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 February 28, 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 75-20849585
(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 April 11, 2003
--------------------- ------------------------------------
$0.01 Par Value 5,278,780

IMPRESO, INC. AND SUBSIDIARIES

FORM 10-Q

February 28, 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., 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 UNAUDITED 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 February 28, 2003, and its results of operations for
the three and six months ended February 28, 2003 and February 28, 2002. Results
of the Company's operations for the interim period ended February 28, 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. 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.

5

Inventories consisted of the following:

4. LONG -TERM DEBT AND LINE OF CREDIT:

6

Notes payable to a commercial financial corporation, secured by real property
and a personal guarantee by the trustee of a trust which is a principal
stockholder of the Company, payable in monthly installments of $21,407
(including interest at 8%), maturing May 2011. 2,086,982 2,130,905

Acquisition note payable, unsecured, payable in quarterly installments of $15,000
(including interest at 8%), maturing April 2006. 225,000 225,000

Acquisition note payable, secured by equipment, payable in monthly installments of
$16,024, no interest, maturing May 2003. 352,145 368,169

Note payable to a commercial financial corporation, secured by real property and
a personal guarantee by the trustee of a trust which is a principal stockholder
of the Company, payable in monthly installments of $22,827 (including a fixed
schedule for interest, 7.0% at February 28, 2003), maturing March 2007. 3,161,103 3,184,468

Note payable to a commercial financial corporation, secured by equipment,
payable in monthly installments of $17,857 (including interest at a variable
rate equal to 30 day Commercial Paper plus 350 basis points, 4.84% at February
28, 2003, maturing February 2009. 1,315,811 1,410,714

Acquisition notes payable, unsecured, payable in monthly installments of
$16,666, maturing February 2007. 731,209 811,792

Prepetition-

Note payable to a commercial financial corporation, secured by real property and
equipment and a personal guarantee by the trustee of a trust which is a
principal stockholder of the Company, payable in monthly installments of $1,461
(including interest at 4%), maturing June 2023. 241,246 245,100
------------ ------------

Total 32,203,440 29,602,012
------------ ------------

Less Current Maturities (21,992,540) (18,992,222)
------------ ------------

Long-Term Debt $ 10,210,900 $ 10,609,790
============ ============

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

In April 2002, TST amended its revolving line of credit to increase the line
from $22 million to $25 million. The amended revolving credit line is limited to
the lesser of $25 million or a percentage of eligible trade accounts receivable
and inventories, as defined. The remaining borrowing capacity under the
revolving credit line was $4.0 million as of February 28, 2003.

7

The line of credit, as amended, has restrictive covenants requiring the
maintenance of a minimum tangible net worth and working capital requirements, as
defined in the agreement. One of the notes payable contains restrictive
covenants on current and debt to worth ratios, and the payment of cash
dividends. As of February 28, 2003, the Company was in compliance with all
covenants.

5. SUPPLEMENTAL CASH FLOW INFORMATION:

6. RECLASSIFICATIONS:

For comparability, the 2002 financial statements reflect reclassifications where
appropriate to conform to the financial statement presentation used in 2003.

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.

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

8

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 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
reasonably 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.

9

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.

RESULTS OF OPERATIONS FOR THE INTERIM PERIODS ENDED FEBRUARY 28, 2003 AND
FEBRUARY 28, 2002.

Net Sales---Net sales increased from $26.4 million in the three months ended
February 28, 2002 to $31.6 million in the same period for the year ending
February 28, 2003 ("Fiscal 2003"), an increase of $5.2 million or 20%. Net sales
increased from $51.8 million in the six months ended February 28, 2002, to $63.5
million in the same period in Fiscal 2003, an increase of $11.7 million, or
22.6%. Net sales increased in the first and second quarters of Fiscal 2003, as
compared to the corresponding period of the prior year, as a result of the
acquisition of United Computer Supplies, Inc. and United Computer Supplies -
East ("United") in April, 2002.

Gross Profit---Gross profit increased from $2.8 million in the three months
ended February 28, 2002, to $3.2 million in the three months ended February 28,
2003, an increase of 11.1%. Gross profit increased from $5.5 million in the six
months ended February 28, 2002, to $6.4 million in the same period in 2003, an
increase of $1 million, or 17.8%. Gross profit as a percentage of net sales
decreased from 10.8%, in the second quarter of Fiscal 2002, to 10.0% in the
corresponding period of Fiscal 2003. Gross profit as a percentage of net sales
decreased from 10.6% in the six month period ended February 28, 2002, to 10.2%
in the same period in Fiscal 2003. Gross profit as a percentage of net sales
decreased in the three and six month periods ended February 28, 2003, as
compared to the corresponding periods of the prior year, resulting from the
acquisition of a commodity product producer, United, which increased sales of
lower margin products as a percentage of net sales.

Selling, General, and Administrative Expenses----SG&A expenses increased from
$2.1 million in the three months ended February 28, 2002, to $2.4 million in the
corresponding period of Fiscal 2003, an increase of $292,000, or 13.7%. SG&A as
a percentage of net sales decreased from 8.0% in the second quarter of Fiscal
2002, to 7.6% in the corresponding period of Fiscal 2003. SG&A expenses
increased from $4.2 million, or 8.2% of net sales for the six months ended
February 28, 2002, to $4.8 million, or 7.5% of net sales in the same period of
Fiscal 2003. The increase in SG&A as a dollar amount for the three and six month
periods ended February 28, 2003, resulted primarily from the addition of United.

