consisting primarily of financing related to the Acquisition.

The Company has no material commitments other than obligations under
operating leases. See Note 6 of Notes to Consolidated Financial Statements.

The Company expects to use $23.4 million of the net proceeds of the
Offering for repayment of the subordinated promissory notes payable to
stockholders and redemption of its Series A Preferred Stock. See Notes 5 and 7
of Notes to Consolidated Financial Statements. The remaining net proceeds, if
any, will be used for working capital and general corporate purposes. Assuming
completion of the Offering and the application of the net proceeds therefrom, as
of June 30, 1996, the Company would have had approximately $9.2 million in
working capital, including approximately $9.9 million in cash and cash
equivalents. The Company believes that it will be able to satisfy its cash
requirements for at least the next twelve months from a combination of the
proceeds of the Offering, cash flow from operations and the Company's bank line
of credit. However, upon completion of the Offering, the Company will continue
to have limited capital resources and may require additional capital sooner. The
Company may not be able to obtain additional financing as needed on acceptable
terms or at all. See "Use of Proceeds," "Capitalization," "Risk Factors--Need
for Additional Financing" and "Certain Transactions."

-28-

BUSINESS

This Business section and other parts of this Prospectus contain forward-
looking statements that involve risks and uncertainties. The Company's actual
results may differ materially from the results discussed in such forward-looking
statements. Factors that may cause such a difference include, but are not
limited to, those discussed in "Risk Factors."

Splash develops, produces and markets color servers that provide an
integrated link between desktop computers and digital color laser copiers and
enable such copiers to provide high quality, high speed, networked color
printing and scanning. These hybrid systems, consisting of color servers and
digital color laser copiers (referred to as connected or multifunction copiers),
support multiple uses including image scanning, image manipulation, printing and
photocopying. The Company's products feature advanced color correction, color
calibration and separations support, ease of use, time-saving workflow
functionality, simulation of many color monitors and printing presses, and
automatic correction for certain printing workflow problems. Splash's color
servers are commonly accessed by users across networks of Windows-based personal
computers, Apple personal computers and UNIX-based computers.

INDUSTRY BACKGROUND

The use of color in communications media is becoming ubiquitous. Just as
photography, television, computer monitors and, more recently, newspapers have
migrated from black and white to color, a similar transition is occurring in
electronic printing. Advances in computer-based color graphics, printing and
imaging technology are fueling increased demand for the ability to produce color
printed materials more easily, more frequently, in smaller batches, and at lower
cost.

Commercial color printing customarily involves a number of complex, labor
intensive and costly steps. Accordingly, color largely has been reserved for
high end and high volume applications, and printing of commercial quality
materials such as magazines, catalogs, brochures and sales material has been
performed primarily by professional independent printing companies. Typically,
the images to be printed are designed and composed by an end user's in-house
staff or by a design house or advertising agency. These images are passed to a
service bureau for prepress preparation are input by a high-quality scanner (or,
more recently accepted in electronic file format from the designer) and prepared
for printing. Preparation for printing includes color retouching and other
manipulation and then separation into the four colors -- cyan, magenta, yellow
and black ("CMYK") -- utilized by large, four-color commercial presses. The
separated CMYK files are transferred electronically to an imagesetter which
generates a separate CMYK film for each color. These films are then used to
print a pre-proof via a film proofer. Color separation and proofing are
typically performed by service bureaus or, at times, by commercial printers.
These steps are often repeated several times to ensure that the proof matches
the end user's expectations. Once approved by the end user, the proof serves as
the basis for the contract between the end user and the commercial printer. In
the final step of the process, the printer utilizes the CMYK films to prepare
printing plates and then print the job on a commercial press which is typically
large and expensive. Each step in the proofing and prepress process is
technically complex, time consuming, labor intensive and costly, and multiple
cycles are often required. Accordingly, the process involves high fixed costs
and considerable time, and historically has been justified only for printing in
large volumes.

The broad use of high quality desktop color displays, desktop software such
as Adobe Photoshop and QuarkXPress, and desktop-based color scanners, as well as
the increased availability of digital color copiers and networked and desktop
color printers, has enabled a greater amount of the color design and production
workflow to be performed more rapidly and at lower costs than was previously
possible. As a result, the different organizations in the traditional printing
workflow have begun to broaden their service offerings, with resultant overlap
of roles. For example, end users and designers are seeking to perform a greater
degree of color preparation and to review a

-29-

greater number of design proofs earlier in the process, and service bureaus are
seeking to expand their service offerings with faster and lower cost color
alternatives. End users, service bureaus and traditional commercial printers are
all seeking to expand their internal capabilities for inexpensive, low volume,
high quality color printing of final output. In the emerging end user office
market in particular, the improvements in color copier technology make possible
inexpensive production of a broad range of color materials, including sales
brochures, product literature and internal communications.

Color printing involves significantly greater complexities and requires
substantially more memory and processing power than black and white printing.
For example, accurate printed replication of an electronic color image displayed
on a monitor is difficult to achieve because the monitor creates color by
projecting light in the three display colors of red, green and blue ("RGB") --an
additive process of light creation -- while printed output is created through
the mixing of the four CMYK ink colors on paper -- a subtractive process of
light absorption. Each display, scanning and printing device has unique color
properties that must be managed and adjusted during production, and each device
must be continually recalibrated over time. The variety of papers, ink and
printing processes also results in variations, as do changes in temperature and
humidity. In addition, different applications and devices may combine multiple
color and file formats when producing an image, resulting in issues of
compatibility and consistency.

Diagram #1:
Complicated, traditional workflow (reading from left to right)
including computer, scanner, imagesetter, film proofer, printing
press, and printed output.

Diagram #2:
Simplified, emerging workflow alternative (reading from left to right)
including only computer, scanner, Splash/copier, and printed output.

The complexities inherent in the color reproduction and printing workflow
have created a need for advanced, integrated, high quality, easy-to-use and
cost-effective color printing solutions. As a result, digital laser color
copiers and associated color servers are becoming increasingly prevalent across
the broad printing market: in end user offices where ease of use is as critical
as high quality results, at design houses and service bureaus which require
advanced color management tools, and at commercial printers which are seeking to
broaden their market through lower cost solutions.

THE SPLASH SOLUTION

Splash color servers provide an integrated link between computers and color
copiers and address the demand for high performance, cost effective digital
color printing. The Company's color servers turn a color copier into an
effective network-based solution for a variety of color printing applications
ranging from commercial and short-run printing to office color printing. The
Company's products feature advanced color correction, color calibration and
separations support, ease of use, time-saving workflow functionality, simulation
of many color monitors and printing presses, and automatic correction for
certain workflow problems.

Diagram #3:
Splash at the center of a network with two Windows PCs doing
newsletters and presentations, two Macs doing comps and pre-proofs,
and a UNIX workstation doing engineering drawings; inclusion of
Novell, AppleTalk, TCP/IP.

Splash servers utilize open systems that can be readily integrated with
corporate networks enabling easy access by a broad range of end users. The
Company's products use Adobe PostScript and are based on the Apple Power
Macintosh computer, both of which are widely used by color graphics
professionals. The Company's servers

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support popular network protocols, including AppleTalk for Apple Macintosh
networks, Novell IPX for Windows-based personal computer networks and TCP/IP for
UNIX-based networks. Open systems enable the Company to concentrate its
development resources on value-added solutions for end users, including improved
color quality, workflow and overall productivity, while being able to leverage
ongoing enhancements in hardware, software and computer performance from IBM,
Motorola, Apple and Adobe. Open systems also provide users with greater
flexibility by allowing the use of standard peripheral products and software.
The Company believes that its open systems approach and color expertise have
enabled it to provide innovative, high performance products.

STRATEGY

Splash's objective is to extend its position as a leading provider of
innovative, high quality color server solutions. To achieve this objective, the
Company's business strategy includes the following key elements:

Leverage Technology Expertise. Splash seeks to leverage its expertise in
color technology, application workflow, software and hardware design and
computer systems integration to continue to offer innovative, easy-to-use, color
server products. The Company believes that its technological leadership has
permitted it to offer a number of significant features for multifunction copiers
prior to its direct competitors. For example, Splash was first to market with a
number of key features in the areas of color calibration, color correction, CMYK
separation and mixed RGB/CMYK printing.

Support Open Systems. Splash intends to continue to utilize standards-based
open systems to enable it to bring new products to market more quickly and to
permit operation with a wide variety of computer networks, devices and
complementary software. Splash provides color servers based on open systems and
popular networking protocols in order to focus the Company's development efforts
on advanced software and hardware designs that optimize color quality and
consistency, workflow efficiency and ease of use.

Broaden Markets and Product Lines. Splash intends to continue to pursue the
markets for connected copiers in pre-proof and prepress applications and to
migrate its products to additional computer platforms in order to address both
the high end of the color server market and the broader, office color printing
market. The Company also intends to develop color servers for a wider range of
Xerox and Fuji Xerox color copiers in order to provide systems with different
feature sets across a range of price points and may consider offering color
servers for the systems of additional copier manufacturers.

Expand Sales and Marketing Organization. Splash intends to expand its sales
and marketing organizations on a worldwide basis in order to support its Xerox
and Fuji Xerox OEM relationships. The Company believes that such expansion will
allow it to better leverage the resources offered by Xerox, Fuji Xerox and their
affiliates, which are among the leading providers of digital color copiers and
have extensive worldwide sales organizations. Splash is seeking to further
develop sales through these channels in Europe and other geographic regions in
which the Company has had lower market penetration.

PRODUCTS AND TECHNOLOGY

Product Lines

Splash offers both pre-configured color server systems and board-level
server kits. The pre-configured color server systems include a Splash copier
interface board and frame buffer installed in an Apple Power Macintosh computer
and feature Splash software, a color display, a keyboard and an interface cable.
The server kits do not include the computer, display and keyboard, thereby
allowing the customer or reseller to install the Splash color server on a
locally procured or existing compatible system. Splash products are sold under
the Splash brand worldwide except in Japan, where they are sold under the SM ICS
brand name of Fuji Xerox. The fundamental

-31-

architectures of the SM ICS and Splash products are substantially identical
other than localization differences for user interface and documentation.

Splash's primary product line is the Splash Professional Color Imaging
("PCI") Series, which was first introduced in the second calendar quarter of
1996. These products use the newest Apple Power Macintosh computers and are
compatible with the PCI bus architecture. The Splash Power Series product line,
based on a design originally launched in 1993 and updated over the years with
successive software releases, uses the NuBus architecture found in earlier Apple
Power Macintosh computers. The Company continues to offer, in limited
quantities, Power Series products, primarily board level kits and spare parts.
The retail prices of Splash PCI Series servers range from $22,000 to $35,000 in
the United States and (Yen) 2,560,000 to (Yen)3,760,000 in Japan, and the retail
prices of Splash Professional Color Image Series kits range from $17,000 to
$29,000 in the United States in each case depending on model and configuration.
The Splash PCI kits are currently not sold in the Japanese market. See "Risk
Factors--Dependence on Xerox and Fuji Xerox and Color Copier Market" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

The Company's products vary primarily by available memory. Memory
configuration impacts print quality, scan resolution and the ability to scan
images of larger sizes. The Company's principal products are
as follows:

PRODUCT COMPUTER HARDWARE DISPLAY FRAME BUFFER
---------------------- --------------------- ------------ --------------

PCI Series Servers
Splash PCI 1280 Server Power PC 604/120 MHz 14" color 128 MB RAM
Splash PCI 640 Server Power PC 604/120 MHz 14" color 64 MB RAM
Splash PCI 320 Server Power PC 604/120 MHz 14" color 32 MB RAM

PCI Series Kits (1)
Splash PCI 1280 Kit * * 128 MB RAM
Splash PCI 640 Kit * * 64 MB RAM
Splash PCI 320 Kit * * 32 MB RAM

Power Series Servers
Splash P105 Pro PowerPC 601/100 MHz NuBus 17" color 128 MB RAM
Splash P85 PowerPC 601/80 MHz NuBus 17" color 72 MB RAM
Splash P70 PowerPC 601/66 MHz NuBus 14" color 72 MB RAM

Power Series Kits (2)
Splash Power Kit Pro * * 128 MB RAM
Splash Power Kit * * 72 MB RAM

_________________________
* Customer supplied.

(1) Compatible hosts for PCI Series Kits are: Apple Power Macintosh 7200,
7500, 7600, 8500, 9500.

(2) Compatible hosts for Power Series Kits are: Apple Power Macintosh 7100,
8100 (non-AV configurations).

Product Features and Technology

Splash servers are based on open systems, enabling the Company to leverage
the development efforts of computer and operating system suppliers, and thereby
concentrate its development resources in those areas specific to the concerns of
color users. This open systems approach has provided an advantage in bringing
innovative color and workflow solutions to the market rapidly. It has also
enabled the Company to provide to its customers with performance increases by
taking advantage of improvements in industry standard microprocessors and
computers.

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Diagram #4:
Splash performance increase over time measured in SpecInts, an
industry standard method of determining integer compute power of
various microprocessors; form is simple x-7 chart with increasing
SpecInts from lower left to upper right, and from 1993 to 1996.

The Splash solution integrates a standard computer system and two primary
components of Splash technology: a copier interface board or board set and
software written for the server and its networked clients. The Splash PCI Series
copier interface board uses double-sided surface mount technology and includes a
number of advanced design features such as a proprietary application specific
integrated circuit (ASIC), certain other custom ASICs and a large frame buffer -
all in a single-slot PCI form factor.

Diagram #5:
Splash board overview with call-outs for custom ASICs, copier
interface circuitry/connector, microcontroller, frame buffer, and PCI
bus circuitry/connector.

Splash software includes: driver software written for several different
types of client workstations; server software including network interface,
spooling, and imaging engine modules that reside on the standard computer
system; and server software including print interface and device control modules
that reside on the Splash board itself. These software modules are layered on a
standard computer operating system to provide compatibility with a wide variety
of off-the-shelf peripherals and third-party software applications.

Diagram #6:
Overall Splash software architecture identifying various layers of
function; from clients sending files across the network, through
internal functions, to output to copier; dotted-line box overarching
all Splash software that would indicate open system and compatibility.

The unique combination of Splash-engineered technology and an open systems
approach has enabled the Company to offer a number of technical innovations for
Adobe PostScript Level 2 color servers. Listed below are a number of innovations
commercially introduced by Splash prior to its direct competitors.

. Printing of traps, overprints and Desktop Color Separations
. Hardware-based color correction in the server while maintaining copier
speed
. Selection of multiple CMYK press profiles from remote client
. Color calibration using a copier's built-in digital scanning
capability
. Color calibration that automatically updates all press profiles
simultaneously
. Random placement of color patches to reduce calibration errors
. Mirror-image target for calibration using alternative media (i.e. T-
shirts and fine art paper)
. Accurate RGB monitor blue/purple printing
. Accurate color correction and printing of multiple RGB formats in the
same file
. Remote viewing of files in a WYSIWYG format
. Advanced print driver to avoid double spooling on Mac clients

The following describes some of the features introduced by Splash.

CMYK Separation Support.Splash's CMYK separation capability enables users
to employ page layout and publishing software to print pre-proofs from color
copiers that incorporate trapping (overlapping mixing of colors), and Desktop

-33-

Color Separations (high-resolution separation files). This feature allows the
printing of high quality pre-proofs and thereby saves professional color
publishing end users time and moneyby reducing the number of cycles of film
proofs required for the design and production process.

Splash Match. Splash Match is a unique color management solution that
permits rapid, automatic and accurate color correction of image files. The user
can select among a variety of color profiles--including RGB monitor matching and
CMYK press matching--through "check box" selections within a printing window in
the graphical user interface from a networked client.

