IMPRESO INC - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

FOR THE QUARTERLY PERIOD ENDED MAY 31, 2003

OR

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the transition period _____________to __________________

COMMISSION FILE NUMBER 000-29883

IMPRESO, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 75-2849585
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

652 SOUTHWESTERN BOULEVARD
COPPELL, TEXAS 75019
(Address of principal executive offices)

(972) 462-0100
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days:

Yes X No
--- ---

Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock as of the latest practicable date.

Class of Common Stock Shares outstanding at July 14, 2003
--------------------- -----------------------------------
$0.01 Par Value 5,278,780

IMPRESO, INC. AND SUBSIDIARIES

FORM 10-Q

MAY 31, 2003

INDEX

IMPRESO, INC. AND SUBSIDIARIES

INTERIM CONSOLIDATED BALANCE SHEETS

ASSETS

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

1

IMPRESO, INC. AND SUBSIDIARIES

INTERIM CONSOLIDATED BALANCE SHEETS (CONTINUED)

LIABILITIES AND STOCKHOLDERS' EQUITY

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

2

IMPRESO, INC. AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

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

3

IMPRESO, INC. AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

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

4

IMPRESO, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. ORGANIZATION AND NATURE OF BUSINESS

Impreso, Inc., (formerly Impreso.com, Inc.) a Delaware corporation (referred to
collectively with its subsidiaries as the "Company"), is the parent holding
company of TST/Impreso, Inc. ("TST"), a manufacturer and distributor to dealers
and other resellers of paper and film products for commercial and home use in
domestic and international markets, and Hotsheet.com, Inc., the owner and
operator of the Hotsheet.com web portal. TST's product line consists of standard
continuous computer stock business forms; thermal facsimile paper; cut sheet
products such as copy paper, ink jet paper, digital photo paper and
transparencies; fine business stationary; point of sale and cash register
machine rolls; high speed laser roll paper; wide format engineering rolls; wide
format ink jet media; and processed laser cut sheets. TST has one wholly owned
subsidiary, TST/Impreso of California, Inc., which was formed to support the
activities of the paper converting segment of the Company's business.

2. INTERIM CONSOLIDATED FINANCIAL STATEMENTS

In the opinion of management, the unaudited Interim Consolidated Financial
Statements of the Company include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the Company's
financial position as of May 31, 2003, and its results of operations for the
three and nine months ended May 31, 2003 and May 31, 2002. Results of the
Company's operations for the interim period ended May 31, 2003, may not be
indicative of results for the full fiscal year. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to the rules and regulations promulgated by the Securities and Exchange
Commission (the "SEC").

The unaudited Interim Consolidated Financial Statements should be read in
conjunction with the audited Consolidated Financial Statements and accompanying
notes of the Company and its subsidiaries, included in the Company's Form 10-K,
as amended (the "Company's Form 10-K"), for the fiscal year ended August 31,
2002 ("Fiscal 2002"). Accounting policies used in the preparation of the
unaudited Interim Consolidated Financial Statements are consistent in all
material respects with the accounting policies described in the Notes to
Consolidated Financial Statements in the Company's Form 10-K.

3. NEW ACCOUNTING PRONOUNCEMENTS

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure." This Statement, which is effective for
the years ending after December 15, 2003 amends Statement No. 123 "Accounting
for Stock-Based Compensation" and provides

5

alternative methods of transition for voluntary change to the fair value-based
method of accounting for stock based employee compensation. In addition,
Statement No. 148 amends the disclosure requirements of Statement No. 123
regardless of the accounting method used to account for stock based
compensation. The Company has chosen to continue to account for stock based
compensation of employees using the intrinsic value method prescribed in
Accounting Principles Board Opinion No. 24 "Accounting for Stock Issued to
Employees" and related interpretations. However, the enhanced disclosure
provisions as defined in SFAS No. 148 are effective for the fiscal quarter ended
May 31, 2003, and have been adopted by the Company.

4. INVENTORIES

Inventories are stated at the lower of cost (principally on a first-in,
first-out basis) or market and include material, labor and factory overhead.

Inventories consisted of the following:

5. LONG-TERM DEBT AND LINE OF CREDIT

The following is a summary of long-term debt and line of credit:

Prepetition amount listed above represents the renegotiated amounts and terms
under the 1993 plan of reorganization.

As of May 31, 2003, the revolving credit line is limited to the lesser of $25
million or a percentage of eligible trade accounts receivable and inventories,
as defined. The line of credit has restrictive covenants requiring the
maintenance of a minimum tangible net worth and working capital requirements, as
defined. On May 31, 2003, the remaining availability under the revolving credit
line was $7 million. As of May 31, 2003, the Company was in compliance with all
covenants.

