SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

[x] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended August 31, 2004

OR

[ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 for the transition period

Commission File Number 000-29883

Impreso, Inc.

(Exact name of registrant as specified in its charter)

(972) 462-0100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12 (g) of the Act:

COMMON STOCK, $0.01 PAR VALUE

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 by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes [ ] No [X]

The aggregate market value of the voting stock held by non-affiliates of the registrant as of February 27, 2004, based upon the closing sale price of the Common Stock as reported on the NASDAQ Small Cap Market, was approximately $ 5,777,068

There were 5,278,780 shares of the registrant’s Common Stock outstanding as of December 13, 2004.

DOCUMENTS INCORPORATED BY REFERENCE

The registrant has incorporated by reference into Part III of this Form 10-K portions of its definitive Proxy Statement for its Annual Meeting of Shareholders on January 25, 2005. Except with respect to information specifically incorporated by reference into this Form 10-K, the Proxy Statement is not deemed to be filed as a part hereof.

Table of Contents

PART I

ITEM 1. BUSINESS

GENERAL

Impreso, Inc. is the holding company of TST/Impreso, Inc. (“TST”), a manufacturer and distributor to dealers and other resellers of various paper and film products for commercial and home use in domestic and international markets, Hotsheet.com, Inc., the owner of Hotsheet.com®, an online web reference directory, and Alexa Springs, Inc. (“Alexa”) the company’s natural spring water bottling subsidiary.

The primary operating company, TST, was founded in 1976. TST operates in the hard copy supply market, which encompasses those products used with a hard copy output or “imaging” device. Approximately 98% of TST’s total output is initially sold domestically. Independent resellers purchase and may further distribute the products internationally. Through its four manufacturing facilities and 50 public distribution warehouse locations throughout the United States and in Quebec, Canada, TST manufactures and distributes its products under its own IMPRESO® label, generic labels and private labels. In April 1997, TST entered into a non-exclusive Trademark Licensing Agreement with International Business Machines Corporation (“IBM”) for the manufacture and distribution of a selected line of paper products. In 2003, this agreement was extended to 2007. On December 1, 2004, International Business Machines, Inc (“IBM”) and TST/Impreso, Inc. (“TST”) agreed to terminate their Trademark Licensing Agreement.

The hard copy imaging business is a very competitive industry. Advances in hardware and imaging material technology have accelerated business and public consumption of new types of products and are changing the industry’s customers, products and channels of distribution. TST has strategically located its distribution points so that it can deliver its products to customers in most major cities in the United States within 24 hours. TST has approximately 3,800 customers, ranging in size from small business forms dealers to large office product wholesalers with multiple offices and branches. An increasing segment of our customer base has been large and medium size mass merchants, including computer and office superstores. Our primary method of generating sales contacts is through our own sales force, manufacturers’ sales representatives, extensive marketing programs, referrals and reputation.

Another subsidiary, Hotsheet.com, Inc., owns and operates the Hotsheet.com web portal. Hotsheet® is an internet website directory, or portal, specializing in listing popular and useful web destinations utilized by a wide general audience. The 11 primary categories provide over 500 links to premier sites. Hotsheet is unique due to the single-page presentation of the main directory.

Services provided by Hotsheet.com include Hotsheet Super Search, a “meta-search” that combines results from multiple web search engines and ranks them by relevance, and My Hotsheet, a unique method of bookmark management that lets users create their own personalized page of categorized favorite links. For the years ended August 31, 2004, 2003 and 2002, net sales of Hotsheet.com, Inc. amounted to $186,903, $158,755, and $122,629, respectively.

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Our newest wholly owned subsidiary, Alexa Springs, Inc. will produce bottled natural spring water from the Ouachita Mountains near Mt Ida, Arkansas. Distribution of Alexa water is scheduled to begin in December 2004. Initially, we will sell the water in one-half liter bottles packaged in a shrunk wrapped 24 count case. The distribution model of the water project is identical to our paper products; the weight and width of the pallets of each are identical and the target customers are the same.

TST’S PRODUCTS

The product lines during the fiscal year ended August 31, 2004 (“Fiscal 2004”) consisted of the following:

Continuous Computer Stock Business Forms. We maintain a wide variety of standard continuous computer stock business forms in various types of papers, formats for readability and contrast, and basis weights. Upon request, we occasionally produce customized forms for larger customers.

Thermal Facsimile Paper. Our thermal facsimile papers are suitable for use with all original equipment manufacturers’ (OEM’s) machines currently on the market and are warranted against damage that the paper may cause to a customer’s thermal facsimile machine.

Cut Sheet Paper for use in Laser Printers, Copying Machines and Plain Paper Facsimile Machines. We convert cut sheet products, including IMPRESO Lazer Cut Sheets®.

Cut Sheet Paper for use in Ink Jet Printers. We manufacture two types of ink jet paper, coated and un-coated. Coated ink jet paper, in both glossy and matte, is designed for superior high resolution color graphics and photographic reproductions. Uncoated ink jet paper is primarily used for traditional monochrome applications.

