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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934For
the fiscal year ended August 31, 2005
 OR
 o
    
    Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934For
the transition period
from
to
 Commission File Number 000-29883
 
 Impreso, Inc.
  
 Delaware
(State or other jurisdiction of
incorporation or organization)
    
    75-2849585
(I.R.S. Employer
Identification No.)
 652 Southwestern Blvd., Coppell, Texas
(Address of principal executive offices)
    
    75019 (Address of
(Zip code)
     þ o
 þ
 o þ
 o þ
 o þ
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS  PART IITEM 1. BUSINESSITEM 2. PROPERTIESITEM 3. LEGAL PROCEEDINGSITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSPART IIITEM 5. MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERSITEM 6. SELECTED FINANCIAL DATAITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREITEM 9A. CONTROLS AND PROCEDURESPART IIIITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTITEM 11. EXECUTIVE COMPENSATIONITEM. 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSITEM. 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSITEM. 14 PRINCIPAL ACCOUNTANT FEES AND SERVICESPART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULESINDEX TO EXHIBITSSIGNATURESReal Estate Lease AgreementCertificate Pursuant to Section 302 - CEOCertificate Pursuant to Section 302 - CFOCertification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906    Table of Contents  
 PART I
 
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
    
    Business Forms Dealers  Businesses that primarily buy and resell
various types of business forms. Examples include Vanguard Direct,
American Business Forms and Better Business Forms.
    
    Wholesale Stationers  Businesses that supply a large variety of
office products to office product dealers. Wholesale stationers
generally do not sell directly to the end user. Examples include
United Stationers, and SP Richards.
    
    Office Products Dealers  Businesses that generally purchase a
majority of their products from wholesale stationers, but often
negotiate directly with manufacturers. Examples include Navrats
Office Products and Crest Office Supply.
    
    Paper Merchants  Businesses that sell all types of papers to printers
and dealers and directly to end users. Examples include Unisource,
Xpedx and Ris Paper.
    
    Consumer Electronics Stores  Businesses that sell retail to the end
user in a broad spectrum electronics environment. Examples include
Frys Electronic and Best Buy.
    
    Mass Merchants  Discount department stores with retail sections that
sell computer, copier and facsimile related supplies. Examples
include Shopko.
 4




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
    
    Grocery and Drug Store Chains  Businesses that sell computer
consumables as a convenience to its customer and secondary sale to its
primary target product. Examples include Walgreens, Kroger and
Rite-Aid.
    
    Wholesale Clubs/Office Superstores  Businesses that sell large
quantities of inventory at or near wholesale prices to end users and
dealers. These stores generally do not provide the credit, delivery
and other types of services and support to the extent that wholesale
stationers provide their customers. Examples include Staples, Costco
and BJs.
    
    Buying Groups  Groups of dealers, ranging from ten to 400 members,
that combine their buying power to receive, among other things, volume
discount pricing and rebate incentives from manufacturers. Examples
include Independent Stationers, Association of Independent Printing
Paper Merchants, and Trimega.
    
    Computer Aided Design (CAD) Supply Dealers  Dealers that typically
sell wide format supplies and papers to architects and engineers.
    
    Contract Stationers  Companies that offer a complete catalog of
office and business supplies generally to large corporations. In many
cases, various types of products are bundled and sold under contract.
Examples include Corporate Express, Boise Cascade Office Products and
Staples.
    
    Cash Register Supply Dealers  Dealers that sell cash register systems
and point of sale supplies to businesses such as restaurants and
retail vendors. Examples include Impact Paper, Paper Rolls Plus and
Systems Supply.
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7
    Table of Contents         ® ®
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  8
    Table of Contents          
    9    Table of Contents  th
   10
    Table of Contents  PART II
 
   2005 Fiscal Year
    
    Price RangeHigh
    
    
    LowFirst Quarter (Sept.- Nov.)
    
    $
    3.160
    
    
    $
    2.120Second Quarter (Dec.- Feb.)
    
    
    2.840
    
    
    
    1.600Third Quarter (Mar.- May)
    
    
    1.950
    
    
    
    1.000Fourth Quarter (June- Aug.)
    
    
    1.970
    
    
    
    1.030
 2004 Fiscal Year
    
    Price RangeHigh
    
    
    LowFirst Quarter (Sept.  Nov.)
    
    $
    2.140
    
    
    $
    1.800Second Quarter (Dec.  Feb.)
    
    
    2.700
    
    
    
    1.830Third Quarter (Mar.  May)
    
    
    3.600
    
    
    
    2.110Fourth Quarter (June  Aug.)
    
    
    2.690
    
    
    
    2.140
   11
    Table of Contents  2001
    
    
    2002
    
    
    2003
    
    
    2004(b)
    
    
    2005Operations Data:Net Sales
    
    $
    94,177,290
    
    
    $
    119,525,362
    
    
    $
    117,222,957
    
    
    $
    103,989,229
    
    
    $
    77,727,971Net Income (loss)
    
    
    1,246,945
    
    
    
    1,676,442
    
    
    
    617,831
    
    
    
    1,013,595
    
    
    
    (2,909,328
    )Earnings (loss) per
common share:Net Income (loss)
    
    
    0.24
    
    
    
    0.32
    
    
    
    0.12
    
    
    
    0.19
    
    
    
    (0.55
    )Consolidated
Balance Sheet Data:Total assets
    
    
    62,202,597
    
    
    
    66,971,864
    
    
    
    56,336,300
    
    
    
    51,753,520
    
    
    
    41,793,418Long-term debt
(excluding current
maturities)
    
    
    6,328,454
    
    
    
    10,609,790
    
    
    
    9,571,934
    
    
    
    8,391,917
    
    
    
    7,774,361Stockholders Equity
    
    $
    14,712,643
    
    
    $
    16,416,612
    
    
    $
    17,040,890
    
    
    
    18,054,485
    
    
    
    15,145,156
 
 (a)
    
    This schedule should be read in conjunction with our audited Consolidated Financial
Statements and related notes thereto.(b)
    
    Earnings per share increase partially due to a non-recurring event, a deferred gain
benefit resulting
from the sale of our California facility. See Form 10-K for the year ended August 31,
2004, page F-10, Other Expense (Income), Net.
 