One of the notes payable contains restrictive covenants on current and debt to
worth ratios, and the payment of cash dividends.

Two of the notes payable are indebtedness of the Company resulting from a seller
financing an acquisition the Company completed in 2001. Payments on these notes
were suspended as a result of a breach by seller of an ancillary supply
agreement entered into as part of the acquisition. On November 20, 2003, the
seller filed for bankruptcy. The Company continues to record these obligations,
while the related disputes are resolved.

6. SUPPLEMENTAL CASH FLOW INFORMATION

7. STOCK OPTIONS

As of May 31, 2003, the Company maintains an Incentive Stock Option Plan. The
Company accounts for this plan under the recognition and measurement principles
of APB Opinion No. 25,

8

"Accounting for Stock Issued to Employees," and related Interpretations No
stock-based compensation costs are reflected in net income, as all options
granted under those plans had an exercise price equal to the market value of the
underlying common stock on the date of grant. The following table illustrates
the effect on net income and earnings per share if the Company had applied the
fair value recognition provisions of FASB Statement No. 123, "Accounting for
Stock-Based Compensation," to stock-based employee compensation.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

CRITICAL ACCOUNTING POLICIES

The accounting policies described below are those the Company considers critical
in preparing its consolidated financial statements . These policies require the
application of significant judgement by management in selecting the appropriate
assumptions for calculating financial estimates. By their nature, these
judgements are subject to an inherent degree of uncertainty. These judgements
are based on historical experience, the Company's observation of trends in the
industry, information provided by customers and information available from other
outside sources, as appropriate and available at the time the estimates are
made. However, as described below, these estimates could change materially if
different information or assumptions were used. The Company believes that of its
significant accounting policies, the following may involve a higher degree of
judgment or estimation than other accounting policies. The descriptions below
are summarized, have been simplified for clarity, and should be read in
conjunction with the notes to the Consolidated Financial Statements in the
Company's Form 10-K for Fiscal 2002.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is provided for
financial reporting purposes using the straight-line method over estimated
useful lives ranging from 5 to 7 years for furniture, fixtures and equipment and
up to 30 years for facilities. These estimates require assumptions that are
believed to be reasonable. Long-lived assets are evaluated for impairment
annually and when an event occurs that indicates an impairment may exist.

Accounts Receivable (doubtful accounts) Reserves

The Company provides for losses on accounts receivable based upon their current
status, historical experience and management's evaluation of existing economic
conditions. Significant changes

9

in customer profitability or general economic conditions may have a significant
effect on the Company's allowance for doubtful accounts.

Revenue Recognition

TST's sales are recorded when products are shipped to customers. TST is
reasonably assured a majority of the sales are collectible upon shipment due to
it's credit policies and collection methods. For those accounts TST is not
reasonablely assured of collection the Company reserves against doubtful
accounts based upon historical experience and management's evaluation of
existing economic conditions. Hotsheet.com, Inc. generates its revenue by click
through fee advertising revenues and commissions earned. Click through fees are
generated when traffic is sent from the Hotsheet.com website, via a link, to a
vendors website. Commissions are generated when the linked traffic makes
purchases. The revenue is recognized upon receipt.

Inventories

Inventories are valued at the lower of cost or market, cost being determined on
the first-in, first-out method. Reserves for slow moving, obsolete products, or
bad (damaged) products are based on historical experience, acquisition
activities, and secured lender policies. The Company evaluates, and if
necessary, adjusts reserves quarterly.

Historically, the Company has not reserved for slow moving, obsolete or bad
inventories. Substantially all of the slow moving products can be repackaged
into different formats or labels. Demand for products that are associated with
obsolete technology slowly decline as sales of new hardware requiring new or
different consumables increase. The reduced demand for products which are
becoming obsolete is easily monitored and scheduled production of these items is
adjusted accordingly. If damage is caused to a product it is most often minor in
value and expensed as damage occurs.

Deferred Taxes

The Company accounts for income taxes under the liability method. Deferred tax
assets and liabilities are recognized based on differences between financial
statement and tax basis of assets and liabilities using presently enacted tax
rates.

Returns and Allowances

The Company records reductions in revenue when product are returned. Returns and
allowances are monitored based on a historical percentage of sales. All returns
must be approved by the Company prior to the product being returned, and in some
instances a restocking fee is charged to the customer. The Company also monitors
reasons for return, such as quality, shipping errors or ordering errors.