Splash ColorCal. Splash ColorCal is a fast, easy-to-use calibration utility
that uses a copier's built-in digital scanning capability for calibration. By
making calibration fast and simple and eliminating the need for separate,
expensive densitometers, Splash provides a mechanism for frequent calibration
that assures reproducible, consistent color. All Splash Match color profiles
(RGB and CMYK) are updated simultaneously upon completion of calibration. Splash
Match also provides an "expert mode" of operation that allows the user to
customize a copier's output to the unique print characteristics of a given press
intended for final printing.

Splash AccuColor. Splash AccuColor, implemented as part of Splash Match,
allows for more accurate translation and printing of monitor blues without the
significant purple shift that occurs with almost all other printing
alternatives. This is a performance advantage in printing applications where the
desired goal is producing output which comes as close as possible to matching
the RGB colors on a user's display. Splash AccuColor allows for screen-to-press
matching through the use of one of several Splash press profiles selectable in
Adobe Photoshop.

Splash IntelliColor. Splash IntelliColor compensates for mistakes commonly
made during the design process such as mixing different RGB file formats or
combining RGB and CMYK formats in the same document. images combined in the same
file are separately and accurately color corrected. This capability is
independent of the end user's application or computer workstation.

Splash Scan and Splash Print. Both Splash Scan and Splash Print are Adobe
Photoshop Plug-in modules that provide 400-dpi, 24-bit color scanning from the
copier and ultra high-speed bit map printing to a copier, respectively. In this
way, scans can be made, retouched and printed locally without tying up the
network.

Splash Colortone. Splash Colortone enhances the print quality of color
servers which have limited frame buffer memory. Splash Colortone delivers true,
continuous tone (contone) or near-contone quality output optimized to the
available frame buffer memory. Splash Colortone is automatically engaged
whenever the Splash server has too little memory to print a given page size with
full color quality. The Splash Colortone feature can print with either a 2:1
memory savings, yielding near-contone quality, or a 4:1 memory savings, yielding
prints with minimal degradation. Splash automatically switches back to true
contone printing when sufficient memory is available.

Splash Edit. Splash Edit is a utility that enables the user to change
certain print settings at the Splash server after the print job has been sent by
the user across the network. Changeable print settings include number of copies,
tray selection, color correction choice, page range and sorter. Because these
settings can be changed at the Splash server next to the copier, the user saves
time by not having to return to the client computer to resend the file.

SALES AND MARKETING

Splash sells its PCI Series color server products to two of the leading
providers of color copiers, Xerox and Fuji Xerox. These OEMs integrate the
Company's color servers with their digital color copiers and sell the connected
systems to end users through a worldwide direct distribution network. Xerox
sells primarily in North America, South America and (through its affiliate, Rank
Xerox) Europe, while Fuji Xerox sells primarily in Japan and Asia Pacific.

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Xerox and Fuji Xerox each provide primary customer service through their
worldwide networks, while Splash provides backup support to Xerox and Fuji
Xerox. These relationships allow Splash to provide strong customer support at
the local level as well as providing Splash with a valuable source of input for
product enhancement. Splash believes that the strength of Xerox and Fuji Xerox
in the office equipment market provides the Company with a significant
opportunity to expand its presence in the end user office printing market.

Fuji Xerox, Xerox and Rank Xerox sell Splash products as well as competing
color servers with their products. The Company does not have contracts with
Xerox and Fuji Xerox with respect to its PCI Series products and is currently
operating on a purchase order basis with these customers. This agreement may be
terminated at the discretion of Xerox upon not less than thirty days written
notice to the Company. Although the Company is currently negotiating an
agreement with Xerox and Fuji Xerox for its PCI Series products, there can be no
assurance that any such agreement will be completed or that the Company will
continue to receive orders from Xerox or Fuji Xerox. Any change in the level of
sales to Xerox or Fuji Xerox would have a material adverse effect on the
Company's business, operating results and financial condition. See "Risk
Factors--Dependence on Xerox and Fuji Xerox."

Revenue from Xerox constituted 40%, 41% and 49% of Splash net revenue in
fiscal 1994, 1995 and the first nine months of fiscal 1996, respectively.
Revenue from Fuji Xerox constituted 60%, 59% and 51% of Splash net revenue in
fiscal 1994, 1995 and the first nine months of fiscal 1996, respectively. See
"Risk Factors--Dependence on Xerox and Fuji Xerox."

As of June 30, 1996, the Company employed six people in sales and
marketing. These people support Xerox's sales force while Fuji Xerox is
supported by its own personnel. Splash's sales and marketing personnel typically
provide support to Xerox and Fuji Xerox through sales literature, periodic
training, customer symposia, pre-sales support and joint sales calls. The
Company also participates in industry trade shows and conferences, publishes
articles in trade and technical journals, distributes sales and product
literature and has a public relations plan intended to generate coverage of the
Company's products and technology by editors of trade journals.

Splash believes that in order to increase its market penetration and
enhance brand awareness, it must expand its sales and marketing efforts. The
Company plans to recruit and hire additional field personnel in Europe, the
United States and Asia Pacific, as well as to expand its marketing programs.
There can be no assurance that the Company will be able to hire additional
personnel, expand its marketing programs or that the Company will be able to
increase its market penetration.

MARKETS AND CUSTOMERS

Splash products are employed by users in five principal markets: commercial
and short-run printing, prepress and trade service, graphic arts and
professional color publishing, print-for-pay, and office color printing. The
Company's strategy is to provide high quality innovative color server solutions
for those end users who are discerning about color and print quality.
Accordingly, the Company to date has focused principally on the prepress and
graphic arts markets. The Company believes that the emerging use of color in a
variety of printing applications is creating an opportunity for the Company's
products in the other market segments.

Diagram #7:
Pyramid segmenting the market into five layers closely following (but
not identically following the textual descriptions); from top to
bottom - (1) commercial and short-run printing, (2) prepress and photo
labs, (3) graphics arts and professional color publishing, (4) print-
for-pay and copy shops, (5) office color printing; brief, additional
description to the side of each; horizontal arrows would indicate
market potential (largest at the bottom); vertical arrow would
indicate color expertise (most at the top).

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Commercial and Short-Run Printing. The commercial printing market
represents the highest quality and highest volume color printing production.
Firms in this market typically have their roots in traditional offset press
printing, in which output is developed in-house at businesses and other
organizations, prepared for printing by service bureaus and trade shops (which
often perform prepress services as described below) and then delivered to the
commercial printer for printing on large, very expensive printing presses. In
recent years, many firms in the commercial printing market have begun to expand
into prepress and short-run printing services. These firms use color server-
based printing devices to more rapidly and less expensively produce pre-proofs
of color output. In addition, many of these firms have begun to use color
server-based printing devices as a less expensive alternative for printing in
smaller quantities. End users of Splash products in this segment include Applied
Computer Services, Inc. and R.R. Donnelley & Sons Company.

Prepress. The prepress market consists of service bureaus and trade shops
which handle complex color production for end users that intend to send print
jobs to short-run and commercial printing firms for high quality or high volume
printing. Prepress firms work closely with end users and the local commercial
printers that perform the print jobs. Prepress firms provide high end scanning,
image retouching, imagesetter output of color separation films for proofing and,
in some cases, the production of contract proofs which serve as the standard for
the commercial print run. Firms in this market are utilizing color server-based
printing devices as a means to reduce the cost and turnaround time for image
design, modification and pre-proofing. End users of Splash products in this
segment include smaller, local operators.

Graphic Arts and Professional Color Publishing. The graphic arts and
professional color publishing market consists of in-house creative staffs and
advertising agencies and design firms. These creative professionals perform
extensive color design and layout but historically have not performed print
production. Users typically utilize networked personal computers and
workstations for color design and use color server-based printing devices for
conceptual and comprehensive designs as well as pre-proofs. Users typically
compose the color image to be printed utilizing applications such as Adobe
Photoshop, Adobe Illustrator, QuarkXPress and Adobe PageMaker. End users of
Splash products in this segment include DRC Advertising, Hearst Magazines and
Gibson Greetings, Inc.

Print-for-Pay. Print-for-pay firms provide a broad range of walk-in
services including faxing, copying, desktop publishing and photographic
services. Recently these firms have begun to use connected color copiers to
offer expanded color printing and copier services. Users in this market segment
range from franchised and local storefronts traditionally focused on black and
white copying services to specialized firms that have traditionally provided
photolab services. End users of Splash products in this segment include The
Digital Cafe, a wholly-owned subsidiary of Boston Photo Imaging, and PIP
Printing.

Office Color Printing. The office color printing market consists of
networked office printing and central reproduction departments in businesses and
other organizations. These organizations which have typically used black and
white laser printers and desktop color ink jet printers for production of word
processed documents, spreadsheets and presentations are increasingly using
connected copiers to produce materials such as product brochures and internal
communications. This market segment is still emerging, but the Company believes
the ability of color servers to operate across corporate networks will help
expand this market.

MANUFACTURING

The Company outsources the manufacture of its products to third party
subcontract manufacturers including MSL, located in Sunnyvale, California, and
Logistix, located in Fremont, California. MSL purchases the components used in
Splash boards from its suppliers and performs double-sided active surface mount
assembly, in-circuit test, functional test and system test of the printed
circuit boards used in the Splash PCI Series products, on a turnkey basis. MSL
also performs in-warranty and out-of-warranty repair of failed boards for the
Splash PCI

-36-

Series products. The Company purchases Apple Power Macintosh computers, monitors
and memory, and furnishes these components as well as the MSL-assembled boards
to Logistix for final assembly. Logistix directly purchases a small portion of
the components used in Splash color servers and does all final assembly and
system configuration. Other subcontract manufacturers perform similar services
with respect to the Splash Power Series product line.

While the Company's subcontract manufacturers conduct quality control and
testing procedures specified by the Company, the Company has from time to time
experienced manufacturing quality problems. Although the Company does not
believe any such problem had a material adverse effect on the its business,
there can be no assurance that quality problems will not occur again in the
future or that any such problem will not have a material adverse effect on its
business, operating results and financial condition.

If the Logistix, MSL or other third party manufacturing facilities utilized
by the Company become unavailable to the Company, or if the manufacturing
operations at these facilities are slowed, interrupted or terminated, the
Company's business, operating results and financial condition could be
materially and adversely affected. Although the Company believes that there are
other companies available with the capability to provide the Company with such
services, there can be no assurance that the Company would be able to enter into
alternative third party arrangements on terms satisfactory to the Company, on a
timely basis, or at all. See "Risk Factors--Dependence on Third Party
Manufacturers."

Certain components necessary for the manufacture of the Company's products
are obtained from a sole supplier or a limited group of suppliers. These include
Apple Power Macintosh computers, certain ASICs and other semiconductor
components. The Company does not maintain any long-term agreements with any of
its suppliers of components. Because the purchase of certain key components
involves long lead times, in the event of unanticipated increases in demand for
the Company's products, the Company could be unable to manufacture certain
products in a quantity sufficient to meet end user demand. In addition, Apple
has recently experienced significant financial difficulties and losses in market
acceptance, and its products have particularly low levels of market acceptance
in the office color printing market into which the Company is seeking to expand.
If Apple were to discontinue production of the Power Macintosh models with which
Splash products operate or were unable to provide or otherwise cease to provide
an acceptable level of end user customer support, the Company's business,
operating results and financial condition would be materially and adversely
affected. The Company also purchases memory modules from a single supplier.
Although other sources are available, a change in memory supplier could require
time to effect and could impact production. This risk would be exacerbated in
times of short memory supply. Any inability to obtain adequate deliveries of any
of the components or any other circumstance that would require the Company to
seek alternative sources of supply could affect the Company's ability to ship
its products on a timely basis, which could damage relationships with current
and prospective customers and could therefore have a material adverse effect on
the Company's business, financial condition and operating results. Moreover,
there can be no assurance that alternative sources of supply would be available
on reasonably acceptable terms, on a timely basis, or at all. The Company has
from time to time experienced shortages in deliveries of ASICs from Toshiba
Corporation, which shortages have impacted production volume capabilities. In
order to attempt to mitigate the risk of such shortages in the future, the
Company intends to increase its inventory of components for which the Company is
dependent upon sole or limited source suppliers. As a result, the Company may be
subject to an increasing risk of inventory obsolescence in the future, which
could materially and adversely affect the operating results and financial
condition. See "Risk Factors--Component Availability" and "--Dependence on Apple
Computer, Inc."

The market prices and availability of certain components, particularly
memory and other semiconductor components and, to a lesser extent, Apple Power
Macintosh computers, which collectively represent a substantial portion of the
total manufactured cost of the Company's products, have fluctuated significantly
in the past. Significant fluctuations in the future could have a material
adverse effect on the Company's business, operating results and financial
condition. See "Risk Factors--Fluctuations in Operating Results; Seasonal
Purchasing

-37-

Patterns," "--Dependence on Component Availability and Cost" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

RESEARCH AND DEVELOPMENT

Splash's research and development efforts are focused on color science,
application workflow, ASIC and board design, software and computer systems
integration and the continued development of new and enhanced products. The
Company also works closely with key technology partners including Adobe, Apple,
Fuji Xerox and Xerox.

The Company has historically devoted a significant amount of its resources
to research and development. As of June 30, 1996, the Company had 23 employees
engaged in research and development. Research and development expenses in fiscal
1994 and 1995 and the first nine months of fiscal 1996 were $2.0 million, $3.3
million and $3.1 million, respectively.

The graphics and color reproduction, color processing and personal
computing markets are characterized by rapid changes in customer requirements,
frequent introductions of new and enhanced products, and continuing and rapid
technological advancement. To compete successfully, the Company must continue to
design, develop, manufacture and sell new products that provide increasingly
higher levels of performance and reliability, take advantage of technological
advancements and changes and respond to new customer requirements. The Company's
success in designing, developing, manufacturing and selling new products will
depend on a variety of factors, including the identification of market demand
for new products, product selection, timely implementation of product design and
development, product performance, cost-effectiveness of current products and
products under development, effective manufacturing processes and the success of
promotional efforts.

COMPETITION

The markets for the Company's products are characterized by intense
competition and rapid change. The Company competes directly with other
independent manufacturers of color servers and with copier manufacturers, and
indirectly with printer manufacturers and others. Splash has a number of direct
competitors for color server products, the most significant of which is EFI.
Splash also faces competition from copier manufacturers that offer internally
developed color server products, such as a non-PostScript color server offered
by Fuji Xerox, or that incorporate color server features into their copiers. In
addition, the Company faces competition from desktop color laser printers that
offer increasing speed and color capability. As component prices decrease and
the processing power and other functionality of copiers, printers and add color
server functionality to their systems, which could reduce the market for the
Company's existing line of products.

The Company also competes indirectly with manufacturers of electronic color
prepress systems, which offer similar functionality for the short-run and
commercial printing market as is provided by the Company's products. The Company
also competes indirectly with providers of color separation, color editing and
page layout software. While this software typically is complementary to the
Company's systems, it may also be competitive and may

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become increasingly competitive to the extent that the providers of such
software extend the functionality of their products in future releases. See
"Risk Factors-- Dependence on Adobe Systems Incorporated."

The Company believes that the principal competitive factors in its markets
are product features, functionality and performance; strength of distribution
channels, including sales capability and after-market support; brand name
recognition and market share; and price. The Company believes that it competes
favorably with respect to product features, functionality and performance,
including color and print quality and the open architecture of the Company's
systems. Splash was the first to introduce a number of significant features to
the multifunction color copier market, and its products currently provide
certain features and functionality not offered by competitors. However, Splash's
competitors also offer certain unique features and functionality which are not
offered by the Company. EFI also has substantially greater name recognition and
a significantly larger installed base than the Company, its products operate
with a broader range of color photocopier systems and its products are generally
priced less than those of Splash. EFI has historically had higher operating
margins than Splash which could allow EFI to increase pricing pressure on Splash
or to respond more effectively to any third party pricing pressures. The Company
also believes that it competes favorably in many distribution channels addressed
by Xerox and Fuji Xerox, but the Company's products do not support the range of
products from different manufacturers supported by EFI and other competitors,
and the Company's relationship with the Xerox distribution channel is currently
not as strong in certain geographical areas, such as Europe (with respect to
Rank Xerox), where the Company historically has had a smaller market presence
and lesser support capabilities.