    12
    Table of Contents  13
    Table of Contents  14
    Table of Contents  Year Ended August 31, 2005
    
    
    Year Ended August 31, 2004AMOUNT
    
    
    PERCENT
    
    
    AMOUNT
    
    
    PERCENTNET SALES BY INDUSTRY SEGMENTHardcopy imaging products
    
    $
    77,525,787
    
    
    
    99.74
    %
    
    $
    103,989,229
    
    
    
    100.00
    %Bottled water
    
    $
    202,184
    
    
    
    0.26
    %
    
    $
    0
    
    
    
    0.00
    %Total
    
    $
    77,727,971
    
    
    
    100.00
    %
    
    $
    103,989,229
    
    
    
    100.00
    %PRE TAX PROFIT FROM
CONTINUING OPERATIONSHardcopy imaging products
    
    $
    (3,839,898
    )
    
    
    -85.22
    %
    
    $
    1,688,166
    
    
    
    100.00
    %Bottled water
    
    $
    (666,056
    )
    
    
    -14.78
    %
    
    $
    0
    
    
    
    0.00
    %Total
    
    $
    (4,505,954
    )
    
    
    -100.00
    %
    
    $
    1,688,166
    
    
    
    100.00
    %As Of August 31, 2005
    
    
    As Of August 31, 2004TOTAL ASSETS BY INDUSTRY
SEGMENTHardcopy imaging products
    
    $
    39,043,670
    
    
    
    93.42
    %
    
    $
    49,642,564
    
    
    
    95.92
    %Bottled water
    
    $
    2,749,748
    
    
    
    6.58
    %
    
    $
    2,110,956
    
    
    
    4.08
    %Total
    
    $
    41,793,418
    
    
    
    100.00
    %
    
    $
    51,753,520
    
    
    
    100.00
    %
   15
    Table of Contents  16
    Table of Contents  17
    Table of Contents  18
    Table of Contents  Less than 1Total
    
    
    year
    
    
    1-3 years
    
    
    4-5 years
    
    
    After 5 yearsLong-Term Debt**
    
    $
    9,204,610
    
    
    $
    1,537,037
    
    
    $
    1,789,875
    
    
    $
    4,879,875
    
    
    $
    997,823Operating Leases
    
    
    11,124,059
    
    
    
    1,286,914
    
    
    
    2,556,116
    
    
    
    2,108,659
    
    
    
    5,172,370Deferred
Compensation
    
    
    296,463
    
    
    
    189,675
    
    
    
    106,788
    
    
    
    
    
    
    
    Total Obligations &
Commitments
    
    $
    20,625,132
    
    
    $
    3,013,626
    
    
    $
    4,452,779
    
    
    $
    6,988,534
    
    
    $
    6,170,193
 
 *
    
    This table does not include the balance on the revolving line of credit.**
    
    Excludes related interest amounts.       19
    Table of Contents  Index to Consolidated Financial Statements
    
    F-1Report of Independent Registered Public Accounting Firm
    
    F-2Blackman Kallick Bartelstein, LLPConsolidated Balance Sheets as of August 31, 2005 and 2004
    
    F-3, F-4Consolidated Statements of Operations for the Years
Ended August 31, 2005, 2004 and 2003
    
    F-5Consolidated Statements of Stockholders Equity
for the Years Ended August 31, 2005, 2004 and 2003
    
    F-6Consolidated Statements of Cash Flows for the Years
Ended August 31, 2005, 2004 and 2003
    
    F-7Notes to Consolidated Financial Statements
    
    F-8
 
   20
    Table of Contents  PART III
 
        
   
   
   21
    Table of Contents  PART IV
 
        
  Exhibit No.
    
    Description of Exhibits2.1
    
    Plan and Agreement of Merger, dated as of December 1, 1999, among
TST/Impreso, Inc., Impreso, Inc. and TST Merger Corp. (incorporated by
reference to Appendix A of the Companys Registration Statement on Form
S-4, No. 333-92381)2.2(a)
    
    Asset Purchase Agreement by and between TST/Impreso, Inc. and Durango
Georgia Converting LLC dated as of April 5, 2001 (incorporated by
reference to Exhibit 2.1 of the Companys Quarterly Report on Form
10-Q, for the quarter ended May 31, 2001)2.2(b)
    
    Asset Purchase Agreement by and between TST/Impreso, Inc. and Bank of
America, N.A. and consented to by United Computer Supplies, Inc.,
United Computer Supplies-East, Inc. and John R. Zimmerman dated as of
March 19, 2002 (incorporated by reference to Exhibit 2.1 of the
Companys Quarterly Report on Form 10-Q, for the quarter ended May 31,
2002)2.2(c)
    
    Real Estate Purchase and Sale Agreement by and between United Computer
Supplies, Inc. and TST/Impreso, Inc. dated as of March 15, 2002
(incorporated by reference to Exhibit 2.21 of the Companys Quarterly
Report on Form 10-Q, for the quarter ended May 31, 2002)3.1
    
    Certificate of Incorporation of the Company (incorporated by reference
to Exhibit 3(a) to the Companys Registration Statement on Form S-4,
No. 333-92381)3.2
    
    By-laws of the Company (incorporated by reference to Exhibit 3(b) to the
Companys Registration Statement on Form S-4, No. 333-92381)4.1
    