Digital Photo Ink Jet Paper. Used for printing images from digital cameras, photo CD’s, the Internet, or desktop scanners.

Gloss Coated Ink Jet Paper. Gloss coated on one side for brilliant, high-contrast color images with photographic detail and matte on the reverse side for text and graphics.

Gloss Opaque Ink Jet Film. A stable and long-lasting film for printing any ink-generated image. Its high gloss finish prints brilliant color images and its matte side prints text and graphics.

Ink Jet Coated Canvas. A textured product which creates the appearance of a painted surface.

Transparency Film for Ink Jet Printers. Clear film specially coated for smudge/bleed-free color or black ink jet imaging.

Transparency Film for Copier and Laser Printers. Overhead transparencies can be created using a plain paper copier and this film.

Transparency Film for Color Laser Printers. Designed specially for color laser applications; the unique coating controls absorption of color, creating high quality full color overhead

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transparencies.

T-Shirt Transfers. A computer and ink jet printer can create personalized designs for applications on various cotton materials.

Point of Sale and Cash Register Machine Rolls. Available in both thermal and plain paper.

Fine Cotton Business Stationery Line. Fine cotton business stationery for sale at the retail level. High Speed Laser Roll Paper. High speed laser roll paper is specifically engineered for high speed roll fed printing systems, such as IBM’s Infoprint® family of continuous-feed printing systems like the Infoprint 3000, Infoprint 4000, and Infoprint 4100. In addition, this paper can be used in Xerox® or OCE® systems. These rolls are used by companies, such as investment banking institutions and publishing companies, for variable data output applications, such as customized statements and book publishing. The advantages of using high speed roll fed printing systems for mass production over traditional methods of offset printing are lower costs and faster speeds of production without sacrificing image quality.

Wide Format Engineering Rolls. Available in three different grades of paper, bond, vellum and translucent bond, and in a variety of widths and lengths. These products are used with wide format printing and copying equipment, such as those used by architectural and engineering firms for design plans and renderings. The introduction of engineering rolls represents our entry into the rapidly growing wide format printing market. This product category also opened a new channel of distribution through computer-aided design (CAD) supply dealers.

Wide Format Ink Jet Media. Available in a wide variety of coated papers and films used for full color graphic signage and display.

Processed Laser Cut Sheets. Laser cut sheets are micro-perforated and/or pre-punched cut sheets used in copiers, laser printers and ink jet printers for applications such as return/reply promotional materials, billing and remittance statements, or coupons. Users can keep printing projects in-house by eliminating the use of outside sources for custom forms.

Ink Jet Greeting Cards. Pre-scored white card stock in matte and glossy finishes, packaged with matching envelopes.

Ink Jet Bumper Stickers. Coated vinyl bumper sticker material for use in ink jet printers to create personalized bumper stickers.

Photo Quality Business Card Size Magnets. Photo quality, magnet stock is die cut into business card size pieces. Excellent for producing business card size magnets, magnets with important phone numbers and photo magnets. Magnets can be affixed to all metal surfaces including refrigerators, lockers, etc.

Bulk Bin Packaging of Wide Format Engineering Rolls. Packaged for large users to buy in bulk and conveniently store.

Expanded Line of Wide Format Ink Jet Media. Additional SKU’s with expanded widths and

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lengths to accommodate new printer capabilities within the market.

Outdoor Banner Material. Part of our Wide Format line of products, specially designed surface for use by retail signage shops and in-house sign production.

Complete Line of ATM Rolls. Expansion of our Point of Sale products for automated teller machines servicing the financial market.

CD/DVD Sleeves. Die cut sheeted paper with adhesive strips for printing and assembling customized CD/DVD protective sheaths.

CD/DVD Labels. Pre-formatted, die cut adhesive paper for printing CD/DVD labels.

Ink Jet Address Labels. Pre-formatted, die cut adhesive paper for printing ink jet address labels.

Two sided Glossy Coated Ink Jet Paper. Gloss coated on both sides for brilliant, high-contrast color images with photographic detail.

Professional Grade Ultimate Glossy Photo Paper. Designed for ink jet printers, this ultra-bright, 100-plus whiteness paper creates a “true photograph” look and feel for high-end applications.

File Folders. Manila folders available in letter and legal size.

Rolodex and Index cards.

99 Brite Ultimate InkJet and Ultimate Laser Paper. Twenty-four pound ultra-bright paper for laser, ink jet, and multi-functional equipment.

Recycled Computer Paper Line. Three recycled grades introduced with varying brightnesses, including an 84 bright, 30% post-consumer waste product which meets governmental agencies’ recycled requirements.

Custom Printed Point of Sale/Add Rolls (Company logo, return policy, etc.)