Interest Expense----Interest expense increased from $379,000 in the three months
ended February 28, 2002, to $474,000 in the same period of Fiscal 2003, an
increase of 25.2%. Interest expense increased from $831,000 in the six months
ended February 28, 2002, to $958,000 in the corresponding period of Fiscal 2003,
an increase of 15.2%. The increase in interest expense for the three and six
months ended February 28, 2003, was primarily attributable to increased
borrowings incurred to finance TST's acquisition of United.

10

Income Taxes---Income tax expense increased from $123,000 for the three months
ended February 28, 2002, to $150,000 in the second quarter of Fiscal 2003.
Income tax expense decreased from $558,000 for the six months ended February 28,
2002, to $343,000 in the six months ended February 28, 2003. The increase in
income tax expense for the three months ended February 28, 2003, was
attributable to an increase in profit. The decrease in income tax expense for
the six months ended February 28, 2003, was due to a decrease in taxable income,
resulting from a litigation settlement received in the first quarter fiscal
2002.

Liquidity and Capital Resources

Working capital increased to $12.6 million at February 28, 2003, from $11.9
million at August 31, 2002. This represented an increase of 5.9%.

Borrowings under TST's line of credit increased from $18 million at August 31,
2003, to $21 million at February 28, 2003, an increase of $3 million, or 16.8%.
The increased borrowing primarily resulted from the decrease in accounts
payable.

In April 2002, TST entered into an agreement with a bank for a two-year renewal
of its revolving line of credit. The new agreement increases the line from $22
million to $25 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. Available borrowings under this line of credit,
which accrues interest at the prime rate of interest plus .25% (4.5% at February
28, 2003), are based upon specified percentages of eligible accounts receivable
and inventories. As of February 28, 2003, there was a $4 million borrowing
capacity remaining under the $25 million revolving line of credit. The revolving
credit line will mature in May 2004.

In the third quarter fiscal 2003, TST intends to begin construction on a 34,500
square foot expansion of the Itasca, Illinois facility. TST has been approved
for 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.

We believe that the funds available under the loans encumbering our California,
Texas, Pennsylvania, Illinois and West Virginia plants, the approved
construction and take out loan, 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 February 28, 2003, we did not own derivative or other financial
instruments for trading or speculative purposes. We do not use financial
instruments and, therefore, the implementation of

11

Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" did not have a material impact on
our financial position or results operations.

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, management
implemented a program to reduce inventory. From August 31, 2001 to August 31,
2002, TST reduced its inventory levels by $4.35 million. This is in addition to
the depletion of $3 million of inventory acquired in the purchase of the assets
of United. Although inventories rose in the First Quarter 2003, management
reduced it by the corresponding amount in the second quarter of fiscal 2003, and
intends to continue reducing inventory levels 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 has
remained relatively stable. Management believes raw material prices will start
to increase in the third quarter of fiscal 2003.

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 of TST

The primary product produced by the Company's acquisitions in fiscal 2001 and
2002, are continuous feed business forms. Management believes that the market
for business forms, which declined in 2002, will continue to decline in 2003.
However, the acquisitions also resulted in fewer competitors in this product
category, thereby increasing the Company's market share and partially offsetting
a reduction of sales. Management believes that the slowed economy will also
effect the Fiscal 2003 results of operations.

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.

12

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.

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 expenditures, 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.

We had both fixed-rate and variable-rate debts as of February 28, 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 February 28, 2003, there was no material exposure to our
financial position or results of operations.

13

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.

14

PART II: OTHER INFORMATION

Item 6: Exhibits and Reports on Form 8-K

(a) Exhibits

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

On April 3, 2002, we filed a Current Report on Form 8-K, dated March 19, 2002,
to report the acquisition of substantially all of the personal property assets
of United Computer Supplies, Inc. and United Computer Supplies-East, Inc. On
June 3, 2002, we filed an amendment to the Current Report on Form 8-K, dated
March 19, 2002, to include the financial statements of United Computer Supplies,
Inc. and United Computer Supplies-East, Inc., and certain pro forma financial
data. On April 2, 2003, we filed an Amendment No. 2 to the Current Report on
Form 8-K, dated March 19, 2002, to include Audited Combined Financial Statements
of United Computer Supplies, Inc. And United Computer Supplies-East, Inc. For
the Years Ended December 31, 2000 and 1999. The following exhibits were filed
with the Form 8-k, as amended:

15

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: April 14, 2003

Impreso, Inc.
(Registrant)

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

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

16

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: April 14, 2003 Signature: /s/ Marshall D. Sorokwasz
---------------------------
Marshall D. Sorokwasz
Chief Executive Officer

17

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: April 14, 2003 Signature: /s/ Susan M. Atkins
---------------------------
Susan M. Atkins
Chief Financial Officer

18

INDEX TO EXHIBITS