Commissions and Rebates

The Company reserves commissions and rebates paid to certain customers based on
specific contractual agreements. These reserves are calculated based upon sales
by customer, and adjusted quarterly to reflect increases and decreases in each
customer's sales and payments of commissions and rebates.

10

RESULTS OF OPERATIONS FOR THE INTERIM PERIODS ENDED MAY 31, 2003 AND MAY 31,
2002.

Net Sales --- Net sales decreased from $33.1 million in the three months ended
May 31, 2002, to $28.9 million in the three months ended May 31, 2003 ("Third
Quarter"), a decrease of $ 4.2 million or 12.6%. Net sales increased from $84.8
million in the nine months ended May 31, 2002, to $92.4 million in the same
period in the year ending August 31, 2003 ("Fiscal 2003"), an increase of $7.5
million, or 8.9%. Net sales decreased in the Third Quarter, as compared to the
corresponding period of the prior year, as a result of decreased sales of
branded products and the slowed economy. The sales decreased due to new
manufacturers in the marketplace of identical branded products. Net sales
increased in the nine months ended May 31, 2003, due to the inclusion of a full
nine months of sales from our acquisition on March 19, 2002, as compared to only
2.5 months in the corresponding period of the prior year.

Gross Profit --- Gross profit decreased from $3.7 million in the three months
ended May 31, 2002, to $3.2 million in the three months ended May 31, 2003, a
decrease of 12.4%. Gross profit increased from $9.2 million in the nine months
ended May 31, 2002, to $9.7 million in the same period in 2003, an increase of
$516,000 or 5.6%. Gross profit margin for the three and nine month periods ended
May 31, 2002 and May 31, 2003, remained stable at 11%. The decrease and increase
in Gross Profit for the three and nine month periods ended May 31, 2003,
corresponded to the decrease and increase, respectively, of net sales for those
periods.

Selling, General, and Administrative Expenses --- SG&A expenses decreased from
$2.5 million in the three months ended May 31, 2002 to $2.3 million in the three
months ended May 31, 2003. This decrease was primarily the result of lower
travel and entertainment expenses which were higher in 2002 due to travel
associated with the United acquisition. SG&A as a percent of net sales increased
from 7.5% in the three months ended May 31, 2002, to 8.1% in the three months
ended May 31, 2003 due to the decrease in sales. SG&A expenses for the nine
months ended May 31, 2003 increased to $7.1 million from $6.7 million in the
nine months ended May 31, 2002, but decreased as a percentage of net sales from
7.9% in the nine months ended May 31, 2002, to 7.7% in the nine months ended May
31, 2003. The decrease in SG&A as a percentage of sales for the nine months
ended May 31, 2003, are due to the efficiencies achieved with the consolidation
of the sales forces following the acquisition of substantially all of the
operating assets of United Computer Supplies, Inc. and subsidiary ("United").

Interest Expense --- Interest expense decreased from $432,000 in the three
months ended May 31, 2002, to $425,000 in the same period of Fiscal 2003. The
decrease of 1.6% is due to the decrease in the prime interest rate on which our
Line of Credit is based. Interest expense increased from $1.3 million in the
nine months ended May 31, 2002, to $1.4 million in the corresponding period of
Fiscal 2003, an increase of 9.5%. This increase was primarily attributable to
increased borrowings due to the acquisition of substantially all of the
operating assets of United.

Income Taxes --- Income tax expense decreased from $299,000 for the three months
ended May 31, 2002, to $217,000 in the Third Quarter.

Income tax expense decreased from $857,000 for the nine months ended May 31,
2002, to $560,000 in the nine months ended May 31, 2003. The decrease in income
tax expense for the three and nine

11

month periods ended May 31, 2003, as compared to the corresponding periods of
the prior year is a result of decrease in taxable income.

LIQUIDITY AND CAPITAL RESOURCES

Working capital increased to $13 million at May 31, 2003, from $12 million at
August 31, 2002. This represented an increase of 9.3%.

Effective October 28, 2002, TST entered into an amended and restated loan
agreement with a commercial financial corporation, which matures in May 2004.
The agreement provides for a $25 million line of credit and an inventory
sub-limit of $21 million. The loan is secured by, among other things, inventory,
trade receivables, equipment and a personal guarantee of Marshall Sorokwasz, our
Chairman of the Board and President, and Trustee of a trust which is a principal
shareholder of our Company. A new provision in the amended and restated loan
agreement allows the Company to elect the application of a Eurodollar interest
rate plus 2.75% for 90 day periods to specified amounts of the loan.