Crayola Brand “Print & Color” Specialty Fun Papers: Includes Crayola T-Shirt Transfers, Crayola Greeting Cards with Envelopes, Crayola Glossy Photo Paper, Crayola Classic Colors, Crayola Assorted Brights and Pastels, Crayola Cling Art, Crayola Stardust Magnets and Stickers, Crayola Stardust Paper and Crayola Repositional Stickers.

TST’S TRADEMARK LICENSE

In April 1997, TST entered into a non-exclusive Trademark Licensing Agreement with IBM. Under this agreement TST manufactures and distributes a selected line of paper products within the United States, Canada and Mexico under the IBM brand name. Through various amendments the authorized product lines have been expanded and the term was extended to April 30, 2007. On December 1, 2004, International Business Machines, Inc (“IBM”) and TST/Impreso, Inc. (“TST”)

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agreed to terminate their Trademark Licensing Agreement.

TST’S MARKETING AND DISTRIBUTION

TST markets its products to approximately 3800 customers through its own sales force and established manufacturers’ representatives. TST’s targeted customers are business consumable and office machine dealers and large and medium size mass merchants, including computer and office superstores. We are continually seeking to diversify our customer base and distribution channels. The incorporation of non-traditional but related product categories into our expanding product line may facilitate our access to different distribution channels.

TST has 54 distribution points (50 public distribution warehouses and four manufacturing locations), which enable it to deliver products to most major cities in the United States within 24 hours. TST’s primary method of generating revenue is through its own sales force. The members of this sales force generally seek business within specific geographic territories. Manufacturers’ representatives serve as an important supplementary source of sales and marketing. Their territories are identified by specific accounts or prospects, primarily those of a retail nature.

TST sells to the following types of customers:

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Business Forms Dealers — Businesses that primarily buy and resell various types of business forms. Examples include Standard Forms, American Business Forms and Better Business Forms.

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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.

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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.

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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.

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Consumer Electronics Stores — Businesses that sell retail to the end user in a broad spectrum electronics environment. Examples include Frye’s, Best Buy and CompUSA.

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Mass Merchants — Discount department stores with retail sections that sell computer, copier and facsimile related supplies. Examples include Kmart and Army and Air Force Exchange Service.

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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.

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Wholesale Clubs/Office Superstores — Businesses that sell large quantities of inventory at or

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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.

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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 and Association of Independent Printing Paper Merchants.

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Computer Aided Design (CAD) Supply Dealers — Dealers that typically sell wide format supplies and papers to architects and engineers. Examples include CAD Supply Specialty and IMPACO.

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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.

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Cash Register Dealers — Dealers that sell cash register systems and point of sale supplies to businesses such as restaurants and retail vendors. Examples include Impact Paper, USA Paper and Columbia Paper & Ribbon.

Though 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. One customer, Staples, Inc. (“Staples”) accounted for more than 10% of TST’s sales in the years ended August 31, 2004, 2003 and 2002. Subsequent to this Form 10-K reporting period, September, October, and November 2004, purchases by Staples decreased significantly. The reduction is expected to be equivalent to approximately $20 million in annual sales. Management believes that this reduction in sales may materially adversely affect our financial position, results of operations and cash flows in Fiscal 2005. TST may in the future be dependent on other significant customers, the loss of which could also materially adversely affect our financial position, results of operations and cash flows.

On December 1, 2004, International Business Machines, Inc (“IBM”) and TST/Impreso, Inc. (“TST”) agreed to terminate their Trademark Licensing Agreement. This decision was a result of IBM adding other converters to the program, IBM’s refusal to provide account protection, and IBM’s continuing request for guaranteed fees. TST’s IBM product sales were approximately 11% in the Fiscal year ended August 31, 2004. TST has approximately eight months to liquidate its IBM branded paper products inventory.

INVENTORY MANAGEMENT; RAW MATERIALS OF TST

We believe that it is necessary for TST to maintain a sufficient 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 the year ended August 31, 2002 (“Fiscal 2002”), we implemented a program to reduce inventory and reduced inventory levels by $4.35 million. This is in addition to the depletion of $3

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million of inventory acquired in the purchase of the assets of United Computer Supplies, Inc. in April 2002. We reduced inventory levels in the fiscal year ending August 31, 2003 (“Fiscal 2003”) by $5.6 million, and the year ended August 31, 2004 (“Fiscal 2004”) by $5.8 million.

In recent years we have depended primarily on domestic vendors of raw materials, which historically charge higher prices for raw materials than international vendors. Prices for raw materials decreased through the first quarter of Fiscal 2004, but in the second quarter of Fiscal 2004 they stabilized and started an upward trend. In February 2004, domestic and international mills announced a price increase that went into effect on March 1, 2004. Other increases were announced by the mills that went into effect on May 1, 2004 and July 1, 2004. These increases were effectively passed through to a majority of our customers. We believe that prices will continue to increase in Fiscal 2005.

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 is continuous feed business forms. Management believes that the market for business forms, which declined in 2004, will continue to decline in 2005. Our percentage of revenue derived from this product decreased from 62% in Fiscal 2003 to 53% in Fiscal 2004. Management expects this product category’s contribution percentage to sales to decline substantially further in Fiscal 2005, partially due to the reduction of the Staples business.

