INTRANET SOLUTIONS INC, SB-2/A, 1996-11-07

INTRANET SOLUTIONS INC
SB-2/A, 1996-11-07
MISC DURABLE GOODS

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 7, 1996
REGISTRATION NO. 333-14175
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

AMENDMENT NO.1

TO FORM SB-2
REGISTRATION STATEMENT

UNDER
THE SECURITIES ACT OF 1933

INTRANET SOLUTIONS, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

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<S> <C> <C>
MINNESOTA 7373 41-1652566
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>

9625 W. 76TH STREET SUITE 150
MINNEAPOLIS, MINNESOTA 55344
(612) 903-2000
(ADDRESS AND TELEPHONE NUMBER
OF PRINCIPAL EXECUTIVE OFFICES)

ROBERT F. OLSON
PRESIDENT AND CHIEF EXECUTIVE OFFICER
9625 W. 76TH STREET SUITE 150
MINNEAPOLIS, MINNESOTA 55344
(612) 903-2000
(Name, address, and telephone number of agent for service)

COPIES TO:
WILLIAM M. MOWER, ESQ.
MASLON EDELMAN BORMAN & BRAND,
A PROFESSIONAL LIMITED LIABILITY PARTNERSHIP
3300 NORWEST CENTER
MINNEAPOLIS, MINNESOTA 55402-4140
(612) 672-8200

APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC: As soon as practicable after
the effective date of this Registration Statement.

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.

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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 REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.

SUBJECT TO COMPLETION

DATED NOVEMBER 7, 1996

PROSPECTUS
INTRANET SOLUTIONS, INC.

680,746 SHARES OF COMMON STOCK

Of the 680,746 shares of Common Stock offered hereby, 435,167 are being
sold by IntraNet Solutions, Inc. (the "Company") and 245,579 are being sold by
the Selling Shareholders. The 435,167 shares offered by the Company are
issuable upon the exercise of (i) 183,500 outstanding, publicly traded,
redeemable warrants (the "Redeemable Warrants") and (ii) an aggregate of
251,667 non-publicly traded, non-redeemable warrants (the "Non-Redeemable
Warrants," together with the Redeemable Warrants, the "Warrants"). The Company
will not receive any proceeds from the sale of the shares being sold by the
Selling Shareholders. See "Principal and Selling Shareholders." No
underwriter is being used in connection with this offering. The Company will
bear the expenses of registration of the securities offered by this Prospectus,
which are expected to be approximately $200,000.

The Company's Common Stock, the Redeemable Warrants and units consisting
of one share of Common Stock and one warrant to acquire one share of Common
Stock at an exercise price of $4.00 per share (the "Units") are traded in the
over-the-counter market through the National Association of Securities Dealers
Automated Quotation System Small-Cap Market(SM) ("NASDAQ") under the symbols
INRS, INRSW and INRSU respectively. On November 4, 1996, the closing bid price
of the Common Stock was $8.00. No Redeemable Warrants or Units traded on such
date.

SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OFFERED
HEREBY.

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

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The per share exercise price of the 183,500 Redeemable Warrants is $4.00.
The per share exercise price of the Non-Redeemable Warrants is $9.00 with
respect to 18,750 Non-Redeemable Warrants, $6.00 with respect to 19,400
Non-Redeemable Warrants, $4.00 with respect to 111,046 Non-Redeemable Warrants,
$2.32 with respect to 43,077 Non-Redeemable Warrants, and $.294 with respect to
59,394 Non-Redeemable Warrants. In the event that all of the Redeemable
Warrants are exercised and none of the Non-Redeemable Warrants are exercised,
the Company will receive an aggregate of $734,000, before deducting estimated
offering expenses of $200,000. In the event that all of the Non-Redeemable
Warrants are exercised and none of the Redeemable Warrants are exercised, the
Company will receive an aggregate of $846,733, before deducting estimated
offering expenses of $200,000. In the event that all of the Warrants are
exercised, the Company will receive an aggregate $1,580,732 before deducting
estimated offering expenses of $200,000. There can be no assurance that any or
all of the Warrants will be exercised.

It is anticipated that each of the persons named herein as Selling
Shareholders will offer and sell the shares that may be sold by such person
hereunder from time to time in ordinary transactions to or through one or more
brokers or dealers in the over-the-counter market or in private transactions at
such prices as may be obtainable.

The date of this Prospectus is ___________, 1996.

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AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a registration statement on Form SB-2, under
the Securities Act of 1933, as amended (the "Securities Act") covering the
securities offered by this Prospectus. This Prospectus does not contain all of
the information set forth in the registration statement and the exhibits
thereto. Statements contained in this Prospectus as to the contents of any
contract or other document referred to herein are not necessarily complete and
in each instance such statement is qualified by reference to each such contract
or document. The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith files reports and other information with the Commission.
Reports and other information filed by the Company with the Commission can be
inspected and copied at the public reference facilities of the Commission, Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549, as well as
at the following Regional Offices: 7 World Trade Center, 13th Floor, New York,
New York 10048 and 500 West Madison Street--Suite 1400, Chicago, Illinois
60661. Copies of such material can be obtained from the Commission by mail at
prescribed rates. Requests should be directed to the Commission's Public
Reference Section, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, DC 20549. The Common Stock and the Redeemable Warrants are listed
on the NASDAQ Small-Cap Market. Material filed by the Company can be inspected
at the offices of the National Association of Securities Dealers, Inc., 1735 K
Street N.W., Washington, D.C. 20006.

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GLOSSARY OF TECHNICAL TERMS

CAD FILE A file containing an electronic drawing created using Computer Automated Design Software.

COMPUTER NETWORK A group of one or more computers connected together for the purpose of sharing data and networked resources
such as printers, modems or fax servers.

DATA VAULT SYSTEM Secure electronic storage of data files using document management software combined with database management
software.

DIGITAL DOCUMENT
DISTRIBUTION Distribution of documents through a computer network by sending the version contained in a computer file
rather than a version printed on paper.

DIGITAL DOCUMENT
MANAGEMENT Software technology that manages information contained in electronic document files, or unstructured data,
providing revision control, configuration management, and workflow.

DISTRIBUTION
TECHNOLOGY The various methods of using state-of-the-art technology to distribute documents, both electronically and in
hardcopy.

DISASTER RECOVERY
SYSTEM A combination of hardware and software designed to provide automated backup and archiving of computer files
to allow rapid recovery in the event of a catastrophic loss of data.

DOCUMENT-BASED
INFORMATION MANAGEMENT Software technology that manages business critical documents and the information contained in those
SYSTEM documents by automating and accelerating the creation, assembly, control, modification and distribution of
such documents.

ELECTRONIC DOCUMENT
WAREHOUSING Using digital document management technology to provide off-site storage of documents contained in computer
files.
</TABLE>

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ELECTRONIC DEMAND
PUBLISHING Providing printed documents "on demand" through the use of high-speed laser printers in order to reduce
inventory and production costs of frequently revised documents.

HARDWARE PLATFORM A standard computer hardware configuration on which a comprehensive approach to a computer solution of a
problem can be based. Examples of well-known hardware platforms include the IBM PC and MacIntosh personal
computers.

HYPERTEXT LINK An automatic link for navigation between electronic documents activated by point and click with a computer
mouse.

INTERNET An open global network of interconnected commercial, educational and governmental computer networks which
utilize a common communications protocol.

INTRANET An organization's private network of its local area networks which utilize Internet data formats and
communications protocols, and which may use the Internet's facilities as the backbone for network
communications.

OVERLAY FILE A file containing markup to communicate changes to a computer file.

POST-SCRIPT An industry standard data file format for communication with printing devices.

SYSTEM INTEGRATOR An organization that specialized in delivering solutions to end-user organizations by combing a variety of
software components and integrating them into a complete end-user solution.

UNSTRUCTURED BUSINESS-
CRITICAL DATA Information that typically exists in the form of word processing documents, spreadsheets, or CAD files that
are maintained on a variety of hardware platforms with little compatibility or data sharing capability
between systems.

VALUE ADDED RESELLER
(VAR) A business that purchases equipment or software from a vendor, usually at a discount, adds value and resells
the altered product.
</TABLE>

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<S> <C>
WEB A collection of electronically retrievable documents related by hypertext links.

WEB GENERATION The process of programmatically constructing a set of interlinked electronic documents.

WORKFLOW A computer application which provides management, control and tracking of a business process such as the routing of
a business document for approval signatures.

WORLD WIDE WEB
(WWW) The worldwide collection of electronically retrievable hypertext linked documents resident on the Internet.
This worldwide collection of documents is unified by standard file format and retrieval protocol standards to
allow document retrieval as if from a single library.

</TABLE>

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<PAGE> 8

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the information and
financial statements (including the notes thereto) appearing elsewhere in this
Prospectus all share amounts reflected herein give effect to a 1-for-4 reverse
stock split effective November 11, 1996 to shareholders of record on October
31, 1996.

THE COMPANY

The Company is a Minneapolis-based technology company focused on assisting
large companies in designing and implementing open, integrated solutions for
managing and distributing business-critical information across and outside
their enterprises. The Company is divided into the following three distinct
business groups: (i) IntraNet Integration Group, which provides open
client-server products to assist companies in managing their intellectual
capital, including hardware and software products, as well as system
installation, support and training; (ii) IntraNet Distribution Group, which
offer customers various service for off-site electronic document warehousing,
electronic demand publishing and multiple methods of digital distribution of
information and (iii) IntraNet Professional Services Group, which is involved
in product development, project management and customized software
applications.

The Company's products and services provide integrated solutions for the
management and distribution of business-critical information contained in
documents. The Company has focused its marketing efforts toward large
companies who have begun to more aggressively reengineer their business
processes. The Company believes that as the trend toward network-based
computing environments as the primary computing resource continues, the demand
for its products, especially its recently developed proprietary products, will
continue. The Company delivers its products primarily through a direct sales
force and currently has more than 250 clients, principally in the Fortune 1000.
The Company currently has operations in Minneapolis, Atlanta, Boston, Denver,
Milwaukee and Phoenix.

On July 30 and 31, 1996, the Company's predecessor, MacGregor Sports and
Fitness, Inc. ("MSF") and IntraNet Integration Group, Inc., a Minnesota
corporation ("IntraNet," formerly known as Technical Publishing Solutions, Inc.
("TPSI")) closed on a tax-free reorganization pursuant to which IntraNet
became a wholly-owned subsidiary of the Company, and MSF changed its name to
IntraNet Solutions, Inc. The transaction was accomplished through a tax-free
reverse subsidiary merger whereby IntraNet merged with and into a wholly owned
subsidiary of MSF, with IntraNet as the surviving corporation (the "Merger").
Accordingly, all financial information provided in this Prospectus for dates
prior to the Merger is that of IntraNet.

The Company was incorporated in the State of Minnesota in November, 1990.
The Company's corporate headquarters are located at 9625 W. 76th Street Suite
150, Minneapolis, Minnesota 55344. The Company's telephone number is (612)
903-2000.

<PAGE> 9

THE OFFERING

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<S> <C>
Securities Offered by the Company......... 435,167 shares of Common Stock that are
issuable upon exercise of the outstanding
Warrants.
Securities Offered by Selling
Shareholders............................. 245,579 shares of Common Stock.
Common Stock Outstanding Before this
Offering................................. 7,440,606 shares of Common Stock
Common Stock Outstanding After this
Offering................................. 7,875,773 shares of Common Stock(1)
Use of Proceeds........................... Day-to-day working capital needs. The
Company will not receive any proceeds
from the sale of securities by the
Selling Shareholders. See "Use of
Proceeds."
Risk Factors.............................. This offering involves a high degree of
risk and immediate substantial dilution.
See "Risk Factors" and "Dilution."
NASDAQ Small Cap
Market(SM) Symbols....................... INRS Common Stock
INRSW Redeemable Warrants(2)
INRSU Units(3)
</TABLE>

(1) Includes 435,167 shares of Common Stock that may be issued upon
exercise of the Warrants.

(2) The Redeemable Warrants will cease to trade on NASDAQ upon their full
exercise or earlier redemption.

(3) Each Unit consists of one share of Common Stock and one warrant to
purchase one share of Common Stock at an exercise price of $4.00.

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SUMMARY CONSOLIDATED FINANCIAL INFORMATION

<TABLE>
<CAPTION>
THREE MONTH
FISCAL YEAR ENDED PERIOD ENDED
MARCH 31, JUNE 30,
1995 1996 1995 1996
--------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues $10,446,661 $14,235,742 $2,851,243 $4,180,934
Cost of revenues 7,600,690 10,708,253 2,060,322 3,264,005
----------- ----------- ---------- ----------
Gross profit 2,845,971 3,527,489 790,921 916,929
Operating expenses 2,612,262 3,670,773 792,945 1,304,604
Interest expense 97,033 230,293 27,737 48,173
----------- ----------- ---------- ----------
Income (loss) before income taxes 136,676 (373,577) (29,761) (435,848)
Provision for (benefit of) income taxes 64,553 (125,770) 0 (150,000)
----------- ----------- ---------- ----------
Net income (loss) $ 72,123 $ (247,807) $ (29,761) $ (285,848)
=========== =========== ========== ==========
Net income (loss) per share $ 0.01 $ (0.03) $ (0.00) $ (0.04)
=========== =========== ========== ==========
Shares used in per share calculation 7,351,516 7,351,516 7,351,516 7,351,516
=========== =========== ========== ==========
</TABLE>

<TABLE>
<CAPTION> JUNE 30, 1996
-------------------------------------------
MARCH 31, 1996 PRO FORMA, AS
ACTUAL ACTUAL PRO FORMA (1) ADJUSTED(1)(2)
------------ ------------- ------------- --------------
<S> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Working capital.................. $(1,076,767) $(1,546,432) $1,753,568 $ 3,134,300
Total assets..................... 5,712,866 6,201,318 8,951,318 10,332,050
Long-term debt................... 706,406 618,931 618,931 618,931
Shareholders' equity
(deficiency).................... (21,183) $ (277,070) 3,022,930 4,403,662
</TABLE>

(1) Assumes completion of the Merger on June 30, 1996. See "Prospectus
Summary."

(2) As adjusted to reflect the exercise of all of the Warrants and the receipt
of the net proceeds therefrom. Does not include (i) 2,500,000 shares of
Common Stock reserved for issuance under the Company's 1994-1997 Stock
Option Plan of which 1,433,523 have been granted and (ii) 219,512 shares
of Common Stock issuable upon exercise of certain warrants which shares
are not registered hereunder. There can be no assurance that any or all
of the Warrants will be exercised.

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RISK FACTORS

The securities offered hereby are speculative in nature, involve a high
degree of risk and an investment in the securities should not be made by any
investor who cannot afford the loss of his or her entire investment. Prior to
making an investment decision with respect to the securities offered hereby,
prospective investors should carefully consider, along with the other matters
discussed in this Prospectus, the following risk factors:

Lack of Profitability. The Company had a net loss of $285,848 for the
quarter ended June 30, 1996, and a net loss of $247,807 for the year ended
March 31, 1996. The Company had an accumulated deficit of $308,113 at June 30,
1996. The likelihood of success of the Company must be considered
in light of the problems, expenses, difficulties, complications and delays
frequently encountered in connection with the establishment of any company.
There is no assurance that the Company can operate profitably or that it will
successfully implement its expansion plans.

Need for Additional Financing. The Company's capital requirements depend
on numerous factors, including the progress of the Company's product
development programs, the resources the Company devotes to the development,
manufacture and marketing of its products, facilities requirements, market
acceptance and demand for its products, and other factors. The timing and
amount of such capital requirements cannot accurately be predicted.
Consequently, the Company believes that the approximately $3.0 million in gross
proceeds it derived from the Merger, together with operating revenues, and its
existing line of credit, will meet only its immediate anticipated needs for
working capital and capital expenditures.

The Company will be required to raise additional funds through public or
private financings, through collaborative relationships or other arrangements.
The Company has recently retained a New York Stock Exchange member, investment
banking firm to act as its exclusive financial consultant for a one year term
to assist the Company in its capital formation efforts and to explore other
strategic opportunities.

Although the Company will require additional funding beyond the proceeds
of this offering, there can be no assurance that such additional funding will
be available on terms attractive to the Company, or at all. Any additional
equity financings may be dilutive to shareholders, and additional debt
financing, if available, may involve restrictive covenants. Collaborative
arrangements may require the Company to relinquish rights to certain of its
technologies, products or marketing territories. See "Use of Proceeds" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources."

Warrant Exercise; Current Prospectus and State Registration Required to
Exercise Warrants. Holders of Warrants will be able to exercise such Warrants
only if a current prospectus relating to the underlying securities is then in
effect and only if such Warrants are qualified for

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sale or exempt from qualification under the applicable securities
laws of the states in which the various holders of the Warrants reside.
Although the Company will use its best efforts to maintain the effectiveness of
a current prospectus covering such securities, there can be no assurance that
the Company will be able to do so. The Company will be unable to issue shares
of Common Stock to those persons desiring to exercise their Warrants if a
current prospectus covering the Common Stock issuable upon exercise thereof is
not kept effective or if such securities are not qualified nor exempt from
qualification in the states in which the holders reside. The Non-Redeemable
Warrants are not registered under federal or state securities laws and may not
be sold except pursuant to an exemption from registration and no public market
exists or is expected to develop for the Non-Redeemable Warrants. See
"Description of Securities -- Warrants."

Fluctuations in Future Operating Results. The Company's future operating
results may vary substantially from quarter to quarter. At its current stage
of operations, the Company's quarterly revenues and results of operations may
be materially affected by the timing of the development, introduction and
market acceptance of the Company's and its competitors' products. Product
development and marketing costs are often incurred in periods before any
revenues are recognized from the sales of products. Operating expenses are
higher during periods in which such product development costs are incurred and
marketing efforts are commenced. In addition, the irregular receipt of
significant contracts could add to quarter to quarter variation in operating
results. Due to these and other factors, including the general economy, stock
market conditions and announcements by the Company or its competitors, the
market price of the securities offered hereby may be highly volatile.

Dependence Upon Continued Market Expansion. The continued expansion of
the Company's business is dependent on the continued expansion of the markets
for which its products were developed. As such, the Company's future success
is dependent upon a continuation of the trend toward network-based computing
environments and the continued willingness of large businesses to reengineer
the processes they employ to create, store manage and distribute data. In
addition, the Company's future success is dependent upon the continued
expansion of the on-demand printing market. Any factors which have an adverse
impact on the continued expansion of these markets generally could have a
material adverse impact on the Company.

Risks Associated with Acquisitions. The Company's ability to achieve its
growth strategy depends in part on the success of the Company's efforts to
expand the Distribution Group concept to regional centers throughout the United
States and its ability to successfully acquire complementary businesses that
will facilitate the provision of integrated communications products and
services. The Company plans to evaluate several potential acquisitions,
primarily in complimentary software development areas, which it believes are
necessary to expand its presence in the document management marketplace. It is
anticipated that funds required for future acquisitions and expansion will be
provided from operating cash flow, the proceeds expected from future debt or
equity financings and proceeds from future borrowings. However, there can be no
assurance that suitable acquisitions candidates will be available to the
Company on favorable terms, that suitable financing for any such acquisitions
or expansion can be obtained by the

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Company, that the Company will be able to integrate successfully acquired
businesses into the Company's existing operations, or that any such acquisitions
or expansions will occur. To the extent it is unable to do so, the Company's
business, operating results and financial condition could be adversely affected.