    Form of Underwriters Warrant (incorporated by reference to Exhibit 4.1
to the Companys Registration Statement on Form S-1, No. 33-93814)10.1
    
    1995 Stock Option Plan (incorporated by reference to Exhibit 10.1 to
the Companys Registration Statement on Form S-1, No. 33-93814)10.2
    
    Employment Agreement dated January 27, 1999, between the Company and
Marshall Sorokwasz (incorporated by reference to Exhibit 10.2 to the
Companys Registration Statement on Form S-1, No. 33-93814)10.3+
    
    IBM Brand Paper Trademark Licensing Agreement, effective as of April 30,
1997 and Amendment No. 1 thereto, between TST/Impreso, Inc. and
International Business Machines Corporation (incorporated by reference to
Exhibit 10(c) of the Companys Quarterly Report on Form 10-Q/A, dated July
15, 1997) [Confidential treatment has been granted for certain portions of
this Exhibit]
 22
    Table of Contents  Exhibit No.
    
    Description of Exhibits10.4
    
    Amendment Number 2 to the IBM Brand Paper Trademark Licensing Agreement,
dated March 5, 1999, between TST/Impreso, Inc. and International Business
Machines Corporation (incorporated by reference to Exhibit 10(d) of the
Companys amended Quarterly Report on Form 10-Q/A, dated June 17, 1999)
[Confidential treatment has been granted for certain portions of this
Exhibit]10.5
    
    Crayola License Agreement made as of February 6, 2002, with an effective
date of March 1, 2002, by and between Binney & Smith Properties, Inc. and
TST/Impreso, Inc. (incorporated by reference to Exhibit 10(e) of the
Companys amended Quarterly Report on Form 10-Q/A dated May 1, 2002)
[Confidential treatment has been granted for certain portions of this
Exhibit]10.6
    
    Employment Agreement dated January 27, 2004, between the Company and
Marshall Sorokwasz (incorporated by reference to Exhibit 10(f) to the
Companys Quarterly Report on Form 10-Q, dated February 29, 2004).10.7
    
    Equipment Lease Agreement, dated October 26, 2004 between Alexa Springs,
Inc. and General Electric Capital Corporation (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on Form 8-K, dated October 26,
2004).10.8
    
    Real Estate Lease Agreement between Alexa Springs, Inc. and Alexa Springs
Water Company. (incorporated by reference to Exhibit 10.1 to the Companys
Current Report on Form 8-K, dated December 1, 2004).10.9
    
    Water Supply Agreement between Alexa Springs, Inc. and Alexa Springs Water
Company. (incorporated by reference to Exhibit 10.2 to the Companys
Current Report on Form 8-K, dated December 1, 2004).10.10
    
    Amended and Restated Loan and Security Agreement, and First, Second, and
Third Amendments by and between Congress Financial Corporation (Southwest)
and TST/Impreso, Inc. and TST/Impreso of California, Inc. (incorporated by
reference to Exhibit 10.1 to the Companys Current Report on Form 8-K,
dated December 14, 2004.)10.11
    
    Fourth Amendment by and between Congress Financial Corporation (Southwest)
and TST/Impreso, Inc. and TST/Impreso of California, Inc. to Amended and
Restated Loan and Security Agreement (incorporated by reference to Exhibit
10.1 to the Companys Current Report on Form 8-K/A, dated December 14,
2004.)10.12
    
    Amendment to Equipment Lease Agreement dated October 26, 2004 between Alexa
Springs, Inc. and General Electric Capital Corporation (incorporated by
reference to Exhibit 10.1 to the Companys Current Report on Form 8-K/A,
dated December 21, 2004.10.13
    
    Real Estate Lease Agreement dated August 15, 2003, between Chambersburg
Business Park, LLP
and TST/Impreso, Inc.21
    
    Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 to
the Companys Annual Report on Form 10-K, dated August 31, 2004)31.1
    
    Certificate Pursuant to Section 302 of Sarbanes  Oxley Act of 2002 for CEO.31.2
    
    Certificate Pursuant to Section 302 of Sarbanes  Oxley Act of 2002 for CFO.32.1
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.1
    
    Value, Inc. Fairness Opinion (incorporated by reference to Exhibit 99.1 to
the Companys Current Report on Form 8-K, dated December 1, 2004)
 23
    Table of Contents  PageReport of Independent Registered Public Accounting Firm
    
    F-2Blackman Kallick Bartelstein, LLPConsolidated Balance Sheets as of August 31, 2005
and 2004
    
    F-3, F-4Consolidated Statements of Operations for the Years
Ended August 31, 2005, 2004 and 2003
    
    F-5Consolidated Statements of Stockholders Equity
for the Years Ended August 31, 2005, 2004 and 2003
    
    F-6Consolidated Statements of Cash Flows for the Years
Ended August 31, 2005, 2004 and 2003
    
    F-7Notes to Consolidated Financial Statements
    
    F-8
 F-1
    Table of Contents  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     
  F-2
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS
 ASSETS
 August 31,
    
    
    August 31,2005
    
    
    2004Current assets:Cash and cash equivalents
    
    $
    -0-
    
    
    $
    173,313Trade accounts receivable, net of allowance for doubtful accounts
of $1,414,042 as of August 31, 2005 and $1,130,315 as of August 31, 2004
    
    
    8,996,319
    
    
    
    12,666,433Income tax receivable
    
    
    1,255,294
    
    
    
    Inventories, net of allowances
    
    
    16,753,921
    
    
    
    22,643,558Prepaid expenses and other
    
    
    217,183
    
    
    
    330,039Assets held for sale
    
    
    1,278,872
    
    
    
    Deferred income tax assets
    
    
    828,092
    
    
    