Competitors in the marketplace have aggressively solicited and bid customers of the Company’s products. Some of these competitors are vertically integrated and have competitive pricing advantages, which is changing how the marketplace does business and is squeezing margins despite the increase in paper prices.

The loss of significant customers, mergers of customers, and loss of portions of business from certain customers has reduced sales in Fiscal 2004, and management believes it will also have a significant impact in Fiscal 2005. To replace these lost sales, we are focusing our marketing efforts on more profitable portions of the business. In the business imaging product line, management believes that wide format rolls and point of purchase rolls have the greatest potential for growth.

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The Company also believes that its entrance into the bottled water business is significant as we begin the diversification of our product offerings out of continuous computer paper. The introduction of water into our paper business is an ideal companion sale as the distribution model for our water products is substantially similar to our paper products. Many of the customers who are currently purchasing business imaging supplies from us also buy bottled water. The weight and dimensions of a pallet of water and paper, and therefore the costs, are also similar. The introduction of water should expand our sales to our existing customers. The bottled water business has experienced phenomenal growth in the past few years. We plan to effectively compete in the wholesale market by offering competitive price points on our water products.

One of our larger customers filed a Chapter 11 bankruptcy on May 7, 2003, owing us approximately $450,000. This amount was written off as bad debt expense in Fiscal 2003. In July 2004, the Company was served with a notice of a preference claim of approximately $1.2 million by the debtor’s bankruptcy trustee. We believe this is a gross preference demand without the Trustee analyzing easily discovered offsets. A request for details on the claim has been made to the Trustee without response. Due to the range of remittance dates by the debtor before and during the preference period, we believe we will be successful in litigation with the trustee of the estate for this alleged preference with the ordinary course of business defense available under the Bankruptcy Code. The amount that will be found to be an actual preference is unknown as of the date of this filing.

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.

The bottled water business is subject to seasonal fluctuations with its demand cycle greatest in summer months.

TST’S BACKLOG

The dollar value of TST’s order backlog as of August 31, 2004 and 2003 was approximately $2.8 million and $ 3.2 million, respectively. TST’s ability to fill orders is directly impacted by the general cyclical pattern of the paper industry and its ability to purchase the raw materials and finished goods necessary to fill customer orders. The increase in backlog is related to TST’s increased net sales.

TST’S COMPETITION

TST competes with a number of other business organizations within the paper industry, some of which have substantially greater financial, human and other resources. TST currently competes principally with manufacturers that distribute their products through dealers, resellers and/or retailers and, to a lesser extent, manufacturers who distribute their own products directly to

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end-users. Weak industry conditions in the past few years have caused the major direct-selling companies, which are much larger than TST, to sell direct and to dealers. In some cases, this has led to TST’s customers reducing their selling prices to compete with these dealers. This has also caused increased competition among companies selling products through dealers. In addition, vertical consolidation among entities in the paper industry has created tougher conditions for TST, because certain of TST’s suppliers have subsidiaries that compete with TST and these suppliers generally support the efforts of their subsidiaries. Finally, in the changing environment of the hard copy supply industry, advancing technology has contributed to the competition as companies must commit resources to obtain new equipment in order to convert the evolving types of business consumables required by the advancement of technology, to expand facilities to house the increasing number of types of products available and for just-in-time inventory purchasing practices of customers.

We have remained competitive by incorporating the manufacture and distribution of technical and high recognition branded paper products into our line. The addition of technical products has positioned TST as a supplier of business consumables at the initial growth stages of the technology’s introduction into the market and, therefore, at the greatest opportunity for strong profit margins and growth in unit sales. Sales of branded products benefit from brand loyalty and name recognition. Since we began the manufacture and distribution of technical and trademark licensed branded products, and have penetrated new distribution channels with our expanding product lines, we believe that in the future the companies we will compete with, will change as the consolidation within the paper industry causes competitors to branch into other categories of products that may not compete with the lines we offer.

We believe that TST effectively competes on the basis of the following: its nationwide distribution network, which enables products to be delivered to its customers in most major cities in the United States within 24 hours; its larger number of inventory items providing customers cost-effective, efficient purchasing and volume discounts; and by providing high-quality products and customer-oriented services.

TRADEMARKS

TST uses the trademark IMPRESO, a Spanish word meaning “printed matter”, on certain products it manufactures and distributes. The trademark and service mark is registered in the United States. These registrations are effective until August 2009 and May 2010, respectively.

The IMPRESO trademark is also registered in Canada and Great Britain. These foreign registrations are effective until July 2007 and October 2007. The foreign registration renewal for the IMPRESO trademark in Italy has been submitted, but we have not received the certificate from the Italian administration. An application to register the IMPRESO trademark under the new European Community Trademark regulations, which was filed July 19, 2000, was denied and subsequently abandoned due to the generic meaning of the word “impreso” in Spain and Portugal. Management believes that the IMPRESO trademark has significant name recognition and is important in marketing and achieving visibility of TST’s products. The goodwill value associated with the name IMPRESO has been pledged as an asset to TST’s current primary secured lender under TST’s revolving line of credit.