INTELLECTUAL PROPERTY

The Company relies in part on trademark, copyright and trade secret law to
protect its intellectual property in the United States and abroad. The Company
seeks to protect its software, documentation and other written materials under
trade secret and copyright laws, which afford only limited protection. The
Splash software included as a part of the Company's products is sold pursuant to
"shrink wrap" licenses that are not signed by the end user and, therefore, may
be unenforceable under the laws of certain jurisdictions. The Company does not
own any issued patent. There can be no assurance that any trademark or copyright
owned by the Company will not be invalidated, circumvented or challenged, that
the rights granted thereunder applications will be issued with the scope of the
claims sought by the Company, if at all. Further, there can be no assurance that
others will not develop technologies that are similar or superior to the
Company's technology, duplicate the Company's technology or design around any
patent of the Company. Moreover, effective intellectual property protection may
be unavailable or limited in certain foreign countries. There can be no
assurance that the steps taken by the Company will prevent misappropriation of
its technology. In addition, the laws of some foreign countries do not protect
the Company's proprietary rights as fully as do the laws of the United States.
There can be no assurance that the Company 's means of protecting its
proprietary rights in the United States or abroad will be adequate or that
competition will not independently develop similar technology. Moreover,
litigation may be necessary in the future to enforce the Company's intellectual

-39-

property rights, to determine the validity and scope of the proprietary rights
of others, or to defend against claims of infringement or invalidity. Such
litigation could result in substantial costs and diversion of management time
and resources and could have a material adverse effect on the Company's
business, operating results and financial condition.

There have been substantial amounts of litigation in the computer and
related industries regarding intellectual property rights, and there can be no
assurance that third parties will not claim infringement by the Company of their
intellectual property rights. In particular, EFI filed suit against Radius in
November 1995, alleging infringement of an EFI patent by Splash's predecessor,
CSG. The subject of the patent claim was acquired by Splash in the Acquisition,
and EFI could add Splash as a defendant to the suit at any time. Although a
portion of the purchase price in the Acquisition was placed in escrow pending
resolution of the EFI litigation, there can be no assurance that any such
litigation against Splash would not have a material adverse effect on the
Company's business, operating results and financial condition. Any claims that
the Company is infringing on proprietary rights of EFI or others, with or
without merit, could be time consuming to defend, result in costly litigation,
divert management's attention and resources, and cause product shipment delays.
If the Company were found to be infringing on the intellectual property rights
of any third party, the Company could be subject to liabilities for such
infringement, which could be material, and could be required to seek licenses
from other companies or to refrain from using, manufacturing or selling certain
products or using certain processes. Although holders of patents and other
intellectual property rights often offer licenses to their patent or other
intellectual property rights, no assurance can be given that licenses would be
offered or that the terms of any offered license would be acceptable to the
Company. Any need to redesign the products or enter into any royalty or
licensing agreement could have a material adverse effect on the Company's
business, operating results and financial condition. See "Certain Transactions."

The Company has been required to place the source code for certain of its
software in escrow for the benefit of Xerox, and such software will be released
to Xerox in the event that the Company either files bankruptcy and as a result
is unable to deliver products for the thirty (30) days of the previously
committed date, or ceases operations.

The Company relies upon certain software licensed from third parties. There
can be no assurance that the software licensed by the Company will continue to
provide competitive features and functionality or that licenses for software
currently utilized by the Company or other software which the Company may seek
to license in the future will be available to the Company on commercially
reasonable terms. The loss of, or inability to maintain, existing licenses could
result in shipment delays or reductions until equivalent software or suitable
alternative products could be developed, identified, licensed and integrated,
and the inability to license key new software that may be developed, on
commercially reasonable terms, would have a material adverse effect on the
Company's competitive position. Any such event would materially adversely affect
the Company's business, operating results and financial condition. See "Risk
Factors--Dependence on Proprietary Technology" and "--Dependence on Adobe
Systems Incorporated."

EMPLOYEES

As of June 30, 1996, the Company employed 40 people, including 23 in
research and development, 5 in operations, 6 in sales and marketing, and 6 in a
general and administrative capacity. The Company also employs a number of
temporary employees and consultants on a contract basis. None of the Company's
employees is represented by a labor union with respect to his or her employment
by the Company. The Company has not experienced any work stoppages and considers
its relations with its employees to be good.

The Company's future success will depend, in part, upon its ability to
attract and retain qualified personnel. Competition for qualified personnel in
the Company's industry is intense, and there can be no assurance that the
Company will be successful in retaining its key employees or that it will be
able to attract skilled personnel as the Company grows. See "Risk Factors--
Dependence on Key Personnel."

-40-

FACILITIES

The Company's principal operations are located in a leased facility of
approximately 24,000 square feet in Sunnyvale, California. The lease on this
building expires in 2001, and the Company has an option to extend the lease for
a period of up to five additional years. The Company also leases space in
Paris, France, primarily for sales and marketing efforts in Europe. The Company
believes that its existing facilities are adequate to meet its needs for the
foreseeable future.

-41-

MANAGEMENT

EXECUTIVE OFFICERS, DIRECTORS AND KEY PERSONNEL

The following table sets forth certain information regarding the executive
officers, directors and other key personnel of the Company as of June 30, 1996:

NAME AGE POSITION
- ------------------------- --- ----------------------------------------------------------------------

Kevin K. Macgillivray 37 President, Chief Executive Officer and Director
Joan P. Platt 42 Chief Financial Officer and Vice President, Finance and Administration
Timothy D. Kleffman 38 Vice President, Engineering Operations
Christine A. Beheshti 34 Vice President, Software Engineering
Gregory M. Avis (1) 37 Director
Charles W. Berger (1) 42 Director
Peter Y. Chung (2) 28 Director
Lawrence G. Finch (2) 62 Director
Richard A. Falk 37 Chief Scientist

______________________
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
* Class I Director
** Class II Director
** Class III Director

Kevin K. Macgillivray has served as President and Chief Executive Officer
of the Company since the Acquisition in January 1996. From April 1995 until the
Acquisition, Mr. Macgillivray was Vice President and General Manager of the
Publishing Division of Radius, a manufacturer of computer video cards and
display products, which included the CSG. From May 1993 to April 1995, Mr.
Macgillivray held other managerial positions within Radius and SuperMac, which
merged into Radius in 1994. From May 1991 to May 1993, Mr. Macgillivray was
Vice President and General Manager of Oce Graphics USA, a computer peripherals
manufacturer. Mr. Macgillivray received a B.S. in Mechanical Engineering from
Stanford University.

Joan P. Platt joined the Company in March 1996 as Vice President, Finance
and Administration and Chief Financial Officer. From October 1986 to March
1996, Ms. Platt was a general practice partner at Coopers & Lybrand L.L.P., a
public accounting firm. Prior to 1986, Ms. Platt was a staff accountant and
manager in the business advisory, accounting and audit practice of Coopers &
Lybrand. Ms. Platt received a B.S. in Business Administration from The
Pennsylvania State University.

Timothy D. Kleffman has served as Vice President, Engineering Operations of
the Company since the Acquisition. Mr. Kleffman was Director of Printer Systems
within the CSG at Radius and SuperMac from October 1992 until the Acquisition.
From August 1985 to October 1992, Mr. Kleffman held various management positions
at ROLM Corporation. Mr. Kleffman received a B.S. in Electrical and Computer
Engineering from the University of California, Davis.

Christine A. Beheshti has served as Vice President, Software Engineering of
the Company since the Acquisition. From March 1993 until the Acquisition, Ms.
Beheshti held various engineering management positions with Radius and SuperMac.
Prior to joining SuperMac, Ms. Beheshti worked for ROLM Corporation, where she
held various software development, management and engineering positions. Ms.
Beheshti received a B.S. in Computer Science from the University of Wisconsin.

-42-

Gregory M. Avis has been a director of the Company since its formation in
December 1995. Mr. Avis has served as a General Partner of Summit Partners,
L.P., a venture capital partnership, since 1987 and has served as a Managing
Partner of Summit Partners, L.P. since 1990. Mr. Avis is also a director of CMG
Information Services, Inc. and Digital Link Corporation. Mr. Avis received a
B.A. in Political Economy from Williams College and an M.B.A. from Harvard
Business School.

Charles W. Berger has been a director of the Company since the Acquisition
in January 1996. Mr. Berger has served as Chief Executive Officer, President and
a director of Radius, a computer peripherals manufacturer, since March 1993 and
has been the Chairman of the Board of Directors of Radius since March 1994.
From April 1992 until he joined Radius, Mr. Berger was Senior Vice President,
Worldwide Sales, Operations and Support for Claris Corporation, a software
subsidiary of Apple, a personal computer manufacturer, that develops and markets
application software. From March 1989 to April 1992, Mr. Berger held various
executive positions at Sun Microsystems, Inc. and its subsidiaries. Mr. Berger
received a B.S. in Business Administration from Bucknell and an M.B.A. from
Santa Clara University.

Peter Y. Chung has been a director of the Company since its formation in
December 1995. Mr Chung has served as a Senior Associate at Summit Partners,
L.P., a venture capital partnership, since August 1994. From August 1989 to July
1992, Mr. Chung was employed by Goldman, Sachs & Co., an investment banking
company. Mr. Chung received a B.A. in Economics from Harvard College and an
M.B.A. from Stanford University.

Lawrence G. Finch has been a director of Splash since the Acquisition in
January 1996. Mr. Finch has served as a General Partner of Sigma Partners,
L.P., a venture capital firm, since January 1989. Mr. Finch is also a director
of Phoenix Technologies Ltd., a developer of computer firmware and software.

Richard A. Falk has served as Splash's Chief Scientist since the
Acquisition in January 1996. From October 1992 until the Acquisition, Mr. Falk
served in various engineering positions with SuperMac and Radius. Prior to
joining Radius, Mr. Falk worked for ROLM Corporation in a variety of
development, engineering and management positions. Mr. Falk received a B.A. in
Physical Sciences and an M.B.A. from the University of California, Berkeley.

The Company's Board of Directors is divided into three classes. The
initial term of the Class I directors expires at the Company's annual meeting of
stockholders in 1997, the initial term of the Class II directors expires at the
Company's annual meeting of stockholders in 1998, and the initial term of the
Class III directors expires at the Company's annual meeting of stockholders in
1999. Thereafter, the term of each class of directors shall be three years. All
directors hold office until the annual meeting of stockholders at which their
respective class is subject to reelection and until their successors are duly
elected and qualified, or until their earlier resignation or removal. Officers
serve at the discretion of the Board and are elected annually. There are no
family relationships among the directors or officers of the Company.

BOARD COMMITTEES

The Board of Directors has had a Compensation Committee and an Audit
Committee since July 1996. The Compensation Committee makes recommendations to
the Board concerning salaries and incentive compensation for the Company's
officers and employees and administers the Company's 1996 Stock Option Plan and
1996 Employee Stock Purchase Plan. The Audit Committee aids management in the
establishment and supervision of the Company's financial controls, evaluates the
scope of the annual audit, reviews audit results, consults with management and
the Company's independent auditors prior to the presentation of financial
statements to stockholders and, as appropriate, initiates inquiries into aspects
of the Company's financial affairs.

-43-

DIRECTOR COMPENSATION

Directors receive no cash remuneration for serving on the Board of
Directors, although directors are reimbursed for all reasonable expenses
incurred by them in attending Board and Committee meetings. Non- employee
directors are eligible to receive stock options under the 1996 Stock Option
Plan. See "--Compensation Plans."

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee of the Board of Directors currently consists of
Messrs. Avis and Berger. Neither of these individuals were at any time since the
formation of the Company, an officer or employee of the Company. No executive
officer of the Company serves as a member of the board of directors or
compensation committee of any entity that has one or more executive officers
serving as a member of the Company's Board of Directors or Compensation
Committee.

EMPLOYMENT CONTRACTS AND CHANGE OF CONTROL ARRANGEMENTS

The Company does not currently have any employment contract in effect with
its Chief Executive Officer or any other Named Executive Officer (as defined
below).

EXECUTIVE COMPENSATION

The following table set forth a summary of the compensation paid by Radius
during the fiscal year ended September 30, 1995 to the Company's Chief Executive
Officer and the Company's other most highly compensated executive officers
(collectively, the "Named Executive Officers") for services rendered in all
capacities to Radius.

SUMMARY COMPENSATION TABLE

PREDECESSOR BUSINESS
------------------------------------------------------------------
LONG TERM
1995 ANNUAL COMPENSATION
----------------
COMPENSATION SECURITIES ALL OTHER
-----------------------------
UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION (1) SALARY($) BONUS($) OPTIONS ($)
- ------------------------------------------ ------------- ------------ ----------- ------------

Kevin K. Macgillivray .................... $ 137,711 $ 35,500 - -
President, Chief Executive Officer and
Director
Timothy D. Kleffman ...................... 127,284 53,250 - -
Vice President, Engineering Operations
Christine A. Beheshti ................... 125,000 24,000 - -
Vice President, Software Engineering

_________________________
(1) In March 1996, the Company hired Joan P. Platt as Vice President, Finance
and Administration and Chief Financial Officer. Ms. Platt's annualized
compensation and target bonus are $135,000 and $25,000, respectively.

OPTION GRANTS IN LAST FISCAL YEAR

The Company was formed in December 1995 and effected the Acquisition in
January 1996. Accordingly, the Company did not grant any stock options to the
Named Executive Officers during the fiscal year ended September 30, 1995. In
February 1996, the Company granted options to purchase shares of the Company's
Common Stock at an exercise price of $0.50 per share to the following executive
officers: (i) Kevin K. Macgillivray received options to purchase an aggregate
of 13,750 shares, (ii) Timothy D. Kleffman received options to purchase an

-44-

aggregate of 13,750 shares and (iii) Christine A. Beheshti received options to
purchase an aggregate of 13,750 shares. In March 1996, the Company granted
options to purchase an aggregate of 27,617 shares of the Company's Common Stock
at an exercise price of $1.00 per share to Joan P. Platt.

COMPENSATION PLANS

1996 Stock Option Plan

The Company's 1996 Stock Option Plan (the "1996 Plan") was adopted in
January 1996 and amended in July 1996. The 1996 Plan provides for the grant to
employees of the Company (including officers and employee directors) of
incentive stock options within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), and for the grant of nonstatutory
stock options to employees and consultants of the Company. The 1996 Plan is
administered by the Board of Directors or a Committee of the Board of Directors
(the "Administrator"), which selects the optionees, determines the number of
shares to be subject to each option and determines the exercise price of each
option. The 1996 Plan authorizes the issuance of an aggregate of up to 900,000
shares of Common Stock. As of June 30, 1996, approximately 160,000 shares had
been issued under the 1996 Plan, options for approximately 70,000 shares were
outstanding, and approximately 670,000 shares remained available for future
grants. The exercise price of all incentive stock options granted under the 1996
Plan must be at least equal to the fair market value of the Common Stock on the
date of grant. The exercise price of all nonstatutory stock options granted
under the 1996 Plan shall be determined by the Administrator. With respect to
any participant who owns stock possessing more than 10% of the voting power of
all classes of stock of the Company, the exercise price of any incentive stock
option granted must equal at least 110% of the fair market value on the grant
date and the maximum term of the option must not exceed five years. The term of
all other options granted under the 1996 Plan may not exceed ten years.

In the event of a merger of the Company with or into another corporation or
a sale of substantially all the Company's assets, the 1996 Plan requires that
each outstanding option be assumed or an equivalent option substituted by the
successor corporation; provided, however, that in the event the successor
corporation refuses to assume or substitute for the outstanding options, such
options will become fully vested and exercisable for a period of fifteen days
after notice from the Administrators. Unless terminated sooner, the 1996 Plan
will terminate ten years from its effective date. The Board has authority to
amend or terminate the 1996 Plan, provided that no such action may impair the
rights of the holder of any outstanding options without the written consent of
such holder.