On October 16, 1996, the Company signed a letter of intent to acquire
substantially all the assets of an established, privately-held custom printing
and graphic communications business located in the southwestern United States,
which had revenues of approximately $3.0 million in its most recent fiscal year
and a history of operating profits. The Company believes this potential
strategic acquisition will give it the opportunity to expand its web-based
document distribution market and its on-demand printing network with an
established operation in the southwest. The acquisition, valued at
approximately $1.8 million, is expected to consist of cash, IntraNet Solutions
common stock and the assumption of certain liabilities. The Company and the
sellers are currently negotiating a definitive agreement, however, there can be
no assurance that such agreement shall ever be entered into, be on the terms
set forth above, or that if entered into, will ever close.

Dependence on Narrow Product Line; Technology Risks; Risk of Market
Acceptance. The Company's future success will depend, to a large extent, on
its ability to increase sales from existing products and derive sales from new
products. There can be no assurance that the Company will be able to further
penetrate the market with its existing products and to introduce and gain
acceptance of its new products. The market is highly competitive and
characterized by rapid innovation and technological change. The Company's
products were specifically designed to meet the needs of the document
management market, but other companies have also introduced or announced the
development of products designed to address the same markets as the Company's
products. The Company's ability to maintain a competitive position will also
depend on its ability to develop enhancements and upgrades to its existing
product line. In addition, technological advances that would make the
Company's products less attractive to current and potential customers could
adversely impact the business of the Company. The Company's plans with respect
to the development of new products are subject to the risks inherent in the
development and marketing of complex software products, including the risks
that the release of the product may be delayed, errors may be found in the
product after its release despite extensive testing, and discovered errors may
not be corrected in a timely manner. Further, the commercial success of the
Company's products will depend on the willingness of potential customers to
perform and accept the use of the Company's products to create, manage and
distribute unstructured business-critical data.

Dependence on Development of New Products. The Company's future strategy
to extend its product line will depend on its ability to design, develop and
market new and innovative products. There can be no assurance that the
Company's will be successful in introducing new products. The Company's
devotes resources to research and development and believes it will have
sufficient resources to support its research and development efforts. However,
there can be no assurance that the level of research and development expenses
necessary for the Company to remain competitive will be as currently
anticipated or that the Company's revenues will be sufficient to cover its
research and development costs.

Intellectual Property. In the absence of significant patent or copyright
protection, the Company may be vulnerable to competitors who attempt to develop
functionally equivalent products. Although the Company believes that it has all
rights necessary to market its products without infringing upon any patents,
copyrights or trademarks held by others, there can be no assurance that
conflicting patent, copyright or trademark rights do not exist. The Company
relies upon trade secret protection for its confidential and proprietary
information. There can be no assurance that others will not independently
develop substantially equivalent proprietary information and techniques or
otherwise gain access to the Company's trade secrets or disclose such
technology, or that the Company can meaningfully protect its trade secrets.
The Company

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<PAGE> 14

has applied for trademark registration for the following marks: INTRANET,
INTRANET SOLUTIONS, DOCUMENT REFINERY, WEB REFINERY, WEB VAULT, Intra.doc!,
Intra.plt!, Intra.img! and Intra.rpt!. There can be no assurance that any
trademarks which have been applied for but not yet issued will be issued. In
the absence of trademark protection, the Company may be unable to take advantage
of the brand name recognition it is attempting to build. Further, even if all
trademarks applied for are issued, there can be no assurance that such
trademarks will prove valuable to the Company.

Dependence Upon Key Vendor Relationships. The Company's is materially
dependent on Sun Microsystems, Inc. and Interleaf, Inc. for the supply of the
hardware and non-proprietary software products sold as part of its systems.
The Company does not currently have a secondary source of supply for these
products. Any disruption in the relationship between the Company and either of
Sun Microsystems, Inc. or Interleaf, Inc. would have a material adverse impact
on the Company.

Dependence on Key Personnel; Need for Additional Employees. The Company
is currently greatly dependent on the personal knowledge and experience of
Messrs. Olson and Sjobeck. The Company believes that its senior management
team has knowledge which, due to the Company's relatively small size, is
personal to such individuals and has not been institutionalized. As such, the
loss of any of these key personnel could be detrimental to the Company. To
avoid the negative impact which the loss of a senior manager could have on the
Company, as well as to achieve its business plan, the Company must hire
additional employees at various operational levels. The future development and
success of the Company will depend in part upon its ability to attract and
retain additional personnel with the highly specialized expertise necessary to
provide, engineer, design and support the integration of such products and
services. There can be no assurance that the Company will be able to attract or
retain such personnel or that the hiring and retention of such personnel will
result in the institutionalization of vital information.

Significant Competition. Some of the Company's competitors currently
marketing products into the document management market are more established
than the Company and have the benefits of pre-existing relationships with
potential customers and greater name recognition than the Company. Some of the
Company's current and potential competitors have significantly greater
technical, financial, and marketing resources than the Company. Although the
Company believes it competes effectively with respect to such factors, there
can be no assurance that the Company will have the financial resources,
technical expertise or marketing, distribution or support capabilities to
compete successfully in the future.

Former Shareholder Lien. Prior to the Merger, TPSI redeemed 50% of its
outstanding shares of its common stock from a former shareholder and director
for $200,000 on July 31, 1995. TPSI paid $150,000 of the purchase price in
cash and delivered a $50,000 note to the former shareholder for the balance of
the purchase price. The note requires annual principal payments of $10,000 and
matures in August, 2000. TPSI also entered into Consulting and Non-Competition
Agreements with the former shareholder. To secure the purchase price of the

-7-

<PAGE> 15

redeemed shares and TPSI's monetary obligations under the agreements, TPSI
pledged the redeemed shares to the former shareholder as collateral. The
Company has met, and intends to meet its monetary obligations to the former
shareholder, in the event it should fail to do so, the former shareholder may
be able to assert a claim of ownership interest in the Company. If the Company
were to fail to make payment to the former shareholder and the former
shareholder were successful in obtaining an ownership interest in the Company,
the value of the shares of Common Stock would be reduced substantially.

Control by Founder. TPSI's founder, Mr. Robert F. Olson, holds
approximately 54% of the Company's outstanding Common Stock. As such, Mr.
Olson is be able to exercise control over the business policies and affairs of
the Company. Additionally, directors, executive officers and principal
shareholders of the Company, and certain of their affiliates, will beneficially
own approximately 63.0% of the Company's outstanding Common Stock upon
completion of this offering (assuming full exercise of all of the Warrants).
Accordingly, these persons, individually and as a group, effectively control
the Company and can direct its affairs and business, including all
determinations with respect to the acquisition or disposition of assets by the
Company, future issuances of Common Stock or other securities by the Company,
and any dividend payable on the Common Stock. Such concentration of ownership
may also have the effect of delaying, deferring or preventing a change in
control of the Company. See "Principal and Selling Shareholders."

Effects of Delisting from Nasdaq SmallCap Market; Lack of Liquidity of Low
Priced Stocks. If the Company fails to maintain the qualification for its
Common Stock to trade on the Nasdaq SmallCap Market, its securities would be
delisted from the Nasdaq SmallCap Market. Factors giving rise to such delisting
could include, but not be limited to, a reduction of the Company's assets to
below $2,000,000, stockholder's equity being reduced to below $1,000,000, a
minimum bid price being less than $1.00 per share, a reduction to one active
market maker or a reduction in the value of the Company's publicly held
securities to less than $250,000. In such event, trading, if any, in the
Common Stock would thereafter be conducted in the over-the-counter markets in
the so-called "pink sheets" or the National Association of Securities Dealer's
"Electronic Bulletin Board." Consequently, the liquidity of the Company's
Common Stock would likely be impaired, not only in the number of shares which
could be bought and sold, but also through delays in the timing of the
transactions, reduction in security analysts' and the news media's coverage if
any, of the Company and lower prices for the Company's securities than might
otherwise prevail. If the Company's Common Stock were to be delisted from the
Nasdaq SmallCap Market, it would become subject to Rule 15g-9 under the
Exchange Act (the "Penny Stock Rules"), which imposes additional sales practice
requirements on broker-dealers which sell such common stock to persons other
than established customers and certain institutional investors. For
transactions covered by this rule, a broker-dealer must make a special
suitability determination for the purchasers and have received the purchaser's
written consent to the transaction prior to sale. Consequently, the Penny
Stock Rules may adversely affect the ability of broker-dealers to sell the
Company's Common Stock and may adversely affect the ability of the Company's
shareholders to sell any of their shares of Common Stock in the secondary
market.

-8-
<PAGE> 16

Demand and Piggy-Back Registration Rights. Certain shareholders and
warrant holders of the Company, including, Robert F. Olson, have the right,
subject to certain conditions, to participate in and demand registrations and
to cause the Company to register certain shares of Common Stock owned by them
encompassing approximately 4.75 million shares of Common Stock. Pursuant to
these registration rights, if the Company proposes to register any of its
Common Stock, other than in certain specified instances, on its own behalf or
on account of others, such holders are entitled to notice of such registration
and must be given the opportunity to participate. In certain circumstances,
the holders also have the right to demand that the Company file a registration
statement covering such shares. These demand and piggyback registration rights
are subject to certain terms and limitations.

Absence of Dividends. The Company has never paid cash dividends on its
Common Stock and does not anticipate paying cash dividends in the foreseeable
future. See "Dividend Policy."

Shares Eligible for Future Sale. Immediately following this offering,
assuming the exercise of all Warrants, and assuming no exercise or conversion
of any other securities, there will be an aggregate of 4,420,969 shares of
Common Stock outstanding that will be freely tradable without restriction
except for volume limitations on sales by affiliates under Rule 144 under the
Securities Act ("Rule 144"). The Company will issue 183,500 shares of Common
Stock in the event all the Redeemable Warrants are exercised and will issue
251,667 shares of Common Stock in the event all the Non-Redeemable Warrants
are exercised, all of which are registered and will be freely tradable without
restriction except for volume limitations on sales by affiliates under Rule
144. The Company may issue up to an additional 1,066,477 shares under its
employee stock option plan. The Company may issue additional options,
warrants, or equity securities in the future. The sale, or availability for
sale, of substantial amounts of Common Stock in the public market subsequent
to this offering could adversely affect the prevailing market price of the
Common Stock and could impair the Company's ability to raise additional capital
through the sale of its equity securities.

Dilution. An individual who exercises a Redeemable Warrant, assuming all
other such securities are exercised simultaneously, will experience immediate
and substantial dilution of $3.57 per share, respectively, in that the exercise
price of the Redeemable Warrants exceeds the per share net tangible book value
of the Company after giving effect to the exercise of all the Redeemable
Warrants. An individual who exercises a Non-Redeemable Warrant, assuming all
other such securities are exercised simultaneously, will experience immediate
and substantial dilution of approximately $2.92 per share, in that the weighted
average exercise price of the Non-Redeemable Warrants exceeds the per share net
tangible book value of the Company after giving effect to the exercise of all
the Non-Redeemable Warrants, but none of the Redeemable Warrants. Purchasers
in this offering may experience further dilution upon exercise of any remaining
outstanding warrants and options. The Company may issue additional options,
warrants, or equity securities in connection with future financings which may
result in further dilution, and may necessitate anti-dilution adjustments to
outstanding warrants and options. The Company currently

-9-
<PAGE> 17

has options outstanding to purchase approximately 1,433,523 shares of its
Common Stock and Warrants outstanding to purchase approximately 654,679 shares
of its Common Stock. The exercise price of these options and Warrants range
from $0.20 to $10.40. See "Dilution" and "Description of Securities."

Volatility of Stock Price. The market prices of the Company's securities
have experienced and may continue to experience substantial volatility. The
securities markets have from time to time experienced significant price and
volume fluctuations that may be unrelated to the operating performance of
particular companies. The market prices of the common stock of many publicly
traded technology companies have in the past been, and can in the future be
expected to be, especially volatile. Announcements of technological
innovations or new products by the Company or its competitors, developments or
disputes concerning patents or proprietary rights, and economic and other
external factors, as well as period-to-period fluctuations in the Company's
financial results, may have a significant impact on the market price of the
Common Stock.

Determination of Exercise Price. The exercise prices of the Warrants were
determined by negotiation between the Company and the Warrant holders and are
not necessarily related to the Company's asset value, net worth or other
established criteria of value and should not be construed to be predictive of
or to imply that any price increases will occur in the Company's securities.

Voting Control; Potential Anti-Takeover Effect. The Company's
shareholders do not have the right to cumulative voting in the election of
directors. The Company is subject to Minnesota statutes regulating business
combinations and restricting voting rights of certain persons acquiring shares
of the Company, which may hinder or delay a change in control of the Company.

-10-
<PAGE> 18

USE OF PROCEEDS

The Company intends to utilize the net proceeds after expenses from the
exercise of the Warrants, estimated to be approximately $1,400,000 for
day-to-day working capital requirements and a reduction in the Company's
Revolving Credit Line. Borrowings under the Company's Revolving Line of Credit
accrue interest at the bank's base lending rate plus 2.5% (10.75% as of June
30, 1996). The reduction of indebtedness upon application of the net proceeds
of this offering will enhance the Company's capacity to finance development
of the products, skills and technologies and further enable the Company to
explore those strategic acquisitions necessary to achieve the Company's growth
strategy. In this regard, on October 16, 1996, the Company signed a letter of
intent to acquire substantially all the assets of an established,
privately-held custom printing and graphic communications business located in
the southwestern United States, which had revenues of approximately $3.0
million in its most recent fiscal year and a history of operating profits. The
Company believes this potential strategic acquisition will give it the
opportunity to expand its web-based document distribution market and its
on-demand printing network with an established operation in the southwest. The
acquisition, valued at approximately $1.8 million, is expected to consist of
cash, IntraNet Solutions common stock and the assumption of certain
liabilities. The Company and the sellers are currently negotiating a
definitive agreement, however, there can be no assurance that such agreement
shall ever be entered into, be on the terms set forth above, or that if entered
into, will ever close.

The foregoing represents the Company's best estimate of the use of the net
proceeds of the offering based upon the current status of its business. Future
events, including the problems, expenses, difficulties, complications, and
delays frequently encountered by newer businesses, as well as changes in the
economic climate and/or the Company's operations, may make revisions in the
allocation of funds necessary or desirable. Any such revisions in the
allocation of proceeds will be made at the discretion of the Board of Directors
of the Company.

The Company will not receive any proceeds from the sale of the shares
being sold by the Selling Shareholders.

DIVIDEND POLICY

To date, the Company has not declared or paid any dividends with respect
to its capital stock, and the current policy of the Board of Directors is to
retain any earnings to provide for the growth of the Company. Consequently, no
cash dividends are expected to be paid on the Company's Common Stock in the
foreseeable future. The Company's Revolving Credit Facility contains covenants
which prevent the Company from paying cash dividends. Further, there can be no
assurance that the operations of the Company will generate the funds needed to
declare a cash dividend or that the Company will have legally available funds
to pay dividends.

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<PAGE> 19

DILUTION

The net tangible book value of the Company (giving effect to the Merger as
if it had occurred on June 30, 1996) as of June 30, 1996 was $2,749,905 or
approximately $.37 per share. Net tangible book value represents the amount of
the Company's tangible assets less all liabilities. Without taking into
account any further changes in net tangible book value after June 30, 1996,
other than to give effect to (i) the exercise of the Redeemable and
Non-redeemable Warrants and (ii) the application of the net proceeds therefrom,
the pro forma net tangible book value as of such date would have been
$4,130,637 or approximately $.56 per share ($3,396,637 or approximately $.44
per share if only the Non-redeemable Warrants are considered and $3,283,905 or
approximately $.43 per share if only the Redeemable Warrants are considered).
This represents an immediate dilution to investors exercising Warrants of
approximately $3.07 per share ($2.92 with respect to the Non-redeemable
Warrants only and $3.57 with respect to the Redeemable Warrants only).
"Dilution" represents the difference between the weighted average exercise
price per share paid by investors exercising their Warrants and the Pro Forma
Net Tangible Book Value. There can be no assurance that any or all of the
Warrants will be exercised.

REDEEMABLE NON-REDEEMABLE
ALL WARRANTS WARRANTS
WARRANTS ONLY ONLY (1)
<S> <C> <C> <C>
Exercise price or weighted
average exercise price per
share $3.63 $4.00 $3.36
Net tangible book value
per share before exercise 0.37 0.37 0.37
Increase per share
attributable to exercise 0.19 0.06 0.07
Pro forma net tangible book
value per share after exercise 0.56 0.43 0.44
Dilution of exercise price or
weighted average exercise
price per share 3.07 3.57 2.92
</TABLE>

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

(1) The per share exercise price of the Non-Redeemable Warrants is $9.00
with respect to 18,750 Non-Redeemable Warrants, $6.00 with respect to
19,400 Non-Redeemable Warrants, $4.00 with respect to 111,046
Non-Redeemable Warrants, $2.32 with respect to 43,077 Non-Redeemable
Warrants, and $.294 with respect to 59,394 Non-Redeemable Warrants.

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<PAGE> 20

CAPITALIZATION

The following table sets forth the Capitalization of the Company at June
30, 1996, as adjusted to reflect the exercise of all of the Warrants, and the
receipt of the net proceeds therefrom. See Consolidated Financial Statements.

<TABLE>
<CAPTION>
PRO FORMA, AS
-------------
ACTUAL PRO FORMA(1) ADJUSTED(1)(2)
---------- ------------ --------------
<S> <C> <C> <C>
Long-term debt, net of current portion 618,931 618,931 618,931
Stockholders' Equity (Deficiency):
Common stock,$.01 par value,
12,500,000 shares authorized, 2,513,355
shares issued and outstanding, 7,440,606
on a pro forma basis and 7,875,773,
pro forma, as adjusted 25,133 74,404 78,758
Additional paid-in capital 20,896 3,271,625 4,648,003
Retained earnings (deficit) (308,113) (308,113) (308,113)
Unearned compensation (14,986) (14,986) (14,986)
--------- ---------- ----------
Total stockholders' equity (deficiency) (277,070) 3,022,930 4,403,662
--------- ---------- ----------
Total capitalization $ 341,861 $3,641,861 $5,022,593
========= ========== ==========
</TABLE>

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

(1) Assumes completion of the Merger on June 30, 1996. (See "Prospectus
Summary")

(2) As adjusted to reflect the exercise of all of the Warrants and the receipt
of the net proceeds therefrom. Does not include (i) 2,500,000 shares of
Common Stock reserved for issuance under the Company's 1994-1997 Stock
Option Plan of which 1,433,523 have been granted and (ii) 219,512 shares of
Common Stock issuable upon exercise of certain warrants which shares are not
registered hereunder. There can be no assurance that any or all of the
Warrants will be exercised.