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TST also has a trademark registration in the United States for “Lazer Cut Sheets®” and “Lazer Bond®”, effective until May 2007. Each of the Lazer Cut Sheet and Lazer Bond trademarks are applied only to one specific product that TST manufactures.

The United States service mark registration obtained on Hotsheet, our subsidiary’s proprietary Internet portal, is effective until January 2008. The European Community Trademark registration for Hotsheet.com is effective until February 2010. The United States service mark registration for Shopsheet®, a sub portal of Hotsheet.com, is effective until February 2010.

The acquisition of United’s assets in March 2002 included one United States trademark: Computer Paper, Computer Paper, which registration was effective until December 2003.

SERVICE AND SUPPORT

We believe that customer service is an important factor in product sales and customer satisfaction. Service and support include TST’s own in-house trucking which back-hauls goods for other entities, which reduces transportation costs and improves customer service. Our in-house graphics department can design and prepare layouts of packaging and can produce negatives, which allows TST speed and flexibility when bringing new products or packaging into the marketplace. TST also sells its graphics capabilities to its customers. TST’s customer service department can expedite service because its computer system sends a bill of lading by facsimile to the appropriate distributing warehouse and an order acknowledgment to the receiving customer when an order is entered by a customer service representative. TST’s computer system automatically calculates inventory levels at each warehouse and the amount of raw materials it must purchase, and identifies which of its plant locations will manufacture an order.

TST also has a collection and credit department. The staff evaluates extensions of credit and makes written and verbal requests for payment from those customers whose invoices are not paid within agreed payment terms. In-house counsel is available to assist the credit department in difficult collections.

TST offers a 120-day warranty on all of its products. To date, warranty expense has been minimal.

ENVIRONMENTAL REGULATION

We believe that compliance with any environmental regulations that may be applicable to us will not have a material adverse effect on our capital expenditures, earnings or competitive position.

EMPLOYEES

We had 295 full-time employees at August 31, 2004 of whom approximately 70% are engaged in manufacturing TST’s products. None of our employees are currently covered by a collective bargaining agreement. We consider our employee relations to be good as a result of an organizational structure which encourages individual initiative as well as team work.

ITEM 2. PROPERTIES

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TST operates four manufacturing plants encompassing an aggregate of approximately 690,000 square feet of space. The Coppell, Texas, facility, where our executive offices are located, is approximately 75,000 square feet. TST owns two of its manufacturing plants, Coppell, Texas and Itasca, Illinois. The Coppell plant mortgage matures in 2011, and the Itasca facility matures in 2009. In April 2004, the Company sold its two buildings in Fontana, California to an unrelated party as part of a sales-leaseback transaction. The transaction has been accounted for as a sale, although the gain associated with the sale has been deferred in accordance with sales-leaseback accounting and is being amortized over 60 months, which represents the life of the related lease agreement. TST leased the two adjacent buildings in Fontana, California, for concurrent five year terms ending 2009. The Company also leases the Chambersburg, Pennsylvania facility and that lease’s initial term expires in 2017. Both the Fontana and Chambersburg leases have options to extend. Subsequent to 2004, TST exited two facilities that it owned, Kearneysville, West Virginia and Greencastle, Pennsylvania, and has placed these buildings on the market to be sold. In Fiscal 2004, TST was leasing under month to month leases a facility in Elk Grove, Illinois and warehouse space in Dallas, Texas. The Elk Grove location was vacated. Annual mortgage payments and minimum lease payments relating to these facilities were approximately $1.6 million in Fiscal 2004 and 768,495 in Fiscal 2003. Costs incurred for the 50 public distribution and 7 storage warehouses TST utilizes throughout the United States and in Quebec, Canada was approximately $751,000 for Fiscal 2004.

We believe the current facilities are in good condition, and are suitable and adequate for current business needs. We estimate that, as of August 31, 2004, TST was operating at approximately 50% capacity for all of the products it manufactures, which will allow it to increase production to meet increased demand, if any, with no immediate capital investment.

Our Hotsheet operation is currently operating from our headquarters at the Coppell, Texas facility and through its internet service providers located in Dallas, Texas and Providence, Rhode Island.

ITEM 3. LEGAL PROCEEDINGS

Legal-

On September 18, 2002, TST filed a lawsuit against a vendor in the United States District Court for the Northern District of Texas — Dallas Division. TST’s general claim is that the vendor breached a Distributor Agreement entered into with TST in several material respects, including the vendor’s late delivery of paper products, the vendor’s delivery of defective product, and the vendor’s failure to properly credit TST’s accounts based upon these and other alleged breaches. The vendor responded to TST’s demand for arbitration by generally denying TST’s claims and asserting a counterclaim seeking to recover disputed accounts receivable and damages related to TST’s alleged interference with the vendor’s relationship with its lender. The Trial is set for March 2005.