    736,810Total current assets
    
    
    29,329,681
    
    
    
    36,550,153Property, plant and equipment, at cost
    
    
    27,174,188
    
    
    
    29,417,303Less-Accumulated depreciation
    
    
    (14,784,634
    )
    
    
    (14,295,714
    )Net property, plant and equipment
    
    
    12,389,554
    
    
    
    15,121,589Noncurrent assetsOther assets
    
    
    74,183
    
    
    
    81,778Total assets
    
    $
    41,793,418
    
    
    $
    51,753,520
  F-3
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS (CONTINUED)
 LIABILITIES AND STOCKHOLDERS EQUITY
 August 31,
    
    
    August 31,2005
    
    
    2004Current liabilities:Accounts payable
    
    $
    8,182,928
    
    
    $
    12,711,758Accrued liabilities
    
    
    796,834
    
    
    
    987,921Accrued commissions
    
    
    954,231
    
    
    
    1,863,698Current maturities of long-term debt
    
    
    1,718,028
    
    
    
    1,407,070Line of credit
    
    
    6,306,354
    
    
    
    6,851,479Current maturities of prepetition debt
    
    
    8,684
    
    
    
    8,384Total current liabilities
    
    
    17,967,059
    
    
    
    23,830,310Deferred income tax liability
    
    
    295,016
    
    
    
    680,012Deferred gain
    
    
    611,826
    
    
    
    796,796Long-term debt, net of current maturities
    
    
    7,562,876
    
    
    
    8,171,228Long-term portion of prepetition debt, net of current maturities
    
    
    211,485
    
    
    
    220,689Total liabilities
    
    
    26,648,262
    
    
    
    33,699,035Stockholders equity:Preferred
stock, $.01 par value; 5,000,000 shares authorized; 0 shares issued and outstanding
    
    
    
    
    
    
    Common stock, $.01 par value; 15,000,000 shares authorized; 5,292,780 issued and 5,278,780 outstanding
    
    
    52,928
    
    
    
    52,928Treasury stock (14,000 shares, at cost)
    
    
    (38,892
    )
    
    
    (38,892
    )Additional paid-in capital
    
    
    6,353,656
    
    
    
    6,353,656Retained earnings
    
    
    8,777,464
    
    
    
    11,686,793Total stockholders equity
    
    
    15,145,156
    
    
    
    18,054,485Total liabilities and stockholders equity
    
    $
    41,793,418
    
    
    $
    51,753,520
  F-4
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Years Ended August 31,2005
    
    
    2004
    
    
    2003Net sales
    
    $
    77,727,971
    
    
    $
    103,989,229
    
    
    $
    117,222,957Cost of sales
    
    
    73,551,166
    
    
    
    90,283,782
    
    
    
    103,432,569Gross profit
    
    
    4,176,805
    
    
    
    13,705,447
    
    
    
    13,790,388Gain on sale of assets
    
    
    (554,374
    )
    
    
    
    
    
    
    Embezzlement recovery
    
    
    (290,840
    )
    
    
    
    
    
    
    Selling, general and administrative expense
    
    
    9,055,980
    
    
    
    10,879,310
    
    
    
    11,297,995Operating
(loss) income
    
    
    (4,033,961
    )
    
    
    2,826,137
    
    
    
    2,492,393Other expenses (income) :Interest expense
    
    
    1,240,794
    
    
    
    1,083,289
    
    
    
    1,787,950Extinguishment of debt
    
    
    (489,645
    )
    
    
    
    
    
    
    Other
expense (income), net
    
    
    (279,156
    )
    
    
    54,682
    
    
    
    (313,489
    )Total other expense
    
    
    471,993
    
    
    
    1,137,971
    
    
    
    1,474,461(Loss) income before income tax expense
    
    
    (4,505,954
    )
    
    
    1,688,166
    
    
    
    1,017,932Income tax (benefit) expense:Current
    
    
    (1,120,348
    )
    
    
    1,177,802
    
    
    
    388,319Deferred
    
    
    (476,278
    )
    
    
    (503,231
    )
    
    
    11,782Total income tax (benefit) expense
    
    
    (1,596,626
    )
    
    
    674,571
    
    
    
    400,101Net (loss) income
    
    ($
    2,909,328
    )
    
    $
    1,013,595
    
    
    $
    617,831Net (loss) income per common share
(basic and diluted)
    
    $
    (0.55
    )
    
    $
    0.19
    
    
    $
    0.12Weighted average shares outstanding (basic)
    
    
    5,292,780
    
    
    
    5,292,780
    
    
    
    5,292,780Weighted average shares outstanding (diluted)
    
    
    5,286,389
    
    
    
    5,301,493
    
    
    
    5,291,322
  F-5
    Table of Contents  Common Stock
    
    
    Additional$.01 Par Value
    
    
    Paid-In
    
    
    Retained
    
    
    TreasuryShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Stock
    
    
    TotalBalance, August 31, 2002
    
    
    5,292,780
    
    
    $
    52,928
    
    
    $
    6,347,209
    
    
    $
    10,055,367
    
    
    $
    (38,892
    )
    
    $
    16,416,612Expired Warrants
    
    
    
    
    
    
    
    
    
    
    6,447
    
    
    
    
    
    
    
    
    
    
    
    6,447Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    617,831
    
    
    
    
    
    
    
    617,831Balance, August 31, 2003
    
    
    5,292,780
    
    
    
    52,928
    
    
    
    6,353,656
    
    
    
    10,673,198
    
    
    
    (38,892
    )
    
    
    17,040,890Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,013,595
    
    
    
    
    
    
    
    1,013,595Balance, August 31, 2004
    
    
    5,292,780
    
    
    
    52,928
    
    
    
    6,353,656
    
    
    
    11,686,793
    
    
    
    (38,892
    )
    