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<PAGE> 21

PRICE RANGE OF SECURITIES

The Company's Common Stock, Redeemable Warrants and Units have traded
separately in the over-the-counter market through the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") under the symbols INRS,
INRSW, and INRSU, respectively, since July 31, 1996. Prior to the Merger, the
Common Stock, Redeemable Warrants, and Units traded under the symbols MACG
MACGW and MACGU, respectively. Trading in the Redeemable Warrants will cease
upon their exercise in full or upon their earlier redemption. The following
table sets forth the range of high and low bid prices for the Common Stock, and
Redeemable Warrants and Units for the periods indicated, as reported by NASDAQ.
The quotes represent "Inter-Dealer" prices without adjustment or mark-ups,
mark-downs or commissions and may not necessarily represent actual transactions.
On November 4, 1996, the last bid price of the Common Stock was $8.00. No
Redeemable Warrants or Units traded on such date. As of November 4, 1996, the
Company had approximately 125 record holders of Common Stock.

<TABLE>
<CAPTION>
REDEEMABLE
COMMON STOCK WARRANTS UNITS
HIGH LOW HIGH LOW HIGH LOW
---- --- ---- --- ---- ---
<S> <C> <C> <C>
Fiscal 1995:
- ------------
First Quarter ended 6/30/94 3.000 1.500 0.750 0.500 3.000 2.000
Second Quarter ended 9/30/94 3.750 1.000 1.500 0.375 4.500 1.750
Third Quarter ended 12/31/94 3.250 2.625 1.500 1.000 4.125 3.500
Fourth Quarter ended 3/31/95 7.750 2.500 1.750 1.000 6.250 3.000

Fiscal 1996:
- ------------
First Quarter ended 6/30/95 4.000 2.875 1.563 1.250 5.000 4.000
Second Quarter ended 9/30/95 6.250 3.000 3.5000 1.188 10.000 4.000
Third Quarter ended 12/31/95 14.000 5.000 10.250 2.750 20.500 8.500
Fourth Quarter ended 3/31/96 16.250 8.750 12.500 5.500 26.000 15.500

Fiscal 1997:
- ------------
First Quarter ended 6/30/96 23.500 9.500 18.500 5.250 43.000 17.000
Second Quarter ended 9/30/96 21.000 8.000 16.250 4.000 31.000 17.500
Third Quarter (through November 4, 1996) 10.500 6.000 6.000 3.000 NT
</TABLE>

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<PAGE> 22

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

INTRODUCTION

The Company is a Minneapolis-based technology company focused on assisting
large companies in designing and implementing open, integrated solutions for
managing and distributing business-critical information across and outside
their enterprises. The Company is divided into three distinct business groups,
including: (i) IntraNet Integration Group which provides open client-server
products to assist companies in managing their intellectual capital, including
hardware and software products, as well as system installation, support and
training; (ii) IntraNet Distribution Group, which offer customers various
service for off-site electronic document warehousing, electronic demand
publishing and multiple methods of digital distribution of information and
(iii) IntraNet Professional Services Group which is involved in product
development, project management and customized software applications.

Except for the historical information contained herein, certain matters
discussed in this prospectus are forward-looking statements which involve risks
and uncertainties, including, but no limited to, economic, competitive,
governmental and technological factors affecting the Company's operations,
markets, products, services and prices and other factors discussed in the
Company's filings with the Securities and Exchange Commission. Therefore, if,
for any reason, the Company's planned operations require more capital than
anticipated, revenues do not increase as planned, or operating income is less
than planned, the Company may need additional financing in order to maintain
its operations. There can be no assurances that the Company would be able to
obtain any such required financing, if and when needed, or that such financing,
if obtained, would be on terms and conditions favorable or acceptable, to the
Company.

RESULTS OF OPERATIONS

Quarter Ended June 30, 1995 Compared to the Quarter End June 30, 1996

For the quarter ended June 30, 1996, total revenues increased to $4.2
million from $2.9 million for the same period in 1995, or $1.3 million (46.6%).
This increase resulted primarily from increases in hardware integration
revenues of $1.0 million ($1.4 million in 1995 compared to $2.4 million in
1996) and increased distribution service revenue of $400,000 ($300,000 in 1995
compared to $700,000 in 1996). The Company's software, technical and support
revenues declined slightly, primarily due to a focus on development of
proprietary software products.

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<PAGE> 23

Cost of hardware integration revenues was $1.2 million for the first
quarter of 1995 and $2.0 million for the first quarter of 1996. Cost of
hardware integration revenues as a percent of hardware integration revenues was
83.2% for the first quarter of 1995 compared to 83.7% for the first quarter of
1996.

Cost of software, technical services, and support revenues was $700,000
for both the first quarter of 1995 and 1996. Cost of software, technical
services, and support revenues as a percent of software, technical services,
and support revenue was 59.1% for the first quarter of 1995 compared to 67.9%
for the first quarter of 1996. Lower margins on software, technical services
and support were primarily due to competitive pricing on non-custom software
products and lower technical service billings.

Cost of distribution services revenue was $200,000 for the first quarter
of 1995 compared to $500,000 for the first quarter of 1996. Cost of
distribution services revenues as a percent of distribution services revenue
was 70.1% for the first quarter of 1995 compared to 75.0% for the first quarter
of 1996. Lower margins on distribution services were primarily due to large
fixed costs associated with additional high speed laser printing devices and
expansion costs related to the opening of locations in Denver and Boston.

Sales and marketing expenses were $400,000 for the first quarter of 1995
compared to $600,000 for the first quarter of 1996. Sales and marketing
expenses as a percent of total revenues were 12.4% for the first quarter of
1995 compared to 13.9% for the first quarter of 1996. Sales and marketing
expenses increased as a percent of revenues primarily due to increases in
staffing and marketing programs.

General and administrative expenses increased by $100,000 from $300,000
for the first quarter of 1995 compared to $400,000 for the first quarter of
1996. General and administrative expenses as a percent of total revenue were
10.2% for the first quarter of 1995 compared to 9.8% for the first quarter of
1996.

Research and development expenses were $100,000 for the first quarter of
1995 compared to $300,000 for the first quarter of 1996. Research and
development expenses as a percent of total revenue were 4.1% for the first
quarter of 1995 and 6.2% for the first quarter of 1996. Total research and
development expenses increased $200,000 for the first quarter of 1996 compared
to 1995 due to a focus on development of proprietary software products.

Year Ended March 31, 1995 compared to the Year Ended March 31, 1996

In fiscal 1996, total revenues increased to $14.2 million from $10.4
million in fiscal 1995, or $3.8 million (36.3%). This increase related
primarily to increases in hardware integration revenues of $3.2 million ($5.0
million in fiscal 1995 compared to $8.2 million in fiscal 1996) and increased
on-demand printing service revenue of $800,000 ($700,000 in fiscal 1995
compared to $1.5 million in fiscal 1996). The Company's on-demand printing
subsidiary (formed in August of 1994) operated for only eight months of the
comparable 1995 fiscal period. Software, technical and support revenues
declined by approximately $200,000 ($4.7 million in fiscal 1995 compared

-16-
<PAGE> 24

to $4.5 million in fiscal 1996) primarily due to a focus on development of
proprietary software products.

Cost of hardware integration revenues was $4.4 million in fiscal 1995 and
$6.8 million in fiscal 1996. Cost of hardware integration revenues as a
percent of hardware integration revenues was 86.7% in fiscal 1995 compared to
82.9% in fiscal 1996. Higher margins on hardware integration revenues were
achieved primarily by taking advantage of larger vendor discounts and other
volume incentives.

Cost of software, technical services, and support revenues were $2.9
million in fiscal 1995 and $2.8 million in fiscal 1996. Cost of software,
technical services, and support revenues as a percent of software, technical
services, and support revenue was 60.8% in fiscal 1995 compared to 61.9% in
fiscal 1996. Lower margins on software, technical services and support were
primarily due to competitive pricing on non-custom software products and lower
technical service billings.

Cost of on-demand printing services revenue was $400,000 in fiscal 1995
compared to $1.1 million in fiscal 1996. Cost of on-demand printing services
revenues as a percent of on-demand printing services revenue was 53.6% in
fiscal 1995 compared to 73.4% in fiscal 1996. Lower margins on on-demand
printing services were primarily due to larger fixed costs associated with a
second high speed laser printing device added in January, 1995.

Sales and marketing expenses were $1.2 million in fiscal 1995 compared to
$1.8 in fiscal 1996. Sales and Marketing expenses as a percent of total
revenues were 11.9% in fiscal 1995 compared to 12.8% in fiscal 1996. Sales and
marketing expenses increased as a percent of revenues primarily due to
increases in staffing and marketing programs.

General and administrative expenses increased by $300,000, from $900,000
in fiscal 1995 compared to $1.2 million in fiscal 1996. General and
administrative expenses as a percent of total revenue were 8.8% in fiscal 1995
compared to 8.3% in fiscal 1996. Increases in general and administrative
expenses were primarily attributable to growth in the business infrastructure
including an overall 46% increase in staffing.

Research and development expenses were $300,000 in fiscal 1995 compared to
$500,000 in fiscal 1996. Research and development expenses as a percent of
total revenue were 3.3% in fiscal 1995 and 3.5% in fiscal 1996. Total research
and development expenses increased $200,000 in fiscal 1996 compared to fiscal
1995 due to a focus on development of proprietary software products.

Depreciation and amortization expense was $100,000 in fiscal 1995 compared
to $159,000 in fiscal 1996. Depreciation and amortization expense increased by
$59,000 in fiscal 1996 compared to fiscal 1995 primarily due to the acquisition
of office and computer equipment.

-17-

<PAGE> 25

Interest expense was $100,000 in fiscal 1995 compared to $200,000 in 1996.
Interest increased by $100,000 in fiscal 1996 compared to fiscal 1995
primarily due to increased borrowings under the Company working capital
revolving line of credit.

LIQUIDITY AND CAPITAL RESOURCES.

Since its inception and prior to the Merger (see financial statement note
3), the Company has funded its operations primarily through revolving working
capital and term loans through banking institutions and capital equipment
leases. In December 1995, the Company issued $550,000 of unsecured convertible
notes to a limited number of accredited investors. The unsecured notes accrued
interest rate of 10%, and were converted into Common Stock immediately prior to
the Merger at a rate of $6.00 per share. See "Prospectus Summary."

As of June 30, 1996 the Company had cash and cash equivalents of $146,407.
Net cash used in operating activities for the quarter ended June 30, 1995 was
$272,000 compared to net cash provided by operations for the quarter ended June
30, 1996 of $5,000. Capital expenditures for the quarters ended June 30, 1995
and 1996, including equipment financed with capital lease obligations, were
$88,000 and $234,000 respectively.

The Company's revolving working capital line of credit allows for
borrowings of up to $1.5 million based on available collateral with interest at
the bank's base lending rate plus 2.5%. At June 30, 1996, the Company had
advances of $1.5 million, which are due on demand. At June 30, 1996, the
Company also had a term loan outstanding in the amount of $183,338. The term
loan requires monthly principal payments of $8,333 plus interest at the bank's
base lending rate plus 2.5%. At June 30, 1996 the Company also had a demand
note payable to its majority stockholder in the amount of $27,500 which accrues
interest at a rate of 12%.

The Company acquired a substantial portion of its distribution services
production equipment with capital lease obligations. These leases require total
monthly payments of $19,556 and carry interest rates between 14.6% and 16.6%.
The Company also has a long-term consulting agreement with a former stockholder
that requires monthly payments of $10,300 through July 2000.

The Company believes that the approximately $3.0 million in gross proceeds
it derived from the Merger along with its existing line of credit, will meet
only its immediate anticipated needs for working capital and capital
expenditures. The Company plans to expand its distribution group concept to
regional centers throughout the United States over the next three years. The
Company also plans to evaluate several potential acquisitions, primarily in
complimentary software development areas, which it believes are necessary to
expand its presence in the document management marketplace. Future financings,
if needed to pursue such short-term objectives, may result in dilution to
holders of Common Stock. It is anticipated that funds required for future
acquisitions and expansion will be provided from operating cash flow, the
proceeds expected from future debt or equity financings and proceeds from
future borrowings. However, there can be no assurance that suitable
acquisitions candidates will be identified by the Company in the future, that
suitable financing for any such acquisitions or expansion can be obtained by
the Company or that any such acquisitions or expansions will occur.

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<PAGE> 26

BUSINESS

GENERAL

The Company is a Minneapolis-based technology company focused on assisting
large companies in designing and implementing open, integrated solutions for
managing and distributing business-critical information across and outside
their enterprises. The Company is divided into three distinct business groups,
including: (i) IntraNet Integration Group which provides open client-server
products to assist companies in managing their intellectual capital, including
hardware and software products, as well as system installation, support and
training; (ii) IntraNet Distribution Group, which offer customers various
service for off-site electronic document warehousing, electronic demand
publishing and multiple methods of digital distribution of information and
(iii) IntraNet Professional Services Group which is involved in product
development, project management and customized software applications.

INTRANET INTEGRATION GROUP

The IntraNet Integration Group provides open, client-server products to
help companies manage their intellectual capital. Data communications
integration consists of consulting, design and implementation of local area
networks, wide area networks, client/server environments and other data and
image communications applications. These products range from powerful hardware
and software for solid system foundation and disaster recovery to
off-the-shelf, custom and proprietary Company software for document creation,
management, and distribution. Until 1994, all of these solutions were sold to
the Company's customers for use internally, running on customer's internal
networks or "intranets". IntraNet Integration Group revenues currently
represent approximately 57% of the Company's total revenues.

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<PAGE> 27

INTRANET DISTRIBUTION GROUP

In 1994, the Company expanded its services to include off-site production
and distribution services by forming a wholly-owned subsidiary, IntraNet
Distribution Group, Inc. (formerly known as DocuPro Services, Inc., "IDG").
IDG is a full-service demand publishing organization providing management and
control of document-based information, using the latest technology for
automating the publishing process, and sophisticated systems for remote
document management -- both of which help organizations manage information
better, reduce costs, save time, and prevent document waste by allowing
customers to take advantage of digital document management and distribution
technology with a minimal incremental investment, along with the added benefit
of maximizing their current technology investments. The range of IDG's
available products and services includes demand printing services, ranging from
printing and bindery to order fulfillment and shipping; secure document
warehousing and remote revision control and Internet publishing and electronic
delivery services including CD-ROM distribution applications, and Web access
services for distributing information using World Wide Web technology over a
private network or using the Internet. IDG also provides installation and
support and education to help organizations maximize their investments. IDG's
revenues currently represent approximately 16% of the Company's total revenues.

INTRANET PROFESSIONAL SERVICES GROUP

The IntraNet Professional Services Group concentrates its efforts in the
area of application development and software customization for organizations
with complex or demanding information management needs. As an integrator of
document management solutions, the Company's professional services group
automate repetitive or time-consuming tasks, or create custom-tailored
interfaces to suit a customer's document management needs. Examples of this
type of application development include: Web creation and management tools;
engineering data management; automatic parts catalog generation; custom
installers and viewers; automated document conversion and format clean-up;
application integration; and project management.

PRODUCTS

The Company has also jointly and independently developed a proprietary
line of software that seeks to make unstructured business data more accessible
to the ultimate consumer of a client's "corporate knowledge." The Company's
proprietary software product line includes: the Intra.doc! management system,
which automates the process of intranet web generation for the management and
viewing of unstructured business data using internet technology; the IntraNet
Remote Print Manager(TM) system which allows customers to manage and order
on-demand printing remotely using World Wide Web technology; and the IntraNet
Order Management(TM) system which facilitates the placement of print orders for
organizations that have multiple locations, such as retail chains.

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<PAGE> 28

The Intra.doc! (TM) Management System

The Company recently launched the release of a comprehensive system for
automatic management of documents on an internal or external World Wide Web
site called the Intra.doc! management system ("Intra.doc!(TM)"). Through the
Intra.doc!(TM) management system, a company can now automates the process of
IntraNet web generation for the management and viewing of unstructured
business-critical data using Internet technology. The Intra.doc!(TM) management
system also reduces the cost and time required to launch and maintain a
content-oriented Web site by automating hyperlink generation and content
updates and therafter continually updating a Web site with the most current
information.

The Company believes that Intra.doc! is able to fill a gap in current
"common gateway interface" ("CGI") technology between the repository of
business data, and the searching and viewing needs of Web site users. CGI-only
solultions are limited in their inability to use H TM L menu hierarchies. Thus
CGI users can view documents in the repository but often must do searches
manually, depending on the limitations of the repository. The Intra.doc!(TM)
management system overcomes both concerns by generating H TM L links
automatically and providing Web access to the information repository. It
refines the source documents directly into web-ready formats using architecture
that overcomes problems of volume, organization, and timely updates. Widely
diverse document types are automatically converted into one virtually universal
format for information searching and sharing.

This system is designed to move information through a three-layer
architecture. First, information in various formats is placed in repository
called the IntraNet Web Library, where it is structured and organized. Second,
information is converted by the IntraNet Web Refinery(TM) software and Document
Refinery(TM) software to the common HTML menu hierarchies and PDF or other
formats necessary for controlled publishing to a Web site. Third, users with
Netscape and other common Internet browsers can use easy navigational menus to
access the information they need, when they need it.

The Intra.doc! (TM) management system also eliminates the need to manually
generate links and navigation aids, overcomes database querying limitation,
provides revision control, allows diverse document types to be accessible on a
Web, and continually updates the site with the most current information.
Viewing capabilities are significantly expanded with the use of
Intra.doc! (TM). Any user on the system can view a document created in
virtually any application without having the origin software loaded on their
desktop.

When maintaining a Web site with the Intra.doc!(TM) management system, the
labor-intensive tasks of making information Web-ready are automated. More
importantly, the information itself becomes more accessible, up-to-date, and
meaningful to the users, while still preserving controls necessary for data
security.

Unless well-managed and well-structured, web managers find that more data
can actually mean a less useful system. Web sites become burdensome and
frustrating to control, uncommon document types such as CAD files cannot be
accommodated on the system, and the higher the volume of information, the more
labor-intensive the task. Many organizations are researching

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<PAGE> 29

internal Web sites as a means of controlled access to vital business data, but
while nearly all companies acknowledge they need document management systems to
remain competitive, many organization express concerns about the investment in
research, hardware, software, implementation, training and maintenance of the
system, and companies worry that today's technology will not adapt to
tomorrow's needs. The Intra.doc!(TM) management system attempts to addresses
each of these concerns.

The Company's Intra.doc!(TM) management system reduces the cost of
deployment, and the architecture of the system is specifically designed to
allow for future needs, such as increasing volumes of information, new and
diverse document types, and advances in Web technology. Intra.doc!(TM) provides
an information flow that structures and manages high volumes of data for
timely, organized knowledge distribution.

The Company believes that the following features of the Intra.doc!(TM)
management system may provided advantages over existing technologies:

- The IntraNet Web Library. The IntraNet Web Library feature of the
Intra.doc!(TM) management system is a storage and control repository
for information that allows document-based data to be
custom-structured to suit the needs of users. Information is checked
into the Web Library, where meta-data for each document -- such as its
format, version, title, subject and group -- is recorded. In the Web
Library, the meta-data is used to organize files so that different
groups within an organization can find the information they need, when
they need it. For example, an engineering and manufacturing firm might
need to retrieve data by part number for the manufacturing group, by
catalog number for the sales and marketing group, by drawing file name
for the engineering group, and by vendor name for the purchasing
group. Without hierarchical structure, this would be unmanageable.
With the Intra.doc!(TM) management system, an ever-expanding quantity
of information can be accommodated and organized.