TST is a defendant in a suit filed in Fiscal 2003 for the collection of sums due under two promissory notes. These liabilities are included on the Company’s balance sheet. TST prevailed in its motion to stay the adversary proceeding and to compel arbitration in Dallas, Texas under the terms of the parties purchase agreement. TST asserts that liability does not exist because of fraud and contractual breaches in connection with the agreements. No arbitration date has been set.

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On November 5, 2003, the Company discovered the Company’s payroll administrator was fraudulently diverting Company funds into her personal bank accounts. The investigation revealed a loss of approximately $627,000 over a period starting in September 2000 until October 2003. In November 2004, the Company and the current insurer executed a settlement for $253,000, without waiving each party’s rights to proceed to suit or defend on the balance of the Company’s losses. We believe recent legal developments could be persuasive in litigating different interpretations of defined terms within the policy. On November 19, 2004, the employee was sentenced to prison, ordered to remit to the Company $70,000 of known funds held in her name, and to pay restitution in full.

In December 2003, TST/Impreso, Inc. entered into a settlement agreement with a customer due to a dispute concerning catalog fees. The settlement requires TST to issue a credit memo to the customer for the purchase of products in the amounts of $50,000, $25,000 and $25,000 on December 31, 2004, June 30, 2005, and December 31, 2005, respectively. These amounts are included in the accrued liabilities.

In April 2004, TST filed a lawsuit in the 68^th judicial district Dallas County against two former outside sales representatives and a competitor, alleging breach of fiduciary duty, tortious interference with existing and prospective business relations, and civil conspiracy. The lawsuit seeks to enforce the duties of loyalty owed to TST by its sales agents, and also protect TST from any unfair business practices of TST’s competitors. The competitor filed a counter claim alleging business disparagement and tortious interference with existing and prospective business relations. The parties to the litigation are actively conducting discovery.

On July 9, 2004, TST received a Preference Claim demand from the Trustee of the estate a former customer in the amount of $1.2 million. No suit has been filed to date. This demand is a gross preference demand and we believe subsequent to a full preference analysis and the Company’s utilization of various defenses, any liability should be lowered to a materially reduced amount. The amount that will be found to be an actual preference is unknown as of the date of this filing.

The Company’s Corporate Income Tax Returns for the fiscal years ending August 31, 2001, 2002, and 2003, are currently under examination by the Internal Revenue Service (“IRS”). The IRS has proposed adjustments to the fiscal years under examination, and the matter has been sent to the Appeals Division of the IRS. The Company does not believe that the proposed adjustments will be upheld by the Appeals Division.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not Applicable.

PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock trades on the NASDAQ SmallCap Market (“NSCM”) under the symbol

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ZCOM. The high and low closing prices for the common stock, as reported on the NSCM are as follows:

On November 18, 2004, the closing price for the common stock on the NSCM was $ 2.52 and the common stock was held by approximately 775 stockholders of record, including holdings through nominee or street name accounts with brokers.

We have not paid any dividends on our common stock since inception, and we do not intend to pay dividends to our stockholders in the foreseeable future. Any such dividends will be declared in compliance with the restrictive covenants of our subsidiary’s lender that no cash dividends paid during any one calendar year shall exceed current year’s net profit. We also intend to reinvest earnings, if any, in the development and expansion of our businesses. The declaration of dividends in the future will be at the discretion of the Board of Directors and will depend upon the earnings, capital requirements and our financial position, general economic conditions and other pertinent factors.

ITEM 6. SELECTED FINANCIAL DATA

The following is a summary of our selected financial data as of and for the five years ended August 31, 2004 (“Fiscal 2004”). The historical financial data has been derived from our audited financial statements. This data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements appearing elsewhere in this document.

SELECTED FINANCIAL DATA (a)
Years Ended August 31,

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(a)

This schedule should be read in conjunction with our audited Consolidated Financial Statements and related notes thereto.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES

The accounting policies described below is those the Company considers critical in preparing its consolidated financial statements. These policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments 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.

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

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majority of the sales are collectible upon shipment due to its 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 analysis of inventories on hand. The Company evaluates, and if necessary, adjusts reserves quarterly.

Reserves for slow moving, obsolete products, or bad (damaged) products are based on historical experience, acquisition activities, and secured lender policies. The Company has not typically reserved for slow moving, obsolete or bad inventories, because substantially all of its slow moving products can be repackaged into different formats or labels, or 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. Due to acquisition activities in 2001 and 2002, the Company implemented a reserve against the purchased inventories.

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

Commissions and Rebates

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

Contingent liabilities.