1996 Employee Stock Purchase Plan

The Company's 1996 Employee Stock Purchase Plan (the "Purchase Plan") was
adopted in July 1996 and will become effective upon the closing of the Offering.
A total of 50,000 shares of Common Stock has been reserved for issuance under
the Purchase Plan. The Purchase Plan is intended to qualify under Section 423
of the Code. Offering periods may be up to 24 months duration and may include
several purchase periods as determined by the Board. The initial offering
period will commence on the date of the Offering and end on the last business
day on or prior to April 30, 1997, and subsequent offering periods are initially
expected to be May 1 to October 31 and November 1 to April 30 of each year.
Employees are eligible to participate if they are regularly employed by the
Company for at least twenty hours per week and more than five months in any
calendar year.

The Purchase Plan permits eligible employees to purchase Common Stock
through payroll deductions, which may not exceed 10% of an employee's base
compensation (20% in the first offering period), including commissions, bonuses
and overtime, at a price equal to 85% of the fair market value of the Common
Stock at the beginning of each offering period or the purchase date, whichever
is lower. In the event of certain changes in control of the Company, the
Purchase Plan provides that the Board of Directors will shorten the offering
period by setting a new purchase date to occur before the change in control
event. Unless terminated sooner, the Purchase Plan will terminate ten years

-45-

after its effective date. The Board of Directors has authority to amend or
terminate the Purchase Plan provided no such action may adversely affect the
rights of any participant.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

The Company's Certificate of Incorporation limits the liability of
directors to the fullest extent permitted by the Delaware General Corporation
Law (the "Delaware Law"). Under the Delaware Law, a director's liability to a
company or its stockholders may not be limited with respect to (i) any breach of
his duty of loyalty to the company or its stockholders, (ii) acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) unlawful payments or dividends or unlawful stock repurchases or
redemptions, or (iv) transactions from which the director derived an improper
personal benefit.

The Company's Bylaws provide that the Company shall indemnify its officers
and directors and may indemnify its employees and other agents to the fullest
extent permitted under the Delaware Law. The Company has also entered into
agreements to indemnify its directors and executive officers, in addition to the
indemnification provided for in the Company's Bylaws. The Company believes that
these provisions and agreements are necessary to attract and retain qualified
directors and executive officers. The Company's Bylaws also permit it to secure
insurance on behalf of any officer, director, employee or other agent for any
liability arising out of his or her actions, regardless of whether the Delaware
Law would permit indemnification.

There is no pending litigation or proceeding involving any director,
officer, employee or agent of the Company where indemnification will be required
or permitted. The Company is not aware of any pending or threatened litigation
or proceeding that might result in a claim for such indemnification.

-46-

CERTAIN TRANSACTIONS

On January 30, 1996, the Company effected the Acquisition and related
transactions. The Acquisition consisted of: (i) the formation and initial
capitalization of Splash Technology Holdings, Inc.; (ii) the formation and
initial capitalization by Splash Technology Holdings, Inc. of a new wholly-owned
subsidiary, Splash Merger Company, Inc., a Delaware Corporation; (iii) the
formation and initial capitalization of a new corporation, Splash Technology,
Inc., a Delaware corporation, into which Radius placed certain assets and
liabilities of its Color Server Group in exchange for all of the capital stock
of Splash Technology, Inc.; and (iv) the merger of Splash Merger Company, Inc.
with and into Splash Technology, Inc. in a reverse triangular merger. As a
result of the merger, Splash Technology, Inc. was the surviving corporation and
Radius received in exchange for its interest in Splash Technology, Inc. (i)
$21.9 million in cash, (ii) an aggregate of 4,282 shares of Series B Preferred
Stock of the Company, which are convertible into a total of 497,465 shares of
Common Stock of the Company (representing approximately 19% of the outstanding
Common Stock of the Company on an as-converted basis prior to the Offering),
and (iii) a payment of approximately $1.5 million in cash on June 9, 1996.

The Acquisition was funded by the purchase of approximately $15.4 million
of Series A Preferred Stock by entities associated with Summit Partners, L.P.
and entities associated with Sigma Partners, L.P. and the purchase of $8.0
million of subordinated promissory notes by entities associated with Summer
Partners, L.P. The following table shows the aggregate amount of Common Stock,
Series A Preferred Stock and subordinated notes acquired by each of the
principal parties in connection with the initial capitalization of Splash
Technology Holdings, Inc. and the amount and type of consideration contributed
therefor.

PURCHASE
PRICE
SHARES OF FOR PRINCIPAL
MANDATORILY MANDATORILY AMOUNT OF
PURCHASE REDEEMABLE REDEEMABLE SUBORDINATED
SHARES OF PRICE FOR SERIES A SERIES A PROMISSORY
COMMON COMMON PREFERRED PREFERRED NOTES
STOCK STOCK STOCK STOCK PURCHASED TOTAL
--------- ---------- ----------- ------------ ------------- -------------

Entities associated with
Summit Partners, L.P......... 1,682,500 $ 67,300 13,933 $ 13,933,000 $ 8,000,000 $ 22,000,300

Entities associated with
Sigma Partners, L.P.......... 167,500 6,700 1,493 1,493,000 - 1,499,700

Management....................... 152,500 6,100 - - - 6,100
--------- ---------- ---------- ------------ ------------ -------------
Total................ 2,002,500 $ 80,100 15,426 $ 15,426,000 $ 8,000,000 $ 23,506,100
========= ========== ========== ============ ============ =============

In connection with the Acquisition, the parties entered into an escrow
agreement providing for an escrow of $4.7 million for satisfaction of possible
claims for indemnification by Splash Technology, Inc., Splash Technology
Holdings, Inc. and its stockholders against Radius. An amount equal to
approximately $2.35 million remains in escrow pending (i) a final, non-
appealable order dismissing with prejudice the EFI litigation, (ii) the
attainment by Radius of certain financial tests, or (iii) or the discretionary
decision by Splash Technology Holdings, Inc. and its stockholders to release the
amount in escrow. See "Risk Factors-Dependence on Proprietary Technology" and
"Business-Intellectual Property."

-47-

aggregate of 13,933 shares and 1,493 shares, respectively, of Series A Preferred
Stock of the Company and funds affiliated with Summit Partners, L.P. acquired
promissory notes of the Company in the aggregate principal amount of $8.0
million. The promissory notes are required to be repaid at face value plus
accrued and unpaid interest, and the Series A Preferred Stock is required to be
redeemed at a price of $1,000 per share plus accrued and unpaid dividends, upon
certain events including an initial public offering at a price of at least
$12.00 per share and aggregate gross proceeds to the Company of at least $35.0
million. It is anticipated that the promissory notes will be repaid and the
Series A Preferred Stock will be redeemed out of the proceeds of the Offering
even at a lesser amount of aggregate gross proceeds to the Company. See "Use of
Proceeds," "Principal and Selling Stockholders" and "Description of Capital
Stock."

The Acquisition constituted a leveraged transaction. As of January 30,
1996, the Company had approximately $12.6 million in assets and approximately
$9.6 million of liabilities. Immediately following the Acquisition, the Company
had $34.6 million in assets and $19.1 million of liabilities. The proceeds from
the Offering will be used primarily to repay the face value of $8.0 million in
subordinated notes and redeem the face value of the $15.4 million of outstanding
Series A Preferred Stock issued in connection with the Acquisition. See
"Acquisition," "Use of Proceeds," "Capitalization," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Principal and
Selling Stockholders."

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PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock of the Company as of June 30, 1996 and as adjusted
to reflect the sale of the shares of Common Stock offered hereby with respect to
(i) each person (or group of affiliated persons) known by the Company to own
beneficially more than 5% of the outstanding shares of Common Stock, (ii) each
Selling Stockholder, (iii) each of the Company's directors, (iv) each of the
Named Executive Officers, and (v) all directors and executive officers as a
group. Except as otherwise indicated in the footnotes to the table, each of the
stockholders has sole voting and investment power with respect to the shares of
beneficially owned by such stockholders, subject to community property laws
where applicable. Unless otherwise indicated, the address for each stockholder
is c/o Splash Technology Holdings, Inc., 555 Del Rey Avenue, Sunnyvale,
California 94086.

SHARES BENEFICIALLY NUMBER SHARES BENEFICIALLY
OWNED PRIOR OF OWNED AFTER
TO OFFERING(1)(2) SHARES OFFERING(1)(2)
------------------------------ ---------------------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT BEING OFFERED NUMBER PERCENT
- ----------------------------------------- --------------- ------------ -------------- ---------- -------------

Summit Partners, L.P. (1)(3)........... 1,682,500 63.2% - 1,682,500 .%
499 Hamilton Avenue, Suite 200
Palo Alto, CA 94301
Gregory M. Avis (1)(4)................. 1,682,500 63.2 - 1,682,500 .
Peter Y. Chung......................... - - - - -
Sigma Partners, L.P. (1)(6)............ 167,500 6.3 - 167,500 -
2884 Sand Hill Road, Suite 121
Menlo Park, CA 94025
Lawrence G. Finch (1)(6)............... 167,500 6.3 - 167,500 .
Radius Inc. (7)........................ 497,465 18.7 . - .
215 Moffett Park Drive
Sunnyvale, CA 94089
Charles W. Berger (7).................. 497,465 18.7 . . .
Kevin K. Macgillivray (8).............. 69,205 2.6 - 69,205 .
Joan P. Platt (9)...................... 27,617 1.0 - 27,617 .
Timothy A. Kleffman(10)................ 55,345 2.1 - 55,345 .
Christine D. Beheshti (11)............. 41,475 1.6 - 41,475 .
All directors and executive officers as
a group (8 persons)(12)................ 2,541,107 95.4 . . .

___________________________
* Less than 1%
(1) Percentage of ownership is based on 2,663,040 shares of Common Stock
outstanding on June 30, 1996 and shares of Common Stock outstanding after
completion of the Offering. Ownership does not include 15,426 shares of
Series A Preferred Stock, all shares of which are held by affiliates of
Summit Partners, L.P. and Sigma Partners, L.P. See "Description of Capital
Stock." Assumes no exercise of the Underwriters' over-allotment option.

(2) Beneficial ownership is determined in accordance with the rules of
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of Common Stock subject to options or warrants held by that person
that are currently exercisable or exercisable within 60 days of June 30,
1996 are deemed outstanding. Such shares, however, are not deemed
outstanding for the purposes of computing the percentage ownership of each
other person. Except as indicated in the footnotes to this table and
pursuant to applicable community property laws, the stockholder named in
the table has sole voting and investment power with respect to the shares
set forth opposite such stockholder's name.

(3) Includes 1,501,375, 64,050 and 117,075 shares of Common Stock held of
record by Summit Ventures IV, L.P., Summit Investors III, L.P., and Summit
Subordinated Debt Fund, L.P., respectively. Summit Partners IV, L.P. is a
General Partner of Summit Ventures IV, L.P. and Summit Partners SD, L.P. is
a General Partner of Summit Subordinated Debt Fund, L.P. Stamps, Woodsum &
Co., IV is a General Partner of Summit Ventures IV, L.P. and Stamps,
Woodsum & Co., III is a General Partner of Summit Subordinated Debt Fund,
L.P. Gregory M. Avis, a director of the Company, is General Partner of
Stamps, Woodsum & Co., III, Stamps, Woodsum & Co., IV, and Summit Investors
III, L.P. See Note (4).

-49-

(4) Includes shares described in Note (1) above. Mr. Avis, a director of the
Company, is a general partner of affiliates of Summit Partners, L.P. Mr.
Avis exercises shared investment and voting power with respect to such
shares, but disclaims beneficial ownership of such shares.

(5) Includes 139,863, 25,459, and 2,178 shares of Common Stock held by Sigma
Partners III, L.P., Sigma Associates III, L.P., and Sigma Investors III,
L.P., respectively. Sigma Management III is a General Partner of Sigma
Partners III, L.P., Sigma Associates III, L.P., and Sigma Investors III,
L.P. and Wade Woodson is a General Partner of Sigma Management III. Mr.
Finch, a director of the Company, is General Partner of Sigma Partners,
L.P. See Note (6).

(6) Includes shares described in Note (1) above. Mr. Finch, a director of the
Company, is General Partner of Sigma Partners, L.P. Mr. Finch exercises
shared investment and voting power with such shares, but disclaims
beneficial ownership of such shares.

(7) Includes 497,465 shares beneficially owned by Radius Inc. Mr. Berger, a
director of the Company, is Chairman of the Board of Directors and Chief
Executive Officer of Radius Inc.

(8) Includes 69,205 shares that are subject to a right of repurchase in favor
of the Company which expires ratably through February 2000.

(9) Includes 27,617 shares that are subject to a right of repurchase in favor
of the Company which expires ratably through March 2000.

(10) Includes 55,345 shares that are subject to a right of repurchase in favor
of the Company which expires ratably through February 2000.

(11) Includes 41,475 shares that are subject to a right of repurchase in favor
of the Company which expires ratably through February 2000.

(12) Includes 193,642 shares that are subject to a right of repurchase in favor
of the Company which expires ratably through March 2000.

-50-

DESCRIPTION OF CAPITAL STOCK

After giving effect to the filing of an Amended and Restated Certificate of
Incorporation on or prior to the closing of the Offering, the authorized capital
stock of the Company will consist of 50,000,000 shares of Common Stock, par
value $0.001 per share, and 5,000,000 shares of Preferred Stock, par value
$0.001 per share.

The following summary of certain provisions of the Common Stock and
Preferred Stock does not purport to be complete and is subject to, and qualified
in its entirety by, the provisions of the Company's Certificate of
Incorporation, which is included as an exhibit to the Registration Statement of
which this Prospectus is a part, and by the provisions of applicable law.

COMMON STOCK

As of June 30, 1996, there were 2,663,040 shares of Common Stock
outstanding held of record by approximately 33 stockholders, as well as options
and warrants to purchase an aggregate of approximately 70,000 shares of Common
Stock. The holders of Common Stock are entitled to one vote per share on all
matters to be voted on by the stockholders. Subject to preferences that may be
applicable to outstanding shares of Preferred Stock, if any, the holders of
Common Stock are entitled to receive ratably such dividends as may be declared
from time to time by the Board of Directors out of funds legally available
therefor. In the event of the liquidation, dissolution or winding up of the
Company, the holders of Common Stock are entitled to share ratably in all assets
remaining after payment of liabilities, subject to prior liquidation rights of
Preferred Stock, if any, then outstanding. The Common Stock has no preemptive
conversion rights or other subscription rights. There are no redemption or
sinking funds provisions applicable to the Common Stock. All outstanding shares
of Common Stock are fully paid and non-assessable, and the shares of Common
Stock to be outstanding upon completion of the Offering will be fully paid and
non-assessable.

PREFERRED STOCK

Effective upon the closing of the Offering, redemption of outstanding
Series A Preferred Stock and automatic conversion of outstanding Series B
Preferred Stock, the Company will be authorized to issue 5,000,000 shares of
undesignated Preferred Stock. The Board of Directors will have the authority to
issue the undesignated Preferred Stock in one or more series and to fix the
rights, preferences, privileges and restrictions granted to or imposed upon any
wholly unissued shares of undesignated Preferred Stock and to fix the number of
shares constituting any series in the designations of such series, without any
further vote or action by the stockholders. The Board of Directors, without
stockholder approval, can issue Preferred Stock with voting and conversion
rights which could adversely affect the voting power of the holders of Common
Stock. The issuance of Preferred Stock may have the effect of delaying,
deferring or preventing a change in control of the Company. The Company has no
present plan to issue Preferred Stock.

WARRANT

In connection with the Acquisition, the Company issued to Imperial Bank
(the "Warrantholder") a warrant to purchase an aggregate of 2,500 shares of
Common Stock at a price of $0.04 per share. The warrant terminates on January
31, 2001. The Warrantholder has certain rights to registration of its shares of
Common Stock issuable upon exercise of such warrant.