    
    18,054,485Net Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,909,329
    )
    
    
    
    
    
    
    (2,909,329
    )Balance, August 31, 2005
    
    
    5,292,780
    
    
    $
    52,928
    
    
    $
    6,353,656
    
    
    $
    8,777,464
    
    
    $
    (38,892
    )
    
    $
    15,145,156
  F-6
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended August 31,August 31,
    
    
    August 31,
    
    
    August 31,2005
    
    
    2004
    
    
    2003Cash Flows From Operating ActivitiesNet (loss) income
    
    $
    (2,909,329
    )
    
    $
    1,013,595
    
    
    $
    617,831Adjustments to reconcile net (loss) income to net cash
provided by operating activities-Depreciation and amortization
    
    
    1,476,536
    
    
    
    1,419,715
    
    
    
    1,438,791Bad debt expense
    
    
    726,488
    
    
    
    753,774
    
    
    
    684,459Increase (decrease) in Provision for Losses of Inventory
    
    
    153,877
    
    
    
    
    
    
    
    Gain on sale of property, plant and equipment
    
    
    (367,609
    )
    
    
    
    
    
    
    Change in deferred gain on sale of property
    
    
    (184,970
    )
    
    
    796,796
    
    
    
    Deferred income tax (benefit) expense
    
    
    (476,278
    )
    
    
    (503,231
    )
    
    
    11,782Decrease (increase) in trade accounts receivable
    
    
    2,943,626
    
    
    
    (1,275,472
    )
    
    
    3,034,355Increase in income tax receivable
    
    
    (1,255,294
    )
    
    
    
    
    
    
    Decrease in inventories
    
    
    5,735,760
    
    
    
    5,818,533
    
    
    
    5,648,924Decrease (increase) in prepaid expenses and other
    
    
    112,856
    
    
    
    (186,421
    )
    
    
    116,046Decrease in noncurrent assets
    
    
    7,595
    
    
    
    
    
    
    
    (Decrease) increase in accounts payable
    
    
    (4,528,830
    )
    
    
    1,609,085
    
    
    
    (5,199,128
    )(Decrease) increase in accrued liabilities
    
    
    (1,100,554
    )
    
    
    958,933
    
    
    
    (1,803,705
    )Net cash provided by operating activities
    
    
    333,874
    
    
    
    10,405,307
    
    
    
    4,549,355Cash Flows From Investing Activities:Additions to property, plant, and equipment
    
    
    (937,042
    )
    
    
    (3,760,684
    )
    
    
    (335,765
    )Proceeds from sale of property, plant and equipment
    
    
    586,205
    
    
    
    2,053,405
    
    
    
    2,048Net Cash used in investing activities
    
    
    (350,837
    )
    
    
    (1,707,279
    )
    
    
    (333,717
    )Cash Flows From Financing Activities:Net payments on line of credit
    
    
    (545,125
    )
    
    
    (7,503,966
    )
    
    
    (3,506,379
    )Payments on prepetition debt
    
    
    (8,904
    )
    
    
    (8,161
    )
    
    
    (7,866
    )Payments on postpetition debt
    
    
    (1,603,248
    )
    
    
    (1,107,717
    )
    
    
    (809,073
    )Proceeds from issuance of debt
    
    
    2,000,927
    
    
    
    
    
    
    
    Net cash used in financing activities
    
    
    (156,350
    )
    
    
    (8,619,844
    )
    
    
    (4,323,318
    )Net (decrease) increase in cash and cash equivalents
    
    
    (173,313
    )
    
    
    78,184
    
    
    
    (107,680
    )Cash and cash equivalents, beginning of period
    
    
    173,313
    
    
    
    95,129
    
    
    
    202,809Cash and cash equivalents, end of period
    
    $
    
    
    
    $
    173,313
    
    
    $
    95,129
  F-7
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. ORGANIZATION AND NATURE OF BUSINESS:
  2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
 Principles of Consolidation
  Use of Estimates and Concentration of Credit
    Cash and Cash Equivalents
  Accounts Receivable (doubtful accounts) Reserves
 F-8
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  Inventories
   Property, Plant and Equipment
  Income Taxes
  Revenue Recognition
   F-9
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  Rebates, Advertising Allowances and Independent Sales Commissions
   Advertising
  Other (Income) Expense, Net
  Cash Flow Information
   Stock Based Compensation
   F-10
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  August 31
    
    2005
    
    2004
    
    2003Net EarningsAs reported
    
    $
    (2,909,329
    )
    
    $
    1,013,595
    
    
    $
    617,831Pro forma
    
    
    (2,911,329
    )
    
    
    1,009,095
    
    
    
    575,831Stock-Based EmployeeCompensation Expense, Net of TaxAs reported
    
    
    
    
    
    
    
    
    
    
    Pro forma
    
    
    2,000
    
    
    
    4,500
    
    
    
    42,000Net Earnings per Common and
Common Equivalent Share:Basic  As reported
    
    
    (0.55
    )
    
    
    0.19
    
    
    
    0.12Diluted   As
reported
    
    
    (0.55
    )
    
    
    0.19
    
    
    
    0.12Basic  Pro forma
    
    
    (0.55
    )
    
    
    0.19
    
    
    
    0.11Diluted  Pro forma
    
    $
    (0.55
    )
    
    $
    0.19
    
    
    $
    0.11
  Net Income Per Share
  Disclosures about Fair Value of Financial Instruments
  F-11
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   New Financial Accounting Pronouncements
      F-12
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  Reclassifications
  3. INVENTORIES:
  August 31,2005
    
    2004Finished goods
    
    $
    9,408,114
    
    
    $
    11,920,405Raw materials
    
    
    6,327,885
    
    
    
    9,866,736Supplies
    
    
    1,385,293
    
    
    