- The IntraNet Web Refinery and Document Refinery. The IntraNet
Web Refinery and Document Refinery features of the Intra.doc!(TM)
management system work in concert to press the data out to a Web site
for use either as an internal means of sharing information, or to a
public Web site for use by customers or others outside the
organization. The Intra.doc!(TM) management system automatically
generates the hyperlinks, navigation tools, file formats and
information protocols necessary for genuine Web-readiness. This
system is based on the most commonly accepted standards for the flow
of information. The Web Refinery uses the meta-data for each document
to control the retrieval and organization of information. It
configures the meta-data to meet the HTML standards for World Wide
Web publishing, generating the hyperlinks and navigational aids. At
the same time, the Document Converter retrieves the document itself,
converting it to the PDF/Acrobat format that has the ability to
preserve the graphic look, feel, and layout of a document. Because
information is automatically made Web-ready, documents become
accessible on the Web without delay, ensuring that the most
up-to-date information is available to users.

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<PAGE> 30

- Expanded Viewing Capabilities. With the Intra.doc!(TM) management
system, viewing capabilities are expanded. Any user on the system can
view a document created in virtually any application. The user need
not have a CAD program loaded on their desktop to view a CAD drawing.
Data security is still well-protected. Restrictions can be placed on
any document or user to prevent viewing without permission, and to
restrict editing permissions to specific users.

IntraNet Remote Print Manager(TM)

In November of 1995 the Company introduced its proprietary IntraNet Remote
Print Manager(TM) ("RPM") system. This interface allows customers to "check in,"
electronically order and then retrieve documents for revision using a data
vault system that controls accuracy and security.

Using a data vault system that controls accuracy and security, users of
the interface can send copies of documents -- either electronically or
physically -- to IDG for electronic document warehousing. Once the documents
have been stored, customers then access them via the Internet or with a modem,
retrieve then to the users' desktop for revision or viewing in their native
applications - Interleaf documents into Interleaf, Printerleaf files into
WorldView, CAD drawings into their original CAD program, and so forth.

The security and integrity of the documents are insured while warehoused;
passwords are used to restrict access to authorized users, and offsite storage
of valuable documents provides an added backup in case of disaster. Once the
revisions are complete, the documents are checked back into the vault, where
revision histories are controlled and kept. The latest information is stored
there for viewing or editing by authorized users. This system can also be used
for high-speed PostScript output of large or frequently produced documents. The
RPM interface gives users an easy mechanism for check-in, check-out, and
viewing of information from document repositories such as the Interleaf
relational Document Manager (RDM) vault.

Using the abilities of the data vault, customers can view and confirm
documents prior to printing, improving accuracy and timeliness. Because
complete bindery and print support services are also available, virtually every
aspect of a print job can be ordered remotely. Finished printed documents can
be shipped directly from IDG and electronic documents can be sent via the World
Wide Web. Using IntraNet RPM to access and revise documents over the Internet
is ideal for companies with remote locations, remote customer sites, or
distribution channels.

IntraNet Order Management(TM)

The IntraNet Order Management(TM) system facilitates the placement of print
orders for organizations that have multiple locations, such as retail chains.
Each location can order according to their needs, while the central office
receives accurate cost-accounting reports by location.

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<PAGE> 31

SUPPLIERS

To date, the majority of the hardware and software products sold by the
Company have been through reseller arrangements with Sun Microsystems, Inc.
("Sun") and Interleaf, Inc. ("Interleaf'), although the Company maintains its
own internal development staff which has provided the customization required by
a significant number of implementations, as well as the research and
development of its recently introduced proprietary products.

The Company has been named Sun's exclusive sales representative for all
public and private educational institutions in Minnesota and Wisconsin. Sun is
one of the leading providers of IntraNet hardware and software, and is the
industry's most popular platform for software development and other Unix
applications. The Company also sells other Sun equipment for applications such
as computational and analysis server platforms, high-end computer simulation
and physical modeling, Internet services, and other demanding technologies.

The Company has also partnered with Interleaf, to expand the North
American sales and marketing channels for Intra.doc!(TM). Interleaf, one of the
world's leading provider of enterprise-wide document management solutions, will
add the new NT-based application to its current line of web-enabled document
applications. The Intra.doc!(TM) management system allows the World Wide Web to
become a low-cost, workgroup access point for easy exchange of
business-to-business information, while offering a growth path into Interleaf's
enterprise document management system.

The Intra.doc!(TM) management system provides crucial document management
capabilities not currently offered in Web management tools. The program
automatically places documents into a Web-ready format while preserving the
formats in which the documents were created. Additionally, the system
automatically indexes and creates the Web hyperlinks that make it possible to
navigate through the information.

The Intra.doc!(TM) management system has already enabled for Interleaf's
RDM system which gives customers a smooth path from a departmental document
management solution into a comprehensive enterprise system with configuration
management, workflow, integrated batch output choices and hundreds of vertical
application solutions. The Intra.doc!(TM) management system is also compatible
with Interleaf's authoring, electronic distribution, Web publishing and filter
products. The Intra.doc!(TM) management system is a business-to-business
intranet/internet application that uses Web technology to distribute
information. It eliminates the need to manually generate links and navigational
aids; continually updates the Web site with the most current information;
permits secure file management and revision control; overcomes database
querying limitations; allows diverse documents (including those in CAD formats)
to be accessible and linked on a Web; allows simultaneous access to multiple
repositories of information; allows users to search for and view business
information from any location; and reduces the cost of installation and
day-to-day management of business information on a Website. All an authorized
user needs to access the site is a standard Web browser and a Web document
viewer.

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<PAGE> 32

SALES AND MARKETING

The Company believes that as the trend toward network-based computing
environments continues, the demand for its products, especially its recently
developed proprietary products, will continue. The Company's marketing
strategy entails emphasizing and leveraging its competitive advantages with an
aggressive direct sales approach, combined with seminar selling, media
advertising, and regional direct mail campaigns. Additionally, the Company is
developing an "alternate channels" marketing strategy for its software
products, allowing third-party organizations to market the product in strategic
niches and geographical areas.

A substantial part of the Company's growth strategy is geographic
expansion of its Distribution Group which the Company hopes to accomplish
through continued development of existing sites while increasing national
presence with expansion into new cities. A national presence should afford the
Company an "electronically ship then print" approach to document distribution
in order to offer its customers faster time to market and decreased shipping
costs. To facilitate this expansion, the Company has established a sales
training program to reduce training lead-time and increase salesperson
effectiveness.

The Company intends that as its expansion continues, it will install its
proprietary technology at each new site; documented processes from the
Minneapolis facility will be used to increase operational effectiveness; a
centralized accounting and production workflow system will be used by all
facilities, as well as delivery of a centralized technical systems
administration to remote sites through a high-speed frame relay network.

RESEARCH AND DEVELOPMENT

The Company has divided its software development personnel into two
departments - Custom Applications, focused on providing billable services, and
Research and Development, focused on IntraNet applications for resale. The two
primary software products that are currently the focus of its research and
development team are the Intra.doc!(TM) management system, the web-based
document control and distribution system, and the IntraNet Remote Print
Manager (TM), for web-accessed remote print management and ordering.

The Intra.doc!(TM) management system is designed to automatically control
and distribute documents for viewing on a web site. The product was in
development much of 1996, with the initial release of the first commercial
off-the-shelf version, in August 1996. The Company is currently developing a
revised version with 32-bit support and enhancements, as well as improved
marketing collateral and manuals. This version should be commercially
available in the fourth calendar quarter of 1997.

Intra.rpm!(TM) system is a web-based tool used by customers of the
Distribution Group for checking files into and out of the IntraNet Library over
the internet, ordering documents for on-demand publishing, and consolidation of
orders within an Oracle database to increase efficiency in production. The
Company is presently focused on expanding this software in an effort to
increase the market for Distribution sales, as well as to create a product to
be sold by the

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<PAGE> 33

Company's resellers. An update version of the Intra.rpm! system is currently
in development and is scheduled to be released prior to the end of 1996.

INTELLECTUAL PROPERTY AND OTHER PROPRIETARY RIGHTS

The Company has applied for trademark registration for the following
marks: INTRANET, INTRANET SOLUTIONS, DOCUMENT REFINERY, WEB REFINERY, WEB
VAULT, Intra.doc!, Intra.plt!, Intra.img! and Intra.rpt!. There can be no
assurance that any trademarks which have been applied for but not yet issued
will be issued. In the absence of trademark protection, the Company may be
unable to take advantage of the brand name recognition it is attempting to
build. Further, even if all trademarks applied for are issued, there can be no
assurance that such trademarks will prove valuable to the Company.

In the absence of significant patent or copyrights protection, the Company
may be vulnerable to competitors who attempt to develop functionally equivalent
products. Although the Company believes that it has all rights necessary to
market its products without infringing upon any patents, copyrights or
trademarks held by others, there can be no assurance that conflicting patent,
copyright or trademark rights do not exist. The Company relies upon trade
secret protection for its confidential and proprietary information. There can
be no assurance that others will not independently develop substantially
equivalent proprietary information and techniques or otherwise gain access to
the Company's trade secrets or disclose such technology, or that the Company's
can meaningfully protect its trade secrets.

It is the Company's policy to require its employees, consultants, and
advisors to execute confidentiality agreements upon the commencement of
employment or other relationships with the Company. These agreements include
standard non-disclosure and non-competition provisions prohibiting employees or
former employees from disclosing the Company's Confidential Information (as
defined therein) and prohibiting employees, and former employees for a period
of one year following termination of their employment with the Company from
organizing or participating in a Competing Business (as defined therein) or
developing or selling Competing Products (as defined therein).

ACQUISITIONS

The Company plans to expand its distribution group concept to regional
centers throughout the United States over the next three years. The Company
also plans to evaluate several potential acquisitions, primarily in
complimentary software development areas, which it believes are necessary to
expand its presence in the document management marketplace. Recently, on
October 16, 1996, the Company signed a letter of intent to acquire
substantially all the assets of an established, privately-held custom printing
and graphic communications business located in the southwestern United States,
which had revenues of approximately $3.0 million in its most recent fiscal year
and a history of operating profits. The Company believes this potential
strategic acquisition will give it the opportunity to expand its web-based
document distribution market and its on-demand printing network with an
established operation in the southwest. The acquisition, valued at
approximately $1.8 million, is expected to consist of cash, IntraNet Solutions
common stock and the assumption of certain liabilities. The Company and the
sellers are currently negotiating a definitive agreement, however, there can be
no assurance that such agreement shall ever be entered into, be on the terms
set forth above, or that if entered into, will ever close.

Future financings, if needed to pursue such short-term objectives, may
result in dilution to holders of Common Stock. It is anticipated that funds
required for future acquisitions and expansion will be provided from operating
cash flow, the proceeds expected from future debt or equity financings and
proceeds from future borrowings. However, there can be no assurance that
suitable acquisitions candidates will be identified by the Company in the
future, that suitable financing for any such acquisitions or expansion can be
obtained by the Company or that any such acquisitions or expansions will occur.

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<PAGE> 34

COMPETITION

Some of the Company's competitors currently marketing products into the
document management market are more established than the Company and have the
benefits of pre-existing relationships with potential customers and greater
name recognition than the Company. Some of the Company's current and potential
competitors have significantly greater technical, financial, and marketing
resources than the Company. Although the Company believes it competes
effectively with respect to such factors, there can be no assurance that the
Company will have the financial resources, technical expertise or marketing,
distribution or support capabilities to compete successfully in the future.
The market is highly competitive and characterized by rapid innovation and
technological change. The Company's products were specifically designed to
meet the needs of the document management market, but other companies have also
introduced or announced the development of products designed to address the
same markets as the Company's products. The Company's ability to maintain a
competitive position will also depend on its ability to develop enhancements
and upgrades to its existing product line.

EMPLOYEES

At June 30, 1996, the Company had approximately 100 employees. No
employee of the Company is currently represented by a labor union. Management
considers its employee relations to be good.

PROPERTIES

The executive offices of the Company and its subsidiaries are located in
Eden Prairie, Minnesota, where the Company leases approximately 42,000 square
feet of office and warehouse space. The Company also has office and warehouse
space in Milwaukee, Wisconsin, where the Company leases approximately 14,000
square feet, Denver, Colorado where the Company leases approximately 6,000
square feet of office space, and Boston, Massachusetts where the Company leases
approximately 3,000 square feet of office space. The Company believes that the
above mentioned facilities are adequate and suitable for its current needs.

LEGAL PROCEEDINGS

The Company is not a party to any material legal proceeding.

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<PAGE> 35

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information with respect to each of
the directors and executive officers of the Company.

NAME AGE POSITION(S) HELD
---- --- ----------------
<S> <C> <C>
Robert F. Olson 40 President, Chief Executive Officer and
Chairman of the Board
Ronald E. Eibensteiner 45 Director
Henry Fong 59 Director
David D. Koentopf 52 Director
Jeffrey J. Sjobeck 36 Chief Financial Officer, Secretary and Director
John Coleman 39 Vice President of Sales and Marketing
</TABLE>

ROBERT F. OLSON. Mr. Olson, age 40, serves as the Company's President and
Chief Executive Officer. Prior to the Merger, Mr. Olson served as TPSI's
Founder, President, Chief Executive Officer and Chairman of the Board of
Directors since its inception in April 1990. From 1987 to 1990, Mr. Olson
served as the General Manager of the Greatway Communications Division of
Anderberg-Lund Printing Company, an electronic publishing sales and services
organization. From 1981 to 1987, Mr. Olson was involved in several electronic
publishing service and resale start-up organizations in general management and
marketing capacities. From 1979 to 1981, Mr. Olson served as Large Account
Sales Representative of Burroughs Corporation.

RONALD E. EIBENSTEINER. Since 1983, Mr. Eibensteiner, age 45, has been
involved in the formation of several technology companies and, as president of
Wyncrest Capital, Inc., has been a seed investor in numerous development stage
companies. Mr. Eibensteiner is a co-founder and a director of Diametrics
Medical, Inc., a manufacturer of blood gas systems; IVI Publishing, Inc., an
electronic publisher of health and medical titles in interactive multimedia
formats; Reality Interactive, an electronic publisher of Quality information
for Fortune 5000 companies; and was Chairman of Prodea Software Corporation, a
data warehousing software company, until its sale to Platinum Technology, Inc.
in January, 1996. Mr. Eibensteiner is also currently Chairman of Rezound
Media, Inc. and a Director of Bank Windsor. He also co-founded Arden Medical
Systems, Inc. in 1983 and served as its Chief Financial Officer until its sale
to Johnson & Johnson in 1987.

HENRY FONG. Mr. Fong, age 59, a founder and promoter of the entity that
merged with and into MSF on December 30, 1991, served as its Chairman of the
Board of Directors and Treasurer from February, 1991, until the merger, at
which time he was elected Chairman of the

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<PAGE> 36

Board and Secretary of MFS. From July 1989 until September 1990, he served as a
Director of MacGregor Sports, Inc., the wholly-owned operating subsidiary of
MacGregor Sporting Goods Corporation, which on February 15, 1991, filed for
protection under Chapter 11 of the United States Bankruptcy Code. Mr. Fong has
been the President, a Director and controlling shareholder of Equitex, Inc., a
Denver-based business development company, since January 1983. He has been the
President, Chief Executive Officer and a Director of Roadmaster Industries,
Inc., since 1987. Equitex and Roadmaster are subject to SEC reporting
requirements.

DAVID D. KOENTOPF. Since 1993, Mr. Koentopf, age 52, has been a private
investor and business consultant to several companies primarily in industrial
and health care related industries. Mr. Koentopf is currently Chairman of the
Board of Everest Medical Corporation, a manufacturer of electrosurgical
instruments and related medical devices. Mr. Koentopf serves as a director of
Arden Industrial Products, Inc., a national distributor of fasteners to the
industrial market, and LifeRate Systems, Inc., a developer of software
operating systems for the health care industry. From 1985 to 1992, Mr.
Koentopf served as President and Chief Operating Officer of Lifetouch, Inc.,
the largest school photography business in the United States. From 1975 to
1985, Mr. Koentopf served in a number of executive positions for Steiger
Tractor, Inc., including President and Chief Executive Officer from 1979 to
1985.

JEFFREY J. SJOBECK. Mr. Sjobeck, age 36, serves as the Company Chief
Financial Officer and Secretary. Prior to the Merger, Mr. Sjobeck served as
Director of TPSI since June 1995 and Chief Financial Officer of TPSI since
December 1994. From June 1993 to November 1994, Mr. Sjobeck served as Chief
Financial Officer of Innovative Gaming Corporation of America. From June 1990
to May 1993, Mr. Sjobeck served as Controller and Chief Financial Officer of
James Phillips Company. From October 1984 to May 1990, Mr. Sjobeck was
employed in the Audit and Accounting division of Coopers & Lybrand LLP. From
August 1982 to September 1984, Mr. Sjobeck was an accountant for Larson, Allen
& Weishair & Co.

JOHN R. COLEMAN. Mr. Coleman, age 39, serves as the Company's Vice
President of Sales and Marketing. Prior to the Merger, Mr. Coleman
served as Vice President of Sales and Marketing for TPSI since September 1995.
From October 1989 to August 1995, Mr. Coleman served as Major Account OEM Sales
Manager and District Sales Manager for Sun Microsystems. From December 1986 to
September 1989, Mr. Coleman served as Strategic Accounts Marketing Manager of
Intel Corporation.

DIRECTORS AND COMMITTEES

The Board of Directors has an Audit Committee comprised of Messrs.
Eibensteiner, Fong and Koentopf. The Audit Committee recommends to the Board
of Directors the appointment of independent auditors, reviews and approves the
scope of the annual audit of the Company's financial statements, reviews and
approves any non-audit services performed by the independent auditors, reviews
the findings and recommendations of the internal and independent auditors and
periodically reviews and approves major accounting policies and significant
internal accounting control procedures.

The Board of Directors also has a Compensation Committee comprised of
Messrs. Eibensteiner, Fong and Koentopf. The Compensation Committee reviews and
recommends compensation of officers and directors, administers stock option
plans and reviews major personnel matters.

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<PAGE> 37

EXECUTIVE COMPENSATION

The following table sets forth the cash compensation paid or accrued
during the fiscal years ended March 31, 1996, 1995 and 1994 for the Company's
Chief Executive Officer (the "Named Executive Officer"). No other executive
officer had aggregate cash compensation, determined in accordance with Item
402(a)(2) of Regulation S-B, in excess of $100,000:

<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION

FISCAL SALARY ALL OTHER
NAME AND PRINCIPAL POSITION YEAR $ COMPENSATION$(1)
------ ------- ----------------

<S> <C> <C> <C>
Robert F. Olson 1996 111,083 14,382
President and Chief Executive Officer 1995 108,282 9,609
1994 105,000 8,009
</TABLE>

(1) Represents matching contributions by the Company under the Company's
401(k) Savings Incentive Plan, term life and disability insurance
premiums.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

The Named Executive Officer did not receive any option grants in the last
fiscal year.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES

The Named Executive Officer did not exercise any stock options in the last
fiscal year.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company's Stock Option and Compensation Committee (the "Compensation
Committee") consists of Messrs. Eibensteiner, Fong and Koentopf. There were no
"interlocks" within the meaning of the rules and regulations of the SEC.