REGISTRATION RIGHTS

Under the terms of the Registration Rights Agreement dated as of January
30, 1996 among the Company and certain holders of its securities (the "Rights
Agreement"), following the closing of the Offering, the holders of

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approximately 2,500,000 shares of Common Stock and the holder of a warrant to
purchase 2,500 shares of Common Stock (the "Registrable Securities") will be
entitled to certain rights with respect to the registration of such shares of
Common Stock under the Securities Act. Under the Rights Agreement, if the
Company proposes to register any of its Common Stock under the Securities Act,
certain holders of Registrable Securities are entitled to notice of such
registration and to include their Registrable Securities therein; provided,
among other conditions, that the underwriters have the right to limit the number
of shares included in any such registration. Beginning six months after the
closing of the Offering, the holders of at least fifty percent (50%) of the
Registrable Securities have the right to require the Company, on not more than
two occasions, to file a registration statement under the Securities Act in
order to register all or any part of their Registrable Securities. The Company
may, in certain circumstances, defer such registration and the underwriters have
the right, subject to certain limitations, to limit the number of shares
included in such registrations. Further, the holders of Registrable Securities
may require the Company to register all or any portion of their Registrable
Securities on Form S-3, when such form becomes available to the Company, subject
to certain conditions and limitations.

ANTITAKEOVER EFFECTS OF PROVISIONS OF CERTIFICATE OF INCORPORATION, BYLAWS AND
DELAWARE LAW

The Company's Certificate of Incorporation and Bylaws, as amended and
restated on or prior to the closing of the Offering, among other things, (i)
permit vacancies on the Board of Directors that may occur between annual
meetings and any newly created seats to be filled only by the Board of Directors
and not by the stockholders, subject to any rights of holders of the Preferred
Stock that may be granted by the Board of directors in the future, (ii) limit
the rights of stockholders to call special meetings of stockholders, (iii)
provide for classification of the Board of Directors into three classes having
terms of three years each, and (iv) provide that the Board of Directors, without
action by the stockholders, may issue and fix the rights and preferences of
shares of Preferred Stock. These provisions may have the effect of delaying,
deferring or preventing a change of control of the Company without further
action by the stockholders, may discourage bids for the Common Stock at a
premium over the market price of the Common Stock, may adversely affect the
market price of, and the voting and other rights of, the holders of the Common
Stock and could have the effect of discouraging certain attempts to acquire the
Company or remove incumbent management, including incumbent members of the
Company's Board of Directors, even if some or a majority of the Company's
stockholders deemed such an attempt to be in their best interests. See
"Management-Executive Officers, Directors and Key Personnel."

The Company is subject to Section 203 of the Delaware General Corporation
Law ("Section 203"). Section 203 prohibits a publicly held Delaware corporation
from engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless (i) prior to such date, the board of
directors of the corporation approves either the business combination of the
transaction that resulted in the stockholder becoming an interested stockholder,
(ii) upon consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder owns at least 85%
of the outstanding voting stock, excluding certain shares held by employee
directors and employee stock plans, or (iii) on or after the consummation date
the business combination is approved by the board of directors and by the
affirmative vote of at least 66% of the outstanding voting stock that is not
owned by the interested stockholder. For purposes of Section 203, a "business
combination" includes, among other things, a merger, asset sale or other
transaction resulting in a financial benefit to the interested stockholder, and
an "interested stockholder" is generally a person who, together with affiliates
and associates, owns (or within three years, did own) 15% or more of the
corporation's voting stock.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is The First National
Bank of Boston. Its telephone number is (617) 575-2000.

-52-

LISTING

The Company has applied to list its Common Stock on the Nasdaq National
Market under the trading symbol "SPLH."

-53-

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offering, there has been no public market for securities of
the Company. No prediction can be made as to the effect, if any, that market
sales of shares or the availability of shares for sale will have on the market
price prevailing from time to time. Nevertheless, sales of substantial amounts
of Common Stock of the Company in the public market after the lapse of the
restrictions described below could adversely affect the prevailing market price
and the ability of the Company to raise equity capital in the future at a time
and place which it deems appropriate.

Upon completion of the Offering, the Company will have . shares of Common
Stock outstanding, assuming no exercise of the Underwriters' over-allotment
option, no exercise of outstanding options and no exercise of warrants after
June 30, 1996. Of this amount, the . shares offered hereby and no
additional shares will be available for immediate sale in the public market as
of the date of this Prospectus. Approximately 320,000 additional shares will be
available for sale in the public market following the expiration of the 180-day
lockup agreements with the Representatives of the Underwriters or the Company,
subject in some cases to compliance with the volume and other limitations of
Rule 144.

DAYS AFTER DATE SHARES ELIGIBLE
OF THIS PROSPECTUS FOR SALE COMMENT
- -------------------------- ----------------------- ----------------------------------------

Freely tradeable shares sold in Offering
Upon Effectiveness......... 0 and shares saleable under Rule 144(k)
that are not subject to 180-day lockup

180 days................... approximately 320,000 Lockup released; shares saleable under
Rules 144 and 701

Thereafter................. approximately 2,350,000 Restricted securities held for two years
or less

In general, under Rule 144 a person (or persons whose shares are
aggregated) who has beneficially owned shares for at least two years is entitled
to sell within any three-month period commencing 90 days after the date of this
Prospectus a number of shares that does not exceed the greater of (i) 1% of the
then outstanding shares of Common Stock (approximately shares immediately after
the Offering) or (ii) the average weekly trading volume during the four calendar
weeks preceding such sale, subject to the filing of a Form 144 with respect to
such sale. A person (or persons whose shares are aggregated) who is not deemed
to have been an affiliate of the Company at any time during the 90 days
immediately preceding the sale who has beneficially owned his or her shares for
at least three years is entitled to sell such shares pursuant to Rule 144(k)
without regard to the limitations described above. Persons deemed to be
affiliates must always sell pursuant to Rule 144, even after the applicable
holding periods have been satisfied.

The Company is unable to estimate the number of shares that will be sold
under Rule 144, as this will depend on the market price for the Common Stock of
the Company, the personal circumstances of the sellers and other factors. Prior
to the Offering, there has been no public market for the Common Stock, and there
can be no assurance that a significant public market for the Common Stock will
develop or be sustained after the Offering. Any future sale of substantial
amounts of the Common Stock in the open market may adversely affect the market
price of the Common Stock offered hereby.

The Company, its directors, executive officers, stockholders with
registration rights and certain other stockholders have agreed pursuant to the
Underwriting Agreement and other agreements that they will not sell any Common
Stock without the prior consent of Alex. Brown & Sons Incorporated for a period
of 180 days from the date of this Prospectus (the "180-day Lockup Period"),
except that the Company may, without such consent, grant options and sell shares
pursuant to the 1996 Plan and the Purchase Plan.

The Company intends to file a registration statement on Form S-8 under the
Securities Act to register approximately 720,000 shares of Common Stock subject
to outstanding options or reserved for issuance under the

-54-

1996 Plan, and the Purchase Plan within 180 days after the date of this
Prospectus, thus permitting the resale of such shares by nonaffiliates in the
public market without restriction under the Securities Act.

Any employee or consultant to the Company who purchased his or her shares
pursuant to a written compensatory plan or contract is entitled to rely on the
resale provisions of Rule 701, which permits nonaffiliates to sell their Rule
701 shares without having to comply with the public information, holding period,
volume limitation or notice provisions of Rule 144 and permits affiliates to
sell their Rule 701 shares without having to comply with the Rule 144 holding
period restrictions, in each case commencing 90 days after the date of this
Prospectus. As of June 30, 1996, the holders of options exercisable into
approximately 70,000 shares of Common Stock will be eligible to sell their
shares in reliance upon Rule 701 or pursuant to the Form S-8 upon the expiration
of the 180-day Lockup Period. Upon completion of the offering, the 4,282 shares
of Series B Preferred Stock owned by Radius will automatically convert to
497,465 shares of the Company's Common Stock. If Radius were to enter bankruptcy
and were allowed to sell its shares of the Company's Common Stock without regard
to the restrictions of Rule 144 under the Securities Act, such additional shares
of Common Stock would become eligible for resale into the public market at an
indeterminate date after the date of this Prospectus.

In addition, after the Offering, the holders of approximately 2,500,000
shares of Common Stock and the holder of a warrant to purchase 2,500 shares of
Common Stock will be entitled to certain rights with respect to registration of
such shares under the Securities Act. Registration of such shares under the
Securities Act would result in such shares becoming freely tradeable without
restriction under the Securities Act (except for shares purchased by affiliates
of the Company) immediately upon the effectiveness of such registration. See
"Description of Capital Stock--Registration Rights."

-55-

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Underwriters named below (the "Underwriters"), through their Representatives,
Alex. Brown & Sons Incorporated and Montgomery Securities, have severally agreed
to purchase from the Company and the Selling Stockholders the following
respective numbers of shares of Common Stock at the initial public offering
price less the underwriting discounts and commissions set forth on the cover
page of this Prospectus.

NUMBER OF
UNDERWRITER SHARES
----------- ---------

Alex. Brown & Sons Incorporated....................................

Montgomery Securities..............................................

----------
Total..........................................................

==========

The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will purchase all shares of the Common Stock offered hereby if any
of such shares are purchased.

The Company has been advised by the Representatives of the Underwriters
that the Underwriters propose to offer the shares of Common Stock to the public
at the initial public offering price set forth on the cover page of this
Prospectus and to certain dealers at such price less a concession not in excess
of $ per share. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of $ per share to certain other dealers. After the
initial public offering, the offering price and other selling terms may be
changed by the Representatives of the Underwriters.

The Company has granted to the Underwriters an option, exercisable not
later than 30 days after the date of this Prospectus, to purchase up to .
additional shares of Common Stock at the public offering price less the
underwriting discounts and commissions set forth on the cover page of this
Prospectus. To the extent that the Underwriters exercise such option, each of
the Underwriters will have a firm commitment to purchase approximately the same
percentage thereof that the number of shares of Common Stock to be purchased by
it shown in the above table bears to . and the Company will be obligated,
pursuant to the option, to sell such shares to the Underwriters. The
Underwriters may exercise such option only to cover over-allotments made in
connection with the sale of Common Stock offered hereby. If purchased, the
Underwriters will offer such additional shares on the same terms as those on
which the . shares are being offered.

-56-

The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act.

The Company and all stockholders of the Company have agreed not to offer,
sell or otherwise dispose of any shares of Common Stock for a period of 180 days
after the effective date of the Offering without the prior written consent of
Alex. Brown & Sons Incorporated, except that the Company may issue, and grant
options to purchase, shares of Common Stock under its current stock option and
purchase plans and other currently outstanding options and warrants. In
addition, the Company may issue shares of Common Stock in connection with
corporate acquisitions.

The Representatives of the Underwriters have advised the Company and the
Selling Stockholders that the Underwriters do not intend to confirm sales to any
account over which they exercise discretionary authority.

Prior to the Offering, there has been no public market for the Common Stock
of the Company. Consequently, the initial public offering price for the Common
Stock will be determined by negotiations between the Company, the Selling
Stockholders and the Representatives of the Underwriters. Among the factors to
be considered in such negotiations will be prevailing market conditions, the
results of operations of the Company in recent periods, the market
capitalizations, the price-earnings ratios, the price-sales ratios, the market
prices generally of securities and stages of development of other companies that
the Company and the Representatives of the Underwriters believe to be comparable
to the Company, estimates of the business potential of the Company and its
industry in general and the present state of the Company's development.

LEGAL MATTERS

The validity of the issuance of shares of Common Stock offered hereby will
be passed upon for the Company by Wilson Sonsini Goodrich & Rosati, Professional
Corporation, Palo Alto, California. Certain legal matters in connection with
the Offering will be passed upon for the Underwriters by Gunderson Dettmer
Stough Villeneuve Franklin & Hachigian, LLP, Palo Alto, California. Jeffrey D.
Saper, a member of Wilson Sonsini Goodrich & Rosati, Professional Corporation,
is the Secretary of the Company.

EXPERTS

The consolidated balance sheets of the Company as of September 30, 1994 and
1995 and June 30, 1996 and the consolidated statements of income cash flows for
each of the two years in the period ended September 30, 1995, the four months
ended January 1996, and the five months ended June 30, 1996; and statement of
parent company investment for each of the two years in the period ended
September 30, 1995 and the four months ended January 31, 1996 and the
consolidated statement of stockholders' equity for the five months ended June
30, 1996, included in this Prospectus have been so included in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of such firm as experts in auditing and accounting.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 with respect to the shares of
Common Stock offered hereby, of which this Prospectus forms a part. In
accordance with the rules of the Commission, this Prospectus omits certain
information contained in the Registration Statement. For further information
with respect to the Company and the securities offered hereby, reference is made
to the Registration Statement and the exhibits and schedules filed therewith.
Statements contained in this Prospectus concerning the provisions of such
documents are necessarily summaries of such documents and

-57-

each such statement is qualified in its entirety by reference to the copy of the
applicable document filed with the Commission as an exhibit to the Registration
Statement. Copies of the Registration Statement and the exhibits and schedules
thereto may be inspected, without charge, at the offices of the Commission, or
obtained at prescribed rates from the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a
Web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission
at http://www.sec.gov.

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SPLASH TECHNOLOGY HOLDINGS, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
________

Pages

Report of Independent Accountants ....................................... F-2

Consolidated Financial Statements:

Consolidated Balance Sheets as of June 30, 1996 and
September 30, 1995 and 1994 ........................................ F-3

Consolidated Statements of Operations for the five months ended
June 30, 1996; the four months ended January 31, 1996 and the
years ended September 30, 1995 and 1994 ............................ F-4

Consolidated Statements of Stockholders' Equity for the five months
ended June 30, 1995 ................................................ F-5

Predecessor Business Statement of Parent Company Investment for
the four months ended January 31, 1996 and the years ended
September 30, 1995 and 1994 ........................................ F-6

Consolidated Statements of Cash Flows for the five months ended
June 30, 1996; the four months ended January 31, 1996 and the
years ended September 30, 1995 and 1994 ............................ F-7

Notes to Consolidated Financial Statements .............................. F-8

F-1

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
Splash Technology Holdings, Inc.

We have audited the accompanying consolidated balance sheet of Splash Technology
Holdings, Inc. and its subsidiaries as of June 30, 1996 and the related
consolidated statements of operations, stockholders' equity and cash flows for
the five months ended June 30, 1996. We have also audited the balances sheets at
September 30, 1994 and 1995, and the statements of operations, cash flows and
parent company investment of the Predecessor Business for the years ended
September 30, 1994 and 1995, and the four months ended January 31, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Splash
Technology Holdings, Inc. and its subsidiaries as of June 30, 1996, and the
consolidated results of their operations and their cash flows for the five
months ended June 30, 1996, in conformity with generally accepted accounting
principles. Also in our opinion, the financial statements of the Predecessor
Business referred to above present fairly, in all material respects, the
financial position of the Predecessor Business as of September 30, 1994 and 1995
and the results of its operations and its cash flows for the years ended
September 30, 1994 and 1995 and for the four months ended January 31, 1996, in
conformity with generally accepted accounting principles.

San Jose, California
July 23, 1996 except for Note 12 the date for which is July 31, 1996.