    1,047,748Work-in-process
    
    
    95,233
    
    
    
    117,396Allowance for slow moving, obsolete, and
damaged inventory
    
    
    (462,604
    )
    
    
    (308,727
    )Total
    
    $
    16,753,921
    
    
    $
    22,643,558
 4. PROPERTY, PLANT AND EQUIPMENT:
  August 31
    
    August 312005
    
    2004Buildings and equipment
    
    $
    22,860,479
    
    
    $
    27,100,375Equipment under capital lease
    
    
    1,938,291
    
    
    
    Furniture, fixtures and other
    
    
    2,375,418
    
    
    
    2,316,92827,174,188
    
    
    
    29,417,303Less-Accumulated depreciation
    
    
    (14,784,634
    )
    
    
    (14,295,714
    )Net property, plant and equipment
    
    $
    12,389,554
    
    
    $
    15,121,589
 
 5. ACCOUNTING FOR LONG-LIVED ASSETS:
  F-13
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   6. EXTINGUISHMENT OF DEBT:
  7. LONG-TERM DEBT AND LINE OF CREDIT:
  August 31,
    
    August 31,2005
    
    2004Line of Credit with a commercial financial corporation under
revolving credit line, Maturing November 2007, secured by
inventories, trade accounts receivable, equipment, and goodwill
associated with TSTs trademark IMPRESO (no value on
financial statements), interest payable monthly at prime plus
0.25% (6.5% and 4.25%, as of August 31, 2005 and August 31,
2004, respectively).
    
    $
    6,306,354
    
    
    $
    6,851,479Note payable to a commercial financial corporation, secured by
real property and equipment, payable in monthly installments of
$4,457 (including interest at 8.50%), maturing November 2008.
    
    
    184,645
    
    
    
    222,039Note payable to a commercial financial corporation, secured by
real property and equipment, payable in monthly installments of
$10,843 (including interest at 8.50%), maturing July 2010.
Revolving lenders blanket lien subordinated to notes
collateral.
    
    
    511,580
    
    
    
    599,536Note payable to a commercial financial corporation, secured by
real property, payable in monthly installments of $2,834
(including interest at 5.5%), maturing October 2010.
    
    
    149,972
    
    
    
    175,978Notes payable to various commercial financial corporations,
secured by equipment, interest rates ranging from 5.25% to
13.8%, maturing at various dates from September 2004 through
July 2008.
    
    
    96,428
    
    
    
    140,069Notes 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 March 2011.
    
    $
    1,182,378
    
    
    $
    1,944,381
 F-14
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 August 31,
    
    August 31,2005
    
    2004Acquisition note payable, unsecured, payable in quarterly
installments of $15,000 (including interest at 8%), maturing
April 2006. (See Footnote 6)
    
    $
    
    
    
    $
    225,000Acquisition note payable, secured by equipment, payable in
monthly installments of $16,024, no interest, matured May 2003.
(See Footnote 6)
    
    
    
    
    
    
    352,145Note 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, 6% as of August 31, 2004), maturing April 2007.
On September 22, 2004, this note was combined with the
construction note, in which the personal guarantee was
relinquished by the lender. The combined Note is payable in
monthly installments of $40,454.51, including interest at prime
plus 1.125% with a cap of 7.5% (7.375% as of August 31, 2005)
maturing September 2009.
    
    
    4,318,812
    
    
    
    3,085,043Construction note payable to a commercial financial
corporation, secured by real property, payable in monthly
installments of interest only, at 6 %, consolidated into new
loan executed September 22, 2004, combined with balance of
existing mortgage on the real property. Interest on the new
combined loan will be prime plus 1.125%, capped at 7.5%,
maturing 5 years from date of execution.
    
    
    
    
    
    
    1,375,059Note 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 LIBOR plus 350
basis points, (6.77% and 4.5%, respectively as of August 31,
2005 and August 31, 2004), maturing February 2009.
    
    
    767,857
    
    
    
    982,143Acquisition notes payable, unsecured, payable in monthly
installments of $16,666, no interest, maturing February 2007.
    
    
    296,463
    
    
    
    476,905Capital lease payable to a commercial financial corporation,
secured by equipment, payable in monthly installments of
$28,320, including interest at 8.51%, maturing October 2011.
    
    
    1,772,769
    
    
    
    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 April 2008.
    
    
    220,169
    
    
    
    229,073Total
    
    
    15,807,427
    
    
    
    16,658,850Less Current Maturities
    
    
    (8,033,066
    )
    
    
    (8,266,933
    )Long-Term Debt
    
    $
    7,774,361
    
    
    $
    8,391,917
 F-15
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
     2006
    
    $
    7,145,0152007
    
    
    766,4842008
    
    
    835,4472009
    
    
    668,9182010
    
    
    3,858,101Thereafter
    
    
    760,693$
    14,034,658
  2006
    
    $
    985,7402007
    
    
    214,9202008
    
    
    214,9202009
    
    
    214,9202010
    
    
    214,920Thereafter
    
    
    250,742Total Minimum Lease Payments
    
    $
    2,096,162Less amount representing interest
    
    
    (323,393
    )Present Value of Net Minimum Lease Payments
    
    $
    1,772,769
 8. REAL ESTATE AND EQUIPMENT LEASE AGREEMENTS:
  F-16
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 Year
    
    All Lease Payments Payments
    
    
    Related Party Lease Payments2006
    
    $
    1,286,914
    
    
    $
    58,9202007
    
    
    1,282,498
    
    
    
    58,9202008
    
    
    1,273,618
    
    
    
    58,9202009
    
    
    1,163,342
    
    
    
    58,9202010
    
    
    1,028,192
    
    
    
