SOURCE: American TonerServ Corp.

November 12, 2007 11:28 ET

American TonerServ Reports Revenue up 528% to $1.1 Million for the Quarter Ended September 30, 2007

For the Nine Months Ended September 30, 2007, Revenue up 692% to $2.6 Million

SANTA ROSA, CA--(Marketwire - November 12, 2007) - American TonerServ Corp. ("ATS" or the "Company") (OTCBB: ASVP), a strategic consolidator in the highly fragmented printer supplies and services industry, announced record operating results for the quarter and nine months ended September 30, 2007.

ATS reported revenue of approximately $1.1 million for the quarter ended September 30, 2007, compared to approximately $0.2 million for the quarter ended September 30, 2006 -- a 528% increase. For the nine months ended September 30, 2007, ATS reported record revenue of approximately $2.6 million, compared to approximately $0.3 million for the nine months ended September 30, 2006 -- a 692% increase. The substantial increase in revenue was primarily attributable to the acquisition of Optima Technologies, LLC which occurred during Q2 2007, the acquisition of the customer lists of Brody Enterprises doing business as Sun Products in Q4 2006, and the acquisition of customer lists of Computech Print Solutions, Inc. and Laser Cartridge Recharge Systems, Inc. which occurred during Q3 2006.

ATS reported a net loss for the quarter ended September 30, 2007 of approximately $1.2 million, compared to net loss for the quarter ended September 30, 2006 of approximately $0.7 million. For the nine months ended September 30, 2007, ATS reported a net loss of approximately $3.1 million, compared to a net loss of approximately $0.9 million for the nine months ended September 30, 2006.

Based on 23,676,336 of weighted shares of common stock outstanding during the third quarter, ATS reported a loss of approximately $0.05 per share for the quarter ended September 30, 2007 and $0.13 per share for the nine months ended September 30, 2007.

About American TonerServ:

American TonerServ Corp. ("ATS") is a consolidator in the highly fragmented printer supplies and services industry. ATS acquires, integrates and manages independent businesses that deliver printer supplies, services and equipment to small/mid-sized businesses. Through its consolidation strategy, ATS plans to capture at least 3 - 5% market share ($250.0 MM annualized revenue) of the compatible toner cartridge industry, establishing itself as the brand of choice in the compatibles market as Hewlett Packard is in the OEM market. Please visit www.AmericanTonerServ.com.

Forward-Looking Statement:

Except for historical information contained herein, the matters set forth above may be forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ from those in the forward-looking statements. Words such as "anticipate," "believe," "estimate," "expect," "intend" and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the current beliefs of management, as well as assumptions made by and information currently available to management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors such as the level of business and consumer spending, the amount of sales of the Company's products, the competitive environment within the industry, the ability of the Company to continue to expand its operations, the level of costs incurred in connection with the Company's expansion efforts, economic conditions in the industry and the financial strength of the Company's customers and suppliers. The Company does not undertake any obligation to update such forward-looking statements. Investors are also directed to consider all other risks and uncertainties.

AMERICAN TONERSERV CORP. AND SUBSIDIARY
Condensed Consolidated Statements of Operations
(Unaudited)
                        Three months ended          Nine months ended
                           September 30,               September 30,
                        2007          2006          2007          2006
                    ------------  ------------  ------------  ------------
Revenues:
  Toner             $    964,909  $    140,057  $  2,292,436  $    153,005
  Service                121,693        32,895       283,364       172,381
                    ------------  ------------  ------------  ------------

Total revenues         1,086,602       172,952     2,575,800       325,386
                    ------------  ------------  ------------  ------------

Cost of sales:
  Toner                  638,392        94,934     1,456,932       101,729
  Service                119,094        22,597       269,174        78,898
  Inventory
   write-down             68,500             -        68,500             -
                    ------------  ------------  ------------  ------------
Total cost of sales      825,986       117,531     1,794,606       180,627
                    ------------  ------------  ------------  ------------

Gross profit             260,616        55,421       781,194       144,759
                    ------------  ------------  ------------  ------------

Operating Expenses:
  Salaries and wages     398,776       305,758     1,161,649       362,133
  Professional fees
   and services          418,965       243,356     1,149,485       315,805
  Sales and marketing     44,327         6,094       211,663        15,875
  General and
   administrative        389,113        64,424       876,937       148,304
  Amortization of
   customer lists         97,981        11,503       232,222        11,503
                    ------------  ------------  ------------  ------------

Total operating
 expenses              1,349,162       631,135     3,631,956       853,620
                    ------------  ------------  ------------  ------------

Loss from operations  (1,088,546)     (575,714)   (2,850,762)     (708,861)

Other income (expense):
  Fair value of
   convertible debt      (50,000)     (150,172)      (45,833)     (150,172)
  Interest expense       (96,161)       (6,838)     (191,049)      (53,425)
  Change in fair value
   of warrant
   liability                 670             -         6,332        12,827
  Gain on claims
   settlement                  -             -         1,301        37,357
                    ------------  ------------  ------------  ------------

Net loss            $ (1,234,037) $   (732,724) $ (3,080,011) $   (862,274)
                    ============  ============  ============  ============

Net loss per share:
  basic and diluted $      (0.05) $      (0.03) $      (0.13) $      (0.11)
                    ============  ============  ============  ============

Weighted average
 number of shares
 outstanding:
  basic and diluted   23,676,336    21,337,097    23,420,257     7,702,283
                    ============  ============  ============  ============



AMERICAN TONERSERV CORP. AND SUBSIDIARY
Condensed Consolidated Balance Sheet
(Unaudited)
                                                              September 30,
                                                                  2007
                                                              ------------
ASSETS
Current assets:
  Cash and cash equivalents                                   $     75,007
  Accounts receivable, net of allowance for doubtful accounts
   of $35,224                                                      604,778
  Inventory                                                        214,961
  Prepaid expenses and other current assets                         32,923
  Deferred compensation                                            446,898
                                                              ------------
     Total current assets                                        1,374,567

  Customer lists, net                                            2,356,590
  Goodwill                                                         421,848
  Property and equipment, net                                      108,800
  Other assets                                                     114,118
                                                              ------------
     Total assets                                             $  4,375,923
                                                              ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable and accrued expenses                       $  1,269,562
  Shareholder advances                                             490,000
  Notes payable - current portion
   (net of unamortized discount of $155,459)                     1,130,696
  Convertible notes payable, related parties – current portion     562,500
  Convertible notes payable – current portion                      537,500
  Deferred revenue                                                  57,657
                                                              ------------
     Total current liabilities                                   4,047,915
                                                              ------------
Long-term liabilities:
  Notes payable (net of unamortized discount of $130,380)          306,600
  Convertible notes payable                                        132,000
  Warrant liabilities                                               41,495
                                                              ------------
     Total long-term liabilities                                   480,095
                                                              ------------
     Total liabilities                                           4,528,010
                                                              ------------
Commitments and contingencies

Stockholders' equity:
  Convertible preferred stock, $.001 par value; 50,000,000
   Series C authorized shares; 1,952,856 shares issued and
   outstanding (liquidation preference of $1,952,855)                1,953
Common stock; $.001 par value; 450,000,000 shares authorized;
 26,643,727 shares issued and outstanding                           26,643
Additional paid-in capital                                      15,645,844
Accumulated deficit                                            (15,826,527)
                                                              ------------
     Total stockholders' deficit                                  (152,087)
                                                              ------------
     Total liabilities and stockholders' deficit              $  4,375,923
                                                              ============

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