The Company is subject to lawsuits, investigations and other claims related to wage and hour/labor, securities, environmental, product and other matters, and is required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses. A determination of the amount of reserves required, if any, for these contingencies is made when losses are determined to be probable and after considerable analysis of each

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individual issue. These reserves may change in the future due to changes in the Company’s assumptions, the effectiveness of strategies, or other factors beyond the Company’s control.

RESULTS OF OPERATIONS FOR THE YEAR ENDED AUGUST 31, 2004, AS COMPARED TO THE YEAR ENDED AUGUST 31, 2003

Net Sales-— Net Sales decreased from $117.2 million in Fiscal 2003 to $104 million in Fiscal 2004, a decrease of $13.2 million, or 11.3%. The decrease resulted from lower sales of branded products.

Gross Profit —Gross Profit decreased from $13.8 million in Fiscal 2003 to $13.7 in Fiscal 2004, a decrease of $85,000 or 1%. Our gross profit percentage increased from 11.8% for Fiscal 2003 to 13.2% for Fiscal 2004. The gross profit percentage increase was primarily the result of decreased costs associated with the shipping and storing of excess inventory. The decreased costs was due to the consolidation of our Kearneysville, West Virginia and Greencastle Pennsylvania plants, and four raw material storage warehouses into our 414,000 square foot leased facility in Chambersburg, Pennsylvania.

Selling, General and Administrative Expenses—SG&A expenses for Fiscal 2004 were $10.9 million or 10.5% of net sales, as compared to $11.3 million, or 9.6% of net sales for Fiscal 2003. SG&A increased as a percentage of net sales in Fiscal 2004, due to the rising cost of employee health benefits, bad debt write off and advertising expense.

Interest Expense—Interest expense decreased from $1.8 million for Fiscal 2003 to $1.1 million for Fiscal 2004, a decrease of $705,000 or 39.4%. This decrease is attributable to the lowering of TST’s line of credit and the sale of the California building.

Income Taxes—Income tax expense was $400,100 for Fiscal 2003 as compared to $674,571 for Fiscal 2004. The increase in tax expense resulted primarily from increased profits and the taxable gain on the sales of the California buildings.

RESULTS OF OPERATIONS FOR THE YEAR ENDED AUGUST 31, 2003, AS COMPARED TO THE YEAR ENDED AUGUST 31, 2002

Net Sales—Net sales decreased from $119.5 million in Fiscal 2002 to $117.2 million in Fiscal 2003, a decrease of $2.3 million or 1.9%, due primarily to a slowed economy.

Gross Profit—Gross profit decreased from $14.1 million in Fiscal 2002 to $13.8 million in Fiscal 2003, a decrease of $354,000 or 2.5%. Our gross profit percentage remained stable at 11.8% in Fiscal 2002 and Fiscal 2003.

Selling, General and Administrative Expenses—SG&A expenses for Fiscal 2003 were $11.3 million, 9.6 % of net sales, as compared to $10.9 million, or 9.1% of net sales for Fiscal 2002. SG&A increased as a percentage of net sales in Fiscal 2003, due to the rising cost of employee health benefits, bad debt write off and advertising expense.

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Interest Expense—Interest expense increased from $1.7 million for Fiscal 2002 to $1.8 million for Fiscal 2003, an increase of $43,000 or 2.5%. This increase is attributable to the United Computer Supplies, Inc. acquisition plants and equipment financing.

Income Taxes—Income tax expense was $1.1 million for Fiscal 2002 as compared to $400,100 for Fiscal 2003. The decrease in tax expense resulted primarily from decreased profits and other income for Fiscal 2003.

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents increased from $95,000 at August 31, 2003 to $173,000 at August 31, 2004.

Borrowings under TST’s line of credit decreased from $14.4 million at August 31, 2003 to $6.9 million at August 31, 2004, a decrease of $7.5 million, or 52.3%. The decreased borrowing primarily resulted from TST’s overall reduction in inventory.

Working capital increased to $13 million at August 31, 2004, from $12.7 million at August 31, 2003, an increase of $322,072 or 2.5%. This increase is primarily attributable to the decrease in the company’s borrowings on its line of credit.

Effective May 2004, TST entered into an amended and restated loan agreement with a commercial financial corporation, which matures in November 2005. The agreement provides for a $10 million line of credit and an inventory sub-limit of $10 million. The loan is secured by, among other things, inventory, trade receivables, and equipment. The 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, was released. Available borrowings under this line of credit, which accrued interest at prime plus the applicable prime rate margin (4.25 % and 0%, respectively, at August 31, 2004), are based upon specified percentages of eligible accounts receivable and inventories. As of August 31, 2004, there was a $3.2 million borrowing capacity remaining under the $10 million revolving line of credit.

Upon completion of the 34,500 foot expansion of our Itasca, Illinois building, on September 22, 2004, we consolidated the existing mortgage and the construction loan executing a five-year, $4.5 million loan with the current mortgagee of the building.