    58,920Thereafter
    
    
    5,750,544
    
    
    $
    250,410$
    11,785,108
    
    
    $
    545,010
    9. COMMITMENTS AND CONTINGENCIES:
    F-17
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  th
        F-18
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 10. INCOME TAXES:
  2005
    
    2004Deferred income tax assets  Current:Allowance for doubtful accounts receivable
    
    $
    565,617
    
    
    $
    452,126Allowance for obsolete inventory
    
    
    185,042
    
    
    
    123,491Accrued vacation
    
    
    77,434
    
    
    
    140,000Deferred income tax assets-noncurrent:Deferred gain on sale of building
    
    
    244,731
    
    
    
    318,718NOL-carry forward
    
    
    920,539
    
    
    
    Deferred rent
    
    
    28,815
    
    
    
    Other
    
    
    36,152
    
    
    
    21,193Deferred income tax liability-long term:Tax over book depreciation and amortization
    
    
    (1,525,254
    )
    
    
    (998,730
    )Net deferred income tax assets
    
    $
    533,076
    
    
    $
    56,798
  2005
    
    2004
    
    2003Federal income tax (benefit) expense at
statutory rate (34%)
    
    $
    (1,824,697
    )
    
    $
    573,976
    
    
    $
    346,097State taxes, net of federal income tax benefit
    
    
    66,781
    
    
    
    102,295
    
    
    
    72,600Tax effect of nondeductible items
    
    
    25,027
    
    
    
    14,907
    
    
    
    19,260Other
    
    
    136,263
    
    
    
    (16,607
    )
    
    
    (37,856
    )Income tax (benefit) expense
    
    $
    (1,596,626
    )
    
    $
    674,571
    
    
    $
    400,101
 11. SEGMENT ANALYSIS:
  F-19
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 Year Ended August 31, 2005
    
    
    Year Ended August 31, 2004AMOUNT
    
    
    PERCENT
    
    
    AMOUNT
    
    
    PERCENTNET SALES BY INDUSTRY
SEGMENTHardcopy imaging products
    
    $
    77,525,787
    
    
    
    99.74
    %
    
    $
    103,989,229
    
    
    
    100.00
    %Bottled water
    
    $
    202,184
    
    
    
    0.26
    %
    
    $
    0
    
    
    
    0.00
    %Total
    
    $
    77,727,971
    
    
    
    100.00
    %
    
    $
    103,989,229
    
    
    
    100.00
    %PRE TAX PROFIT FROM
CONTIUNING OPERATIONSHardcopy imaging products
    
    $
    (3,839,898
    )
    
    
    -85.22
    %
    
    $
    1,688,166
    
    
    
    100.00
    %Bottled water
    
    $
    (666,056
    )
    
    
    -14.78
    %
    
    $
    0
    
    
    
    0.00
    %Total
    
    $
    (4,505,954
    )
    
    
    -100.00
    %
    
    $
    1,688,166
    
    
    
    100.00
    %
 As Of August 31, 2005
    
    
    As Of August 31, 2004TOTAL ASSETS BY INDUSTRY
SEGMENTHardcopy imaging products
    
    $
    39,043,670
    
    
    
    93.42
    %
    
    $
    49,642,564
    
    
    
    95.92
    %Bottled water
    
    $
    2,749,748
    
    
    
    6.58
    %
    
    $
    2,110,956
    
    
    
    4.08
    %Total
    
    $
    41,793,418
    
    
    
    100.00
    %
    
    $
    51,753,520
    
    
    
    100.00
    %
 12. RELATED PARTIES:
     13. STOCK OPTIONS:
  F-20
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
     Weighted Average
    
    
    Weighted AverageRange of
    
    Number
    
    
    Remaining Contractual
    
    
    Exercise PriceExercise Prices
    
    Outstanding
    
    
    Life (Years)
    
    
    Per Share$1.70-2.20
    
    
    99,000
    
    
    
    1.5
    
    
    $
    1.74$2.70-3.63
    
    
    80,500
    
    
    
    0.9
    
    
    $
    3.00$5.38-6.75
    
    
    228,700
    
    
    
    0.2
    
    
    $
    5.96$8.38-10.38
    
    
    9,500
    
    
    
    1.7
    
    
    $
    9.88$12.75-12.75
    
    
    3,000
    
    
    
    1.7
    
    
    $
    12.75Total
    
    
    420,700
    
    
    
    
    
    
    $
    4.56
  Weighted AverageRange of
    
    Number
    
    
    Exercisable PriceExercise Prices
    
    Exercisable
    
    
    Per Share$1.70-2.20
    
    
    96,000
    
    
    $
    1.74$2.70-3.63
    
    
    79,500
    
    
    $
    3.00$5.38-6.75
    
    
    228,700
    
    
    $
    5.96$8.38-10.38
    
    
    9,500
    
    
    $
    9.88$12.75-12.75
    
    
    3,000
    
    
    $
    12.75Total
    
    
    416,700
    
    
    $
    4.56
  F-21
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  WeightedAvailable
    
    
    AverageGranted
    
    
    for Grant
    
    
    PriceAugust 31, 2002
    
    
    467,400
    
    
    
    78,550
    
    
    $
    4.54Granted
    
    
    8,000
    
    
    
    (8,000
    )
    
    $
    2.169Canceled
    
    
    
    
    
    
    
    
    
    
    Expirations
    
    
    (8,200
    )
    
    
    8,200
    
    
    $
    6.00August 31, 2003
    
    
    467,200
    
    
    
    78,750
    
    
    $
    4.48Granted
    
    
    3,000
    
    
    
    (3,000
    )
    
    $
    2.70Canceled
    
    
    (1,500
    )
    
    
    1,500
    
    
    $
    2.533Expirations
    
    
    (49,500
    )
    
    
    49,500
    
    
    $
    3.84August 31, 2004
    
    
    419,200
    
    
    