F-2

SPLASH TECHNOLOGY HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
September 30, 1994 and 1995 and June 30, 1996

(in thousands, except per share data)
_________

SPLASH TECHNOLOGY
PREDECESSOR BUSINESS HOLDINGS, INC.
------------------------------ -----------------------------
PRO FORMA
(NOTE 2)
SEPTEMBER 30, JUNE 30, JUNE 30,
1994 1995 1996 1996
-------------- ------------ ------------ -------------
(unaudited)

ASSETS
Current assets:
Cash and cash equivalents.......................................... $ -- $ -- $ 6,601
Accounts receivable, net of allowance for doubtful accounts of
$16, $84 and $300 as of September 30, 1994 and 1995
and June 30, 1996, respectively.................................. 5,274 4,716 4,037
Inventories........................................................ 1,287 3,965 3,945
Prepaid expenses and other current assets.......................... -- -- 119
Deferred income taxes.............................................. 622 622 3,633
-------- -------- --------
Total current assets.......................................... 7,183 9,303 18,335
Property and equipment, net.......................................... 200 385 679
Deferred income taxes................................................ -- -- 8,249
Other long term assets............................................... -- -- 1,239
-------- -------- --------
Total assets.................................................. $ 7,383 $ 9,688 $ 28,502
======== ======== ========

LIABILITIES
Current liabilities:
Trade accounts payable............................................. $ 772 $ 2,538 $ 2,154
Other accrued liabilities.......................................... 331 1,074 1,955
Royalties payable.................................................. 1,233 1,978 1,070
Deferred revenue................................................... -- -- 5,227
Income taxes payable............................................... 721 1,395 1,974
-------- -------- --------
Total current liabilities..................................... 3,057 6,985 12,380
Subordinated promissory notes payable to stockholders................ -- -- 8,600
-------- -------- --------
Total liabilities............................................. 3,057 6,985 20,980
-------- -------- --------
Commitments (Note 6).

STOCKHOLDERS' EQUITY
Preferred Stock:
Authorized: 5,000,000 shares
Series A Preferred Stock, par value $.001 per share:
Authorized: 15,426 shares
Issued and outstanding: 15,426 shares; liquidation
value: $15,735,000.............................................. $ -- $ -- $ 1 $ 1
Series B preferred stock, par value $.001 per share:
Authorized, issued and outstanding: 4,282 shares as
of June 30, 1996 and no shares pro forma;
liquidation value: $4,338,000................................... -- -- 1 --
Parent company investment............................................ 4,326 2,703 -- --
Common stock, par value $.001:
Authorized: 10,000,000 shares as of June 30, 1996,
50,000,000 shares pro forma; Issued and outstanding:
2,165,575 shares as of June 30, 1996 and 2,663,040
shares pro forma................................................. -- -- 2 3
Additional paid-in capital........................................... -- -- 19,462 19,462
Retained earnings (accumulated deficit).............................. -- -- (11,944) (11,944)
-------- -------- -------- --------
Total stockholders' equity.................................... 4,326 2,703 7,522 $ 7,522
-------- -------- -------- --------

Total liabilities and stockholders' equity $ 7,383 $ 9,688 $ 28,502
======== ======== ========

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

F-3

SPLASH TECHNOLOGY HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)
________

SPLASH
TECHNOLOGY
PREDECESSOR BUSINESS HOLDING, INC.
------------------------------------------------------- ---------------
NINE MONTHS
ENDED FOUR MONTHS FIVE MONTHS
YEAR ENDED JUNE 30, ENDED ENDED
SEPTEMBER 30, 1995 JANUARY 31, JUNE 30,
-----------------------
1994 1995 (UNAUDITED) 1996 1996
---------- ----------- ------------- ------------ ---------------

Net revenue.............................................. $ 16,354 $ 30,472 $ 20,343 $ 13,008 $ 18,326
Cost of net revenue...................................... 12,068 20,723 13,737 8,427 11,455
-------- -------- -------- -------- --------
Gross profit........................................ 4,286 9,749 6,606 4,581 6,871
-------- -------- -------- -------- --------
Operating expenses:
Research and development.............................. 1,999 3,295 2,034 1,498 1,624
Sales and marketing................................... 562 2,076 1,505 688 806
General and administrative............................ 377 891 667 287 668
Amortization of purchased technology and write-off
of in-process technology............................ -- -- -- -- 22,729
-------- -------- -------- -------- --------
Total operating expenses.......................... 2,938 6,262 4,206 2,473 25,827
-------- -------- -------- -------- --------

Income (loss) from operations................... 1,348 3,487 2,400 2,108 (18,956)

Interest expense, net.................................... -- -- -- 18 388
-------- -------- -------- -------- --------
Income (loss) before provision for income taxes. 1,348 3,487 2,400 2,090 (19,344)

Provision for (benefit from) income taxes................ 99 1,395 960 836 (7,765)
-------- -------- -------- -------- --------

Net income (loss)............................... $ 1,249 $ 2,092 $ 1,440 $ 1,254 $(11,579)
======== ======== ======== ======== ========

Net loss per share....................................... $ (4.38)
========

Shares used in computing per share amounts............... 2,726
========

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

F-4

SPLASH TECHNOLOGY HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)
________

RETAINED
PREFERRED STOCK ADDITIONAL EARNINGS
---------------------------------------
SERIES A SERIES B COMMON STOCK PAID-IN (ACCUMULATED
------------------ ------------------- -----------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT) TOTAL
-------- -------- -------- -------- -------- -------- ---------- ------------ -------

Balances, February 1, 1996
Issuance of preferred stock:
Series A.............................. 15,426 $ 1 -- $ -- -- $ -- $14,699 $ -- $14,700
Series B.............................. -- -- 4,282 1 -- -- 4,099 -- 4,100
Issuance of common stock............... -- -- -- -- 2,002,500 2 204 -- 206
Exercise of employee stock options for
cash.................................. -- -- -- -- 163,075 -- 95 -- 95

Accretion for dividends on preferred
stock Series A and B.................. -- -- -- -- -- -- 365 $ (365) --
Net loss............................... -- -- -- -- -- -- -- (11,579) (11,579)
------ ------ ------ ------ --------- ------ ------- -------- -------

Balances, June 30, 1996................. 15,426 $ 1 4,282 $ 1 2,165,575 $ 2 $19,462 $(11,944) $ 7,522
====== ====== ====== ====== ========= ====== ======= ======== =======

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

F-5

SPLASH TECHNOLOGY HOLDINGS, INC.

PREDECESSOR BUSINESS STATEMENT
OF PARENT COMPANY INVESTMENT

(in thousands)
_______

Balance, October 1, 1993....................................... $ (20)
Net change in parent company investment........................ 3,097
Net income..................................................... 1,249
-------

Balance, September 30, 1994.................................... 4,326
Net change in parent company investment........................ (3,715)
Net income..................................................... 2,092
-------

Balance, September 30, 1995.................................... 2,703
Net change in parent company investment........................ (12)
Net income..................................................... 1,254
-------
Balance, January 31, 1996...................................... $ 3,945
=======

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

F-6

SPLASH TECHNOLOGY HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)
________

SPLASH
TECHNOLOGY
PREDECESSOR BUSINESS HOLDING, INC.
--------------------------------------------------------- --------------
NINE MONTHS
ENDED FOUR MONTHS FIVE MONTHS
YEAR ENDED JUNE 30, ENDED ENDED
SEPTEMBER 30, 1995 JANUARY 31, JUNE 30,
-----------------------
1994 1995 (UNAUDITED) 1996 1996
----------- ---------- -------------- ---------------- ----------------

Cash flows from operating activities:
Net income (loss)........................................ $ 1,249 $ 2,092 $ 1,440 $ 1,254 $(11,579)
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization.......................... 80 259 82 102 57
Provision for doubtful accounts........................ 16 68 -- 17 199
Purchased and in-process technology.................... -- -- -- -- 22,729
Deferred income taxes.................................. (622) -- -- 622 (11,014)
Changes in assets and liabilities:
Accounts receivable.................................. (3,947) 490 419 (4,597) 5,059
Inventories.......................................... (513) (2,678) (2,678) 2,231 (2,211)
Prepaid expenses and other current assets............ -- -- -- -- (119)
Other long term assets............................... -- -- -- -- (118)
Trade accounts payable............................... (914) 1,766 1,049 (2,391) 2,008
Other accrued liabilities............................ 317 743 108 1,986 (1,042)
Royalties payable.................................... 796 745 (47) 1,434 (2,302)
Deferred revenue..................................... -- -- -- 905 2,157
Income taxes payable................................. 721 674 239 (559) 1,974
-------- -------- -------- -------- --------
Net cash provided by (used in)
operating activities............................ (2,817) 4,159 612 1,004 5,798
-------- -------- -------- -------- --------

Cash flows from investing activities:
Purchase of property and equipment....................... (280) (444) (333) (63) (306)
Acquisition of Color Server Group from Radius
(net of cash acquired)................................. -- -- -- -- (22,492)
-------- -------- -------- -------- --------
Net cash used in investing activities.............. (280) (444) (333) (63) (22,798)
-------- -------- -------- -------- --------
Cash flows from financing activities:
Proceeds from Series A preferred stock................... -- -- -- -- 14,700
Proceeds from common stock............................... -- -- -- -- 206
Proceeds from subordinated debt.......................... -- -- -- -- 8,600
Exercise of stock options for cash....................... -- -- -- -- 95
Net change in Parent Company Investment.................. 3,097 (3,715) (279) (12) --
-------- -------- -------- -------- --------
Net cash provided by (used in)
financing activities.............................. 3,097 (3,715) (279) (12) 23,601
-------- -------- -------- -------- --------

Net increase in cash....................................... -- -- -- 929 6,601

Cash and cash equivalents at beginning of period........... -- -- -- -- --
-------- -------- -------- -------- --------
Cash and cash equivalents at end of period................. $ -- $ -- $ -- $ 929 $ 6,601
======== ======== ======== ======== ========

Supplemental disclosure of cash flow information:
Taxes paid............................................... $ -- $ -- $ -- $ -- $ 1,275
Interest paid............................................ $ -- $ -- $ -- $ -- $ 198

Non-cash financing activities:
Accretion of preferred stock............................. $ -- $ -- $ -- $ -- $ 365
Issuance of Series B preferred stock..................... $ -- $ -- $ -- $ -- $ 4,100

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

F-7

SPLASH TECHNOLOGY HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
_______

1. Recent Reorganization and Basis of Presentation:
-----------------------------------------------

Splash Technology Holdings, Inc. (the "Company"), through its wholly-owned
subsidiaries Splash Technology, Inc. and Splash Technology S.a.r.l.,
develops, produces and markets color servers, which consist of computer
hardware and software systems that provide an integrated link between
desktop computers and digital color copiers and enable such copiers to
provide high speed and quality networked color printing and scanning. The
Company sells its color servers through two original equipment
manufacturers who integrate the Company's color servers into connected
digital color photocopier systems which are sold to end users in North and
South America, Europe, Asia and Australia. The Company operates in one
business segment.

The business of the Company was previously operated as the unincorporated
Color Server Group of SuperMac Technology Inc. ("SuperMac") until August
1994 when SuperMac merged with Radius Inc. ("Radius"). In January 1996, the
assets and liabilities of the Color Server Group of Radius were transferred
by Radius into its newly created wholly-owned subsidiary, Splash
Technology, Inc. In December 1995, Splash Technology Holdings, Inc. was
incorporated in Delaware and was capitalized by the sale of Series A
preferred stock and common stock and subordinated debt to an investor group
consisting of certain affiliates of Summit Partners, L.P., Sigma Partners,
L.P. and certain members of the management of the Company. On January 31,
1996, Splash Technology, Inc. merged with a wholly-owned subsidiary of
Splash Technology Holdings, Inc. and as part of the consideration for the
merger, Splash Technology Holdings, Inc. issued Series B preferred stock to
Radius. The surviving corporation in the merger was Splash Technology
Holdings, Inc.

The acquisition of Splash Technology, Inc. was regarded as a purchase of
net assets accounted for under the purchase method of accounting as of
January 31, 1996. The total purchase price of $27,843,000 (including the
costs of the acquisition of $321,000), consisting of cash and the fair
value of Series B Preferred Stock of $4,100,000, has been allocated to the
net assets acquired based on their estimated fair values as of January 31,
1996. The two principal components of the initial excess purchase price
allocation included in-process research and development projects
($19,324,000) and existing purchased technology ($3,405,000). The Company
allocated a portion of the purchase price to various in-process research
and development projects that had identifiable economic value and expensed
this value as of the date of the acquisition. The purchased technology is
related to the Company's Power Series product for which the Company was
developing a replacement product at the time of the acquisition due to the
discontinuance of the Apple CPU architecture on which the Power Series
product relied. The Company transitioned to the new product in May 1996 and
accordingly, the fair value of the purchased technology was fully amortized
over the four months to May 31, 1996.

Continued

F-8

SPLASH TECHNOLOGY HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
_______

1. Recent Reorganization and Basis of Presentation, continued:
-----------------------------------------------

The fair value of the assets acquired (net of cash acquired of $929,000)
and liabilities assumed were as follows:

In-process technology $19,324
Purchased technology 3,405
Receivables 9,296
Inventories 1,734
Property and equipment 430
Other long term assets 1,121
Payables (147)
Other accrued liabilities (6,049)
Deferred revenue (2,200)
-------
$26,914
=======

Of the purchase consideration, $2,350,000 remains in escrow pending
resolution of certain events including unasserted claims.

The Predecessor Business's financial statements presented herein include
the results of operations and cash flows for the four months ended January
31, 1996 and the years ended September 30, 1995 and 1994, and the balance
sheets as of September 30, 1995 and 1994, as if the Color Server Group
existed as a corporation separate from Radius and SuperMac during such
periods on a historical basis. The Company's financial statements presented
herein include the results of operations and cash flows for the five months
ended June 30, 1996 and the balance sheet as of that date. Results for the
four months ended January 31, 1996 and the five months ended June 30, 1996
are not necessarily indicative of the results for the entire year.

Radius and SuperMac each performed certain corporate headquarter functions
on behalf of the Color Server Group and provided certain marketing,
technology, human resource and financial and accounting services. Costs
associated with these services have been allocated to the Color Server
Group based on relative headcount, which management believes to be a
reasonable basis for allocation.

Continued

F-9

SPLASH TECHNOLOGY HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
_______

2. Summary of Significant Accounting Policies:
------------------------------------------

BASIS OF CONSOLIDATION:

The accompanying consolidated financial statements include the accounts of
the Company and its wholly owned subsidiaries, Splash Technology, Inc. and
Splash Technology S.a.r.l. All significant intercompany transactions
between the entities have been eliminated.

USE OF ESTIMATES:

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.

REVENUE RECOGNITION:

Revenue is generally recognized upon shipment of the product to the
customer. The Company generally does not grant rights of return. In May
1996, the Company made the transition from its Power Series products to its
new PCI Series products. In calendar year 1996, one of the Company's
original equipment manufacturer ("OEM") customers accumulated a substantial
quantity of the Power Series product. Due to the transition of products and
the accumulation of Power Series product, the Company is recognizing
revenue from the sales of the Power Series product upon notification from
the OEM that the product has been sold to their end user. At June 30, 1996,
the Company had deferred revenue of $5,120,000 from sales of Power Series
products to the OEM.

WARRANTIES:

The Company's products are generally warranted for 15 months. Estimated
future costs of repair, replacement, or customer accommodations are
reflected in the accompanying consolidated financial statements.

Continued

F-10

SPLASH TECHNOLOGY HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
______

2. Summary of Significant Accounting Policies, continued:
------------------------------------------

RESEARCH AND DEVELOPMENT:

Costs incurred in the research and development of new software products are
expensed as incurred until technological feasibility has been established.
To date, the establishment of technological feasibility of the Company's
products and general release substantially coincide. As a result, the
Company has not capitalized any software development costs since such costs
have not been significant.

INCOME TAXES:

The Company uses the liability method to calculate deferred income taxes.
The realization of deferred tax assets is based on historical tax positions
and expectations about future taxable income.

Income taxes have been provided in the Predecessor Business statements of
operations as if the Predecessor Business was a separate taxable entity.
Since the division was not a separate taxable entity but was included in
the consolidated income tax returns of the Radius and SuperMac companies,
the current benefit from or provision for U.S. federal and state income
taxes was ultimately assumed to be receivable from or payable to Radius or
SuperMac in the period presented. In accordance with the merger agreement
with Radius, the Company is not required to repay Radius for the
utilization of their tax losses against the Company's taxable income as a
Predecessor Business. Such benefits are reflected as capital contributions
as of each fiscal year end.