EMPLOYMENT AGREEMENTS

In July, 1996, the Company entered into three-year employment agreement
with each of Robert F. Olson, the Company's President and Chief Executive
Officer, and Jeffrey J. Sjobeck, the Company's Chief Financial Officer. Mr.
Olson receives an annual base salary of $155,000 and Mr. Sjobeck receives an
annual base salary of $75,000, and each has the opportunity to earn
performance-related bonuses, including stock options issued pursuant to the
Company's 1994-1997 Stock Option Plan. Pursuant to their respective agreements,
neither Mr. Olson nor Mr. Sjobeck may disclose confidential information about
the Company and each has agreed not to compete with the Company for a two-year
period after any termination of employment. The Company may terminate either
Mr. Olson's or Mr. Sjobeck's employment without "cause" upon 120 days' written
notice to the Board of Directors. In the event of any such termination, Mr.
Olson will be

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<PAGE> 38

entitled to receive severance compensation equal to the greater of six months
of his base salary or the balance of the compensation due and owing to him
under his employment agreement, and Mr. Sjobeck will be entitled to 120 days'
severance pay.

STOCK OPTIONS PLANS

The Company adopted and shareholders approved as a condition to the
Merger, the 1994-1997 Stock Option and Compensation Plan (the "Plan") for
officers, directors (excluding outside directors), employees and certain key
consultants and advisors of the Company. The purpose of the Plan is to enhance
shareholder value and to advance the interests of IntraNet by furnishing a
variety of economic incentives (the "Incentives") designed to attract, retain
and motivate those persons eligible for Incentives under the Plan. Incentives
under the Plan consist of opportunities to purchase or receive shares of
IntraNet Common Stock, monetary payments or both.

The Plan is administered by either a stock option committee of
disinterested persons of the Board of Directors of IntraNet (the "Committee"),
or by the entire IntraNet Board of Directors until such time as a Committee is
formed and established. The Committee, or the Board, as the case may be, has
complete and final authority with respect to the interpretation and
administration of the Plan. Immediately after the effective date of the Merger
approximately 70 persons, currently in the employ of the Company, or in key
consulting relations with it (or with its subsidiaries or affiliates), became
eligible to participate in the Plan. Eligibility for Incentives under the Plan
is determined by the Committee, or the Board, as the case may be, with respect
to both individuals and groups based on a variety of criteria, including, but
not limited to, pay grade, job performance, job responsibility, length of
service and various other factors that the Committee, or the Board, may deem
appropriate at the time of granting any Incentives. To date, the Company
estimates that grants of Incentives to 60 persons currently in its employ have
been made in the form of non-statutory or non-qualified stock options.

Incentives under the Plan may be granted in any one or more or any
combination of the following forms, as determined by the Committee, or the
Board, as the case may be: (a) incentive stock options; (b) non-statutory or
non-qualified stock options; (c) stock appreciation rights; (d) stock awards;
(e) restricted stock awards; (f) performance shares; and (g) cash awards
(collectively hereinafter the "Incentives"). Prices and expiration dates of,
and material conditions to, the granting of options under the Plan shall be
determined by the Committee, or the Board, based on its assessment of
employment, tax and other financial factors affecting IntraNet from time to
time. Incentives granted under the Plan shall generally not be transferable.
Subject to certain adjustments, the maximum number of shares of Common Stock
that may be issued under the Plan is 2,500,000. Generally, an optionee may pay
the exercise price to exercise a stock option in the form of cash or the
surrender of shares of Common Stock. Options granted under the Plan shall be
exercisable for up to a ten (10) year period from the date of grant, or, in
case the optionee ceases to be employed by IntraNet for any reason, generally
six (6) months after the date of such termination of employment.

-31-

<PAGE> 39

PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth certain information with regard to the
beneficial ownership of the shares of the Company's Common Stock as of the date
of this Prospectus by (i) each person known by the Company to be the beneficial
owner of more than 5% of the outstanding Common Stock, (ii) each director and
executive officer of the Company, and (iii) all executive officers and
directors as a group and (iv) each selling shareholder. Unless otherwise
indicated, each of the following persons has sole voting and investment power
with respect to the shares of Common Stock set forth opposite their respective
names. Unless otherwise indicated, the address of 5% shareholders, directors
and executive officers is 9625 W. 76th Street Suite 150, Minneapolis, Minnesota
55344.

<TABLE>
<CAPTION>
SHARES SHARES
BENEFICIALLY OWNED BENEFICIALLY OWNED
PRIOR TO THE OFFERING SHARES TO AFTER THE OFFERING
---------------------- BE SOLD IN ---------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENTAGE THE OFFERING NUMBER PERCENTAGE
- ------------------------- ---------- ---------- ------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Henry Fong
7315 E. Peakview Avenue
Englewood, CO (1)........................... 789,679 10.5% 0 789,679 9.9%
Equitex, Inc. (1)
7315 E. Peakview Avenue
Englewood, CO............................... 636,011 8.5% 0 636,011 8.0%
Robert F. Olson(2).......................... 4,055,918 54.5% 0 4,055,918 51.5%
David Koentopf (3).......................... 38,262 * 0 38,262 *
Ronald E. Eibensteiner (4).................. 188,570 2.5% 0 188,571 2.4%
Jeffrey J. Sjobeck(5)....................... 16,143 * 0 16,143 *
John Coleman (6)............................ 60,731 * 20,305 40,426 *
Dale Ragan (7).............................. 41,897 * 20,305 21,592 *
John Stapleton (8).......................... 20,947 * 10,152 10,795 *
Craig Avery (9)............................. 29,589 * 7,997 21,592 *
William Max McGee (10)...................... 41,897 * 20,305 21,592 *
Laurential American Equity Fund (11)........ 36,599 * 36,599 0 0
Laurentian Special Equity Fund (12)......... 65,688 * 65,688 0 0
Robert Maietta (13)......................... 18,750 * 18,750 0 0
Boston Financial Partners (14).............. 26,379 * 26,379 0 0
Security Pacific Business Credit Inc. (15).. 59,394 * 59,394 0 0
MCPED (16).................................. 44,384 * 44,384 0 0
D. Bradly Olah (17)......................... 3,834 * 3,834 0 0
Kim Hensley (18)............................ 6,250 * 6,250 0 0
J. T. Emerson (19).......................... 8,750 * 8,750 0 0
C. Frederick LeBaron, Jr. (20).............. 96,099 * 12,500 83,599 1.0%
T. B. Olson (21)............................ 2,500 * 2,500 0 0
Timothy Duuos (22).......................... 6,250 * 6,250 0 0
Vance Vinar (23)............................ 1,000 * 1,000 0 0
Mark Cates (24)............................. 1,000 * 1,000 0 0
Raymond Rossini (25)........................ 2,000 * 2,000 0 0
Floyd Adelman (26).......................... 3,000 * 3,000 0 0
F. Stephen Gill (27)........................ 1,500 * 1,500 0 0
Keith J. Nelson (28)........................ 500 * 500 0 0
Raymond Dykema (29)......................... 26,250 * 26,250 0 0
Aaron Grunfeld (30)......................... 19,400 * 19,400 0 0
</TABLE>

-32-

<PAGE> 40

<TABLE>
<S> <C> <C> <C> <C> <C>
Joel Ronning (31)........................... 5,000 * 5,000 0 0
Joseph Buska (32)........................... 500 * 500 0 0
Richard Lockwood............................ 35,000 * 8,750 26,250 *
Joseph G. Fredericks........................ 5,000 * 5,000 0 0
Bruce Reichert.............................. 3,000 * 3,000 0 0
Okabena Partnership K....................... 50,000 * 50,000 0 0
All directors and executive officers........
as a group (6 persons) (33)................. 5,149,303 66.8% 20,305 5,128,998 63.0%
</TABLE>

- ----------------
*Less than 1%.

(1) Mr. Fong, who owns no shares in his own name, may be, through his
control of certain entities, as described below, deemed to be a beneficial
owner of shares held by such entities. The shares of such entities are,
therefore, duplicated in the table above, and include 62,500 shares of
Common Stock subject to warrants exercisable within 60 days. Mr. Fong is
President and a Director of Equitex, Inc., and President and Chairman of
Roadmaster Industries, Inc. and Chairman of California Pro Inc.
California Pro Sports, Inc. owns 55,965 Common Shares, Equitex, Inc. owns
636,011 Common Shares, and Roadmaster Industries, Inc., directly or
indirectly through its subsidiary Roadmaster Corporation, owns 35,152
Common Shares. Other portfolio companies of Equitex, Inc. own a total of
13,486 Common Shares. Equitex disclaims direct and indirect beneficial
ownership of all such shares.

(2) Includes 109,619 shares of common stock subject to currently exercisable
warrants.

(3) Includes 1,034 shares of common stock subject to currently exercisable
warrants.

(4) Includes 28,939 shares of common stock and 17,071 shares of common
stock subject to currently exercisable warrants owned by Wyncrest Capital,
Inc., an investment fund controlled by Mr. Eibensteiner.

(5) Includes 16,143 shares of common stock subject to currently
exercisable stock options.

(6) Includes 13,107 shares of common stock subject to currently
exercisable warrants and 18,834 shares of common stock subject to
currently exercisable stock options.

(7) Includes 13,107 shares of common stock subject to currently
exercisable warrants.

(8) Includes 6,553 shares of common stock subject to currently
exercisable warrants.

(9) Includes 799 shares of common stock subject to currently exercisable
warrants.

(10) Includes 13,107 shares of common stock subject to currently
exercisable warrants.

(11) Includes 989 shares of common stock subject to currently exercisable
warrants.

(12) Includes 1,775 shares of common stock subject to currently exercisable
warrants.

(13) Includes 18,750 shares of common stock subject to currently exercisable
warrants.

(14) Includes 26,379 shares of common stock subject to currently exercisable
warrants.

(15) Includes 59,394 shares of common stock subject to currently exercisable
warrants.

(16) Includes 1,199 shares of common stock subject to currently exercisable
warrants.

-33-

<PAGE> 41

(17) Includes 103 shares of common stock subject to currently exercisable
warrants.

(18) Includes 6,250 shares of common stock subject to currently exercisable
warrants.

(19) Includes 8,750 shares of common stock subject to currently exercisable
warrants.

(20) Includes 12,500 shares of common stock subject to currently
exercisable warrants and 82,141 shares of common stock that may be
deemed to be owned by Mr. LeBaron through his control of certain entities,
as to which he disclaims beneficial ownership.

(21) Includes 2,500 shares of common stock subject to currently exercisable
warrants.

(22) Includes 6,250 shares of common stock subject to currently exercisable
warrants.

(23) Includes 1,000 shares of common stock subject to currently exercisable
warrants.

(24) Includes 1,000 shares of common stock subject to currently exercisable
warrants.

(25) Includes 2,000 shares of common stock subject to currently exercisable
warrants.

(26) Includes 3,000 shares of common stock subject to currently exercisable
warrants.

(27) Includes 1,500 shares of common stock subject to currently exercisable
warrants.

(28) Includes 500 shares of common stock subject to currently exercisable
warrants.

(29) Includes 26,250 shares of common stock subject to currently exercisable
warrants.

(30) Includes 19,400 shares of common stock subject to currently exercisable
warrants.

(31) Includes 5,000 shares of common stock subject to currently exercisable
warrants.

(32) Includes 500 shares of common stock subject to currently exercisable
warrants.

(33) Includes 216,438 shares of common stock subject to currently
exercisable warrants and 53,820 shares of common stock subject to
currently exercisable options. Also includes shares that may be deemed to
be owned by Mr. Henry Fong through his control of certain entities, as to
which he disclaims beneficial ownership. (See notes 1 and 2 above).

-34-
<PAGE> 42

CERTAIN TRANSACTIONS

Prior to the Merger, MSF's assets consisted solely of its ownership of all
of the rights in and to the "MacGregor" trademark pursuant to certain license
agreements and certain related assets (the "MacGregor Rights"). Pursuant to,
and as a condition of the closing of the Merger, MSF was required to dispose of
all of its existing assets such that, prior to closing, its balance sheet would
show a tangible net worth less non-current assets of at least $3,000,000, cash
of at least $1,000,000 and no liabilities. MSF was also required to have
satisfied, in full, all existing indebtedness owed to its lenders and all
indebtedness in favor of its then trade debtors of the Company including all
affiliates. To meet such condition, and to produce a balance sheet prior to
closing indicating such tangible net worth, cash and no liabilities, MSF
completed a series of transactions prior to closing that the Company's
shareholders approved on July 30, 1996. Such transactions included the sale of
all the rights of MSF in and to the MacGregor Rights to Hutch Sports USA Inc.
("Hutch"), a subsidiary of Roadmaster Industries, Inc. ("Roadmaster"). MSF
and Roadmaster were affiliates in that they were both under the indirect common
control of Mr. Henry Fong, the former chairman of MSF and a director of the
Company. As a result of his interest in such transaction, Mr. Henry Fong (and
his affiliates) abstained from voting in connection with the sale and transfer
of the MacGregor Rights from MSF to Hutch.

The MSF disposition of assets required under the Merger Agreement resulted
in Hutch's acquiring the MacGregor Rights for a purchase price of $2,910,000,
payable as follows: (i) $1,000,000 in cash on or prior to closing; and (ii) the
delivery of a one-year unsecured installment promissory note in the amount of
$1,910,000 to be paid in twelve (12) equal monthly installments bearing
interest at the rate equal to the prime or base rate from time to time publicly
announced by Bank America, N.A. MSF closed on the disposition of such assets
immediately prior to closing on Merger, but made such transaction effective
February 1, 1996. In response to such agreement, MSF reduced the carry amount
of its intangible assets at January 31, 1996 by $1,200,000. Previously, MSF
anticipated realizing approximately $4,000,000 on the sale of the MacGregor
Rights. However, in late 1995, as previously disclosed, due to the competitive
retail environment in which the MSF trademarks operate, MSF's Board of
Directors believed the approximately $2,900,000 offered by Hutch would be the
maximum amount a buyer would reasonably offer for these assets. Over the last
two years, management and the Board of Directors of MSF investigated the sale
of the MacGregor Rights to various potential buyers, and based on the results
of those prior negotiations, believed the transaction with Hutch offered the
best outcome for MSF and its shareholders.

Additionally, during the past two years, MSF engaged, as required under
the terms of the Merger Agreement in various transactions as follows:

In April of 1995, Equitex, Inc. converted $1,000,000 of the indebtedness
owed to it by MSF into Class C Preferred Stock, and MSF agreed to pay the
remaining outstanding balance of principal and interest in the amount of
$805,254 subsequent to July 31, 1995. In contemplation of the Merger, and in
order to fulfill the conditions to the Merger that all preferred shares be
converted to MSF Common Stock, and that all outstanding indebtedness of MSF be
eliminated,

-35-
<PAGE> 43

Equitex agreed, as of January 31, 1996, to convert the Class C preferred shares
into 250,000 MSF Common Stock, and did so in May of 1996. In addition, to
satisfy the remaining balance of its indebtedness to Equitex (which had been
outstanding since 1991, pursuant to various agreements between the parties),
MSF agreed in October of 1995, when the amount of the indebtedness was $824,021
to convert its indebtedness to shares of common stock. On the conversion date
of January 31, the amount of the indebtedness (including accrued interest) was
approximately $916,000. In conversion of that amount, therefore, the Company
issued an additional 163,444 shares of Common Stock. The indebtedness was
converted at the rate of $5.60 per share, which management believes
approximated the fair market price of the newly issued restricted MSF Common
Stock at the time of the conversion based on the price MSF was able to obtain
from the sale of a large block of similarly restricted stock to unrelated third
parties. Those shares (which were similarly restricted in that as unregistered
shares they would not be freely tradeable for two years) were sold at a price
of $4.80 to the following third parties in February of 1996: Wayne R. Mills,
20,750; Russell Casement, 5,625; George Arellano, 4,792; Joseph Hovorka, 3,750;
Bertrand T. Ungar, 8,333; K. Keating, 12,708; and David Olson, 1,209.

In addition to the conversion of the Class C Shares into shares of MSF
Common Stock, Equitex engaged in the following transactions on the following
dates: On May 21, 1996 Equitex sold warrants for the purchase of 21,750 shares
of MSF Common Stock with an expiration date of October 31, 1996 and an exercise
price of $4.00, for a price of $14.00 per share. Between the dates of May 15
and May 24, 1996 Equitex sold 86,750 shares of MSF Common Stock at prices
ranging from $13.32 to $20.50. All of the warrants and shares of MSF Common
Stock sold by Equitex in the referenced transactions had previously been
acquired by Equitex from time to time in the open market and were sold in the
open market. Such sales yielded aggregate proceeds of $1,655,345.

Henry Fong is also Chairman of California Pro Sports, Inc. Michael S.
Casazza, the former President of MSF and Barry Hollander, the former Chief
Financial Officer of MSF, held those same offices at California Pro Sports,
Inc. MSF previously physically occupied office space leased by California Pro
Sports, Inc., and has used office equipment, employees and other facilities and
services of California Pro Sports, Inc. in connection with the MSF operations.
In consideration of the provision of those services, MSF incurred indebtedness
of $313,000 to California Pro Sports, Inc. during the quarter ended January 31,
1996. MSF similarly determined to convert the amount of such indebtedness, as
of January 31, 1996, to MSF Common Stock at $5.60 per share, which management
believes approximated the fair market price of newly issued restricted MSF
Common Stock at the time of the conversion based on the price MSF was able to
obtain from the sale of a larger block of similarly restricted stock to
unrelated third parties.

On April 5, 1996 MSF issued 98,800 warrants for the purchase of shares of
MSF Common Stock, at an exercise price of $4.00 per share, of which 62,500 were
issued to Mr. Fong. $790,400, the difference between the quoted market price
of the common stock at the date of grant and the exercise price of the
warrants, was recognized as compensation expense.

-36-
<PAGE> 44

In December 1995, TPSI issued $550,000 of unsecured convertible notes to a
limited number of accredited investors. The unsecured notes accrued interest
rate of 10%, and were converted into common stock immediately prior to the
Merger at a rate of $6.00 per share. In consideration of such loans, TPSI also
issued common stock purchase warrants which, pursuant to the terms of the
Merger Agreement became warrants to acquire an aggregate of 55,385 shares of
Common Stock.

Prior to the Merger, TPSI redeemed 50% of its outstanding shares of its
common stock from a former shareholder and director for $200,000 on July 31,
1995. TPSI paid $150,000 of the purchase price in cash and delivered a $50,000
note to the former shareholder for the balance of the purchase price. The note
requires annual principal payments of $10,000 and matures in August, 2000.
TPSI also entered into Consulting and Non-Competition Agreements with the
former shareholder. To secure the purchase price of the redeemed shares and
TPSI's monetary obligations under the agreements, TPSI pledged the redeemed
shares to the former shareholder as collateral.

-37-
<PAGE> 45

DESCRIPTION OF SECURITIES

The Company's authorized capital stock consists of 12,500,000 shares of
Common Stock, $.01 par value per share. Prior to this offering, there were
7,440,606 shares of Common Stock issued and outstanding and 2,088,202 shares
reserved for issuance upon exercise of outstanding options and warrants.

Holders of the Common Stock are entitled to receive such dividends as may
be declared by the Board of Directors out of assets legally available
therefore, and to share ratably in the assets of the Company available upon
liquidation.