We do not believe that the funds available under the loans encumbering our Texas, West Virginia, Pennsylvania and Illinois plants, the revolving credit facility, cash and cash equivalents, trade credit and internally generated funds will be sufficient to satisfy our requirements for working capital and capital expenditures for at least the next twelve months. However, we believe we will be able to obtain an increase in our line with favorable terms. Such belief is based on certain assumptions, including the continuation of the state of current operations, and there can be no assurance that such assumptions are correct. The expansion of our operations due to the start up costs of Alexa Springs, Inc. will require us to obtain additional capital. We anticipate that the

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funds required will be generated through an increase in our revolving line of credit. Our recent reduction in our line from $25 million to $10 million became operationally restrictive due to recent events such as the loss of certain customers combined with the cash requirements to start operations at a new business.

At August 31, 2004, the Company had the following contractual obligations and other commercial commitments*:

*		This table does not include the balance on the revolving line of credit.
**		Excludes related interest amounts.

As of August 31, 2004, 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 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 of operations.

SUBSEQUENT EVENTS

In October 2004, Alexa executed a $1.9 million equipment leaseback agreement with a commercial financial institution. The leased equipment included a majority of the water bottling equipment located in our Mt. Ida, Arkansas plant (See Form 8-K, dated October 26, 2004 and filed November 1, 2004)

Subsequent to this Form 10-K reporting period, Alexa negotiated a real estate lease and water supply agreement with Alexa Springs Water Company and our Board of Directors authorized the President of Alexa to execute the agreements with an effective date of December 1, 2004. (See Form 8-K, dated December 1, 2004 and filed December 7, 2004) Under the ten year water supply contract executed by Alexa with Alexa Springs Water Company on December 1, 2004, Alexa must purchase all of the production of the springs. Alexa also executed a ten year lease that runs concurrently with the water supply agreement on the land and buildings, approximately 34,200 square feet, which house the springs. Both of these agreements have an automatic renewal of second ten year terms if not terminated in accordance with the agreements.

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On November 30, 2004, TST filed a lawsuit in the Dallas County Judicial District against a company that operated as our customer and as a vendor alleging breach of contract seeking to collect an outstanding accounts receivable, and against an employee of the company alleging libel and slander.

On December 1, 2004, International Business Machines, Inc (“IBM”) and TST/Impreso, Inc. (“TST”) agreed to terminate their Trademark Licensing Agreement dated April 30, 1997. This decision was a result of IBM adding other converters to the program, IBM’s refusal to provide account protection, and IBM’s continuing request for guaranteed fees. TST’s IBM products sales were approximately 11% in the Fiscal year ended August 31, 2004. TST has approximately eight months to liquidate its IBM branded paper products inventory

IMPACT OF INFLATION

Inflation is not expected to have a significant impact on our business.

FORWARD-LOOKING STATEMENTS

Management’s Discussion and Analysis of Financial Condition and the Results of Operations and other sections of this Form 10-K 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 7A. 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 are 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 August 31, 2004. 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.

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The estimated fair value of our total long-term fixed rate and floating rate debt approximates carrying value. See Note 2 to Consolidated Financial Statements. Based upon our market risk sensitive debt outstanding at August 31, 2004, there was no material exposure to our financial position or results of operations.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

(a)

Evaluation of 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.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

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We have adopted a code of ethics that applies to all of our principal executive officers and senior financial officers. This code of ethics is posted on our Website. The Internet address for our Website is http://www.tstimpreso.com, and the code of ethics may be found as follows:

1) From our main Web page, first click on “Corporate Info”.

2) then click on “Corporate Compliance”.

Or for a mailed copy call (972) 462-0100 ext 1117.

We intend to satisfy the disclosure requirement required under Item 10 of Form 8-K regarding an amendment to, or waiver from, a provision of this code of ethics by posting such information on our website, at the address and location specified above.

The remaining information required by this item is incorporated herein by reference in the Company’s definitive proxy statement to be filed with the Commission not later than 120 days after August 31, 2004.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated herein by reference in the Company’s definitive proxy statement to be filed with the Commission not later than 120 days after August 31, 2004.

ITEM. 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item is incorporated herein by reference in the Company’s definitive proxy statement to be filed with the Commission not later than 120 days after August 31, 2004...

ITEM. 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is incorporated herein by reference in the Company’s definitive proxy statement to be filed with the Commission not later than 120 days after August 31, 2004.

ITEM. 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is incorporated herein by reference in the Company’s definitive proxy statement to be filed with the Commission not later than 120 days after August 31, 2004.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

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(a) 1. Financial Statements:

The financial statements of the Company filed in this Annual Report on Form 10-K is listed in Item 8.

     2. Financial Statement Schedules:

The financial statement schedules of the Company filed in this Annual Report on Form 10-K are listed in the attached Index to Financial Statement Schedules.

     3. Exhibits:

The exhibits required to be filed as part of this Annual Report on Form 10-K is listed in the attached Index to Exhibits.

(b) Current Reports on Form 8-K

No report on Form 8-K was filed during the last quarter of the period covered by this report.

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INDEX TO EXHIBITS

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS