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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, 2001
OR
Transition report pursuant to Section 13 or 15(d) of the Securities
- --- Exchange Act of 1934
COMMISSION FILE NUMBER 000-29883
IMPRESO.COM, 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 13, 2001
--------------------- ------------------------------------
$0.01 Par Value 5,278,780
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IMPRESO.COM, INC. AND SUBSIDIARIES
FORM 10-Q
FEBRUARY 28, 2001
INDEX
PAGE NUMBER
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PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Interim Consolidated Balance Sheets at February 28,
2001 (Unaudited) and August 31, 2000 1
Interim Consolidated Statements of Operations for the
Three and Six Months Ended February 28, 2001 and February 29, 2000
(Unaudited) 3
Interim Consolidated Statements of Cash Flows for the
Six Months Ended February 28, 2001 and February 29, 2000
(Unaudited) 4
Notes to Interim Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Item 3. Quantitative and Qualitative Disclosures about Market Risk 12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
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IMPRESO.COM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
February 28, August 31,
2001 2000
------------ ------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 168,115 $ 149,527
Trade accounts receivable, net of allowance for doubtful
accounts of $256,411 at February 28, 2001 and
$168,631 at August 31, 2000 7,759,077 8,914,102
Investments in marketable securities 11,088 11,088
Inventories 22,643,042 21,232,863
Prepaid expenses and other 701,470 223,113
Deferred income tax assets 62,435 57,335
------------ ------------
Total current assets 31,345,227 30,588,028
------------ ------------
Property, plant and equipment, at cost 18,799,819 18,648,715
Less-Accumulated depreciation (10,262,817) (9,880,019)
------------ ------------
Net property, plant and equipment 8,537,002 8,768,696
------------ ------------
Other assets 88,458 26,824
------------ ------------
Total assets $ 39,970,687 $ 39,383,548
============ ============
The accompanying notes are an integral part of these
consolidated financial statements.
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IMPRESO.COM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
LIABILITIES AND STOCKHOLDERS' EQUITY
February 28, August 31,
2001 2000
------------ ------------
(Unaudited)
Current liabilities:
Accounts payable $ 9,431,571 $ 6,623,776
Accrued liabilities 1,283,908 1,984,952
Current maturities of long-term debt 318,591 247,798
Line of credit 10,667,071 12,469,390
Current maturities of prepetition debt 7,339 7,194
------------ ------------
Total current liabilities 21,708,480 21,333,110
------------ ------------
Deferred income tax liability 788,004 763,769
Long-term debt, net of current maturities 3,469,491 3,529,352
Long-term portion of prepetition debt, net of current maturities 249,030 252,727
------------ ------------
Total liabilities 26,215,005 25,878,958
------------ ------------
Commitments and contingencies
Stockholders' 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 shares 52,928 52,928
Warrants -- 110
Treasury Stock (14,000 shares, at cost) (38,892) --
Additional paid-in capital 6,319,682 6,319,572
Retained earnings 7,421,964 7,131,980
------------ ------------
Total stockholders' equity 13,755,682 13,504,590
------------ ------------
Total liabilities and stockholders' equity $ 39,970,687 $ 39,383,548
============ ============
The accompanying notes are an integral part of these
consolidated financial statements.
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IMPRESO.COM, INC. AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended
February 28 February 29, February 28, February 29,
2001 2000 2001 2000
------------ ------------ ------------ ------------
Net Sales $ 21,289,448 $ 16,801,376 $ 42,539,654 $ 33,906,444
Cost of sales 18,840,876 14,627,973 37,795,005 29,828,680
------------ ------------ ------------ ------------
Gross profit 2,448,572 2,173,403 4,744,649 4,077,764
Other costs and expenses:
Selling, general and administrative 1,847,403 1,683,706 3,637,594 3,164,886
Interest expense 383,369 313,878 729,869 557,284
Other income, net (47,348) (77,652) (94,331) (74,704)
------------ ------------ ------------ ------------
Total other costs and expenses 2,183,424 1,919,932 4,273,132 3,647,466
Income before income tax expense 265,148 253,471 471,517 430,298
Income tax expense (benefit):
Current 91,595 108,102 162,398 183,902
Deferred 10,735 6,946 19,135 (17,678)
------------ ------------ ------------ ------------
Net income $ 162,818 $ 138,423 $ 289,984 $ 264,074
============ ============ ============ ============
Net income per common share
(basic and diluted) $ 0.03 $ 0.03 $ 0.05 $ 0.05
============ ============ ============ ============
Weighted average shares outstanding 5,279,313 5,292,780 5,284,432 5,292,780
The accompanying notes are an integral part of these
consolidated financial statements.
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IMPRESO.COM, INC. AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
February 28 February 29,
2001 2000
----------- ------------
Cash Flows From Operating Activities
Net income $ 289,984 $ 264,074
Adjustments to reconcile net income to net cash
used in operating activities-
Depreciation and amortization 396,012 324,774
(Gain) loss sale of property, plant, and equipment (4,632) 28,488
Increase (decrease) in deferred income taxes 19,135 (17,678)
(Increase) decrease in accounts receivable, net 1,155,025 (223,340)
Increase in inventories (1,410,179) (7,081,884)
Increase in prepaid expenses and other (478,357) (44,254)
Increase in other non current assets (61,634) (26,102)
Increase in accounts payable 2,807,795 3,415,359
Decrease in accrued liabilities (701,044) (410,502)
Decrease in Federal Income Tax receivable -- 478,909
----------- -----------
Net cash provided by (used in) operating activities 2,012,105 (3,292,156)
----------- -----------
Cash Flows From Investing Activities:
Additions to property, plant, and equipment (159,686) (848,936)
----------- -----------
Net cash used in investing activities (159,686) (848,936)
----------- -----------
Cash Flows From Financing Activities:
Net (payments) borrowings on line of credit (1,802,319) 4,021,375
Payments on prepetition debt (3,552) (656,557)
Borrowings on post prepetition debt, net 10,932 969,310
Purchase of Treasury Stock (38,892) --
----------- -----------
Net cash (used in) provided by financing activities (1,833,831) 4,334,128
----------- -----------
Net increase in cash and cash equivalents 18,588 193,036
Cash and cash equivalents, beginning of period 149,527 22,629
----------- -----------
Cash and cash equivalents, end of period $ 168,115 $ 215,665
=========== ===========
The accompanying notes are an integral part of these
consolidated financial statements.
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IMPRESO.COM, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION AND NATURE OF BUSINESS:
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 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, 2001, and its results of operations for
the three and six months ended February 28, 2001 and February 29, 2000. Results
of the Company's operations for the interim period ended February 28, 2001, 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
(the "Company's Form 10-K"), for the fiscal year ended August 31, 2000 ("Fiscal
2000"). 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.
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Inventories consisted of the following:
February 28, August 31,
2001 2000
------------ -----------
Finished goods $12,828,161 $ 7,875,235
Raw materials 9,032,922 12,624,295
Supplies 734,285 643,333
Work-in-process 47,674 90,000
----------- -----------
Total inventories $22,643,042 $21,232,863
=========== ===========
4. LONG -TERM DEBT AND LINE OF CREDIT:
The following is a summary of long-term debt and line of credit: February 28, August 31,
2001 2000
------------ -----------
Line of Credit with a commercial financial corporation under revolving credit line
maturing May 2001, secured by inventories, trade accounts receivable, equipment,
goodwill associated with TST's trademark "IMPRESO" (no value on financial
statements), and a personal guarantee by the trustee of a trust which is the
largest stockholder of the Company, interest payable monthly at prime plus .25%
(9.25% at February 28, 2001) $10,667,071 $12,469,390
Note payable to a commercial financial corporation, secured by real property, 1,681,343 1,685,461
interest at 4.5% above the 11th District Cost of Funds rate (9.75% at February 28,
2001) maturing August 2008
Note payable to a commercial financial corporation, secured by real property and 324,898 614,097
equipment, interest at 8.50%, maturing December 2009
Note payable to a commercial financial corporation, secured by real property and 842,018 869,940
equipment, interest at 8.50%, maturing August 2010. Revolving lender's blanket lien
subordinated to note's collateral
Note payable to a commercial financial corporation, secured by real property, 254,402 --
interest at 5.50%, maturing November, 2010
Notes payable to various commercial financial corporations, secured by equipment, 685,421 607,652
interest rates ranging from 0.9% to 11.17%, maturing at various dates from June
2001 thru July 2005
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 the largest
stockholder of the Company, interest at 4%, maturing June 2023 256,369 259,921
----------- -----------
Total $14,711,522 16,506,461
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As of February 28, 2001, the revolving credit line is limited to the lesser of
$14,900,000 or a percentage of eligible trade accounts receivable and
inventories, as defined. On February 28, 2001, the remaining availability under
the revolving credit line was $4.2 million. The line of credit has restrictive
covenants requiring the maintenance of a minimum tangible net worth and working
capital requirements, as defined. As of February 28, 2001, the Company was in
compliance with all covenants.
5. SUPPLEMENTAL CASH FLOW INFORMATION:
Six Months Ended
February 28 February 29
2001 2000
----------- -----------
Cash paid during the period for:
Interest $729,869 $557,284
Income taxes $144,216 $ 79,606
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS FOR THE INTERIM PERIODS ENDED FEBRUARY 28, 2001 AND
FEBRUARY 29, 2000.
Net Sales---Net sales increased from $16.8 million in the three months ended
February 29, 2000, to $ 21.3 million in the same period for the year ending
August 31, 2001 ("Fiscal 2001"), an increase of $4.5 million or 26.7%. Net sales
increased from $33.9 million in the six months ended February 29, 2000, to $42.5
million in the same period in Fiscal 2001, an increase of $8.6 million, or
25.5%. Net sales increased in the first and second quarters of Fiscal 2001 as a
result of increased sales of all product categories.
Gross Profit--- Gross profit increased from $2.2 million in the three months
ended February 29, 2000, to $ 2.4 million in the three months ended February 28,
2001, an increase of 12.7%. Gross profit
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increased from $4.1 million in the six months ended February 29, 2000, to $4.7
million in the same period in 2001, an increase of $667,000 or 16.4%. Gross
profit decreased from 12.9%, in the second quarter of Fiscal 2000, to 11.5% in
the corresponding period of 2001. Gross profit decreased from 12.0% in the six
month period ended February 29, 2000, to 11.2% in the same period in Fiscal
2001. Gross profit, as a percentage of net sales, decreased in the three and six
month periods ended February 28, 2001, as compared to the corresponding periods
of the prior year, as a result of lower finished goods selling prices of
commodity products in the market place.
Selling, General, and Administrative Expenses---- SG&A expenses increased from
$1.7 million in the three months ended February 29, 2000, to $1.8 million in the
corresponding period of Fiscal 2001, an increase of $164,000 or 9.7%. SG&A as a
percentage of net sales decreased from 10% in the second quarter of Fiscal 2000,
to 8.7% in the corresponding period of Fiscal 2001. SG&A expenses increased from
$3.2 million, or 9.3% of net sales for the six months ended February 29, 2000,
to $3.6 million, or 8.6% of net sales in the same period of Fiscal 2001. The
increase in SG&A as a dollar amount and decrease as a percentage of net sales
for the three and six month periods of February 28, 2001, resulted primarily
from the increase in basic expenditures required to create additional sales and
efficiencies obtained with an increased sales volume.
Interest Expense----Interest expense increased from $314,000 in the three months
ended February 29, 2000, to $384,000 in the same period of Fiscal 2001, an
increase of 22.1%. Interest expense increased from $557,000, in the six months
ended February 29, 2000, to $730,000 in the corresponding period of Fiscal 2001,
an increase of 31%. The increase in interest expense for the three and six month
periods ended February 28, 2001, was primarily attributable to increased
borrowings. The increased borrowings reflected the Company's increased
inventory, which increased 6.6% as of February 28, 2001, as compared to August
31, 2000, and financed acquisitions of property.
Income Taxes--- Income tax expense decreased from $115,000 for the three months
ended February 29, 2000, to $102,330 in the second quarter of Fiscal 2001.
Income tax expense increased from $166,000 for the six months ended February 29,
2000, to $182,000 in the six months ended February 28, 2001. The decrease in
income tax expense for the three months ended February 28, 2001, was
attributable to a prior year accrual adjustment. The increase in income tax
expense for the six months ended February 28, 2001, was the result of an
increase in taxable income and an increase in deferred taxes.
LIQUIDITY AND CAPITAL RESOURCES
Working capital increased to $9.6 million at February 28, 2001 from $9.3 million
at August 31, 2000. This represented an increase of 4.1%.
TST's revolving line of credit is currently $14.9 million. The loan is secured
by, among other things, inventory, trade receivables, equipment and a personal
guarantee of Marshall Sorokwasz, our
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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% (9.25% at
February 28, 2001), are based upon specified percentages of eligible accounts
receivable and inventories. As of February 28, 2001, there was a $4.2 million
borrowing capacity remaining under the $14.9 million revolving line of credit.
The revolving credit line will mature in May 2001.
On April 5, 2001, we executed an asset purchase agreement with Durango Georgia
Converting, LLC to purchase substantially all of the assets of the Sky division.
The funding of this purchase is expected to be accomplished by renewing,
extending, and increasing our revolving line of credit from $14.9 million to $22
million, with the increased line to be collateralized by the inventory, trade
receivables, and equipment to be acquired in this acquisition, and by obtaining
a $2.24 million loan from another commercial financial institution secured by
our Coppell, Texas facility and the plant to be acquired in connection with the
acquisition. The proposed term for the extension of our revolving line of credit
is two years.
We believe that the funds available under the loans for our West Virginia and
California facilities, the revolving credit facility and its anticipated
extension in the line and term to May 2003, the proposed mortgages on our
Coppell, Texas facility and the plant to be acquired in connection with the
acquisition, 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, the funds required
for the new facilities 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.
On September 1, 2000, we adopted Statement of Financial Accounting Standards
(SFAS) No. 133, Accounting for Derivatives Instruments and Hedging Activities,
as amended by SFAS No. 138, Accounting for Derivative Instruments and Certain
Hedging Activities, which establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. SFAS No. 133, as amended, requires
the recognition of all derivative instruments as either assets or liabilities in
the statement of financial position measured at fair value. The adoption of SFAS
133 had no impact to our financial statements taken as a whole. As of February
28, 2001, we did not own derivative or other financial instruments for trading
or speculative purposes.
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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. Because
TST has in the past and is currently expanding the manufacturing and
distribution of new brands and types of products, its raw material and finished
goods inventory requirements have increased over prior years. In addition,
increasing international sourcing of raw materials has impacted delivery cycles
resulting in TST's expanding inventory to accommodate less frequent, larger
shipments. 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 or if prices
for raw materials required by it increase, or if new technology is developed
that renders obsolete products held in inventory by TST, the Company's business
could be materially adversely affected.
The price of raw materials that TST utilizes substantially increased in March
2000. A proposed October 2000 increase was not successfully implemented by
suppliers. During the first and second quarters of Fiscal 2001, the price of raw
materials has remained relatively stable. Management believes that raw material
paper costs will increase in the second half of Fiscal 2001. Market indications
are that the supply of paper raw material utilized by TST will tighten further
due to mill consolidation and the permanent shutdown of suppliers' mills.
Currently, raw material inventory costs are equal to or less than average raw
material market costs. Management believes that its increase of TST's inventory
has advantageously positioned itself to capitalize on this anticipated future
market trend.
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
Due to actual and proposed price increases by our suppliers, TST implemented
price increases on finished goods in March 2000 and October 2000. The finished
goods price increase in March 2000 and October 2000 were successfully
implemented on a majority of TST's customers. However, resistance by customers
to future finished goods price increases could create downward pressure on
finished goods selling prices, which could result in lower net sales and profit
margins. If selling prices for products manufactured by us cannot increase in
relationship 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. In addition, the increased
growth of discount retailers, such as office superstores, and the increase of
sales to those retailers as a percentage of our
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total sales could also contribute to a reduction in our profit margin, as price
wars among them adversely impact their suppliers.
SEASONALITY
TST may be subject to certain seasonal fluctuations in that orders for products
may decline over the summer months. However, we do not believe that such
fluctuations have a material adverse effect on our results of operations.
SUBSEQUENT EVENTS
On April 5, 2001, TST entered into an Asset Purchase Agreement with Durango
Georgia Converting, LLC to purchase substantially all of the assets of the Sky
Division for approximately $11.7 million. Completion of the transaction, which
is scheduled to close later this month, is subject to certain contingencies and
standard conditions to closing. Sky's manufacturing facility is located in Green
Castle, Pennsylvania and produces primarily continuous feed business forms in
addition to custom cut forms and other higher margin products. The addition of
this plant strengthens TST's East Coast production and delivery, and increases
the number of TST's manufacturing facilities to four. Recently, Sky's annual
sales have exceeded $40 million. Management believes the addition of the assets
of Sky to TST will result in a substantially larger company with the resources
to aggressively expand its share of the business forms market.
On November 30, 2000, we received notice from the Nasdaq Stock Market that we
had failed to maintain a market value of public float of our common stock
greater than or equal to $5 million in accordance with the applicable Nasdaq
National Market maintenance requirement. We were unable to achieve compliance
with the requirement by February 28, 2001, the end of a 90-day grace period. On
March 9, 2001, we requested an oral hearing in front of the Nasdaq
Qualifications Hearing Panel ( the" Panel"). The oral hearing was held April 12,
2001.
At the oral hearing on April 12, 2001, management presented to the Panel our
proposed plan of compliance and requested an extension of time in order to
regain compliance, or a waiver from the market value of public float
requirement. We are currently in compliance with all of the remaining
maintenance standard requirements. We also demonstrated to the Panel our current
compliance with all of the maintenance standards of the Nasdaq Small Cap Market,
and requested that if the Panel made a determination to deny our request for
continued listing on the Nasdaq National Market, that the panel recommend our
securities for listing on the Nasdaq Small Cap Market. As of April 16, 2001, we
have not received the Panel's determination.
Pursuant to Nasdaq Market Place Rule 4860, the Nasdaq Listing and Hearing Review
Council (the "Listing Council") may, on its own motion, determine to review any
Panel decision within 45 calender
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days after issuance of the written decision of the Panel. If the Listing Council
determines to review this decision , it may affirm, modify, reverse, dismiss, or
remand the decision to the Panel. In addition, we may, within 15 calender days
of the date of the written decision, appeal the Panel's decision to the Listing
Council. Any reviews by the Listing Council will not operate as a stay of the
Panel decision. The decision of the Listing Council may be appealed to the
Securities and Exchange Commission ("SEC") and ultimately to the courts.
Should the Panel decline to allow our securities to continue listing on the
Nasdaq National Market or recommend listing on the Nasdaq Small Cap Market, we
may independently apply to become listed on the Nasdaq Small Cap Market or the
American Stock Exchange. There can be no assurance, however, that we will
qualify at the time of application for such listing or can remain in compliance
therewith.
If we do not qualify for listing on any of these markets, we may apply for
listing on the OTC Bulletin Board. The OTC Bulletin Board is a regulated
quotation service that displays real-time information on over-the-counter (OTC)
equity securities. An OTC equity security generally is any equity that is not
listed or traded on Nasdaq or a national securities exchange.
FORWARD-LOOKING STATEMENTS
Management's Discussion and Analysis of Financial Condition and the 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
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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, 2001. 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 fair value. Based upon our market risk sensitive debt outstanding
at February 28, 2001, there was no material exposure to our financial position
or results of operations.
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PART II: OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
EXHIBIT NO. DESCRIPTION OF EXHIBITS
(a) No reports on Form 8-K were filed during the quarter ended
February 28, 2001.
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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 16, 2001
Impreso.com, Inc.
(Registrant)
/s/ Marshall Sorokwasz
-----------------------------
Marshall Sorokwasz
Chairman of the Board, Chief
Executive Officer, President,
and Director
/s/ Susan Atkins
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Susan Atkins
Chief Financial Officer
and Vice President
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