Each share of Common Stock is entitled to one vote for all purposes.
Accordingly, the holders of more than fifty percent of all of the outstanding
shares of Common Stock can elect all of the directors. Significant corporate
transactions such as mergers, sales of assets and dissolution or liquidation
require approval by the affirmative vote of the majority of the outstanding
shares of Common Stock. Other matters to be voted upon by the holders of Common
Stock normally require the affirmative vote of a majority of the shares present
or represented by proxy at the particular shareholders' meeting. The Company's
directors and officers, as a group beneficially own approximately 67.6% of the
outstanding Common Stock of the Company. Upon completion of this Offering, such
persons will beneficially own approximately 63.9% of the outstanding shares.
See "Principal and Selling Shareholders." Accordingly, such persons will
continue to be able to control the Company's affairs, including, without
limitation, the sale of equity or debt securities of the Company, the
appointment of officers, the determination of officers' compensation and the
determination whether to cause a registration statement to be filed.

WARRANTS

As of September 30, 1996, the Company had outstanding 183,500 Redeemable
Warrants, and an aggregate of 471,179 Non-Redeemable Warrants. All of the
foregoing warrants are collectively referred to herein as the "Warrants."

General. The Redeemable Warrants may be exercised upon surrender of the
certificate therefor on or prior to the expiration or redemption date at the
offices of the Company's warrant agent (the "Warrant Agent") with the form of
"Election to Purchase" on the reverse side of the certificate filled out and
executed as indicated, accompanied by payment (in the form of certified or
cashier's check payable to the order of the Warrant Agent or the Company, as
applicable) of the full exercise price for the number of Warrants being
exercised.

The exercise price of the Warrants were determined by negotiation between
the Company and the warrant holders and should not be construed to be
predictive of or to imply that any price increases will occur in the Company's
securities. The Warrants contain provisions that protect the holders thereof
against dilution by adjustment of the exercise price in certain events, such as
stock dividends, stock splits, mergers, combinations or recapitalizations, and
for other unusual

-38-
<PAGE> 46

events (other than employee benefit and stock option plans for employees,
directors, or consultants to the Company).

The Company is not required to issue fractional shares, and in lieu
thereof will make a cash payment based upon the current market value of such
fractional shares (determined as the last sale price reported by NASDAQ on the
business day prior to the date of exercise or, if no such sale is made on such
day, the mean between the last reported bid and asked prices reported by NASDAQ
as of the business day prior to the date of exercise). The holder of a Warrant
will not possess any rights as a shareholder of the Company unless and until he
or she exercises the Warrant.

MINNESOTA ANTI-TAKEOVER LAW

The Company is governed by the provisions of Sections 302A.671 and
302A.673 of the Minnesota Business Corporation Act, which are anti-takeover
laws. In general, Section 302A.671 provides that the shares of a corporation
acquired in a "control share acquisition" have no voting rights unless voting
rights are approved in a prescribed manner. A "control share acquisition" is
an acquisition, directly or indirectly, of beneficial ownership of shares that
would, when added to all other shares beneficially owned by the acquiring
person, entitle the acquiring person to have voting power in the election of
directors of 20% or more. In general, Section 302A.673 prohibits a public
Minnesota corporation from engaging in a "business combination" with an
"interested shareholder" for a period of four years after the date of
transaction in which the person became an interested shareholder, unless the
business combination is approved in a prescribed manner. "Business
combination" includes mergers, asset sales and other transactions resulting in
a financial benefit to the interested shareholder. An "interested shareholder"
is a person who is the beneficial owner, directly or indirectly, of 10% or more
of the corporation's voting stock or who is an affiliate or associate of the
corporation and at any time within four years prior to the date in question was
the beneficial owner, directly or indirectly, of 10% or more of the
corporation's voting stock.

TRANSFER AGENT, WARRANT AGENT AND REGISTRAR

Norwest Bank Minnesota, N.A., is the transfer agent and registrar for the
Common Stock and the warrant agent for the Redeemable Warrants.

REPORTS TO SHAREHOLDERS

The Company will furnish to its shareholders annual reports containing audited
financial statements and quarterly reports containing unaudited financial
information.

-39-
<PAGE> 47

PLAN OF DISTRIBUTION

The Company hereby offers: (i) 183,500 shares of Common Stock that are
issuable upon the exercise of the Redeemable Warrants and (ii) 251,667 shares
of Common Stock that are issuable upon exercise of the Non-Redeemable Warrants.
The Selling Shareholders hereby offer 245,579 shares of Common Stock. No
underwriter is being used in connection with this offering. See "Principal and
Selling Shareholders" and "Description of Securities."

The Selling Shareholders and/or their pledgees, donees, transferees or
other successors in interest will sell the securities of the Company covered by
this Prospectus to the public in the over-the-counter market or in negotiated
transactions, or otherwise, at prices and on terms then obtainable.
Broker-dealers either may act as agents for the Selling Shareholders and/or
their pledgees, donees, transferees or other successors in interest for such
commissions as may be agreed upon at the time, or may purchase any of the
securities covered hereby as principals and thereafter may sell such securities
from time to time in the over-the-counter market or in negotiated transactions,
or otherwise, at prices and on terms then obtainable.

LEGAL MATTERS

The validity of the securities offered hereby was passed upon for the
Company by Maslon Edelman Borman & Brand, a Professional Limited Liability
Partnership Minneapolis, Minnesota.

EXPERTS

The financial statements as of March 31, 1996 and for the two years
then ended included herein have been audited by Lund Koehler Cox & Company,
PLLP independent public accountants, as indicated in their report with
respect thereto, and are included herein in reliance upon the authority of said
firm as experts in giving said report.

-40-

<PAGE> 48
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Public Accountants F-1
Consolidated Financial Statements:
Balance Sheets F-2
Statements of Operations F-3
Statements of Stockholders' Equity F-4
Statements of Cash Flows F-5
Notes to Consolidated Financial Statements F-6
<PAGE> 49
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To IntraNet Solutions, Inc.:

We have audited the accompanying consolidated balance sheets of IntraNet
Solutions, Inc. (formerly known as Technical Publishing Solutions, Inc.) and
Subsidiaries as of March 31, 1996, and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the years in the
two-year period ended March 31, 1996. These consolidated 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 financial position of IntraNet
Solutions, Inc. and Subsidiaries as of March 31, 1996, and the results of their
operations and their cash flows for each of the years in the two-year period
ended March 31, 1996 in conformity with generally accepted accounting
principles.

LUND KOEHLER COX & COMPANY, PLLP

Minneapolis, Minnesota
October 15, 1996

F-1
<PAGE> 50
INTRANET SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
March 31, JUNE 30,
1996 1996
---- ----
ASSETS (UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $37,513 $146,407
Accounts receivable, net 3,102,394 2,933,557
Inventories 324,523 510,079
Prepaid expenses and other 418,438 654,374
---------- ----------
Total current assets 3,882,868 4,244,417

PROPERTY AND EQUIPMENT, NET 1,539,318 1,683,876
INTANGIBLE ASSETS, NET 290,680 273,025
---------- ----------

$5,712,866 $6,201,318
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:
Revolving credit facility $1,108,098 $1,488,644
Convertible promissory notes 550,000 550,000
Current portion of long-term debt 127,496 127,496
Current portion of capital lease obligations 148,045 163,223
Current portion of stock redemption payable 9,500 9,500
Accounts payable 2,701,244 3,223,503
Sales tax payable 68,147 42,236
Accrued expenses 247,105 186,247
---------- ----------
Total current liabilities 4,959,635 5,790,849

DEFERRED INCOME TAXES 38,000 38,000
STOCK REDEMPTION PAYABLE, NET OF CURRENT PORTION 30,008 30,608
LONG-TERM DEBT, NET OF CURRENT PORTION 108,341 83,342
CAPITAL LEASE OBLIGATIONS, NET OF CURRENT PORTION 598,065 535,589
---------- ----------

Total liabilities 5,734,049 6,478,388
---------- ----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIENCY):
Common stock, $.01 par value, 12,500,000 shares authorized,
2,500,000 and 2,513,355 shares issued and outstanding 25,000 25,133
Additional paid-in capital (7,711) 20,896
Retained earnings (deficit) (22,265) (308,113)
Unearned compensation (16,207) (14,986)
---------- ----------

Total stockholders' equity (deficiency) (21,183) (277,070)
---------- ----------

$5,712,866 $6,201,318
========== ==========
</TABLE>

See notes to consolidated financial statements.

F-2

<PAGE> 51
INTRANET SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
Year Three Months
Ended Ended
March 31, June 30,
----------------------------- ----------------
1995 1996 1995 1996
---- ---- ---- -----
(UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES:
Hardware integration $5,015,758 $8,198,800 $1,426,883 $2,391,762
Software, technical services and support 4,738,648 4,522,054 1,142,144 1,102,957
On-demand printing services 692,255 1,514,888 282,216 686,215
---------- ---------- --------- ----------
Total revenues 10,446,661 14,235,742 2,851,243 4,180,934
---------- ---------- --------- ----------

COST OF REVENUES:
Hardware integration 4,350,199 6,795,594 1,187,365 2,000,661
Software, technical services and support 2,879,454 2,799,650 675,174 748,468
On-demand printing services 371,037 1,113,009 197,783 514,876
---------- ---------- --------- ----------

Total cost of revenues 7,600,690 10,708,253 2,060,322 3,264,005
---------- ---------- --------- ----------

Gross profit 2,845,971 3,527,489 790,921 916,929
---------- ---------- --------- ----------

OPERATING EXPENSES:
Sales and marketing 1,244,995 1,827,003 354,301 582,349
General and administrative 916,253 1,188,364 289,274 408,065
Research and development 341,740 496,066 117,734 258,080
Depreciation and amortization 109,274 159,340 31,636 56,110
---------- ---------- --------- ----------

Total operating expenses 2,612,262 3,670,773 792,945 1,304,604
---------- ---------- --------- ----------

Income (loss) from operations 233,709 (143,284) (2,024) (387,675)

INTEREST EXPENSE 97,033 230,293 27,737 48,173
---------- ---------- --------- ----------

INCOME (LOSS) BEFORE INCOME TAXES 136,676 (373,577) (29,761) (435,848)

Provision for (benefit of) income taxes 64,553 (125,770) 0 (150,000)
---------- ---------- --------- ----------

NET INCOME (LOSS) $72,123 ($247,807) ($29,761) ($285,848)
========== ========== ========= ==========

NET INCOME (LOSS) PER COMMON SHARE
AND COMMON SHARE EQUIVALENTS $0.01 ($0.03) ($0.00) ($0.04)
========== ========== ========= ==========

WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING 7,351,516 7,351,516 7,351,516 7,351,516
========== ========== ========== ==========
</TABLE>

See notes to consolidated financial statements.

F-3

<PAGE> 52
INTRANET SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Common Stock Additional Retained
-------------------------- Paid-in Earnings Unearned
Shares Amount Capital (Deficit) Compensation Total
----------- -------- ---------- --------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE - MARCH 31, 1994 5,000,000 $50,000 $(50,000) $ 324,037 $ 0 $ 324,037

Grant of stock options -- -- 29,343 -- (29,343) 0

Stock options compensation earned -- -- -- -- 11,564 11,564

Net income -- -- -- 72,123 -- 72,123
---------- ------- -------- --------- -------- ---------

BALANCE - MARCH 31, 1995 5,000,000 50,000 (20,657) 396,160 (17,779) 407,724

Grant of stock options -- -- 5,236 -- (5,236) 0

Stock options compensation
earned -- -- -- -- 6,808 6,808

Repurchase of common
stock (2,500,000) (25,000) 7,710 (170,618) -- (187,908)

Net loss -- -- -- (247,807) -- (247,807)
---------- ------- -------- --------- -------- ---------

BALANCE - MARCH 31, 1996 2,500,000 25,000 (7,711) (22,265) (16,207) (21,183)

Stock options compensation
earned -- -- -- -- 1,221 1,221

Common stock sold pursuant to
stock option & warrant exercises 13,355 133 28,607 -- -- 28,740

Net loss -- -- -- (285,848) -- (285,848)
--------- ------- -------- --------- -------- ---------
BALANCE - JUNE 30, 1996 2,513,355 $25,133 $ 20,896 $(308,113) $(14,986) $(277,070)
========= ======= ======== ========= ======== =========
</TABLE>

See notes to consolidated financial statements.

F-4

<PAGE> 53
INTRANET SOLUTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Year Three Months
Ended Ended
March 31, June 30
-------------------------- --------------------
1995 1996 1995 1996
------------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $72,123 ($247,807) ($29,761) ($285,848)
Adjustments to reconcile net income (loss) to
cash flows from operating activities:
Depreciation and amortization 158,160 327,221 68,545 107,031
Stock option compensation earned 11,564 6,808 0 1,221
Deferred income taxes 47,766 (55,770)
Changes in operating assets and liabilities (325,039) (325,061) (310,443) 182,835
--------- -------- -------- ---------
Cash flows from operating activities (35,426) (294,609) (271,659) 5,239
--------- -------- -------- ---------

Cash flows from investing activities:
Proceeds from sale of property and equipment 0 126,286 0 0
Purchase of property and equipment (363,512) (429,193) (88,395) (233,934)
Acquisition of intangible assets 0 (325,000) 0 0
--------- -------- --------- ---------

Cash flows from investing activities (363,512) (627,907) (88,395) (233,934)
--------- -------- -------- ---------

Cash flows from financing activities:
Net advances on revolving credit facility 103,162 874,936 408,005 380,546
Proceeds from convertible promissory notes 0 550,000 0 0
Proceeds from long-term debt 640,000 0 0 0
Payments on long-term debt (456,655) (119,163) (16,666) (24,999)
Payments on capital lease obligations (16,074) (204,983) (25,248) (47,298)
Sale (Repurchase) of common stock 0 (150,000) 0 29,340
--------- -------- -------- ---------

Cash flows from financing activities 270,433 950,790 366,091 337,589
--------- -------- -------- ---------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (128,505) 28,274 6,037 108,894

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 137,744 9,239 9,239 37,513
--------- -------- -------- ---------

CASH AND CASH EQUIVALENTS, END OF PERIOD $9,239 $ 37,513 $ 15,276 $ 146,407
========= ======== ======== =========

SUPPLEMENTAL CASH FLOWS INFORMATION:
Cash paid for interest $97,768 $226,533 $ 50,367 $ 86,045
Cash paid for income taxes $22,387 $ 19,396 $ 750 $ 0

NONCASH FINANCING AND INVESTING ACTIVITIES:
Equipment acquired with capital lease obligation $758,817 $ 93,530 $ 0 $ 0
Common stock redeemed with note payable, net $0 $ 37,908 $ 0 $ 0

DETAIL OF CHANGES IN OPERATING ASSETS AND LIABILITIES:
Accounts receivable, net ($748,428) ($1,002,824) $ 44,540 $ 168,837
Inventories (199,530) (77,889) 82,000 (185,556)
Prepaid expenses and other (75,955) (317,061) 18,913 (235,936)
Accounts payable 628,468 969,949 (370,696) 522,259
Sales tax payable 56,968 (41,149)
Accrued expenses 13,438 143,913 (85,200) (86,769)
Other Current Assets
--------- ----------- -------- ---------

Net changes in operating assets and liabilities ($325,039) ($325,061) ($310,443) $ 182,835
========= =========== ========= =========
</TABLE>

See notes to consolidated financial statements.

F-5
<PAGE> 54

INTRANET SOLUTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995 AND 1996
(including data applicable to unaudited periods)

(1) NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS AND PRINCIPLES OF CONSOLIDATION - IntraNet Solutions, Inc.
(formerly known as Technical Publishing Solutions, Inc.) ("ISI" or "the
Company") was incorporated in the State of Minnesota in 1990 and is the
surviving entity of the reverse merger discussed in Note 2. The Company is a
single source vendor providing computer hardware, software, development,
distribution and related services to help companies create, manage and
distribute unstructured business-critical information typically found in
documents. The Company has offices in Minneapolis, Milwaukee, Denver and
Phoenix and sales affiliates in Boston and Atlanta. The consolidated financial
statements include the accounts of IntraNet Solutions, Inc. and its
wholly-owned subsidiaries DocuPro Services, Inc. and IntraNet Integration
Group, Inc. All significant intercompany transactions have been eliminated.

CASH AND CASH EQUIVALENTS - The Company considers all short-term, highly liquid
investments that are readily convertible into known amounts of cash and have
original maturities of three months or less to be cash equivalents.

ACCOUNTS RECEIVABLE - Provision for losses on trade accounts receivable is made
in amounts required to maintain an adequate allowance to cover anticipated bad
debts. Accounts receivable are charged against the allowance when it is
determined by the Company that payment will not be received. Any subsequent
receipts are credited to the allowance. Accounts receivable is presented net
of an allowance of $30,000 as of March 31 and June 30, 1996.

INVENTORIES - Inventories, consisting primarily of computer hardware and
software and publishing supplies, are valued at the lower of cost (first-in,
first-out) or market value.

DEPRECIATION - Property and equipment, including leasehold improvements, are
recorded at cost. Depreciation is provided for using the straight-line method
over the estimated useful lives of the assets, two to ten years, or the life of
the lease, whichever is shorter. Maintenance, repairs and minor renewals are
expensed when incurred.

INTANGIBLE ASSETS - Intangible assets are recorded at cost and presented net of
accumulated amortization of $34,320 and $51,975 at March 31 and June 30, 1996.
Goodwill is amortized on a straight-line basis over eight years. The Company's
two covenants not to compete are amortized on a straight-line basis over their
terms of five and two years. Management periodically evaluates the value of
recorded intangible assets. At June 30, 1996, management believes all recorded
intangible assets will be realized.

SOFTWARE DEVELOPMENT COSTS - Software development costs generally are expensed
as incurred as development expense. Statement of Financial Accounting
Standards No. 86 requires the capitalization of certain software development
costs once technological feasibility is established. The capitalized cost is
then amortized on a straight-line basis over the estimated product life, or on
the ratio of current revenues to total projected product revenues, whichever is
greater. To date, the period between achieving technological feasibility, that
the Company has defined as the establishment of a working model, and the
general availability of such software has been short and software development
costs qualifying for capitalization have been insignificant. Accordingly, the
Company has not capitalized any software development costs.

F-6

<PAGE> 55

INTRANET SOLUTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
MARCH 31, 1995 AND 1996
(including data applicable to unaudited periods)

REVENUE RECOGNITION - The Company produces its revenues from (i) the sale of
software, (ii) the sale of service and maintenance contracts and (iii) the sale
of a variety of other products and services. Revenue from the sale of software
is recognized in accordance with Statement of Position 91-1 "Software Revenue
Recognition". Accordingly, revenue is recognized at the time of product
shipment if no significant Company obligations remain and collection of the
resulting sale price is probable. In instances where significant Company
obligations remain, revenue recognition is delayed until the obligation has
been satisfied. Revenue from service and maintenance contracts is generally
recognized ratably over the term of the contract. Revenue from contracts with
original durations of one year or less is recognized at the time of sale if the
Company does not expect to have material future obligations to service the
contract. Revenue from the sale of all other products and services is
recognized at the time of delivery to the customer.

INCOME TAXES - The Company has adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes", under which deferred income
tax assets and liabilities are recognized for the differences between financial
and income tax reporting bases of assets and liabilities based on currently
enacted rates and laws.