    126,750
    
    
    $
    4.55Retirement
    
    
    
    
    
    
    (31,500
    )
    
    
    Granted
    
    
    3,000
    
    
    
    (3,000
    )
    
    $
    1.71Canceled
    
    
    
    
    
    
    
    
    
    
    Expirations
    
    
    (1,500
    )
    
    
    1,500
    
    
    $
    2.11August 31, 2005
    
    
    420,700
    
    
    
    93,750
    
    
    $
    4.56
 14. EMPLOYEE 401(k) PLAN:
  15. NON-CASH ACTIVITY:
  16. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED):
  F-22
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 Quarters EndedNovember 30
    
    
    February 29
    
    
    May 31
    
    
    August 312005Net Sales
    
    $
    19,976,634
    
    
    $
    18,629,137
    
    
    $
    19,829,734
    
    
    $
    19,292,466Gross Profit
    
    
    979,858
    
    
    
    556,146
    
    
    
    1,096,596
    
    
    
    1,544,205Net Loss
    
    
    (760,037
    )
    
    
    (1,209,018
    )
    
    
    (573,646
    )
    
    
    (366,628
    )Basic and Diluted Earnings per Share
    
    $
    (0.14
    )
    
    $
    (0.23
    )
    
    $
    (0.11
    )
    
    $
    (0.07
    )2004Net Sales
    
    $
    26,959,403
    
    
    $
    25,460,177
    
    
    $
    25,475,574
    
    
    $
    26,094,075Gross Profit
    
    
    3,679,902
    
    
    
    3,326,886
    
    
    
    3,516,017
    
    
    
    3,182,642Net Income (Loss)
    
    
    482,216
    
    
    
    262,240
    
    
    
    348,051
    
    
    
    (78,912
    )Basic and Diluted Earnings per Share
    
    $
    0.09
    
    
    $
    0.05
    
    
    $
    0.07
    
    
    $
    (0.02
    )
  17. SUBSEQUENT EVENTS:
   F-23
    Table of Contents  PageReport of Independent Registered Public Accounting Firm
Blackman Kallick Bartelstein, LLP
    
    
    S -2Schedule II- Valuation and Qualifying Accounts
    
    
    S-3
 S-1
    Table of Contents  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON SUPPLEMENTAL INFORMATION
   
 S-2
    Table of Contents  IMPRESO, INC. AND SUBSIDIARIES (a)
 VALUATION AND QUALIFYING ACCOUNTS
 FOR THE YEARS ENDED AUGUST 31, 2005, 2004, AND 2003
 AdditionsBalance at
    
    
    Additions
    
    
    Charged
    
    
    
    
    
    
    Balance atBeginning
    
    
    Charged
    
    
    to other
    
    
    
    
    
    
    End ofof Period
    
    
    to Income
    
    
    Accounts
    
    
    Deductions
    
    
    PeriodAugust 31, 2005:Allowance for doubtful accounts
    
    $
    1,130,315
    
    
    $
    726,487
    
    
    $
    
    
    
    $
    (442,760)
    (b)
    
    $
    1,414,042Inventory Reserves
    
    
    308,727
    
    
    
    157,160
    
    
    
    
    
    
    
    (3,283
    )
    
    
    462,604Total reserves and allowances
    
    $
    1,439,042
    
    
    $
    883,647
    
    
    $
    
    
    
    
    ($446,043
    )
    
    $
    1,876,646August 31, 2004:Allowance for doubtful accounts
    
    $
    630,916
    
    
    $
    753,774
    
    
    $
    
    
    
    $
    (254,375
    ) (b)
    
    $
    1,130,315Inventory Reserves
    
    $
    388,118
    
    
    
    
    
    
    
    
    
    
    $
    (79,391
    )
    
    $
    308,727Total reserves and allowances
    
    $
    1,019,034
    
    
    $
    753,774
    
    
    $
    
    
    
    $
    (333,766
    )
    
    $
    1,439,042August 31, 2003:Allowance for doubtful accounts
    
    $
    515,010
    
    
    $
    684,459
    
    
    $
    
    
    
    $
    (568,553
    ) (b)
    
    $
    630,916Inventory Reserves
    
    
    753,715
    
    
    
    191,581
    
    
    
    
    
    
    
    (557,178
    )
    
    
    388,118Total reserves and allowances
    
    $
    1,268,725
    
    
    $
    876,040
    
    
    $
    
    
    
    $
    (1,125,731
    )
    
    $
    1,019,034
 
 (a)
    
    This schedule should be read in conjunction with the Companys audited consolidated
financial statements and related notes thereto.(b)
    
    Write-off of uncollectible receivables. S-3
    Table of Contents  Impreso, Inc.
 By:
    
    /s/ Marshall D. SorokwaszMarshall D. Sorokwasz, President
   Signature
    
    Title
    
    Date/s/Marshall D. Sorokwasz
    
    Chairman of the Board,
    
    December 14, 2005Marshall D. Sorokwasz
    
    President, Principal Executive
Officer and Treasurer/s/ Richard D. Bloom
    
    Senior Vice President of Operations,
    
    December 14, 2005Richard D. Bloom
    
    Director/s/ Donald E. Jett
    
    Secretary, Director
    
    December 14, 2005Donald E. Jett/s/ Susan M. Atkins
    
    Vice President of Finance,
    
    December 14, 2005Susan M. Atkins
    
    Principal Financial Officer,
Principal Accounting Officer/s/ Jay W. Ungerman
    
    Director
    
    December 14, 2005Jay W. Ungerman/s/ Robert F. Torisio
    
    Director
    
    December 14, 2005Robert F. Troisio/s/ Ian Ratner
    
    Director
    
    December 14, 2005Ian Ratner