SOURCE: Ace Marketing & Promotions, Inc.

August 12, 2009 16:51 ET

Ace Reports Results of Operations for the Second Quarter of 2009

VALLEY STREAM, NY--(Marketwire - August 12, 2009) - Ace Marketing & Promotions, Inc. (OTCBB: AMKT) announced today the results for its second quarter ended June 30, 2009 and the six months ended June 30, 2009.

Three months Ended June 30,                          2009         2008
                                                  ----------   ----------
Revenue (A)                                       $  841,247   $2,049,867
Cost of Revenue (B)                                  500,349    1,578,235
                                                  ----------   ----------
Gross profit (C)                                     340,898      471,632
Selling, General & Administrative expenses (D)       499,189      666,312
                                                  ----------   ----------
Loss from Operations (E)                          $ (158,291)  $ (194,680)
                                                  ==========   ==========


Six months Ended June 30,                            2009        2008
                                                  ----------   ----------
Revenue  (A)                                      $1,296,279   $3,226,050
Cost of Revenue (B)                                  831,217    2,388,695
                                                  ----------   ----------
Gross Profit (C)                                     465,062      837,355
Selling, General & Administrative expenses (D)     1,090,135    1,334,030
                                                  ----------   ----------
Loss from Operations (E)                            (625,073)    (496,675)
                                                  ==========   ==========

(A) Revenues decreased due to the general state of economy and customers choosing to cancel or delay purchases of promotional products and the non-reoccurrence of a major one-time order with the New York State Troopers of $685,000.

(B) Cost of revenues decreased directly due to decreases in sales.

(C) Gross profit percentage for the second quarter was 41% versus 23% for the comparable period of the prior year. The gross profit percentage for the six months ended June 30, 2009 was 36% as compared to 26% for the comparable period of the prior year. Gross profit for the second quarter decreased approximately $131,000 and for the six months ended June 30, 2009 decreased by approximately $372,000, as compared to the comparable period of the prior year, due to decreasing sales. The second quarter and six months ended June 30, 2008 gross profit percentages were unusually low due to a one-time sale to the New York State Troopers at a substantially lower than normal gross profit percentage.

(D) Operating expenses for the three months ended and six months ended June 30, 2009 decreased by approximately $166,000 and $345,000, respectively, as compared to the comparable period of the prior year. Operating expenses for the three months and six months ended June 30, 2009 include a decrease in stock based payments (non-cash) of $182,573 and $200,957, respectively, as compared to the comparable periods of the prior year.

(E) Net loss for the three months ended June 30, 2009 decreased by approximately $36,000 over the comparable period of the prior year despite a substantial decrease in revenue and gross profit primarily due to a $182,573 decrease in stock based payments (non-cash). Net loss from operations for the six months ended June 30, 2009 increased by approximately $128,000 due to substantial decreases in sales and gross profit, partially offset by decrease in operating expenses (primarily in stock based payments) (non-cash).

About Ace Marketing

Ace Marketing & Promotions, Inc., based in New York, is a full-service sports & entertainment promotional marketing company offering a wide array of business solutions which include mobile website development, portable media, ACE CMS Platform, print solutions and Branded Merchandise & Fulfillment. Ace Marketing & Promotions, Inc. is a leader in Proximity Marketing(SM) with proprietary Bluetooth and Wi-Fi integrated technology that establishes the benchmark for how multimedia messages are being delivered. Established in 1998, the Company has built a successful, scalable business platform capable of consolidating a portion of the promotional products industry. Proximity Marketing(SM), Rockzimity, and Rockzimity Marketing are service marks of Ace Marketing & Promotions, Inc. 2009. Ace's Corporate Overview is available at http://www.acemarketing.net on the "About Us" tab. Ace has recently added several new revenue stream models. The long-term strategic plan is for Ace to find new opportunities while leveraging its core competencies. For a demo of Ace's Proximity Marketing you can visit http://www.acemarketingdemo.com. For additional information, a copy of Ace's Form 10-K can be obtained on the Internet by going to www.acemarketing.net, clicking on links and then clicking on SEC Filings.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performances or achievements express or implied by such forward-looking statements. The forward-looking statements are subject to risks and uncertainties including, without limitation, changes in levels of competition, possible loss of customers, and the company's ability to attract and retain key personnel.

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