NET INCOME (LOSS) PER COMMON SHARE - Net income (loss) per common share is
determined by dividing net income (loss) by the weighted average number of
common share and common share equivalents outstanding during each period.
Common share equivalents include the dilutive effects of options and warrants
which are assumed to be exercised at the beginning of periods using the
treasury stock method and the fair value of the Company's common shares.
Common share equivalents are not included in the calculation if the effect is
anti-dilutive. Primary and fully diluted net income (loss) per share are the
same. The effects of the reverse merger discussed in Note 2 and the
stock-splits discussed in Note 7 have been retroactively applied.

USE OF ESTIMATES - The preparation of 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.

LONG-LIVED ASSETS - During fiscal 1996, the Company adopted SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed Of" (Statement No. 121). Statement No. 121 establishes
accounting standards for the recognition and measurement of impairment of
long-lived assets, certain identifiable intangibles and goodwill either to be
held or disposed. The adoption of Statement No. 121 did not have a material
impact on the Company's financial position or results of operations.

F-7

<PAGE> 56

INTRANET SOLUTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
MARCH 31, 1995 AND 1996
(including data applicable to unaudited periods)

(2) REVERSE MERGER

On January 16, 1996, the Company and its then sole stockholder entered into an
agreement and plan of merger with MacGregor Sports and Fitness, Inc. (MSF). MSF
was a publicly traded non-operating entity. At closing on July 31, 1996, the
Company's stockholders received approximately 60% of the then outstanding
common stock of MSF in exchange for their common stock. The Company recorded
this transaction as an acquisition and recapitalization. Accordingly,
historical financial information is that of the Company as the surviving entity
of the reverse merger. The following unaudited pro forma consolidated balance
sheet presents the financial position of the Company as if the aforementioned
transaction had occurred as of June 30, 1996:

(IN THOUSANDS)

<TABLE>
<CAPTION>
COMPANY MSF PRO FORMA
ASSETS HISTORICAL HISTORICAL ADJUSTMENTS PRO FORMA
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Current assets $4,244 $3,000 $ (250)(B) $6,994

Property and equipment, net 1,684 1,684
Intangible assets, net 273 273
------ ------ ------ ------
$6,201 $3,000 ($ 250) $8,951
====== ====== ====== ======

LIABILITIES AND
STOCKHOLDERS' EQUITY

Current liabilities $5,790 $ 0 (550)(A) $5,240
Long-term liabilities 688 0 688
------ ------ ------
6,478 0 5,928
Stockholders' equity (250)(B)
(277) 3,000 550 (A) 3,023
------ ------ ------ ------
$6,201 $3,000 ($ 250) $8,951
====== ====== ====== ======
</TABLE>

Pro forma adjustments to reflect:

(A) Conversion of promissory notes into common stock.
(B) Legal, accounting and banking fees and other costs of the transaction.

F-8

<PAGE> 57

INTRANET SOLUTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
MARCH 31, 1995 AND 1996
(including data applicable to unaudited periods)

(3) ACQUISITION OF ASSETS

On December 14, 1995, the Company acquired the assets of a division of a
printing business in Denver, Colorado for $200,000. The Company has recorded
the acquisition using purchase accounting and allocated the purchase price
$75,000 to inventory and equipment, $40,000 to a covenant not to compete
(amortized over two years) and $85,000 to goodwill (amortized over eight
years). In addition to the purchase price, the Company agreed to sublease
certain equipment from the seller. The operations of this business are
included in the Company's consolidated financial statements from the date of
acquisition. Due to the small nature of the business acquired and the date of
acquisition, the operations did not materially impact the Company's results of
operations for the year ended March 31, 1996.

(4) PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at:

<TABLE>
<S> <C> <C>
March 31, June 30,
1996 1996
---------- ---------
Equipment and furniture $2,007,626 2,164,177
Leasehold improvements 13,429 88,429
---------- ---------
Total property and equipment 2,021,055 2,252,606
Less: accumulated depreciation 481,737 568,730
---------- ---------
Total property and equipment, net $1,539,318 $1,683,876
========== ==========
</TABLE>

Property and equipment includes items under capital leases of $852,346, net of
accumulated depreciation of $147,803, as of March 31, 1996.

(5) SHORT-TERM DEBT

REVOLVING CREDIT FACILITY - The Company has a revolving credit agreement that
provides for borrowings of up to $1,500,000 based on available collateral.
Advances of $1,108,098, and $1,488,644 were outstanding as of March 31 and June
30, 1996. Advances are due on demand and accrue interest at the bank's base
lending rate plus 2.5% (the effective rate of interest was 10.75% as of March
31, 1996 and June 30, 1996). The agreement is secured by substantially all
Company assets, personally guaranteed by a stockholder and requires the
Company to meet various covenants including maintenance of minimum levels of
net worth.

CONVERTIBLE PROMISSORY NOTES - In December 1995, the Company issued $550,000 of
10% unsecured convertible promissory notes. The notes were due the earlier of
August 30, 1996 or the closing of the transaction described in Note 2. The
notes were converted into common stock of the Company at $3.47 per share. In
connection with the notes, the Company issued 67,693 warrants to acquire shares
of its common stock at an exercise price of $2.32 per share (a price greater
than the fair market value at the date of issuance).

F-9

<PAGE> 58

INTRANET SOLUTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
MARCH 31, 1995 AND 1996
(including data applicable to unaudited periods)

(6) LONG-TERM DEBT AND CAPITAL LEASES

LONG-TERM DEBT -

<TABLE>
<S> <C> <C>
March 31, June 30,
1996 1996
-------- --------
Note payable - bank,
monthly installments of
$8,333 plus interest at
the bank's base lending
rate plus 2.5%
(effective rate of
10.75% at March 31
and June 30,
1996), due March 1998,
secured by
substantially all
Company assets and
guaranteed by a
stockholder. $208,337 183,338
Note payable -
stockholder, due on
demand, interest at
12%, unsecured and
subordinated to bank
indebtedness. 27,500 27,500
-------- ---------
Total long-term debt 235,837 210,838
Less: current maturities 127,496 127,496
-------- ---------
Long-term debt, net $108,341 83,342
======== =========
</TABLE>

Future maturities of long-term debt are $127,496 and $108,341 for the years
ending March 31, 1997 and 1998.

CAPITAL LEASE OBLIGATIONS - The Company has certain assets under capital lease
obligations. The leases require total monthly payments of $19,556 and carry
interest rates between 14.6% and 16.6%. The minimum lease payments required
under the capital leases together with the present value of the minimum lease
payments are as follows for the years ending March 31,:

<TABLE>
<S> <C>
1997 $246,568
1998 246,568
1999 243,595
2000 164,998
2001 38,409
--------
Total 940,138
Less: amount representing interest 194,028
--------
Present value of future minimum lease payments 746,110
Less: current portion 148,045
--------
Long-term portion $598,065
========
</TABLE>

F-10

<PAGE> 59

INTRANET SOLUTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
MARCH 31, 1995 AND 1996
(including data applicable to unaudited periods)

(7) STOCKHOLDERS' EQUITY

STOCK REDEMPTION - During July 1995, the Company entered into a stock
redemption agreement to acquire 50% of its outstanding common stock from a
single stockholder for $200,000. The Company paid $150,000 at closing with the
remaining $50,000 due in $10,000 annual installments without interest. The
Company has recorded the remaining payment obligation at its net present value.

STOCK SPLITS - On June 2, 1995, the Company declared a 900-for-1 stock split.
On November 6, 1995, the Company declared a 21.22-for-1 stock split. On
October 15, 1996, the Company declared a 1-for-4 reverse stock split. The
stock splits have been retroactively reflected in the accompanying consolidated
financial statements.

STOCK OPTIONS - The Company has a 1994-1997 Stock Option Plan (the Plan),
pursuant to which options and other awards to acquire an aggregate of
2,500,000 shares of the Company's common stock may be granted. The Company
integrated all previous granted options into the Plan. The Plan is
administered by the Board of Directors, which has the discretion to determine
the number and purchase price of shares subject to stock options (which may be
below the fair market value of the common stock on the date thereof), the term
of each option, and the time or times during the term when the options become
exercisable.

The following summarizes stock options activity through June 30, 1996:

<TABLE>
<CAPTION>
Number
of Exercise
Options Prices
--------- --------------
<S> <C> <C>
Outstanding as of March 31, 1995 497,771
Options granted 934,149 $0.20 - $10.40
---------
Outstanding as of March 31, 1996 1,431,920
Options Canceled (66,384)
Options exercised (10,763)
=========
Outstanding as of June 30, 1996 1,354,773 $0.20 - $10.40
=========
</TABLE>

Certain options granted above have exercise prices less than the fair market
value of the Company's common stock on the date of grant. The Company
recognizes the compensation element of these grants over the vesting period of
the related options. The options generally vest over periods of one to five
years. As of June 30, 1996, 453,667 options were exercisable. The options
expire at various dates through January 2006. Subsequent to June 30, 1996 the
Company granted 78,750 options at $8.60 per share.

(8) RETIREMENT SAVINGS PLAN

The Company maintains a pre-tax salary reduction/profit sharing plan under the
provisions of Section 401(k) of the Internal Revenue Code. The Plan covers
substantially all full-time employees who have reached the age of 21. Profit
sharing contributions by the Company are completely discretionary.
Contributions for the years ended March 31, 1995 and 1996 were $48,162 and $0.

F-11

<PAGE> 60

INTRANET SOLUTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
MARCH 31, 1995 AND 1996
(including data applicable to unaudited periods)

(9) INCOME TAXES

Provision for income taxes consisted of the following components for the years
ended March 31,:

<TABLE>
<CAPTION>
1995 1996
------- ----------
<S> <C> <C>
Current:
Federal $12,787 ($59,770)
State 4,000 0
------- ----------
Total 16,787 (70,000)
Deferred 47,766 (66,000)
------- ----------
Total provision $64,553 ($125,770)
======= ==========
</TABLE>

The tax effects of temporary differences giving rise to the deferred items
consisted of the following at:

March 31,
1996
---------
<S> <C>
Net current deferred tax assets:
Allowance for uncollectible accounts $12,000
Inventory 12,000
---------
Net current deferred tax assets $24,000
=========
Net long-term deferred tax liabilities
(assets):
Net operating loss carryforwards ($71,000)
Amortization of intangible assets (9,000)
Depreciation of fixed assets 118,000
---------
Net long-term deferred tax liabilities $38,000
=========
</TABLE>

Deferred tax liabilities and deferred tax assets reflect the net tax effects of
temporary differences between the approximate carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income
tax purposes. The net current deferred tax assets as of March 31, 1996, are
included in prepaid expenses and other in the consolidated balance sheet. At
March 31, 1996, the Company had a net operating loss carryforward of
approximately $177,000, which, if not used, expires in 2011.

F-12

<PAGE> 61

INTRANET SOLUTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
MARCH 31, 1995 AND 1996
(including data applicable to unaudited periods)

(10) COMMITMENTS AND CONTINGENCIES

OPERATING LEASES - The Company has entered into certain noncancelable
operating lease agreements related to office/warehouse space, equipment and
vehicles. Total rent expense under operating leases was $220,020 and
$254,662 for the years ended March 31, 1995 and 1996. Minimum remaining
rental commitments under operating leases are as follows for the years ending
March 31,:

1997 $182,961
1998 106,247
1999 73,290
--------
Total $362,498
========
</TABLE>

In April 1996, the Company entered into a seven year operating lease agreement
for approximately 34,000 square feet of office and warehouse space for its
Minneapolis operations. The lease requires monthly payments of approximately
$20,000.

SOFTWARE ROYALTIES - The Company has acquired a suite of software products
complimentary with its own software development through a royalty agreement.
Prepaid royalties of up to $60,000 are payable upon delivery and acceptance of
source code, documentation and certain upgrades. Royalties (including prepaid
royalties) are due based on 15% of product sales until a total of $250,000 has
been paid and 10% thereafter. At March 31, 1996, the Company had prepaid
$50,000 of royalties. No royalties have been earned in any period.

CONSULTING AGREEMENT - The Company has a consulting agreement with a former
stockholder that requires monthly payments of $10,300 through July 2000.

(11) MAJOR SUPPLIERS

MAJOR SUPPLIERS - The Company utilizes a single supplier to provide the
majority of its computer hardware sales. Purchases from this supplier were
approximately 54% and 68% of total product purchases during the years
ended March 31, 1995 and 1996. The Company has a supply and resale
agreement with this supplier that expires June 30, 1997 and is annually
renewable.

The Company utilizes a single supplier to provide the majority of its software
and maintenance services. Purchases from this supplier were approximately 24%
of total product purchases during the year ended March 31, 1995 and 13% for
1996. The Company has a supply and resale agreement with this supplier that
expires January 1, 1998.

F-13

<PAGE> 62

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED IN CONNECTION
WITH THIS OFFERING TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER OR A SOLICITATION IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE CIRCUMSTANCES OF THE
COMPANY OR THE FACTS HEREIN SET FORTH SINCE THE DATE HEREOF.

TABLE OF CONTENTS

AVAILABLE INFORMATION......................................... iii
PROSPECTUS SUMMARY............................................ 1
THE COMPANY................................................... 1
RISK FACTORS.................................................. 4
USE OF PROCEEDS............................................... 11
DIVIDEND POLICY............................................... 11
DILUTION...................................................... 12
CAPITALIZATION................................................ 13
PRICE RANGE OF SECURITIES..................................... 14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS................................... 15
BUSINESS...................................................... 19
MANAGEMENT.................................................... 28
PRINCIPAL AND SELLING SHAREHOLDERS............................ 32
CERTAIN TRANSACTIONS.......................................... 35
DESCRIPTION OF SECURITIES..................................... 38
PLAN OF DISTRIBUTION.......................................... 40
LEGAL MATTERS................................................. 40
EXPERTS....................................................... 40
INDEX TO FINANCIAL STATEMENTS................................. F-1

INTRANET SOLUTIONS, INC.

680,746 SHARES OF COMMON STOCK

PROSPECTUS

____________, 1996

<PAGE> 63

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company is governed by Minnesota Statutes Chapter 302A. Minnesota
Statutes Section 302A.521 provides that a corporation shall indemnify any
person made or threatened to be made a party to any proceeding by reason of the
former or present official capacity of such person against judgments,
penalties, fines, including, without limitation, excise taxes assessed against
such person with respect to an employee benefit plan, settlements, and
reasonable expenses, including attorney's fees and disbursements, incurred by
such person in connection with the proceeding, if, with respect to the acts or
omissions of such person complained of in the proceeding, such person has not
been indemnified by another organization or employee benefit plan for the same
expenses with respect to the same acts or omissions; acted in good faith;
received no improper personal benefit and Section 302A.255, if applicable, has
been satisfied; in the case of a criminal proceeding, had no reasonable cause
to believe the conduct was unlawful; and in the case of acts or omissions by
persons in their official capacity for the corporation, reasonably believed
that the conduct was in the best interests of the corporation, or in the case
of acts or omissions by persons in their capacity for other organizations,
reasonably believed that the conduct was not opposed to the best interests of
the corporation. Subdivision 4 of Section 302A.521 of the Minnesota Statutes
provides that a company's articles of incorporation or bylaws may prohibit such
indemnification or place limits upon the same. The Company's articles and
bylaws do not include any such prohibition or limitation. As a result, the
Company is bound by the indemnification provisions set forth in Section
302A.521 of the Minnesota Statutes.

As permitted by Section 302A.251 of the Minnesota Statutes, the Articles
of Incorporation of the Company provide that a director shall have no personal
liability to the Company and its shareholders for breach of his fiduciary duty
as a director, to the fullest extent permitted by law.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

<TABLE>
<S> <C>
SEC fees $ 1,275
Accounting fees and expenses 15,000
Legal fees and expenses 135,000
Printing expenses 30,000
Miscellaneous 18,725
--------
Total $200,000
========
</TABLE>

All of the foregoing expenses, except SEC filing fee, have been estimated.

-I-

<PAGE> 64

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.

Since October 1, 1993, the Company has sold the securities indicated
below. The number of shares and the aggregate consideration has not been
adjusted to give effect to the 1-for-4 reverse stock split effective November
11, 1996 to shareholders of record on October 31, 1996.

On July 30 and 31, 1996, the Company's predecessor, MacGregor Sports and
Fitness, Inc. ("MSF") and IntraNet Integration Group, Inc., a Minnesota
corporation ("IntraNet," formerly known as Technical Publishing Solutions, Inc.
("TPSI")) closed on a tax-free reorganization pursuant to which IntraNet
became a wholly-owned subsidiary of the Company, and MSF changed its name to
IntraNet Solutions, Inc. The transaction was accomplished through a tax-free
reverse subsidiary merger whereby IntraNet merged with and into a wholly owned
subsidiary of MSF, with IntraNet as the surviving corporation (the "Merger").
Pursuant to the Merger Agreement, the IntrNet shareholders received
approximately 1.73 MSF shares in exchange and conversion for each one share of
IntraNet common stock held on the Effective Date. As a result of the
reorganization, MSF issued, at closing, 18,000,000 common shares to the former
shareholders of IntraNet.

In December 1995, the Company issued $550,000 of unsecured convertible notes to
a limited number of accredited investors. The unsecured notes accrued interest
rate of 10%, and were converted into Common Stock immediately prior to the
Merger at a rate of $6.00 per share.

It was claimed that each and every issuance and sale of such stock was exempt
from registration pursuant to Sections 4(2) and 4(6) of Act and pursuant to SEC
Rules 505 and 506, as transactions not involving a public offering.

ITEM 27. EXHIBITS.

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
3.1 Articles of Incorporation, as amended.
3.2 By-laws.
5 Opinion of Maslon Edelman Borman & Brand, a Professional Limited Liability
Partnership.
10.1 Lease Agreement by and between CSM Investors, Inc. and the Company dated April 24, 1996 (1)
10.2 Credit and Security Agreement by and between Diversified Business Credit, Inc. and the Company
dated March 14, 1995 (1)
10.3 Term Loan Supplement to Credit Agreement dated March 14, 1995 by and between the Company and
Diversified Business Credit, Inc. (1)
10.4 Company's 1994- 1997 Stock Option Plan. (1)
10.5 Employment Agreement dated July 30, 1996 by and between the Company and Robert Olson (1)
10.6 Employment Agreement dated July 30, 1996 1995 by and between the Company and Jeffrey J. Sjobeck (1)
21. Subsidiaries of Company. (1)
23.1 Consent of Maslon Edelman Borman & Brand, a Professional Limited Liability
Partnership (included in Exhibit 5).
23.2 Consent of Lund Koehler Cox & Company, PLLP. (1)
25.1 Powers of Attorney. (1)
27 Financial Data Schedule (1)
</TABLE>

-II-
<PAGE> 65

__________

(1) Previously filed

ITEM 28. UNDERTAKINGS.

The undersigned small business issuer hereby undertakes:

(1) to file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:

(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement; and

(iii) Include any additional or changed material information on
the plan of distribution; and

(2) for determining liability under the Securities Act to treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering; and

(3) to file a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.

Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions,
or otherwise, the small business issuer has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the small business issuer of expenses
incurred or paid by a director, officer or controlling person of the small
business issuer 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, the small business issuer 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 whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.