Available borrowings under this line of credit, which accrued interest at the
prime rate of interest plus .25% (4.5% at May 31, 2003), are based upon
specified percentages of eligible accounts receivable and inventories. As of May
31, 2003, there was a $7 million borrowing capacity remaining under the $25
million revolving line of credit.

On July 7, 2003, we elected to implement the Eurodollar interest rate, currently
1.110% plus 2.75%, to $12,000,000 of our outstanding loan balance. This rate is
locked for 90 days.

On April 22, 2003, we executed a one-year, $1.4 million construction loan with
the current mortgagee of the Itasca, Illinios building to expand the building an
additional 34, 500 square feet.

We believe that the funds available under the loans encumbering our California,
Illinois, Pennsylvania, Texas and West Virginia plants, the revolving credit
facility, cash and cash equivalents, trade credit and internally generated funds
will be sufficient to satisfy our requirements for working capital and capital
expenditures for at least the next twelve months. Such belief is based on
certain assumptions, including the continuation of current operations and no
extraordinary adverse events, and there can be no assurance that such
assumptions are correct. In addition, expansion of our operations due to an
increased demand for products TST manufactures or significant growth of
Hotsheet.com, Inc. may require us to obtain additional capital to add new
operations or manufacturing facilities. If that should occur, we anticipate that
the funds required would be generated through securities offerings or additional
debt. There can be no assurance that any additional financing will be available
if needed, or, if available, will be on acceptable terms.

As of May 31, 2003, we did not own derivative or other financial instruments for
trading or speculative purposes. The implementation of Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" does not have a material impact on our financial position or results
of operations.

12

INVENTORY MANAGEMENT; RAW MATERIALS OF TST

We believe that it is necessary for TST to maintain a large inventory of
finished goods and raw materials to adequately service its customers. In recent
years inventory levels had been increased to facilitate the introduction of new
brands and expanded product lines. At the beginning of Fiscal 2002, we
implemented a program to reduce inventory. From August 31, 2001 to August 31,
2002, TST inventory levels were reduced by over $4.3 million. This is in
addition to the depletion of $3 million of inventory acquired in the purchase of
the assets of United in March 2002. In the nine months ended May 31, 2003,
inventories decreased an additional $2.5 million. Management intends to continue
reducing inventory through the remainder of Fiscal 2003, however, downward
pressures on raw material prices could compress the market for our existing
inventory and have a material adverse effect on the results of operations of TST
or restrain management's attempts at reducing inventory.

For the six month period ended February 28, 2003, the price of raw materials had
remained relatively stable. During the Third Quarter, the price of raw materials
started to rapidly drop. Management believes that prices will continue to
decrease through the end of our 2003 fiscal year and the first three months of
the fiscal year ending August 31, 2004.

TST bears the risk of increases in the prices charged by its suppliers and
decreases in the prices of raw materials held in its inventory. If prices for
products held in its finished goods inventory decline, if prices for raw
materials required by it increase, or if new technology is developed that
renders obsolete products distributed and held in inventory by TST, the
Company's business could be materially adversely affected.

TST purchases raw paper, coated thermal facsimile paper, coated technical paper,
carbon and carbonless paper (consisting of a wide variety of weights, widths,
colors, sizes and qualities), transparency film, packaging and other supplies in
the open market from a number of different companies around the world. We
believe that TST has adequate sources of raw material supplies to meet the
requirements of its business. We believe that TST has a good relationship with
all of its current suppliers.

MARKET CONDITIONS

The primary product produced by the Company is continuous feed business forms.
Management believes that the market for business forms, which declined in 2002,
will continue to decline in 2003 although it will be partially offset by fewer
competitors in the market place. Management believes that the slowed economy had
a significant impact on Third Quarter results of operation, and will continue to
affect the Fiscal 2003 results of operations.

The slowed economy has resulted in an increase in bad debt. One of our larger
customers filed a Chapter 11 bankruptcy on May 7, 2003, owing us approximately
$450,000. Of this amount, $219,000 has been written off as bad debt expense this
quarter, the remainder has been reserved for in our bad debt reserve. Although
the Company has not been served with any notice of a preference action, we could
be subject to a preference action of approximately $1 million by the debtor's
bankruptcy trustee. Due to the range of remittance dates by the debtor before
and during the preference period, we believe we will prevail in any litigation
by the trustee of the bankruptcy for this alleged preference with the ordinary
course of business defense available under the Bankruptcy Code.

13

If selling prices for products manufactured by us cannot increase in relation to
raw material cost increases, or if prices for products manufactured by us
decline as a result of market pressures, our results of operations could be
materially adversely affected.