CASH AND CASH EQUIVALENTS:

All highly liquid investments with an original, or remaining, maturity of
three months or less at the date of purchase and money market funds are
considered cash equivalents.

Cash and cash equivalents consist primarily of deposits with banks in the
United States.

FINANCIAL INSTRUMENTS:

The Company's financial instruments, including borrowings under the line of
credit and the subordinated promissory notes payable to stockholders, are
stated at fair value.

INVENTORIES:

Inventories are stated at the lower of cost or market. Cost is determined
on a first-in, first-out basis.

Continued

F-11

SPLASH TECHNOLOGY HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
______

2. Summary of Significant Accounting Policies, continued:
------------------------------------------

PROPERTY AND EQUIPMENT:

Property and equipment are stated at cost and are depreciated using the
straight line method over their estimated useful lives ranging from three
to seven years or, in the case of leasehold improvements, the lease period,
if shorter. Upon disposal, the assets and related accumulated depreciation
are removed from the Company's accounts, and the resulting gains or losses
are reflected in the statements of income. The Predecessor Business'
accounting policy was to expense all items of property and equipment upon
acquisition. Accordingly, appropriate adjustments have been included in
the financial statements to reflect the capitalization and depreciation of
property and equipment during the periods presented.

CONCENTRATION OF CREDIT-RISKS:

Cash and cash equivalents are deposited with major banks in the United
States and France. Deposits in these banks may exceed the amount of
insurance provided on such deposits. The Company has not experienced any
losses on its deposits of cash and cash equivalents.

The Company sells its products to two OEM customers who distribute the
Company's products with their own color photocopier systems on a worldwide
basis. The Company performs ongoing credit evaluations of its customers.
The Company does not require collateral for its receivables and maintains
an allowance for potential credit losses. At June 30, 1996, the accounts
receivable balance is comprised primarily of these two customers, which
represent 57% and 37% of accounts receivable.

Continued

F-12

SPLASH TECHNOLOGY HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
______

2. Summary of Significant Accounting Policies, continued:
------------------------------------------

RECENT PRONOUNCEMENTS:

During March 1995, the Financial Accounting Standards Board issued
Statement No. 121 (SFAS 121), "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of," which requires the
Company to review for impairment of long-lived assets, certain identifiable
intangibles, and goodwill related to those assets whenever events or
changes in circumstances indicate that the carrying amount of an asset
might not be recoverable. In certain situations, an impairment loss would
be recognized. SFAS 121 will become effective for the Company's year
ending September 30, 1997.

During October 1995, the Financial Accounting Standards Board issued
Statement No. 123 (SFAS No. 123), "Accounting for Stock-Based
Compensation," which established a fair value based method of accounting
for stock-based compensation plans and requires additional disclosures for
those companies who elect not to adopt the new method of accounting. The
Company intends to continue to account for stock options under APB Opinion
No. 25, "Accounting for Stock Issued to Employees." SFAS No. 123 will be
effective for fiscal years beginning after December 15, 1995, and will
require the Company to provide additional disclosures in the financial
statements for the year ending September 30, 1997.

COMPUTATION OF NET LOSS PER SHARE:

Net loss per share is computed using the weighted average number of common
and dilutive common equivalent shares outstanding during the period.
Dilutive common equivalent shares consist of the incremental common shares
issuable upon conversion of convertible preferred stock (using the "if
converted" method) and stock options and warrants (using the treasury stock
method) as if converted for all periods presented.

The Company has computed common and dilutive common equivalent shares in
determining the number of shares used in calculating earnings per share for
all periods presented pursuant to the Securities and Exchange Commission
Staff Accounting Bulletin (SAB) No. 83. SAB 83 requires the Company to
include all common shares and all common share equivalents issued during
the 12 month period preceding the filing date of an initial public offering
in its calculation of the number of shares used to determine earnings per
share as if the shares had been outstanding for all periods presented. Net
loss for the purposes of the computation reflects the cumulative dividend
(and dividend accretion) payable on the shares of preferred stock.

Continued

F-13

SPLASH TECHNOLOGY HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
______

2. Summary of Significant Accounting Policies, continued:
------------------------------------------

UNAUDITED INTERIM FINANCIAL INFORMATION:

The accompanying interim statements of operations and cash flows for the
nine months ended June 30, 1995 together with the related notes are
unaudited but include all adjustments, consisting of only normal recurring
adjustments, which the Company considers necessary to present fairly, in
all material respects, the results of operations and cash flows for the
periods ended June 30, 1995. Results for the nine months ended June 30,
1995 are not necessarily indicative of results for an entire year.

UNAUDITED PRO FORMA INFORMATION:

In conjunction with the initial public offering, all of the Company's
outstanding Series B preferred stock will be converted into shares of
Common Stock as described in Note 7. The pro forma effect of these
conversions has been reflected in the accompanying pro forma balance sheet
assuming the conversion had occurred June 30, 1996 and is unaudited.

3. Balance Sheet Detail (in thousands):
--------------------

INVENTORIES:

SPLASH TECHNOLOGY
PREDECESSOR BUSINESS HOLDINGS, INC.
---------------------------- -----------------
SEPTEMBER 30, JUNE 30,
----------------------------
1994 1995 1996
------------- ------------- -----------------

Raw materials $ 714 $ 591 $1,593
Work in processs 81 166 --
Finished goods 492 3,208 2,352
------ ------ ------
$1,287 $3,965 $3,945
====== ====== ======

PROPERTY AND EQUIPMENT:

SPLASH TECHNOLOGY
PREDECESSOR BUSINESS HOLDINGS, INC.
------------------------------ -------------------
SEPTEMBER 30, JUNE 30,
------------------------------
1994 1995 1996
------------ -------------- -------------------

Furniture and fixtures $ 81 $ 201 $ 270
Computer equipment 199 523 241
Leasehold improvements -- -- 80
Trade show booth -- -- 145
-------- ------ ------
280 724 736

Less accumulated depreciation (80) (339) (57)
and amortization -------- ------ -------
$ 200 $ 385 $ 679
======= ====== ======

Continued

F-14

SPLASH TECHNOLOGY HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
----------

4. Revolving Credit Facility:
-------------------------

In January 1996, the Company entered into an agreement with a bank to
borrow up to a maximum of $4,000,000 under a revolving line of credit
subject to a borrowing base of 80% and 70% of eligible domestic and foreign
accounts receivable, respectively. The line bears interest at prime rate
plus 0.75%, is collateralized by accounts receivable, owned property and
equipment and inventory of the Company and matures on January 31, 1997.
The agreement contains dividend restrictions and certain financial
covenants concerning required liquidity, net worth and indebtedness ratios
as well as required profitability. The Company has no borrowings
outstanding under the line of credit as of June 30, 1996.

5. Subordinated Promissory Notes Payable to Stockholders:
-----------------------------------------------------
The Company issued subordinated promissory notes payable to stockholders,
with a face value totaling $8,000,000, which bear interest at 12%, payable
quarterly. The subordinated promissory notes were issued to stockholders in
conjunction with the Series A preferred stock and the fair value of the
notes was established at $8,600,000 by an independent third party
valuation. In the event of liquidation, merger or a firm commitment
underwriting pursuant to a public offering of common stock at a price of at
least $12.00 per share with gross proceeds to the Company of at least
$35,000,000, all principal and accrued interest shall be payable
immediately ("Qualified Liquidity Event"). In the event that a public
offering does not qualify as a Qualified Liquidity Event, the interest rate
increases to 15%. In the event that a Qualified Liquidity Event is not
consummated on or before January 30, 2001, then all outstanding principal
must be paid in two equal installments on January 30, 2001 and 2002. The
notes are subordinate to the Revolving Credit Facility (see Note 4).

6. Commitments:
-----------

The Company leases certain office facilities under noncancelable operating
leases which expire in April 2001. The Company is responsible for taxes,
insurance and maintenance expenses related to the leased facilities. Under
the term of certain lease agreements, the leases may be extended, at the
Company's options, and certain of the leases provide for adjustments of the
minimum monthly rent.

Future minimum annual lease payments under the leases are as follows (in
thousands):

Period Ending
-------------

June 30, 1997 $384
June 30, 1998 398
June 30, 1999 412
June 30, 2000 427
June 30, 2001 442

Rent expense for the five months ended June 30, 1996 was $83,960.

Continued

F-15

SPLASH TECHNOLOGY HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
-------

7. Preferred Stock:
---------------

The Company has authorized and issued 15,426 shares of Series A preferred
stock at a face value of $1,000 per share and 4,282 shares of Series B
preferred stock in a non cash transaction as part of the consideration for
the merger. The valuation of the Series A and Series B preferred stock by
an independent third party resulted in values of $14,700,000 and
$4,100,000, respectively for those instruments. The rights, preferences and
privileges of the Series A and Series B preferred stock are as follows:

LIQUIDATION RIGHTS:

The preferred stock has certain liquidation preferences over the common
stock in the event of a liquidating event such as a dissolution of the
affairs of the Company or a take-over by another corporation. The
liquidation preferences entitle the preferred stockholders to receive
$1,000 per share in addition to amounts due on unpaid dividends which have
been accrued or declared. The Series A preferred stockholders have
preference over the Series B preferred stockholders in determining the
order of liquidation payout. The preferred stock does not participate in
the distribution of assets remaining after the liquidation preference has
been paid.

CONVERSION RIGHTS:

The Series A preferred stock has no conversion rights. The Series B
preferred stockholders have the right at any time to convert each share of
preferred stock into common stock at the specified conversion rate per
share, which currently is 116.176 shares of common stock for each share of
preferred stock. The conversion rate will be adjusted for stock splits and
recapitalization. In the event of a public offering of the Company's
common stock where the gross proceeds received by the Company equals or
exceeds $35,000,000 and the offering price is at least $12.00 per share, or
in the event of a merger or sale of the Company where the consideration or
proceeds equals or exceeds $50,000,000, all shares of the Series B
preferred stock automatically convert into shares of common stock at the
specified conversion rate.

REDEMPTION RIGHTS:

The Company may redeem all or any of the shares of the Series A preferred
stock at any time. The Company may also redeem all or any of the shares of
the Series B preferred stock at any time but only if there are no shares of
the Series A preferred stock then outstanding.

The Company is required to redeem all of the shares of the Series A
preferred stock in the event of a public offering of the Company's common
stock or a merger or sale of the Company meeting the quantitative criteria
disclosed in the paragraph concerning conversion rights above. Provided
there are no shares of the Series A preferred stock then outstanding, the
Company is required to redeem the shares of the Series B preferred stock,
one half on January 1, 2002 and one half on January 1, 2003. The
redemption price for each share of preferred stock will be $1,000, plus any
unpaid and accrued dividends.

Continued

F-16

SLASH TECHNOLOGY HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
--------

7. Preferred Stock, continued:
---------------

VOTING RIGHTS:

The Series B preferred stockholders are entitled to vote on all matters
with the holders of common stock as if on an as converted basis. The
Series A preferred stockholders have no rights to vote other than to elect
one director to the Board of Directors. The other five directors are
elected by the common stockholders in conjunction with the Series B
preferred stockholders.

DIVIDEND RIGHTS:

The preferred stockholders will be entitled to receive dividends in
preference to the common stockholders. In addition, the Series A preferred
stockholders also have preference to the Series B preferred stockholders.
From the date of issuance until January 1, 1997, there shall be no
cumulative dividends payable to the preferred stockholders. After that
date, cumulative dividends are payable when and if declared or accumulate
as part of the shares' liquidation preferences as follows:

Dividends per Share
-------------------
Series A Series B
-------- --------

January 2, 1997 to January 1, 1998 $ 60 $60

January 2, 1998 to January 1, 1999 $ 80 $60

January 2, 1999, and thereafter $100 $60

The carrying amounts of both Series A and Series B have been increased by
amounts representing dividends not currently declared or paid but which
will be payable under the dividend rights of the respective series of
preferred stock. The increases have been effected by a charge against
retained earnings.

8. Common Stock:
------------

On January 31, 1996, the Company sold 2,002,500 shares of common stock at a
price of $0.04 per share for aggregate proceeds of $80,100. The Company
has granted certain registration rights to certain holders of common
shares, options, warrants and convertible securities in the event of any
registration of shares by the Company under the Securities Act.

Continued

F-17

SPLASH TECHNOLOGY HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
_______

8. Common Stock, continued:
------------

In connection with the line of credit, the Company issued the bank a
warrant to purchase 2,500 shares of common stock with an exercise price of
$0.04 per share. The warrant is not exercisable until the earlier of
January 31, 1997, an initial public offering, or an asset sale or merger.

STOCK OPTIONS AND REPURCHASE AGREEMENTS:

The Company reserved 261,758 shares of common stock for issuance under its
stock option plan as of January 30, 1996. Under this plan, the Board of
Directors may grant incentive or nonstatutory stock options at a price not
less than 100% or 85%, respectively, of fair market value of common stock,
as determined by the Board of Directors, at grant date. Options under the
plan are immediately exercisable. Stock issued through option exercises are
subject to the Company's right of repurchase at the original exercise
price. The number of shares subject to repurchase generally decrease by 25%
of the options shares one year after the grant date, and thereafter,
ratably over 48 months.

Activity for the Company's stock option is summarized as follows:

Average Price
Available Outstanding Per Share Amount
--------- ----------- ------------- --------------
(in thousands)

Options authorized 261,758 -- -- --

Options granted (234,880) 234,880 $0.50-$6.00 $ 212

Options canceled 3,751 (3,751) $0.50 (2)

Options exercised -- (163,075) $0.50-$6.00 (95)
-------- -------- ------

Balances, June 30, 1996 30,629 68,054 $0.50-$6.00 $ 115
======== ======== ======

At June 30, 1996, all options and shares outstanding under the Plan were
subject to repurchase.

9. Business Segments, Exports and Major Customers:
----------------------------------------------

The Company operates in a single industry segment encompassing the
development, manufacture, sales and support of high performance color
servers.

The Company sells its products and services to customers in the United
States and Japan. Net revenue from export sales accounted for 60%, 59% and
43% of total revenues for the years ended September 30, 1994, 1995 and the
five months ended June 30, 1996. All of export sales were made to Japan.

In the years ended September 30, 1994 and 1995 and the five months ended
June 30, 1996, two customers accounted for 60% and 40%; 59% and 41%; and
43% and 57% of total revenues, respectively. In addition, although all
sales made to the Company's U.S. based customers are considered U.S. sales,
this customer has a significant international customer base, and the
Company believes that a significant portion of the Company's products
purchased by the customer are resold outside the U.S.