The undersigned small business issuer hereby undertakes that:

-III-
<PAGE> 66

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the small business issuer 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 of
1933, 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.

-IV-
<PAGE> 67

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable ground to believe that it meets
all of the requirements for filing on Form SB-2 and authorized this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on
November 4, 1996.

INTRANET SOLUTIONS, INC.
Registrant

By /s/ Robert F. Olson
-------------------
Robert F. Olson

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on the 4th day of
November, 1996 by the following persons in the capacities indicated:

SIGNATURE TITLE
<S> <C>
/s/ Robert F. Olson President, Chief Executive Officer, ( Principal Executive
- -------------------------- Officer) and Chairman of the Board
Robert F. Olson

/s/ Jeffrey J. Sjobeck Chief Financial Officer (chief financial officer and accounting
- -------------------------- officer)
Jeffrey J. Sjobeck

* Director
- --------------------------
Ronald E. Eibensteiner

* Director
- --------------------------
David D. Koentopf

* Director
- --------------------------
Henry Fong
</TABLE>

* By: /s/ Jeffrey J. Sjobeck
--------------------------
Jeffrey J. Sjobeck
as Attorney-in-fact

-V-
<PAGE> 68

EXHIBITS

NUMBER DESCRIPTION PAGE
- ------ ----------- ----
<S> <C> <C>

3.1 Articles of Incorporations, as amended

3.2 By-Laws

5 Opinion of Maslon Edelman Borman & Brand, a
Professional Limited Liability Partnership

</TABLE>

-IV-

<PAGE> 1
EXHIBIT 3.1

ARTICLES OF INCORPORATION
OF
INTRANET SOLUTIONS, INC.
(as amended)

ARTICLE I.

The name of this Corporation shall be IntraNet Solutions, Inc. (the
"Corporation")

ARTICLE II.

The registered office of the Corporation in Minnesota shall be: 9625 West
76th Street, Suite 150, Minneapolis, Minnesota 55344.

ARTICLE III.

The aggregate number of shares of stock which the Corporation shall have
authority to issue is twelve million five hundred thousand (12,500,000) shares
of common stock, $.01 par value.

ARTICLE IV.

Shares of the Corporation acquired by the Corporation shall become
authorized but unissued shares and may be reissued as provided in these
Articles of Incorporation.

ARTICLE V.

No shareholder of this Corporation shall have any cumulative voting
rights.

ARTICLE VI.

No shareholder of this Corporation shall have any preemptive rights by
virtue of Section 302A.413 of the Minnesota Statutes (or similar provisions of
future law) to subscribe for, purchase or acquire any shares of the Corporation
of any class, whether unissued or now or hereafter authorized, or any
obligations or other securities convertible into or exchangeable for any such
shares.

<PAGE> 2

ARTICLE VII.

Any action required or permitted to be taken at a meeting of the Board of
this Corporation may be taken by written action signed hy the number of
directors that would be required to take such action at a meeting of the Board
of Directors at which all directors are present.

ARTICLE VIII.

No director of this Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty by such director as a director; provided, however, that this Article shall
not eliminate or limit the liability of a director to the extent provided by
applicable law: (i) for any breach of the director's duty of loyalty to the
Corporation or its shareholders; (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law; (iii)
under Section 302A.559 or 80A.23 of the Minnesota Statutes, as amended; (iv)
for any transaction from which the director derived an improper personal
benefit; or (v) for any act or omission occurring prior to the effective date
of this Article. If the Minnesota Business Corporation Act hereafter is
amended to authorize the further elimination or limitation of the liability of
directors, then the liability of a director of the Corporation in addition to
the limitation and elimination of personal liability provided herein, shall be
eliminated or limited to the fullest extent permitted by the Minnesota Business
Corporation Act, as so amended. No amendment to or repeal of this Article VIII
shall apply to, or have any effect on, the liability or alleged liability of
any director for or with respect to any acts or omissions of such director
occurring prior to such amendment or repeal.

ARTICLE IX.

The Corporation shall indemnify to the fullest extent permissible under
the provisions of Chapter 3O2A of the Minnesota Statutes, as amended, (as now
or hereafter in effect) any person made or threatened to be made a party to or
witness in any threatened, pending, or completed civil, criminal,
administrative, arbitration, or investigative proceeding, including a
proceeding by or in the right of the Corporation by

2
<PAGE> 3

reason of the fact that he, his testator or intestate, is or was a
director or officer of the Corporation, or by reason of the fact that such
director or officer, while a director or officer of the Corporation, is or was
serving at the request of the Corporation, or whose duties in that position
involved service as a director, officer, partner, trustee or agent of another
organization or employee benefit plan, against all judgments, penalties, fines,
including, without limitation, excise taxes assessed against the person with
respect to an employee benefit plan, settlements, and reasonable expenses,
including attorneys' fees and disbursements. Nothing contained herein shall
affect any rights to indemnification to which employees or agents of the
Corporation other than directors and officers may be entitled under the
provisions of Chapter 302A of the Minnesota Statutes, as amended. Any repeal
or modification of this Article IX shall be prospective only, and shall not
adversely affect any right to indemnification or protection of a director or
officer of the Corporation existing at the time of such repeal or modification.
No amendment to or repeal of this Article shall apply to or have any effect on
the liability of or alleged liability of any director or the Corporation for or
with respect to any acts or omissions of such director occurring prior to such
amendment or repeal.

ARTICLE X.

The shareholders of this Corporation may, by a majority vote of all shares
issued, outstanding and entitled to vote:

1. Authorize the Board of Directors to sell, lease, exchange or
otherwise dispose of all, or substantially all, of its property and
assets, including its goodwill, upon such terms and conditions and
for such consideration, which may be money, shares, bonds, or other
instruments for the payment of money or other property, as the Board
of Directors deems expedient and in the best interests of the
Corporation;

2. Amend the Articles of Incorporation of this Corporation for
any reasons or lawful purpose, and in the event that any such
amendment adversely affects the rights of holders of shares of such
different classes, the

3
<PAGE> 4

affirmative vote of a majority of each such class shall be
sufficient to adopt the amendment; and

3. Adopt and approve an agreement of merger or consolidation
presented to them by the Board of Directors.

AS APPROVED AND ADOPTED BY THE BOARD OF DIRECTORS OF INTRANET SOLUTIONS,
INC. EFFECTIVE OCTOBER 15, 1996.

<PAGE> 1
EXHIBIT 3.2

BYLAWS
OF
INTRANET SOLUTIONS, INC.

ARTICLE I

OFFICES AND CORPORATE SEAL

Section 1.01. Registered and Other Offices. The registered office of the
corporation in Minnesota shall be that set forth in the Articles of
Incorporation or in the most recent amendment of the Articles of Incorporation
or statement of the Board of Directors filed with the Secretary of State of
Minnesota changing the registered office in the manner prescribed by law. The
corporation may have such other offices, within or without the State of
Minnesota, as the Board of Directors shall, from time to time, determine.

Section 1.02. Corporate Seal. The corporation shall have no corporate
seal.

ARTICLE II

MEETINGS OF SHAREHOLDERS

Section 2.01. Time and Place of Meetings. Regular or special meetings of
the shareholders, if any, shall be held on the date and at the time and place
fixed by the Chairman of the Board of Directors in the absence of Board action,
or the Board, except that a special meeting called by, or at the demand of a
shareholder or shareholders, shall be held in the county where the principal
executive office is located.

Section 2.02. Regular Meetings. At any regular meeting of the
shareholders there shall be an election of qualified successors for directors
who serve for an indefinite term and whose terms have expired or are due to
expire within six months after the date of the meeting. Any business
appropriate for action by the shareholders may be transacted at a regular
meeting. No meeting shall be considered a regular meeting unless specifically
designated as such in the notice of meeting or unless all the shareholders are
present in person or by proxy and none of them objects to such designation.

Section 2.03. Demand by Shareholders. Regular or special meetings may be
demanded by a shareholder or shareholders, pursuant to the provisions of
Minnesota Statutes, Sections 302A.431, Subd. 2, and 302A.433, Subd. 2,
respectively.

Section 2.04. Quorum; Adjourned Meetings. The holders of fifty percent
(50%) of the voting power of the shares entitled to vote at a meeting
constitute a quorum for the transaction of business; said holders may be
present at the meeting either in person or by proxy. If a quorum is present
when a duly called or held meeting is convened, the shareholders present may
continue to

<PAGE> 2

transact business until adjournment, even though withdrawal of shareholders
originally present leaves less than the proportion or number otherwise required
for a quorum.

Section 2.05. Voting. At each meeting of the shareholders, every
shareholder having the right to vote shall be entitled to vote either in person
or by proxy. Unless otherwise provided by the Articles of Incorporation or a
resolution of the Board of Directors filed with the Secretary of State, each
shareholder shall have one vote for each share held. Upon demand of any
shareholder, the vote upon any question before the meeting shall be by ballot.

Section 2.06. Notice of Meetings. Notice of all meetings of shareholders
shall be given to every holder of voting shares, except where the meeting is an
adjourned meeting and the date, time and place of the meeting were announced at
the time of adjournment. The notice shall be given at least ten (10), but not
more than sixty (60) days before the date of the meeting, except that written
notice of a meeting at which an agreement of merger is to be considered shall
be given to all shareholders, whether entitled to vote or not, at least twenty
(20) days prior thereto. Every notice of any special meeting shall state the
purpose or purposes for which the meeting has been called, and the business
transacted at all special meetings shall be confined to the purpose stated in
the call, unless all of the shareholders are present in person or by proxy and
none of them objects to consideration of a particular item of business.

Section 2.07. Waiver of Notice. A shareholder may waive notice of any
meeting of shareholders. A waiver of notice by a shareholder entitled to
notice is effective whether given before, at or after the meeting and whether
given in writing, orally or by attendance.

Section 2.08. Authorization Without a Meeting. Any action required or
permitted to be taken at a meeting of the shareholders may be taken without a
meeting as authorized by law.

ARTICLE III

DIRECTORS

Section 3.01. General Purposes. Except as authorized by the shareholders
by unanimous affirmative vote, the business and affairs of the corporation
shall be managed by and shall be under the direction of the Board of Directors.

Section 3.02. Number. Qualifications and Term of Office. The Board of
Directors of this corporation shall consist of not less than one nor more than
seven persons. The initial Board of Directors shall consist of five persons.
The number of directors may be increased or, subject to Minnesota Statutes,
Section 302A.223, decreased at any time by amendment of these Bylaws.
Directors need not be shareholders. Each of the directors shall hold office
until the regular meeting of the shareholders next held after his election,
until his successor shall have been elected and shall qualify, or until he
shall resign or shall have been removed as hereinafter provided.

-2-
<PAGE> 3

Section 3.03. Board Meetings; Place and Notice. Meetings of the Board of
Directors may be held from time to time at any place within or without the
State of Minnesota that the Board of Directors may designate. In the absence
of designation by the Board of Directors, Board meetings shall be held at the
principal executive office of the corporation, except as may be otherwise
unanimously agreed orally or in writing or by attendance. The Chairman of the
Board, the President, or directors comprising at least one third of the number
of directors then in office may call a Board meeting by giving five (5)
business days notice if by mail, or three (3) business days notice if by
telephone, telex, telegram or in person, to all directors of the day or date
and time of the meeting. The notice need not state the purpose of the meeting.
If a meeting schedule is adopted by the Board, or if the date and time of a
Board meeting has been announced at a previous meeting, no notice is required.

Section 3.04. (a) Advance Written Consent or Opposition. Any member of
the Board or a committee thereof, as the case may be, may give advance written
consent or opposition to a proposal to be acted on at a Board or committee
meeting. If a director or committee member is not present at the meeting,
advance written consent or opposition to a proposal does not constitute
presence for the purpose of determining whether a quorum exists, but such
advance written consent or opposition shall be a vote in favor of or against
the proposal or resolution if the proposal or resolution acted upon at the
meeting is substantially the same or has substantially the same effect as the
proposal or resolution to which the member of the Board or committee has
consented or objected.

(b) Action Without Meeting. Any action, other than an action requiring
shareholder approval, may be taken by written action signed by the number of
directors that would be required to take the same action at a meeting of the
board at which all directors were present. An action requiring shareholder
approval required or permitted to be taken at a board meeting may be taken by
written action signed by all of the directors. Any such written action is
effective when signed by the required number of directors, unless a different
effective time is provided in the written action. When written action is taken
by less than all directors, all directors shall be notified immediately of its
text and effective date. Failure to provide the notice does not invalidate the
written notice. A director who does not sign or consent to the written action
has no liability for the action or actions taken thereby.

Section 3.05. Waiver of Notice. A director may waive notice of a meeting
of the Board. A waiver of notice by a director is effective, whether given
before, at or after the meeting and whether given in writing, orally or by
attendance.

Section 3.06. Quorum. A majority of the directors currently holding
office is a quorum for the transaction of business. If a quorum is present
when a duly called or held meeting is convened, the directors present may
continue to transact business until adjournment, even though withdrawal of
directors originally present leaves less than the proportion or number
otherwise required for a quorum.

-3-

<PAGE> 4

Section 3.07. Vacancies. Vacancies on the Board resulting from the
death, resignation or removal of a director may be filled by the affirmative
vote of a majority of the remaining directors, even though less than a quorum.
Each director elected under this Section to fill a vacancy shall hold office
until a qualified successor is elected by the shareholders at the next regular
or special meeting of the shareholders.

ARTICLE IV

OFFICERS

Section 4.01. Numbers. The officers of the corporation shall be a
President, one or more Vice Presidents, a Secretary, and a Treasurer, and such
other officers as the Board of Directors, in its discretion, may deem
necessary. The Board of Directors, in its discretion, shall elect a Chairman
of the Board of Directors, who, when present, shall preside at all meetings of
the Board of Directors, and who shall have such other powers as the Board shall
prescribe.

Section 4.02. Term. Officers shall hold office at the will of the Board
for an indefinite term until their successors are elected and qualified. Any
officer elected or appointed by the Board of Directors may be removed by the
Board at any time with or without cause.

Section 4.03. President. The President shall have such powers and duties
as are designated by the Board of Directors. The President and the Secretary,
unless some other person is specifically authorized by vote of the Board of
Directors, shall sign all certificates of stock, bonds, deeds, mortgages,
agreements, modification of mortgage agreements, leases, and contracts of the
corporation.

Section 4.04. Vice President. If a Vice President or Vice Presidents
have been elected, they shall have such powers and perform such duties as may
be prescribed by the Board of Directors or by the President. In the event of
absence or disability of the President, Vice Presidents shall succeed to the
President's power and duties in the order designated by the Board of Directors.

Section 4.05. Secretary. The Secretary shall keep accurate minutes of
all meetings of the shareholders and the Board of Directors, shall give proper
notice of meetings of shareholders and directors, and shall perform such other
duties and have such other powers as the Board of Directors or the President
may from time to time prescribe. In his absence at any meeting, an Assistant
Secretary or a Secretary Pro Tempore shall perform his duties.

Section 4.06. Treasurer. The Treasurer, subject to order of the Board of
Directors, shall have the care and custody of the money, funds, valuable
papers, and documents of the corporation (other than his own bond, if any,
which shall be in the custody of the President), and shall have and exercise,
under the supervision of the Board of Directors, all the powers and duties

-4-

<PAGE> 5

commonly incident to his office, and shall give bond in such form and amount
and with such sureties as shall be required by the Board of Directors. The
Treasurer shall keep accurate accounts of all monies of the corporation
received or disbursed. He shall deposit all monies, drafts and checks in the
name of, and to the credit of, the corporation in such banks and depositaries
as a majority of the whole Board of Directors shall from time to time
designate. He shall have power to endorse for deposit all notes, checks and
drafts received by the corporation. He shall disburse the funds of the
corporation in the manner prescribed by the Board of Directors, making proper
vouchers therefor. He shall render to the directors, whenever required, an
account of all his transactions as Treasurer and of the financial condition of
the corporation and shall perform such other duties as may be prescribed from
time to time by the Board of Directors.

Section 4.07. Additional Officers and Agents. The Board of Directors, at
its discretion, may appoint Vice presidents, one or more assistant treasurers,
one or more assistant secretaries, and such other officers or agents as it may
deem advisable, and may prescribe the duties of any such officer or agent.

Section 4.08. Compensation. The officers of the corporation shall
receive such compensation for their services as may be determined from time to
time by resolution of the Board of Directors.

ARTICLE V

SHARES AND THEIR TRANSFER

Section 5.01. Certificates for Shares. Every shareholder of this
corporation shall be entitled to a certificate, to be in such form as
prescribed by law and adopted by the Board of Directors, certifying the number
of shares of the corporation owned by him. The certificates shall be numbered
in the order in which they are issued and shall be signed by the president and
Secretary.

Section 5.02. Transfer of Shares. Transfer of shares on the books of the
corporation may be authorized only by the shareholder named in the certificate
or the shareholder's legal representative, or the shareholder's duly authorized
attorney in fact, and upon surrender of the certificate or the certificates for
such shares. The corporation may treat, as the absolute owner of shares of the
corporation, the person or persons in whose name or names the shares are
registered on the books of the corporation.

-5-

<PAGE> 6

ARTICLE VI

AMENDMENTS

Section 6.01. Subject to the power of shareholders to adopt, amend, or
repeal these Bylaws as provided in Minnesota Statutes Section 302A.181,
subdivision 3, any Bylaw may be amended or repealed by the Board of Directors
at any meeting, provided that, after adoption of the initial Bylaws, the Board
shall not adopt, amend, or repeal a Bylaw fixing a quorum for meetings for
shareholders, prescribing procedures for removing directors or filling
vacancies in the Board, or fixing the number of directors or their
classifications, qualifications, or terms of office. The Board may adopt or
amend a Bylaw to increase the number of directors.

ARTICLE VII

INDEMNIFICATION

Section 7.01. The corporation shall indemnify persons for such expenses
and liabilities in such manner, under such circumstances, and to the extent
required by Minnesota statutes Section 302A.52l.

<PAGE> 1
EXHIBIT 5

[MASLON EDELMAN BORMAN & BRAND LETTERHEAD]
96-1254

IntraNet Solutions, Inc.
9625 W. 76th Street, Suite 150
Minneapolis, MN 55344

Ladies and Gentlemen:

We have acted on behalf of IntraNet Solutions, Inc., a Minnesota
corporation (the "Company") in connection with the preparation of a
Registration Statement on Form SB-2 (the "Registration Statement"),
relating to the registration under the Securities Act of 1933, as
amended, of which up to 435,167 shares, $.01 par value, (the "Company
Shares") will be offered and issued upon exercise of certain warrants
by the Company and up to 254,579 shares (the "Selling Shares") will be
offered and sold by certain shareholders of the Company (the "Selling
Shareholders").

Upon examination of such corporate documents and records as we
have deemed necessary or advisable for the purposes hereof and
including and in reliance upon certain certificates by the Company, it
is our opinion that:

1. The Company is a validly existing corporation in good standing
under the laws of the State of Minnesota.

2. The Shares have been duly authorized, and when issued as
described in the Registration Statement, will be validly issued, fully
paid and non-assessable.

3. The Selling Shares have been validly issued and are fully paid
and non-assessable.

We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and the references to our firm under the
heading "Legal Matters" in the Registration Statement.

Very truly yours,

Maslon Edelman Borman & Brand,
a Professional Limited Liability Partnership