Although TST has specialized in select markets and has emphasized service and
long-term relationships to meet customer needs more effectively, there are no
long-term contractual relationships between it and any of its customers. There
can be no assurance that purchases by these customers will remain at significant
levels. TST may in the future be dependent on these or other significant
customers. The loss of any other significant customer could materially adversely
affect our financial position, results of operations and cash flows.

SEASONALITY

TST may be subject to certain seasonal fluctuations in that orders for products
may decline over the summer months. If the market for finished goods decreases,
then the adverse impact of the seasonal fluctuations on the Company will be
greater.

Hotsheet.com revenues are partially generated by retail sales which are
typically stronger during the Christmas holiday season.

SUBSEQUENT EVENTS

In the third quarter fiscal 2003, TST sought approval from the Village of Itasca
for its construction plan on a 34,500 square foot expansion of the Itasca,
Illinois facility. TST believes it will receive such approval on July 17, 2003.
TST has executed a construction and takeout loan with the current lender on the
building. The cost of construction is currently estimated to be approximately
$1.37 million.

FORWARD-LOOKING STATEMENTS

Management's Discussion and Analysis of Financial Condition and Results of
Operations and other sections of this Form 10-Q contain "forward-looking
statements" about our prospects for the future, including but not limited to our
ability to generate sufficient working capital, our ability to continue to
maintain sales to justify capital expenses, and our ability to generate
additional sales to meet business expansion. Such statements are subject to
certain risks and uncertainties which could cause actual results to differ
materially from those projected, including availability of raw materials,
availability of thermal facsimile, computer, laser and color ink jet paper, to
the cyclical nature of the industry in which we operate, the potential of
technological changes which would adversely affect the need for our products,
price fluctuations which could adversely impact the large inventory we require,
loss of any significant customer, and termination of contracts essential to our
business. Parties are cautioned not to rely on any such forward-looking
statements or judgments in making investment decisions.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are not exposed to market risks such as foreign currency exchange rates, but
are exposed to risks such as variable interest rates. Market risk is the
potential loss arising from adverse changes in market prices and rates. Our
subsidiaries do not have supply contracts with any of their foreign vendors. All
foreign vendors are paid in United States currency. In addition, TST's
international sales of finished goods is insignificant. Accordingly, there are
not sufficient factors to create a material foreign exchange rate risk;
therefore, we do not use exchange commitments to minimize the negative impact of
foreign currency fluctuations.

14

We had both fixed-rate and variable-rate debts as of May 31, 2003. The fair
market value of long-term variable interest rate debt is subject to interest
rate risk. Generally the fair market value of variable interest rate debt will
decrease as interest rates fall and increase as interest rates rise.

The estimated fair value of our total long-term fixed rate and floating rate
debt approximates carrying value. Based upon our market risk sensitive debt
outstanding at May 31, 2003, there was no material exposure to our financial
position or results of operations.

ITEM 4. CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report, the company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based
upon that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective in
timely alerting them to material information relating to the Company (including
its consolidated subsidiaries) required to be included in the Company's periodic
SEC filings. There were no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation.

15

PART II: OTHER INFORMATION

(a) Exhibits

Exhibit No. Description of Exhibits
----------- -----------------------

99 Certification of Chief Executive Officer and
Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K and 8-K/A

None

16

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Dated: July 15, 2003

Impreso, Inc.
(Registrant)

/s/ Marshall Sorokwasz
--------------------------------
Marshall Sorokwasz
Chairman of the Board, Chief
Executive Officer, President,
and Director

/s/ Susan Atkins
--------------------------------
Susan Atkins
Chief Financial Officer
and Vice President

17

CERTIFICATION

Pursuant to Rule 13a-14(b) and 15d-14

I, Marshall D. Sorokwasz, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Impreso, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;

(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the Audit Committee of
the registrant's Board of Directors (or persons performing the equivalent
function):

(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: July 15, 2003 Signature: /s/ Marshall D. Sorokwasz
--------------------------------------
Marshall D. Sorokwasz
Chief Executive Officer

18

CERTIFICATION

Pursuant to Rule 13a-14(b) and 15d-14

I, Susan M. Atkins, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Impreso, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;

(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and,

(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the Audit Committee of
the registrant's Board of Directors (or persons performing the equivalent
function):

(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: July 15, 2003 Signature: /s/Susan M. Atkins
-----------------------------------
Susan M. Atkins
Chief Financial Officer

19

INDEX TO EXHIBITS