Continued

F-18

SPLASH TECHNOLOGY HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
------

10. Income Taxes:
-------------

The provision for (benefit from) income taxes consists of the following (in
thousands):

SPLASH TECHNOLOGY
PREDECESSOR BUSINESS HOLDINGS, INC.
------------------------------------- -------------------
FOUR MONTHS FIVE MONTHS
FISCAL YEAR ENDED ENDED ENDED
SEPTEMBER 30, JANUSARY 31, JUNE 30,
---------------------------
1994 1995 1996 1996
------------ ---------- ------------- -------------------

Current:
Federal $ 522 $ 1,095 $ 192 $ 2,551
State 199 300 22 698
------ -------- ------ --------
721 1,395 214 3,249
------ -------- ------ --------

Deferred:
Federal $ (537) $ -- $ 537 $ (9,365)
State (85) -- 85 (1,649)
------ -------- ------ --------
(622) -- 622 (11,014)
------ -------- ------ --------
$ 99 $ 1,395 $ 836 $ (7,765)
====== ======== ====== ========

The Company's effective tax rate differs from the statutory federal income
tax rate as shown in the following schedule:

Tax provision at federal statutory rate 34.0% 34.0% 34.0% 34.0%
State taxes, net of federal tax benefit 6.1 6.1 6.1 6.1
Net operating losses (33.3) -- -- --
Other 0.6 (0.1) (0.1) --
------- ------ ------- -------
7.4% 40.0% 40.0% 40.1%
======= ====== ======= =======

continued

F-19

SPLASH TECHNOLOGY HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
______

10. Income Taxes, continued:
------------

The components of the deferred tax asset are as follows (in thousands):

SEPTEMBER 30, JUNE 30,
-------------------------
1994 1995 1996
------------ ------------ ----------

Deferred tax assets:
In-process and purchased technology $ -- $ -- $ 8,865
Receivable allowances 6 34 80
Inventory valuation allowance 231 221 334
Warranty accruals 55 128 92
State taxes 68 102 240
Deferred revenue -- -- 2,055
All other 262 137 216
------ ------ --------
Total deferred tax assets 622 622 11,882
Long-term portion of in-process and
purchased technology -- -- 8,249
Current portion of deferred tax asset ------ ------ --------
$ 622 $ 622 $ 3,633
====== ====== ========

At June 30, 1996, the Company assessed the recoverability of the deferred
tax asset and based on its expectations about taxable income for future
periods, determined that it was more likely than not that the deferred tax
asset would be recovered.

11. Employee Benefit Plan:
---------------------

The Company adopted the Splash Technology, Inc. 401(k) Profit Sharing Plan
(the Plan) effective February 1996, which qualifies under Section 401(k) of
the Internal Revenue Code of 1986, as amended, and covers essentially all
employees. Each eligible employee may elect to contribute to the Plan,
through payroll deductions, up to 15% of compensation, subject to certain
limitations. The Company, at its discretion, may make additional
contributions on behalf of non-highly compensated employees. All employer
contributions are 100% vested after four years. During the five months
ended June 30, 1996, there were no Company contributions.

12. Subsequent Events:
-----------------

On July 25 1996, the Board of Directors authorized management of the
Company to file a Registration Statement with the Securities and Exchange
Commission permitting the Company to sell up to $34,500,000 of shares of
its common stock to the public including shares which may be offered on
behalf of selling stockholders. Radius, Inc. has agreed that pursuant to
the planned public offering at a price to the public of at least $12.00 per
share, the Series B Preferred Stock held by Radius shall automatically
convert to common stock at the applicable conversion price.

On July 25, 1996, the Board of Directors of the Company authorized an
amendment to the Company's Amended and Restated Certificate of
Incorporation to increase the Company's authorized number of shares to an
aggregate of 50,000,000 shares of common stock, par value $.001 per share
and 5,000,000 shares of preferred stock, par value $.001 per share.

F-20

SPLASH TECHNOLOGY HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

_______

On July 25, 1996, the Board of Directors adopted a payroll deduction
Employee Stock Purchase Plan and reserved an aggregate of 50,000 shares of
Common Stock for issuance thereunder and also amended and restated the 1996
Stock Option Plan and increased the aggregate number of shares Common Stock
reserved for issuance thereunder to 900,000 shares.

On July 31, 1996, the Board of Directors of the Company authorized the
establishment of a classified board of directors, effective upon the
Company's planned initial public offering, providing for three classes of
directors having terms of three years each (subject to initial staggering
year terms for the three classes).

F-21

================================================================================

NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, ANY SELLING STOCKHOLDER OR
ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON OR BY ANYONE IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.

_________________

TABLE OF CONTENTS

Page
----

Prospectus Summary.................................................... 3
Risk Factors.......................................................... 5
Use of Proceeds....................................................... 16
Dividend Policy....................................................... 16
Acquisition........................................................... 16
Capitalization........................................................ 18
Dilution.............................................................. 19
Selected Consolidated Financial Data.................................. 20
Management's Discussion and Analysis
of Financial Condition and Results of Operations..................... 22
Business.............................................................. 29
Management............................................................ 42
Certain Transactions.................................................. 47
Principal and Selling Stockholders.................................... 49
Description of Capital Stock.......................................... 51
Shares Eligible for Future Sale....................................... 54
Underwriting.......................................................... 56
Legal Matters......................................................... 57
Experts............................................................... 57
Additional Information................................................ 57
Index to Consolidated Financial Statements............................ F-1

_________________

UNTIL , 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK OFFERED HEREBY, WHETHER OR
NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

================================================================================

. SHARES

[SPLASH LOGO]

COMMON STOCK

________________

PROSPECTUS
________________

ALEX. BROWN & SONS
INCORPORATED

MONTGOMERY SECURITIES

, 1996

================================================================================

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable in connection with the sale of
the Common Stock being registered hereby. All amounts are estimates except the
SEC registration fee and the NASD filing fee.

AMOUNT TO BE
PAID BY
REGISTRANT
--------------

SEC Registration Fee..................................... $ 11,897
NASD Filing Fee.......................................... 3,950
Nasdaq National Market Application Fee................... 50,000
Printing................................................. 160,000
Legal Fees and Expenses.................................. 250,000
Accounting Fees and Expenses............................. 410,000
Blue Sky Fees and Expenses............................... 15,000
Director and Officer Liability Insurance................. 250,000
Custodial Fees........................................... 2,500
Transfer Agent and Registrar Fees........................ 10,000
Miscellaneous............................................ 36,653
--------
Total............................................... $1,200,000
=========

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law (the "Delaware Law")
authorizes a court to award, or a corporation's Board of Directors to grant,
indemnity to directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Securities Act"). Article Ten of the Registrant's Certificate
of Incorporation (Exhibit 3.1 hereto) and Article VI of the Registrant's Bylaws
(Exhibit 3.2 hereto) provide for indemnification of the Registrant's directors,
officers, employees and other agents to the maximum extent permitted by Delaware
Law. In addition, the Registrant has entered into Indemnification Agreements
(Exhibit 10.1 hereto) with its officers and directors. The Underwriting
Agreement (Exhibit 1.1) also provides for cross-indemnification among the
Company and the Underwriters with respect to certain matters, including matters
arising under the Securities Act.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Since September 30, 1995, the Registrant has issued and sold the following
unregistered securities:

1. On January 30, 1996, the Registrant issued and sold an aggregate of
152,500 shares of Common Stock to four members of management pursuant to
restricted stock purchase agreements for aggregate cash consideration of $6,100.

2. On January 30, 1996, the Registrant issued and sold an aggregate of
15,426 shares of mandatorily redeemable Series A Preferred Stock to Summit
Subordinated Debt Fund, Summit Ventures IV, L.P., Summit

II-1

Investors III, L.P., Sigma Partners III, L.P., sigma Associates III, L.P. and
Sigma Investors III, L.P. pursuant to the Purchase Agreement for an aggregate
cash consideration of $15,426.

3. On January 30, 1996, the Registrant issued and sold an aggregate of
4,282 shares of Series B Preferred Stock to Radius Inc. in return for a portion
of its ownership of Splash Technology, Inc.

4. On January 31, 1996, the Registrant issued a warrant to purchase an
aggregate of 2,500 shares of Common Stock to Imperial Bank for an aggregate cash
consideration of $1.00.

There was no underwriter involved in connection with any transaction set
forth above. The issuances of the securities set forth in paragraph 1 of this
Item 15 were deemed to be exempt from registration under the Securities Act in
reliance upon Rule 701 promulgated thereunder. The other issuances set forth in
this Item 15 were deemed to be exempt from registration pursuant to Section 4(2)
of the Securities Act and Regulation D promulgated thereunder as a transaction
by an issuer not involving a public offering.

In all of such transactions, the recipients of securities represented their
intention to acquire the securities for investment only and not with a view to
or for sale in connection with any distribution thereof, and appropriate legends
were affixed to the securities issued.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES

(A) EXHIBITS.

EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
----------- ------------------------------------------------

1.1* Form of Underwriting Agreement.
2.1 Merger Agreement, dated December 21, 1995, among
Summit Subordinated Debt Fund, L.P., Summit
Ventures IV, L.P., Summit Investors II, L.P.,
Splash Technology Holdings, Inc. and Splash Merger
Company, Inc.
Radius Inc., Splash Technology, Inc.,
2.2 Amendment No. 1 to Merger Agreement dated
January 30, 1996.
3.1 Certificate of Incorporation of Registrant.
3.2* Form of Amended and Restated Certificate of
Incorporation of Registrant.
3.3 Bylaws of Registrant.
3.4* Form of Amended and Restated Bylaws of Registrant.
4.1 Warrant, dated January 31, 1996, issued by
Registrant to Imperial Bank.
5.1* Opinion of Wilson Sonsini Goodrich & Rosati,
Professional Corporation.
10.1 Form of Indemnification Agreement.
10.2* 1996 Stock Option Plan and form of Stock Option
Agreement.
10.3* 1996 Employee Stock Purchase Plan and form of
Subscription Agreement.
10.4 Registration Rights Agreement dated January 30,
1996 among the Registrant and certain stockholders
of the Registrant.
10.5* Configurable Postscript Interpreter OEM License
Agreement dated September 18, 1992 between the
Registrant and Adobe Systems Incorporated.
10.6* Xerox and SMT Hardware Purchase and Software
Development/License Agreement between the
Registrant and Xerox Corporation dated November
13, 1993.
10.7 Property Lease covering Registrant's facilities in
Sunnyvale, California.
10.8 Security and Loan Agreement dated January 31,
1996, between the Registrant and Imperial Bank.
11.1 Computation Regarding Earnings Per Share.
21.1 Subsidiaries of Registrant.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2* Consent of Wilson Sonsini Goodrich & Rosati,
Professional Corporation (included in Exhibit
5.1).
24.1 Power of Attorney (see page II-4).

II-2

__________________
* To be supplied by amendment.

(B) FINANCIAL STATEMENT SCHEDULES

Schedule II - Valuation and Qualifying Accounts

ITEM 17. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions referenced in Item 14 of this Registration
Statement or otherwise, the Registrant has been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the
Securities Act, the information omitted from the form of this prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective.

(2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the Offering of such securities at that
time shall be deemed to be the initial bona fide Offering thereof.

The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing, as specified in the Underwriting Agreement, certificates in such
denomination and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Sunnyvale, State of
California, on August 5, 1996.

SPLASH TECHNOLOGY HOLDINGS, INC.

BY: /S/ KEVIN K. MACGILLIVRAY
------------------------------------------
Kevin K. Macgillivray,
President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Kevin Macgillivray and Joan Platt
and each of them acting individually, as his or her attorney-in-fact, each with
full power of substitution, for him or her in any and all capacities, to sign
any and all amendments to this registration Statement, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorney to any and all amendments
to said Registration Statement.

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED:

SIGNATURE TITLE DATE
- ---------------------------------- ----------------------------- -------------------------

/s/ Kevin K. Macgillivray Director, President and Chief August 5, 1996
- ----------------------------------
Kevin K. Macgillivray Officer (Principal Executive
Officer)

/s/ Joan P. Platt Chief Financial Officer and August 5, 1996
- ----------------------------------
Joan P. Platt Vice President, Finance and
Administration (Principal
Financial and Accounting
Officer)
/s/ Gregory M. Avis
- ---------------------------------- Director August 5, 1996
Gregory M. Avis

/s/ Charles W. Berger Director August 5, 1996
- ----------------------------------
Charles W. Berger

/s/ Peter Y. Chung Director August 5, 1996
- ----------------------------------
Peter Y. Chung

/s/ Lawrence G. Finch Director August 5, 1996
- ----------------------------------
Lawrence G. Finch

II-4

SPLASH TECHNOLOGY HOLDINGS, INC.
--------------------------------

REPORT ON FINANCIAL STATEMENT SCHEDULE
--------------------------------------

In connection with our audit of the consolidated financial statements of
Splash Technology Holdings, Inc., and its subsidiaries as of June 30, 1996 and
for the five months ended June 30, 1996, and in connection with our audit of the
Predecessor Business as of September 30, 1994 and 1995, and for the years then
ended and for the four months ended January 31, 1996, which financial statements
are included in the Prospectus, we have also audited the financial statement
schedules listed in Item 16(b) herein.

In our opinion, this financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, present fairly,
in all material respects, the information required to be included therein.

Coopers & Lybrand L.L.P.

San Jose, California
July 31, 1996

II-5

Schedule II

FINANCIAL STATEMENT SCHEDULE
----------------------------

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(in thousands)

VALUATION FOR BALANCE AT BALANCE AT
DOUBTFUL ACCOUNTS BEGINNING OF PERIOD ADDITIONS DEDUCTIONS END OF PERIOD
--------------------- ------------------- ------------- -------------- -------------

Years ended:

September 30, 1994(1) - 16 - 16
======= ======= ======== =======

September 30, 1995(1) 16 68 - 84
======= ======= ======== =======

Four months ended
January 31, 1996(1) 84 17 - 101
======= ======= ======== =======

Five months ended
June 30, 1996 101 199 - 300
======= ======= ======== =======

VALUATION FOR BALANCE AT BALANCE AT
INVENTORY RESERVES BEGINNING OF PERIOD ADDITIONS DEDUCTIONS END OF PERIOD
--------------------- ------------------- ------------- -------------- -------------

Years ended:

September 30, 1994(1) - 575 - 575
======= ======= ======== =======

September 30, 1995(1) 575 - (25) 550
======= ======= ======== =======

Four months ended
January 31, 1996(1) 550 - (550) -
======= ======= ======== =======

Five months ended
June 30, 1996 0 832 - 832
======= ======= ======== =======

VALUATION FOR BALANCE AT BALANCE AT
WARRANTY RESERVES BEGINNING OF PERIOD ADDITIONS DEDUCTIONS END OF PERIOD
--------------------- ------------------- ------------- -------------- -------------

Years ended:

September 30, 1994(1) - 136 - 136
======= ======= ======== =======

September 30, 1995(1) 136 181 - 317
======= ======= ======== =======

Four months ended
January 31, 1996(1) 317 - (176) 141
======= ======= ======== =======

Five months ended
June 30, 1996 141 232 - 373
======= ======= ======== =======

________________________
(1) Predecessor Business.

EXHIBIT INDEX

EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
---------- -------------------------------------------------------------

1.1* Form of Underwriting Agreement.
2.1 Merger Agreement, dated December 21, 1995, among Radius Inc.,
Splash Technology, Inc., Summit Subordinated Debt Fund, L.P.,
Summit Ventures IV, L.P., Summit Investors II, L.P., Splash
Technology Holdings, Inc. and Splash Merger Company, Inc.
2.2 Amendment No. 1 to Merger Agreement dated January 30, 1996.
3.1 Certificate of Incorporation of Registrant.
3.2* Form of Amended and Restated Certificate of Incorporation of
Registrant.
3.3 Bylaws of Registrant.
3.4* Form of Amended and Restated Bylaws of Registrant.
4.1 Warrant, dated January 31, 1996, issued by Registrant to
Imperial Bank.
5.1* Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
10.1 Form of Indemnification Agreement.
10.2* 1996 Stock Option Plan and form of Stock Option Agreement.
10.3* 1996 Employee Stock Purchase Plan and form of Subscription
Agreement.
10.4 Registration Rights Agreement dated January 30, 1996 among
the Registrant and certain stockholders of the Registrant.
10.5* Configurable Postcript Interpreter OEM License Agreement
dated September 18, 1992 between the Registrant and Adobe
Systems Incorporated.
10.6* Xerox and SMT Hardware Purchase and Software
Develpoment/License Agreement between the Registrant and
Xerox Corporation dated November 13, 1993.
10.7 Property Lease covering Registrant's facilities in Sunnyvale,
California.
10.8 Security and Loan Agreement dated January 31, 1996, between
the Registrant and Imperial Bank.
11.1 Computation Regarding Earnings Per Share.
21.1 Subsidiaries of Registrant.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2* Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
24.1 Power of Attorney (see page II-4).

____________________________
* To be supplied by amendment.